Thursday, December 9, 2010

Delaware River Basin Commission Issues Draft Gas Drilling Regulation

Delaware River Basin Commission Executive Director Carol R. Collier this week issued draft natural gas development regulations for public comment.
A moratorium on issuing new approvals for Marcellus Shale drilling operations has been in place since May in the Delaware River Basin and will remain in effect until these rules are finalized.
The purpose of the proposed regulations is to protect the water resources of the Delaware River Basin during the construction and operation of natural gas development projects. The draft regulations establish requirements to prevent, reduce, or mitigate depletion and degradation of surface and groundwater resources and to promote sound practices of watershed management.
According to a fact sheet on the proposal, the new rules would--
-- Development Plan: Requires the development of a Natural Gas Development Plan for any company holding 3,200 acres or more in Marcellus Shale leases or has the intent to construct more than 5 natural gas well pads.
The NGDP requirement is designed to foster protection of water resources through broad scale lease area planning rather than limited site-by-site decision making, thereby encouraging development only in areas most suitable for it and minimizing impact to sensitive water resource features. These plans identify geographic and hydrological constraints to natural gas development and identify measures to minimize those impacts.
-- Minimum Setbacks/Monitoring/Tracking: The draft rule sets minimum setbacks from water bodies, wetlands, surface water supply intakes and water supply reservoirs at distances specified in the regulations, and from occupied homes, public buildings, public roads, public water supply wells, and domestic water supply wells as provided by regulations of the state in which the well pad is located.
A requirement for pre- and post-project monitoring of surface and groundwater near well pads involving high volume hydraulically fractured wells, including a characterization of the hydrology, water chemistry and biological resources of surface waters and the water chemistry of ground waters.
Requires the monitoring, tracking, and reporting of water usage and wastewater treatment and disposal. All wastewaters must be transported to approved treatment and disposal facilities.
-- Well Construction, Operation: The Commission is relying on state oil and gas well regulatory programs to cover the construction and operation of wells. However, the Commission is separately requiring that all non-domestic wastewater be transferred to appropriate tanks for temporary storage on the well pad site or to a centralized wastewater storage facility and that fluids and drill cuttings from horizontal wellbores in the target formation be beneficially reused or disposed of at an appropriate waste facility.
In addition, the Commission is proposing to require any wastewater plant accepting wastewater produced at well sites to obtain approval from the Commission.
-- Expedited Approvals: The proposal includes an expedited permit review under an Approval By Rule process for certain projects including: (a) bulk water sales for uses related to natural gas by holders of valid Commission approvals that can provide water within their current allocations; (b) well pad projects that conform to a Commission-approved Natural Gas Development Plan; (c) well pad projects that conform to specified restrictions and setback requirements; and (d) water supply projects involving the reuse of recovered flowback and production fluids as make-up water for hydraulically fracturing natural gas wells.
In addition, projects that do not involve fracturing or that consist of well pads constructed exclusively for the development and operation of exploratory natural gas wells and that are expected to use no more than 80,000 gallons or equivalent of hydraulic fracturing fluids (“low volume hydraulically fractured wells”) are eligible for an ABR if they comply with applicable state programs and Commission setbacks and requirements.
-- Bonding: The Commission is proposing a $125,000 bond for each gas well drilled to provide financial assurance for the plugging, abandonment and restoration of natural gas wells and remediation of any pollution from gas well development activities.
A copy of the proposal is available online.
"The DRBC's action represents a good first step that is necessary to move this process forward," said DEP Secretary John nHanger. "It's important to note that these are proposed rules that are now open for public comment. It's time for the public to have their say on these matters.
"Changes may still be made before we reach a final product that is clear and enforceable. Once the comments have been addressed and changes made, the rules will be brought back to the commission for a full vote."
Secretary Hanger added that, once finalized, DRBC's rule will complement the many measures DEP has implemented to strengthen oversight of natural gas development in Pennsylvania. In the past two years, the commonwealth has more than doubled the number of DEP staff regulating the industry to 202 employees as of today.
Submitting Comments
Three public hearings will be scheduled during the 90-day comment period to receive oral testimony on the proposed rulemaking. Details will be released as soon as the dates and locations have been confirmed.
Written comments will be accepted through the close of business March 16 by two methods only: electronic submission using a web-based form available on the DRBC website (preferred method); or paper submission mailed or delivered to: Commission Secretary, DRBC, P.O. Box 7360, 25 State Police Drive, West Trenton, NJ 08628-0360.
Please include the name, address, and affiliation (if any) of the commenter. Paper submissions also will be accepted at the three public hearings.
Due to the expected volume, comments that are faxed, telephoned, or emailed to individual DRBC Commissioners and staff will not be accepted for the rulemaking record.
All written comments submitted via the two methods described above that are received prior to the comment deadline, along with oral testimony presented at the hearings will become a part of the rulemaking record and be considered by the Commissioners prior to any action on the proposed regulations. Such action will be taken at a duly noticed public meeting of the Commission at a future date.
The Commission thanks the National Park Service for allowing the use of its Planning, Environment and Public Comment online system to facilitate the electronic submission of written comments on this proposed rulemaking.

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