Wednesday, February 28, 2024

DEP: Oil & Gas Regulatory Program Will Be In The Red By Fall; All Sectors Greenhouse Gas Reduction Program No Go; Update On Permitting Reform

On February 28, DEP Interim Acting Secretary Jessica Shirley told the House Appropriations Committee funding for DEP’s Oil and Gas Regulatory Program will be in the red by Fall and an “all sectors” greenhouse gas reduction program will not be recommended to implement the PA Climate Change Action Plan.

She also gave an update on DEP’s initiative to speed up its permit review programs.

For the first time, the House held a hearing on the Governor’s budget requests for both DEP and DCNR at the same hearing.

Click Here to watch a video of the nearly three and a half hour hearing.

Click Here for a copy of DEP’s written budget testimony.

Here is a quick summary of three of the key issues raised during questioning of DEP--

-- Oil & Gas Regulatory Funding Will Be In The Red By Fall: In response to questions from Rep. Martin Causer (R-Cameron), Minority Chair of the House Environmental Committee, about $11 million proposed in the budget for DEP’s Well Plugging Fund, Shirley said, “So the $11 million, it's kind of a misnomer. It's not actually for well plugging, but it will go to the well plugging fund. 

“[The Fund] sustains our Oil and Gas Program, all of our oil and gas operations, and if we don't receive $11 million in funding, our well plugging fund, which supports our entire oil and gas program, will go in the red by this fall.”

In separate questioning by Rep. Greg Vitali (D-Delaware), Majority Chair of the House Committee, outlining staffing shortfalls in several DEP programs, he said, “Full complement [in the Oil and Gas Program] according to DEP, about a year or two ago is 226 positions. 

“Currently, I'm informed by the oil and gas program, you're down to 171. So you're down 55 positions in the Oil and Gas Program. 

“Your December 2022 report [on conventional well drilling] outlined a practice among the conventional drillers of routinely abandoning their conventional gas wells, failing to report production, spreading of roadside brine. A previous, not current, but previous Oil and Gas Program head publicly stated at the meeting that you're failing in your mission.”

“I don't think it's done an adequate job of addressing the staffing shortfalls of the DEP, the chronic staffing shortfalls that have existed for many years.”

Shirley responded, “I would just say that we fully acknowledge that the department has been significantly under invested in over a long period of time. 

“I think when you look back from 2007 until now, there was a very long period of time where there was no additional investment and if anything, additional cuts to the department. 

“We've seen our staff decrease. 

“We've also steadily seen some of that start to come back, and this budget also increases the department staff through a number of our requests.”

“I don't know that we would be able to get to those full amounts over one year that we were at previously in 2007.”

-- All Sector Carbon Trading Program No Go: In response to a question, Shirley ruled out having an “all sectors” cap and invest program for all sectors of the economy to reduce greenhouse gas emissions in the state to implement the PA Climate Change Action Plan.

The all sectors program was recommended as an initiative during a presentation at the February 20 DEP’s Climate Change Advisory Committee. Read more here.

“It's not something that the administration supports at this time,” said Shirley.  “We have a contractor that helps us to develop the climate action plan, does modeling and things for us. 

“What they did was look at what other states across the country have done to reduce greenhouse gas emissions in their states, and just put it as a menu of options for discussion for the Climate Advisory Committee. 

“It wasn't something that we're pushing. It was just a discussion point.”

-- Update On 10 Point Permit Process Improvement Plan: In response to questions on the 10 Point Permit Plan outlined at the 2023 budget hearings, Shirley said “There are parts of the plan I think that will achieve greater efficiencies and we're choosing to focus on those. 

“I will tell you that in the last year, we created some pilot programs specifically to look at expedited review, where we allowed applicants to pay a larger fee to be able to have their permits reviewed at the front of the line. 

“That larger fee was to go to pay overtime resources for our staff to be able to review those permits in overtime on an overtime plan. 

“What we found is that we had no takers to that expedited review process. 

“I think we decided to maybe shift over to really focusing more on how we can improve our own processes internally.

“We went through a project jumpstart, which is what we called it, where we pulled together our experts, our internal experts, our field staff who are using the [Chapter] 102 [Erosion and Sedimentation] and [Chapter] 105 [Obstructions & Encroachment] permits. 

“These are our most popular permits. We said, where are there areas to achieve permit improvement efficiencies? Where can we touch the permit less, review the permit smarter? 

“That's where I think the payback program comes in, because instead of reviewing a permit maybe two times, we're only reviewing it once because it's all one review. It's not a disjointed completeness review and then a technical review. 

“Out of that is what actually spawned our pilot program with the county conservation districts that we believe if implemented correctly, will cut 73 days off of a permit timeline that currently takes 176 days. It cuts it down to 103 days.”

Acting DEP Executive Deputy Secretary Ramez Ziadeh noted, “Individual permits require a public notice and a 30 day comment period that is required by law. That is accounted for within the 103 days that she just mentioned.

“We can't really do away with that. That's required by law. We have to go through that process, and we have to respond to any comments that we receive and consider those comments before we take final action on that authorization,” said Ziadeh.

Interim Acting Secretary Shirley continued, saying “We have a couple different permits. You'll probably hear of [General Permits] PAGO-1, a PAGO-2, [and] an individual permit, those types of things. 

“But, what we found out of that project jumpstart process, I'm just going to give you an example. 

“80 to 90% of our [Chapter] 102 [Erosion & Sedimentation permits], which is are earth moving permits, applicants use a PAGO-2 [General] permit. 

“A PAGO-2 permit is between one and 100 acres of earth moving. It takes the department one week to review one of those permits. 

“However, 40% of those permits that come in the door are actually eligible for a PAGO-1 [General] permit, which is one to five acres. 

“These are much smaller and that takes us one day to review. 

“If we are limiting [guiding applicants to] the type of permit that they can use, we think that the reason that they do this is consultants, because they can charge more to use a PAGO-2 permit instead of a PAGO-1. 

“We'll be able to review five permits in the same time that it currently takes us to review one just by putting them in the correct permit type.

“But, those PAGO-1 and PAGO-2 are general permits. They do not require public comment and they take significantly less time.

“We have 800 different permits within the department. We are focusing on the permits that are the highest utilized permits, the ones that are most popular, the ones that we know are taking the longest to do or where we think we can get the most efficiencies. 

“But, at the same time that we're focusing on the [Chapter] 102 and [Chapter] 105 permits, we're also asking our programs to look at each of their individual permits as well, improve their standard operating procedures, reduce the amount of touches that they have on their permits, and improve their permitting processes.”

In response to a follow-up question about when the 10-Point Program will be done, Interim Acting Secretary Shirley said, “I don't think it'll be done, especially because, and I'll just say this. A lot of this hinges on the IT [information technology] modernization. 

“We are asking for $7 million this year. That is a drop in the bucket for what it is going to actually cost. 

“When we created eFACTS in 1994, it cost [$6 million] in 1994 IT costs [which equals $12.4 million in today’s dollars]. It's $7 million this year that we're asking for where we're going to be focusing on the [Chapter] 102 and [Chapter] 105 permits.

“But then, over time we're going to continue to add additional permits into that program, which will then be a full scale program for the department through, not only allow applicants to be able to apply what I'm envisioning and calling TurboTax for DEP, some yes/no questions, auto-populate some things, tells you what kind of permit you need, makes it really simple for folks to use. 

“But then, as a full scale workflow management tool for us, for the department to be able to monitor how long it's taking folks to work on permits, where the permit is in line, and then putting that information back out online for folks to be able to see, where is my permit? 

“I submitted my tax return this weekend. I know that the IRS has accepted it and it's under review. We want to create something very similar for DEP. I told you I can talk about this a lot.”

[Note: Ramez Ziadeh said on February 21 that since the state’s PAyback Money Back Permit Review Guarantee Program started on November 1, 2023, no applicant for a DEP permit in the program has requested their permit application fee back.  Read more here.]

Click Here to watch a video of the nearly three and a half hour hearing.

Resource Links:

-- DEP Testimony Provides Overview Of Budget Request, Progress On Permitting, Environmental Justice, Infrastructure Investments, PFAS, Watershed Cleanup, Climate, Clean Energy Initiatives  [PaEN]

-- Click Here to watch a video of the House budget hearing. 

-- Click Here to watch video of the Senate budget hearing

-- DEP Legislative Budget Hearing Materials

-- DCNR Budget Testimony Reviews Funding Requests, Need For Continued Investment In Recreation, Natural Resources, Workforce Development  [PaEN]

-- DCNR FY 2024-25 State Budget Legislative Materials

-- Gov. Shapiro’s Proposed 2024-25 Budget Includes DEP Permit Modernization Initiative, Expands PFAS ‘Forever Chemical’ Testing; Expands DCNR Trails Program, PA Outdoor Corp  [PaEN]

Related Articles This Week:

-- DEP: Oil & Gas Regulatory Program Will Be In The Red By Fall; All Sectors Greenhouse Gas Reduction Program No Go; Update On Permitting Reform  [PaEN]

[Posted: February 28, 2024]  PA Environment Digest

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