On Monday DEP issued its 2015 Annual Report on the Oil and Gas Regulatory Program which once again shows the number of violations by conventional oil and gas well drillers far exceeds the number of violations by unconventional (Marcellus and Utica Shale) drillers.
The report also shows a dramatic decrease in the number of new well permits issued by DEP (which affects revenue DEP needs to support its program), a decrease in the number of new wells drilled (which affects the revenue collected under the Act 13 drilling impact fees), and another increase in natural gas production.
Compliance
From 2010 through 2015, the number of violations for unconventional wells decreased from 1,280 to 404. The decrease from 2014 to 2015 was 425 to 404.
The number of violations for conventional wells decreased from a high of 2,092 in 2011 to 1,024 in 2015. The change from 2014 to 2015 show a reduction from 1,464 to 1,024.
The longer term trend represents a 67 percent reduction in violations during this five-year period for unconventional wells and 51 percent reduction for conventional wells during this four-year period.
DEP conducted 34,604 inspections of conventional (13,556), unconventional (13,186) and well site and administration (7,862) in 2015. That total is up from 26,940 in 2014.
DEP said, “Although the total number of violations continue to decline, the graph shows (photo) that the number of violations at conventional wells consistently exceeds the number of violations at unconventional wells.”
DEP said it is “committed to vigorously pursuing enforcement actions as warranted and to encouraging operators to come into compliance with environmental laws and regulations.”
DEP said to improve the efficiency of its inspection program, it is deploying tablet computers for all oil and gas inspectors to enable them to capture the results of inspections in real time and to reduce operating costs.
There were $3.4 million in fines and penalties collected by DEP in 2014, down from a record $7.1 million in 2014, but up from $2.5 million in 2013.
For the first time since 2009, DEP reports there were no new confirmed cases of natural gas migration, although it did investigate 24 complaints of gas migration.
Gas migration is usually caused by problems in the casing and cementing of wells as the are being drilled or completed. DEP credits updated well and reporting standards for the decrease in cases.
DEP confirmed 86 cases of gas migration between 2009 and 2015-- 47 from conventional wells and 36 cases from unconventional wells.
Click Here for an updated list of water supplies determined to be affected by oil and gas drilling. Click Here for a list of hydrogen sulfide special caution areas caused by oil and gas drilling.
New Wells
The reports shows the number of new unconventional drilling permits issued by DEP in 2015 dropped by more than one-third to 2,081 and the number of conventional wells by nearly two-thirds-- 439. Click Here for an interactive map of gas well locations. Click Here for detailed report on permits issued.
The highest number of unconventional well permits were issued in Washington, Greene, Susquehanna, Bradford and Butler counties. Warren, McKean, Venango, Forest and Lycoming counties lead in new conventional well permits.
DEP said in the report it is evaluating its oil and gas well permit fee structure in light of the decline in the number of new well permits and will make a recommendation on revisions to the Environmental Quality Board.
The number of new wells drilled also decreased significantly in 2015.
There were 785 unconventional wells drilled in 2015 , versus 1,372 in 2014. There were 285 conventional wells drilled in 2015 while 789 were drilled in 2014.
This decrease in new wells will have a significant impact on the revenue derived from the drilling impact fees because newer wells, if produced, yield much more natural gas than older wells as recent reports have shown.
Did you know DEP can send you email notices of permit applications submitted in your community through its eNotice system. Click Here to sign up.
Natural Gas Production
DEP reported more than 4.6 trillion cubic feet of natural gas were produced in Pennsylvania by unconventional gas wells in 2015, an increase of 561 million cubic feet from 2014. About 1 trillion cubic feet of natural gas produced from unconventional wells in 2011.
Currently, Pennsylvania is the second largest supplier of natural gas in the nation.
“As our report shows, despite the reduction in the number of natural gas wells that were drilled in PA during 2015, the overall volume of natural gas produced continued to increase to a record level,” said Acting Secretary Patrick McDonnell. “We will continue to work with all of our stakeholders to balance the needs of our new energy economy with the imperative that we protect our resources.”
Click Here for copies of oil and gas well production reports.
Methane Reduction
DEP said it will implement the new methane emission reduction standards for the oil and gas industry during 2016 covering well sites, processing facilities, compressor stations and along pipeline routes.
Also noted in the report were--
-- Abandoned Well Plugging: DEP reported it safely plugged 38 abandoned and orphaned oil and gas wells in 2015 bringing the total plugged since 1989 to 3,036. DEP has an inventory of 8,363 abandoned and orphaned wells. Click Here for the DEP inventory of abandoned and orphaned wells.
DEP noted limited funding for well plugging limiting the number of wells the agency can plug each year.
-- Pipeline Infrastructure Task Force Report: With respect to the recommendations made in the report of the Pipeline Infrastructure Task Force report in February, DEP says only, “recommendations that fall within the purview of Commonwealth agencies will be further assessed and evaluated for possible implementation. Industry and other agencies are encouraged to do the same for recommendations that lie within their purviews.”
-- Radiation Risks From Natural Gas: The report also noted the publication of the final report on potential radiation hazards from the production and use of natural gas in Pennsylvania that concluded there is “little or limited potential” for additional radiation exposure to the public or workers due to the development, production, transmission, processing, storage or end use of natural gas.
-- Seismic Monitoring Network: DEP and the Department of Conservation and Natural Resource collaborated on an enhanced statewide seismic monitoring network to better identify and understand seismic events that may occur from, among other reasons, unconventional drilling activity.
-- Area Of Review Technical Workgroup: DEP convened a technical workground in October of last year to address the complexities associated with implementing the Area Of Review provisions of the updated Chapter 78a drilling regulations. DEP said it expects the report to be published this year for public comment.
-- Electronic Reporting: DEP said it is making progress in developing and implementing electronic reporting systems for well completion and for well records as well as a system for tracking complaints from the public on water supplies affected by drilling.
A copy of DEP’s 2015 Annual Oil And Gas Report is available online.
Copies of many other reports produced by DEP’s Oil and Gas Program are available on the Oil and Gas Reports webpage.
For more information on the regulatory program, visit DEP’s Office of Oil and Gas Management webpage.
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Independent Fiscal Office: Drilling Impact Fee Revenue Projected To Decline Thru 2018
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