Source: http://www.lexology.com, September 5, 2013
By: Scott J. Bent, Baker & Hostetler LLP
Oil and gas drillers in Pennsylvania’s Marcellus Shale formation may soon find themselves subject to more stringent environmental protection standards under regulations proposed by the Pennsylvania Department of Environmental Protection (“the Department”). The Department announced on August 27, 2013 that the proposed regulations were approved by the state’s Environmental Quality Board. The proposal now moves to the Pennsylvania Attorney General’s Office and the Office of General Counsel, followed by a public comment period.
The proposed regulations address four general issues: 1) protection of public lands and resources; 2) orphan and abandoned well identification; 3) pollution containment practices; and 4) protection of water resources.
Protection of Public Resources
Under the proposed regulations, applicants for well permits must notify the appropriate public resource agency (such as the Department of Conservation and Natural Resources or the Pennsylvania Game Commission) if a well site is within a certain distance of public lands or resources. For example, notice is required if a site is within 200 feet of a national natural landmark or within 1,000 feet of a water well, surface water intake, reservoir, or other water source used by a water purveyor.
The resource agency has an opportunity to provide comments and recommendations to the Department and the well operator. The Department makes the final determination on the permit application, and it may add conditions to the well permit to mitigate potential impact to public resources.
Orphan and Abandoned Well Identification
According to some estimates, Pennsylvania is home to over 250,000 “orphaned or abandoned wells,” which were not properly plugged after drilling operations ceased. Under the proposed regulations, oil and gas operators must identify orphaned or abandoned wells within 1,000 feet of the vertical and horizontal well bores prior to hydraulic fracturing. Operators must visually monitor the identified orphan or abandoned wells that are likely to have penetrated the formation intended to be hydraulically fractured. Operators must also plug orphaned or abandoned wells altered by their fracturing processes.
Pollution Containment Practices
The proposed regulations include provisions for temporary and long-term storage of fracking materials, freshwater impoundments, and secondary containment. Open pits may only be used for temporary storage of fracking materials, and they must comply with thickness, fencing, and testing requirements. Additionally, modular storage must be approved by the Department, and tank valves and access lids must be locked to prevent unauthorized access.
Regarding long-term storage, open top structures may not be used to store produced water, and underground tanks may not be used to store brine unless approved by the Department. All long-term storage tanks must be protected from the unauthorized acts of third parties.
Freshwater impoundments must be constructed with a synthetic impervious liner, and they must be registered with the Department. Impoundments must also be fenced, and they must be restored, unless approved by the landowner.
Operators must use secondary containment—such as liners or double-walled tanks—at hydraulic fracturing well sites. Operators must inspect their secondary containment systems at least weekly to ensure integrity. Secondary containment systems may utilize subsurface units.
Protection of Water Resources
Under the proposed regulations, pipeline construction companies must develop Preparedness, Prevention, and Contingency Plans when performing horizontal directional drilling under a waterway to minimize the impact in the case of an inadvertent return. The regulations provide rules for operator response to spills and releases, and they require remediation in accordance with statutory standards. Operators must also restore their well sites—by, for instance, filling pits and removing drilling equipment—within 9 months of completing drilling.
The Department acknowledges that the proposed regulations would increase costs for drilling operators, especially those operating hydraulic fracturing wells. Examples of such costs include: 1) consultant fees; 2) additional safety measures; 3) labor for inspections and testing; 4) additional reporting and record-keeping requirements. The Department points out, however, that because most operators of hydraulic fracturing wells subcontract their work, the additional costs will benefit small businesses like environmental consultants and equipment and supply companies.