Friday, March 30, 2018

Global Shale Law Compendium: Shale Law Governance in Pennsylvania – Regulations from 2008 to 2010

Written by Chloe Marie – Research Fellow

The Global Shale Law Compendium series addresses legal developments and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will focus on the legal, policy, and governance issues related to shale gas development in the United States, and more specifically in the state of Pennsylvania.

In prior articles, we reviewed statutes applicable to unconventional oil and gas development that were enacted in Pennsylvania during the time period from 2010 through 2012, and from 2013 to 2016, as well as fiscal legislation adopted from 2009 to 2017. This article will address shale-related regulations that were promulgated from 2008 to 2010. In two subsequent articles, we will address regulations promulgated from 2011 to 2014, and from 2015 to 2018.

·         Regulatory activity in 2008

On January 12, 2008, the Environmental Quality Board (EQB) proposed to amend Chapter 93 relating to water quality standards as part of the federally-required triennial review of water quality standards under the Federal Clean Water Act. The proposed amendments called for a merger of sections of Chapter 16 relating to water quality toxics management strategy, including criteria tables, into Chapter 93 in order to reinforce the Commonwealth’s water quality standards. In addition, the amendments involved changes in definitions as well as specification and clarification of the water quality criteria in general. See PA Bulletin, Vol. 38, No. 2, January 12, 2008, pp. 236 et seq.

 On April 12, 2008, the Department of Environmental Protection (DEP) announced the availability of the Erosion and Sediment Control General Permit (ESCGP-1) for earth disturbance activities resulting from oil and gas exploration, production, processing or treatment operations or transmission facilities. The availability notice provided that the ESCGP-1 was set to expire on April 12, 2013. See PA Bulletin Vol. 38, No. 15, April 12, 2008, pp. 1781

In a notice dated October 11, 2008, DEP introduced changes to the well permit application for Marcellus Shale gas well development. DEP explained that, as of the issuance date of this notice, permit applicants were required to use the revised “Application Addendum for Marcellus Shale Gas Well Development” in addition to the conventional well permit application. See PA Bulletin, Vol. 38, No. 41, October 11, 2008, pp. 5720

In an order dated November 15, 2008, the EQB added a new Chapter 110 entitled water resources planning as mandated by the Water Resources Planning Act (27 Pa. C.S. Chapter 31). This new chapter provides regulations for water withdrawal and use registration, monitoring, recordkeeping and reporting requirements intended to further enhance water resources planning. See PA Bulletin, Vol. 38, No. 46, November 15, 2008, pp. 6266 et seq.

·         Regulatory activity in 2009

On January 31, 2009, DEP provided additional modifications to the existing well permit application for Marcellus Shale gas well development due to a recent revision of the Application Addendum, which provide further explanation of impoundment requirements and support information. See PA Bulletin Vol. 39, No. 5, January 31, 2009, pp. 641

On February 7, 2009, DEP issued a notice of intent to implement an NPDES General Permit for Stormwater Associated with Mining Activities (BMR GP-104). DEP stated that this General Permit would apply to earth disturbance activities resulting from coal and noncoal mining operations, provided that the discharge associated with such operations merely is composed of stormwater. See PA Bulletin, Vol. 39, No. 6, February 7, 2009, pp. 734

In a notice of proposed rulemaking dated February 14, 2009, EQB proposed to add provisions requiring a new fee schedule for the administration of oil and gas well permits in Chapter 78, Subchapter B. EQB justified these amendments by an increase in the number of permit applications, mostly due to the development of Marcellus shale in Pennsylvania. EQB stated that a “regulatory fee increase is needed to provide the [DEP] with the resources to perform the additional work associated with the review of Marcellus Shale gas well permit applications and with the oversight of any permits that are issued.” See PA Bulletin, Vol. 39, No. 7, February 14, 2009, pp. 838 et seq.

On April 18, 2009, EQB issued a notice of final rulemaking concerning the establishment of a new Marcellus Shale permit fee. The final rulemaking provided for a base permit fee in the amount of $900 with an additional $100 for every 500 feet the well bore extends beyond 1,500 feet. See PA Bulletin, Vol. 39, No. 16, April 18, 2009, pp. 1982 et seq.

On May 16, 2009, DEP gave notice of the adoption of amendments of Chapter 93 relating to water quality standards. The amendments included an update of the water quality criteria, addition of new definitions, and the removal of the water quality criterion for molybdenum (Mo). See PA Bulletin, Vol. 39, No. 20, May 16, 2009, pp. 2523

In a notice of proposed rulemaking dated August 29, 2009, EQB proposed to amend Chapter 102 relating to erosion and sediment control and stormwater management in order to provide new erosion and sediment permitting requirements for oil and gas activities associated with earth disturbance. See PA Bulletin, Vol. 39, No. 35, August 29, 2009, pp. 5131 et seq.

On October 24, 2009, EQB announced modifications in the final-form rulemaking regarding Chapter 78 amendments. The modifications include additional definitions for Marcellus Shale well, non-vertical well and vertical well and supplemental information relating to Marcellus Shale well permit fee. See PA Bulletin, Vol. 39, No. 43, October 24, 2009, pp. 6232 et seq.

EQB issued a proposed rulemaking notice on November 7, 2009, proposing to amend Chapter 95 relating to wastewater treatment requirements. The proposed amendments prohibited new discharges of wastewaters containing High Total Dissolved Solids (TDS) resulting from any direct source or site of fracturing, production, field exploration, drilling, or well completion; however treated discharges may be allowed based on specific requirements. See PA Bulletin, Vol. 39, No. 45, November 7, 2009, pp. 6467

·         Regulatory activity in 2010

In an advanced notice of proposed rulemaking dated January 30, 2010, DEP sought public comments on proposed amendments of Chapter 78 relating to oil and gas wells. DEP introduced further measures to update and modify existing performance testing and design requirements regarding the drilling, casing, cementing, testing, monitoring and plugging of oil and gas wells, and the protection of water supplies. See PA Bulletin, Vol. 40, No. 5, January 30, 2010, pp. 623

On February 13, 2010, EQB proposed to eliminate 25 Pa. Code Chapter 92 relating to NPDES permitting, monitoring and compliance and replace it with a new Chapter 92a for reorganization purposes. This reorganization was justified by a need to be consistent with Federal regulations set out in 40 CFR Part 122 relating to EPA administered permit programs and NPDES. More precisely, the amendments included a new NPDES permit fee structure, among other things, and provisions regarding exclusion from permit requirements for oil and gas activities were meant to be deleted. See PA Bulletin, Vol. 40, No. 7, February 13, 2010, pp. 847

On July 10, 2010, DEP issued a formal notice of proposed rulemaking to amend Chapter 78 following receipt of public comments that resulted from the advanced notice published in January 2010. Additional issues were raised about Marcellus shale gas development and, in this regard, DEP proposed to clarify operator responsibilities and requirements pertaining to the construction and operation of wells for water protection purposes. The proposed regulation stated that “if the existing supply did not meet safe drinking water standards, the operator shall supply a water source that is as good as the preexisting supply.” See PA Bulletin, Vol. 40, No. 28, July 10, 2010, pp. 3845 et seq.

On September 18, 2010, DEP proposed to review the General Plan Approval and Operating Permit BAQ-GPA/GP-5 for Natural Gas, Coal Bed Methane or Gob Gas Production or Recovery Facilities. The amendments provided changes in emissions limits for air pollution sources, permitting requirements, fee schedule, and compliance with new source performance standards and national standards for hazardous air pollutants. See PA Bulletin, Vol. 40, No. 38, September 18, 2010, pp. 5387

On October 9, 2010, EQB published a notice of final rulemaking eliminating Chapter 92 and relocating it within Chapter 92a. The final rulemaking amendments include the revision of “Best Management Practices” definition, further treatment requirements regarding new or changed water quality standards, and elimination of references to the permits-by-rule, among other things. See PA Bulletin, Vol. 40, No. 41, October 9, 2010, pp. 5767 et seq.

On October 16, 2010, DEP announced the availability of Final NPDES General Permit for Stormwater Associated with Mining Activities (BMR GP-104). This General Permit applies to earth disturbance activity of 1 acre or more resulting from coal and noncoal mining operations as long as the discharge triggering earth disturbance merely is composed of stormwater.  See PA Bulletin, Vol. 40, No. 42, October 16, 2010, pp. 6040 et seq.

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