As we reported back in May of this year, a review team assembled by the State Review of Oil & Natural Gas Environmental Regulations (“STRONGER”) completed an in-state review of Pennsylvania’s Oil and Gas Regulatory Program. STRONGER’s review team recently published its final written report regarding its May 2013 review on its website that highlights the strengths of Pennsylvania’s program and identifies several recommendations for the program to consider moving forward. Some strenths of Pennsylvania’s program included its increase of “staff levels to address additional permitting, inspection, and enforcement activities related to increased unconventional well development,” as well as its initiation of a “comprehensive evaluation of radiation levels specificially associated with unconventional gas development” (generally referred to as the “TENORM Study”). In addition to recommending that Pennsylvania complete its TENORM Study, the STRONGER report also included a recommendation that Pennsylvania “maintain consistent standardized data for tracking vioaltions and enforcement actions.” According to the Pennsylvania Department of Environmental Protection’s press release, the Department will work to implement these recommendations in addition to other recommendations made in STRONGER’s final report.
The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) published a notice in today’s Federal Register extending the period for responding to its inquiry about expanding the integrity management program requirements to pipelines located outside of high consequence areas and eliminating the class location requirements for gas pipelines. As explained in our previous post, a mandate in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, the most recent reauthorization of the federal pipeline safety laws, requires PHMSA to evaluate these issues and provide a report to the U.S. Congress with its findings by January 2014. The new deadline for submitting comments on the original notice is November 1, 2013.
Ohio officials notified companies that a federal chemical disclosure law trumps a 2001 state law requiring that information regarding chemicals used in the hydraulic fracturing process only be filed with the Ohio Department of Natural Resources, a law intended to centralize information. Now, beginning September 21, 2013, to comply with federal law, a list of toxic chemicals used by Ohio shale drillers must be made available locally to governments. The new reporting parameters follow an April letter from the U.S. Environmental Protection Agency, which made clear that Ohio’s chemical reporting laws do not supersede federal right-to-know requirements.
Utilizing technologies that created the Marcellus Shale boom in Western Pennsylvania, smaller operators in the region are beginning to rework their shallow wells, as well as drill new ones, to explore and produce shallower formations. Rather than drilling to depths up to or greater than one mile to reach the oil and gas in the unconventional shale plays like the Marcellus and the Utica Shale, some companies are stopping at shallower depths, and continuing to produce the once robust conventional sandstones, such as the Elk Sandstone and the Upper Devonian Shale.
While the production isn’t as great as the more compact and larger Marcellus Shale, the cost to drill (or rework) a shallow well is markedly cheaper, potentially coming in at under $1 million (versus the nearly $10 million it costs to drill a horizontal Marcellus well). Similarly, the shallow wells, thanks in part to the rock into which the wells are drilled being more porous, require far less fluids – shallow wells are using, on average, less than 3% of the frac fluid during the drilling process.
The shallow formations, once the only known formations for area drillers, are seeing a renewed interest thanks in part to the technology and processes that allowed larger companies to drill much deeper into the Marcellus Shale. Early results on the shallow wells is difficult to analyze, as reporting requirements for conventional wells only compel companies to release production data once per year.
Earlier this week, U.S. EPA published final revisions to the New Source Performance Standards for the Oil and Natural Gas Sector (i.e., 40 CFR 60, Subpart OOOO). As discussed in a previous post, EPA has made significant changes to the provisions affecting storage tanks. The revised regulations are effective immediately. Additional information is available here.
Last week the University of Texas, in conjunction with the Environmental Defense Fund and 9 companies involved in natural gas production, released a study which found that 0.42% of natural gas produced in the U.S. is emitted into the atmosphere as methane (the main component of natural gas). This estimate is lower than the leak rates found in a 2010 Cornell University study, which estimated leakage at between 0.6 to 3.2%, and U.S. EPA’s review of 2011 data which showed that gas leaked from wells at a rate of 0.47%. Researchers in the University of Texas study recorded direct measurements of actual emissions at 190 well sites, whereas Cornell and U.S. EPA researchers used data provided by drillers. This is the first of multiple studies to be completed by the University of Texas.
The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final rule in today’s edition of the Federal Register that amends its administrative procedures for federal enforcement actions effective October 25, 2013. The final rule is intended to comply with a mandate in Section 20 of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, the most recent reauthorization of the federal pipeline safety laws. Section 20 directed PHMSA to issue regulations that (1) require hearings to be convened before a dedicated “presiding official,” a term defined by statute as an attorney on the staff of the Deputy Chief Counsel that is not engaged in investigative or prosecutorial functions; (2) ensure the expedited review of corrective action orders, which are issued in cases where a pipeline facility is hazardous to life, property, or the environment; (3) create a separation of functions between agency personnel who perform investigatory and prosecutorial duties and those who are responsible for deciding the final outcome of cases; and (4) prohibit ex parte communications on relevant matters by the parties to those actions. The final rule addresses these issues and includes some changes to the draft regulations that the agency published in an August 13, 2012 notice of proposed rulemaking. The changes are largely based on comments submitted by industry trade organizations and the federal committee that advises PHMSA on pipeline safety matters.
On September 20th, Governor Corbett announced that he nominated Ellen Ferretti of Luzerne County as Secretary of the Department of Conservation and Natural Resources (DCNR) and E. Christopher Abruzzo of Dauphin County as Secretary of the Department of Environmental Protection (DEP). Ms. Ferretti had been serving as deputy secretary for parks and forestry until she was named interim secretary of the DCNR in June. Mr. Abruzzo was serving as Governor Corbett’s deputy chief of staff until he was appointed interim secretary of the DEP in April. The Pittsburgh Post-Gazette reports that both nominations will be subject to state Senate approval.
U.S. EPA recently revised its oil spill prevention, control, and countermeasure (SPCC) program guidance to help promote consistency in the way SPCC rules are administered by different EPA regions. The SPCC rules mandate the implementation of professionally-developed, facility-wide spill prevention plans, and apply to facilities that meet all of the following: (1) store, transfer, use or consume oil or oil products; (2) store more than 1,320 gallons in above-ground containers or more than 42,000 gallons in buried containers; and (3) have a reasonable potential to discharge oil or oil products to waterbodies or adjoining shorelines. EPA revised the program guidance in response to criticism from EPA’s inspector general. Earlier this year, the inspector general found that EPA regions lacked guidance or direction on coordinating regional responses to oil spills. The regulated community may comment on the revised guidance. Additional information is available here.
West Virginia Senate President Jeff Kessler is leading the drive to create an oil and natural gas trust fund named the “Future Fund” that would support education, economic development or tax relief decades from now, reports the Global Post. Kessler recently led a group of West Virginia lawmakers to visit North Dakota, where 30 percent of oil and gas tax collections are placed into the state’s Legacy Fund, which cannot be spent until 2017. Kessler indicated that he would like to present the Future Fund proposal as a constitutional amendment in January 2014, stating that he believes that constitutional protections would lock down the fund from lawmakers and interest groups that would like to spend the money prematurely.
The Pennsylvania Department of Environmental Protection will publish its final technical guidance document “Addressing Spills and Releases at Oil & Gas Well Sites or Access Roads” in the September 21, 2013 Pennsylvania Bulletin. The proposed Spill Policy was originally published in the April 14, 2012 Pennsylvania Bulletin for public comment, and the Department’s responses to the 67 comments from 12 commentors are included in a Comment and Response document published on the Department’s website today. The final Spill Policy is effective as of September 21, 2013.
WFMJ reports that State Sen. Jim Ferlo (D-Allegheny) announced that he will introduce Senate Bill 1100 next week, which will place a moratorium on new permits for hydraulic fracturing. The bill, known as the Natural Gas Drilling Moratorium Act, will also seek to create a commission to analyze the agricultural, economic, environmental and social effect of Marcellus Shale drilling. WESA indicates that such a commission would be comprised of seven individuals from various backgrounds, including a nonprofit environmental organization, an academic institution, the oil and gas industry, a geologist, a medical or public health expert, the Pennsylvania Secretary of Environmental Protection and the Pennsylvania Secretary of Conservation and Natural Resources. The bill would halt any new permits for natural gas drilling. StateImpact reports that the bill does not provide a time limit on the proposed moratorium.
The Bowling Green City Council unanimously passed an ordinance banning “fracking” and the disposal of waste fluids within the city limits. In an apparent move to side-step the authority of the Ohio Department of Natural Resources, which maintains authority to issue drilling permits throughout the state, Bowling Green’s ordinance is part of the city’s criminal code instead of its zoning code. It is unknown whether Bowling Green’s new ordinance will face a legal challenge because it is well outside of the established Utica shale play.
EQT Corporation and Green Field Energy Services announced on Monday that they had achieved a major milestone in the hydraulic fracturing field. Using pumps powered entirely by “field” gas, or gas supplied from a separate (and previously drilled) natural gas well, Green Field successfully completed multiple stages in the hydraulic fracturing process on lands leased by EQT Corp.
What this means for the industry is a potentially cleaner method of operating some of the machinery necessary in the hydraulic fracturing process. Rather than relying on diesel-powered trucks and pumps, Green Field’s Turbine Frac Pump technology uses natural gas, a cleaner and more environmentally friendly fuel than diesel. Steve Schlotterbeck, Senior VP and President of EQT Exploration and Production noted that this new technology allows companies to “reduce emissions of carbon monoxide, carbon dioxide, nitrogen, and sulfur oxides; as well as decrease the amount of truck traffic on local roads.”
EQT began a program in 2012 to convert a number of their drilling rigs to natural gas-powered rigs, and so far four such rigs have been converted.
An environmental advocacy group reportedly filed a lawsuit against the New York Department of Health on September 13, 2013, seeking to force the release of documents related to the agency’s public health review of hydraulic fracturing. The Seneca Lake Pure Waters Association filed the action after the Department of Health rejected the group’s earlier request to obtain the documents under the State Freedom of Information Law. Groups on both sides of the debate on whether the state’s hydraulic fracturing moratorium should be lifted have criticized the lack of transparency in the Department of Health’s public health review. Currently the State has no timetable for completion of the public health review.