Friday, May 11, 2018

Global Shale Law Compendium: Shale Governance in Pennsylvania – Regulations from 2015 to 2018

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 2015 to 2018. In two preceding articles, we addressed regulations promulgated from 2008 to 2010, and from 2011 to 2014.

·       Regulatory activity in 2015

On January 17, 2015, DEP amended the General Plan Approval and/or Operating Permit (BAQ-GPA/GP-5 or General Permit) for the construction, modification and/or operation of natural gas compression and/or gas processing facilities. Major modifications include the removal of the 100,000 ton per year greenhouse gas emissions applicability threshold for the use of the GP-5 as well as the clarification of the GP-5 scope to all types of natural gas-fired compressors. See PA Bulletin, Vol. 45, No. 3, January 17, 2015, pp. 370.

On April 4, 2015, DEP issued an advance notice of final rulemaking proposing, in particular, the extension of the well permit renewal from 1 year to 2 years and specifying that permits would expire unless drilling is completed within 16 months of permit issuance. In addition, DEP addressed the use of pits requirement to temporarily store waste at unconventional well sites. DEP also sought public comments on those changes. See PA Bulletin, Vol. 45, No. 14, April 4, 2015, pp. 1615 et seq.

·       Regulatory activity in 2016

On January 2, 2016, DEP required anyone involved in certain natural gas related activities in Pennsylvania to report their air contaminant emission inventories for the calendar year 2015. Source reports must be submitted to DEP no later than March 1, 2016. Thereafter, the submission deadline is March 1 of every year. Furthermore, DEP specified that natural gas related activities include, among others, unconventional natural gas development, production, transmission, processing and related activities. See PA Bulletin, Vol. 46, No. 1, January 2, 2016, pp. 67.

On October 8, 2016, the Environmental Quality Board (EQB) issued a notice of final rulemaking amending Chapter 78 relating to oil and gas wells and adding Chapter 78a relating to unconventional wells. EQB stated that “the goal of this final-form rulemaking is to set performance standards for surface activities associated with the development of unconventional wells and to prevent and minimize spills and releases to the environment to ensure protection of the waters of the Commonwealth, public health and safety, and the environment. New regulations in Chapter 78 mostly concerned wastewater and waste management and disposal standards, well monitoring for the ones located close to hydraulic fracturing activities, and reporting and remediating spills and releases requirements. See PA Bulletin, Vol. 46, No. 41, October 8, 2016, pp. 6431 et seq.

·       Regulatory activity in 2017

On February 4, 2017, DEP proposed a new General Plan Approval and/or General Operating Permit for Unconventional Natural Gas Well Site Operations and Remote Pigging Stations (BAQ-GPA/GP-5A or GP-5A). In addition, DEP proposed to review the existing General Plan Approval and/or General Operating Permit for natural gas compressor stations, processing plants and transmission stations as well as the Air Quality Permit exemption document.

The new GP-5A and GP-5 would have similar requirements, but DEP added specific requirements for the GP-5A regarding well drilling and hydraulic fracturing operations, well completion operations, and wellbore liquids unloading operations. Concerning the Air Quality exemptions document, DEP proposed to divide it into two new categories, namely Category 38a applicable only to conventional and unconventional natural gas well sites constructed or modified between August 10, 2013 and the proposed amendment’s effective date, and Category 38b applicable only to conventional natural gas well sites constructed or modified after the proposed amendment’s effective date. See PA Bulletin, Vol. 47, No. 5, February 4, 2017, pp. 733 et seq.

On October 21, 2017, EQB proposed to amend Chapter 93 as part of the Federal required-triennial review of quality standards in accordance with the Federal Clean Water Act. Among other things, EQB proposed changes concerning toxic substances and human health and aquatic life criteria for toxic substances. See PA Bulletin, Vol. 47, No. 42, October 21, 2017, pp. 6609 et seq.

On December 9, 2017, DEP announced that it would extend for 12 months the availability of the existing Erosion and Sediment Control General Permit (ESCGP-2) for earth disturbance associated with oil and gas exploration, production, processing or treatment operations or transmission facilities. See PA Bulletin, Vol. 47, No. 49, December 9, 2017, pp. 7533.

·       Regulatory activity as of March 31, 2018

On February 24, 2018, the EQB proposed to amend Chapter 245 relating to administration of the Storage Tank and Spill Prevention Program and mandate underground storage tank (UST) owners and operators to implement spill prevention, overfill prevention and release detection equipment requirements, among other things. The EQB specifies, however, that those owners and operators are not required to periodically verify the equipment functionality. See PA Bulletin, Vol. 48, No. 8, February 24, 2018, pp. 1101 et seq.

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