Wednesday, June 1, 2011

DEP Recommends Higher Penalties, Better Buffers, Drilling Wastewater Manifests

The Department of Environmental Protection last week gave members of the Governor's Marcellus Shale Advisory Commission a set of recommended changes to the Oil and Gas Act to consider, including higher penalties, larger buffer areas and requiring cradle to grave drilling wastewater manifests.
"The amendments embody Gov. Corbett's concepts to improve (the Oil and Gas Act), as well as some improvements needed that have come to our attention as we regulate the natural gas industry," said DEP Secretary Mike Krancer. "We believe the suggested amendments will provide DEP with additional tools to ensure that natural gas is extracted in a safe and environmentally protective manner in Pennsylvania."
The recommendations include:
-- Expending an operator's presumptive liability for pollution from 1,000 to 2,500 feet and from six months to one year. The presumption would include pollution caused by drilling, altering or fracking a well;
-- Require operators to provide a notice and copy of a well plat to property users and host municipalities within 2,500 feet of a proposed well;
-- Increase the private well distance restriction from 200 to 500 feet, unless waived by owner;
-- Restrict well drilling from within at least 1,000 feet of a public water supply, unless waived by owner;
-- Add a prohibition for locating a well site in floodplains;
-- Require cradle to grave manifesting of frack wastewater from high volume wells (more than 80,000 gallons used in the fracking process);
-- Increase the current well bonding amounts from the existing $2,500 per well with cap of $25,000 to a minimum of $10,000 per well of over 6,000 feet in depth up to different caps based on the number of wells owned by the operator as outlined in Senate Bill 602 (MJ White-R-Venango) and providing an opportunity to revisit bonding levels in future years;
-- Authorize DEP to revoke an operator's well permit if the operator has failed to comply with any provision of the Oil and Gas Act and is not correcting violations to the satisfaction of DEP or has shown a lack of ability or intention to comply with any provision of the Act;
-- Authorize DEP to withhold new permits or permit renewals if the operator failed or continues to fail to comply with any provision of the Oil and Gas Act and is not correcting violations to the satisfaction of DEP or has shown a lack of ability or intention to comply with any provision of the Act or if the applicant has a related entity (including subsidiary corporation, contractor or subcontractor) engaged in unlawful conduct under the Act;
-- Authorize DEP to impose penalties, removing the requirement the Environmental Hearing Board assess penalties, and provide for the right to appeal penalties to the EHB;
-- Increase civil penalties up to $50,000, plus $2,000 for each day of continued violation;
-- Increase criminal penalties consistent with other state environmental laws;
-- Add a provision requiring those charged with a violation to pay the penalty within 30 days or put the amount in an escrow account or post an appeal bond;
-- Authorize DEP to develop a well operation permit so entities can adopt orphaned or abandoned wells (the agency's previous authority was struck down in a court case);
-- Authorize DEP, by regulation, to condition a well permit based on its assessment of the impact to public resources; and
-- Provide DEP with authority to enter into contracts with well control specialists in order to provide adequate emergency response in the event of a well control emergency, add a provision holding well control specialists free from all damages arising from their operations, and allow DEP to seek cost recovery from operators where DEP is required to employ well control specialists.
A copy of the DEP recommendations is available online.
The next meetings of the Governor's Commission work groups will happen the week of June 6. The full Commission meets again on June 17. The Commission must complete its work by July 22.

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