Thursday, June 26, 2014

Analysis: What Regulations Apply To Oil & Gas Wells, Drilling In PA If These Bills Pass?

The Senate and House Environmental Committees this week reported out Senate Bill 1378 (Scarnati-R-Jefferson) and House Bill 2350 (Causer-R-Cameron) that their sponsors initially said were to make a logical separation of administrative, construction and environmental protection requirements between conventional and unconventional (Marcellus Shale) oil and gas wells.
But statements by the prime sponsors at the Committee meetings have raised red flags.
“We erred in including conventional oil and gas wells in Act 13,” said Sen. Joe Scarnati (R-Jefferson), prime sponsor of Senate Bill 1378, at the Senate Environmental Committee meeting Wednesday. “The intent (of this bill) is to take conventional wells back out of Act 13.”
“Conventional wells are shallow and have significantly smaller well pads. Their overall impact on the surrounding environment is far less than that of deep, Marcellus wells,” said Rep. Martin Causer (R-Cameron), prime sponsor of the House Bill. “Both types of drilling will continue to be regulated under this bill, but by differentiating between the two, we can protect against over regulation that could eventually drive shallow well producers out of business.”
What Standards Apply Then?
If the intent of the bills is to remove or “differentiate” conventional well regulatory requirements of Title 58 regulating oil and gas operations, the basic law that requires regulation of oil and gas well development, what requirements do apply to each kind of well?
Section 4 of both bills says--
“General rule.-- Proposed regulations and regulations promulgated by the Environmental Quality Board under 58 Pa.C.S. (relating to oil and gas) or other laws of this Commonwealth relating to conventional oil and gas wells or unconventional gas wells shall differentiate between conventional oil and gas wells and unconventional gas wells.”
Under existing law, the permit, well construction, environmental setbacks, bonding, enforcement and other requirements of Title 58 covered both kinds of wells.
If the intent is to take conventional wells out of Title 58 or to “differentiate” the requirements, do any of these apply?  Just some? Or to what extent?
The choice of what applies and what doesn’t is left to the Environmental Quality Board and the Department of Environmental Protection in the rulemaking process under Senate Bill 1378 and House Bill 2350.
New Ability To Challenge Regulations
Once those decisions are made in the rulemaking process, however, the language in both bills gives the conventional and unconventional oil and gas industry a new legal right to challenge the determinations made by the EQB and DEP, not just on the substance-- what is a reasonable setback from a stream or wetland or reasonable well construction standards, but also on whether the requirement should even apply to a conventional or unconventional well.
These are significant questions that should be answered before the Senate and House rush to take final action on either bill.

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