Friday, January 26, 2018

Re-Write Of Oil & Gas Act For Conventional Drillers Returns To 1984

Sen. Scott Hutchinson (R-Venango) Monday circulated a co-sponsor memo to colleagues asking them to sign on to a re-write of the Oil and Gas Act to specifically apply to only conventional oil and gas drillers.  The draft is based on the Oil and Gas Act passed in 1984.
The existing Act 13 would then apply only to unconventional oil and gas drilling.
The draft of the legislation was discussed at length at the PA Grade Crude (Oil) Development Advisory Council meeting on Thursday in Indiana.
“In the near future I plan to introduce legislation that would re-enact the Oil and Gas Act of 1984 with provisions that make it reflective of today’s conventional oil and gas industry,” said Sen. Hutchinson.
“The conventional oil and gas industry has been in Pennsylvania and contributing to our economy for more than a century and a half. With the Marcellus Shale boom and the proliferation of advanced drilling methods, a new type of oil and gas industry developed in Pennsylvania,” said Sen. Hutchinson.  “As a result, Act 13 of 2012 was passed to address some of the concerns and issues that were specific to this new unconventional industry. Although it was intended to address new issues with the unconventional industry, Act 13 also placed an unbearable burden on the much smaller conventional producers and over time has brought the conventional industry to near collapse.
“To help alleviate this, I am introducing a redraft of the Oil and Gas Act with new language designed to update or clarify old provisions where needed,” explained Sen. Hutchinson. “This will help to provide a legislative framework for regulations specific to conventional oil and gas drillers in a way that protects the environment while preserving this valuable industry.”
Click Here for a copy of the draft legislation.
Differences With 1984 Law
The draft Conventional Oil and Gas Act being circulated for comments now is based on the Oil and Gas Act adopted in 1984.  There are, however, some key differences even from that basic law--
-- Eliminates Protections For Public Resources: Section 305 of the draft omits this language from Section 205 of the 1984 law--
The department shall, on a making a determination on a well permit, consider the impact of the proposed well on public resources to include, but not be limited to, the following:
(1)  Publicly owned parks, forests, gamelands and wildlife areas.
(2)  National or State scenic rivers.
(3)  National natural landmarks.
(4)  Habitats of rare and endangered flora and fauna and other critical communities.
(5)  Historical and archaeological sites listed on the federal or State list of historic places.
The conventional oil and gas industry lost a challenge to DEP’s ability to consider impacts on public resources last June before the PA Supreme Court.  This is no doubt an attempt to correct that.  Click Here for more.
-- Drastically Increases The Threshold For Spill Reporting: New Section 1103 eliminates the requirement to report any spills less than 25 barrels of oil (1,000 gallons) or 90 barrels of brine (3,780 gallons) unless the well operator determines there is an immediate threat to public safety, health or the environment. The threshold for reporting now is 5 gallons of a regulated substance, like oil and more than 5 gallons of brine within 24-hour period.
-- Takes Away Authority For DEP To Issue Injection Well Permits: New Section 904 takes away DEP’s present authority to issue its own permit for drilling waste injection wells unless it has primacy under the U.S. EPA Underground Injection Well Program.  DEP has approved permits for 3 injections wells for drilling wastewater in Clearfield,  Elk and Indiana counties.
-- Sets New Standard For Crude Oil Spill Site Cleanup: New Section 1103 sets a new standard for crude oil spill site cleanup from active wells in law for total petroleum hydrocarbons of 10,000 mg/kg (ppm) and substitutes something called "established field practices" for cleaning up a spill rather than the methods used in the PA Land Recycling Program. The number comes from EPA’s standard for cleaning up abandoned oil and gas wells where no responsible party is found.  The PA Land Recycling Program does not have a total petroleum hydrocarbon standard because it is too imprecise.  Instead, standards are set for benzene, toluene , ethylbenzene and xylene.
-- Allows For Warnings For Violations: New Section 711 establishes a new enforcement practice of issuing warnings for violations that pose no material harm to public health or the environment, rather than just having DEP issue notices of violations to “alleviate the unwarranted use of notices of violation for minor violations.”  The warnings will be issued were compliance can be accomplished within 48 hours and cannot be used as a basis for a civil penalty when compliance is achieved.
-- Fines, Penalties, Permit, Registration Fees Go To General Fund: Section 601 of the 1984 law directed all fines, penalties, permit and registration fees for oil and gas wells to a restricted account used to pay for the administrative costs of the program.  The new Section 901 directs those monies to the General Fund where are not directly available to support the program.  This puts the Oil and Gas Program at the mercy of annual appropriations from the General Fund.  [Note: DEP’s General Fund appropriations have been cut by the General Assembly and Governors over the last decade by 40 percent leaving only fees to support environmental protection programs in many cases.] Sen. Hutchinson has separate legislation-- Senate Bill 32-- to do this same thing for the entire Oil and Gas Regulatory Program conventional and unconventional.
Click Here for a copy of the draft legislation.
(Photo: Conventional well drilling site, PA Independent Oil & Gas Association.)
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