The Department of Environmental Protection Wednesday released the final version of its Chapter 78 (conventional) and Chapter 78A (unconventional-- Marcellus Shale) oil and gas drilling regulations it has submitted to the Environmental Quality Board for consideration on February 3.

The regulatory package-- over 2,500 pages-- is available on the EQB webpage.  The package includes the Executive Summary, Preamble, Final Regulation, Comment/Response- Part 1 (original comment period), Comment/Response- Part 2 (advanced notice of final rulemaking),  Regulatory Analysis Form, 1-Page Summaries and a Regulation Fact Sheet.

Comments by the Conventional Oil and Gas Advisory Committee and comments by the Oil and Gas Technical Advisory Board are also available.

“These regulatory changes are balanced, incremental and appropriate; protecting public health while enabling responsible drilling to proceed,” said DEP Secretary John Quigley. “These rules are a long time coming -- more than 4 years -- and were written with an unprecedented amount of public participation and transparency.  We’ve worked hard to ensure that the health and safety of our citizens are protected, and the needs of industry are being met.”

Quigley said the amendments to the oil and gas regulations address surface activities at well sites, and center on five core areas:

— Improve protection of water resources,

— Add public resources considerations,

— Protect public health and safety,

— Address landowner concerns, and

— Enhance transparency and improve data management.

“It’s important to emphasize the role of the public and stakeholders in this process. Across a dozen public hearings, two public comment periods that attracted almost 28,000 comments, and 20 meetings with the Oil and Gas Technical Advisory Board and Conventional Oil and Gas Advisory Committee, this has been an exercise in transparency in rulemaking,” said Quigley.

“These rules present a distinct, substantive separation of regulatory provisions applicable to conventional and unconventional wells. They will allow the oil and gas industries in Pennsylvania to continue to flourish, while adding additional common-sense environmental and public health safeguards,” he added.

Here are a few differences between the regulations for unconventional (Marcellus Shale) and conventional drilling--

-- Use of pits to store drilling wastes: The unconventional industry will be prohibited from utilizing pits to store drill cuttings and waste fluids. The conventional industry will continue to be able to use pits that are less than 3,000 square feet and store less than 125,000 gallons of fluid under a permit by rule. Larger pits will require an individual permit.

-- Disposal of drill cuttings: The unconventional industry will be required to obtain an individual permit to dispose of drill cuttings at the well site. This practice is permitted by rule for the conventional industry and no changes to this practice are proposed through this rulemaking.

-- Secondary containment at well sites: The unconventional industry will be required to employ secondary containment around all storage vessels, trucks used to store pollutional substances and drill rigs. Secondary containment is only required at new, replaced or refurbished brine tanks at conventional sites.

-- Gathering lines: The unconventional rules contain new sections on gathering line construction and horizontal directional drilling beneath streams. The conventional rules do not contain these sections.

-- Temporary pipelines: The unconventional rules contain a new section on the installation and use of temporary lines used to transport fresh water and wastewater. The conventional rules do not contain this provision.

-- Water management plans: The unconventional rules require operators to obtain a water management plan before they withdraw water for hydraulic fracturing purposes. The conventional rules do not contain this requirement.

-- Beneficial use of brine: Conventional operators have the ability to beneficially use their brine for dust suppression and de-icing purposes. Waste fluid from unconventional wells may not be used.

-- Reporting: Unconventional operators must report their product (gas and condensate) and waste on a monthly basis. Conventional operators must report annually.

Industry Reaction - Unconventional Drillers

Marcellus Shale Coalition president David Spigelmyer issued the following statement regarding the Department of Environmental Protection’s release of its final rulemaking regarding oil and gas operations:

“Pennsylvania is already well-recognized for having among the nation’s strongest and most effective environmental and enforcement standards, which the industry has worked hard to modernize.  Unfortunately, DEP failed to consult with the industry regarding its comprehensive comments, as well as to better understand the cost of compliance with this rulemaking as they had done with the initial proposal in 2013.  As reflected in our comments, this rulemaking will cost Pennsylvania job creators nearly $2 billion annually without providing meaningful environmental benefits.

“We have worked in good-faith to provide constructive comments on this proposed rule.  We stand ready to work collaboratively with DEP and the General Assembly to advance common-sense policies that work for all Pennsylvanians.”

Pennsylvania Independent Oil & Gas Association President Louis D. D’Amico today issued the following statement regarding the state Department of Environmental Protection’s transmittal of the final oil and natural gas regulations (Chapter 78 and 78a) to the Environmental Quality Board:

“The development of these regulations over the past four years has been flawed to the point of being fraudulent. The modernization of environmental controls was required by Act 13 for the unconventional industry and yet, despite working on these regulations since 2011, DEP has still not explained or shown the need to make them applicable to the conventional industry.

“The reasonableness of these rulemaking packages is not determined by the volume of materials accompanying them, and DEP’s touting its responses to ‘every one of the almost 28,000 comments’ received is disingenuous because many of those comments were form letters and, more importantly, DEP’s responses come too late in the process to have any legitimacy or merit.

“Just as disingenuous is DEP’s reference to the ’20 meetings with the Oil and Gas Technical Advisory Board and Conventional Oil and Gas Advisory Committee’ as some type of evidence this has been an ‘exercise in transparency in rulemaking.’  One must remember that in the middle of this rulemaking process this administration quietly replaced all of the long-serving and dedicated TAB members and violated the Oil and Gas Act by trying to add new ‘non-voting’ members, and yet still failed to engage TAB and the Conventional Oil and Gas Advisory Committee in the required ‘consultation’ or to provide both with the required ‘reasonable opportunity to review and comment prior to submission of the packages to the EQB.

“Repeated references by this administration to whatever it proposes as ‘commonsense’ cannot magically transform any of them, especially these rulemakings.  We look forward to pressing on with our fight against this abuse of process and extreme regulatory overreach these rulemakings represent.”

Industry Reaction - Conventional Drillers

PA Independent Oil & Gas Association President Louis D. D’Amico Thursday issued the following statement regarding the Department of Environmental Protection’s transmittal of the final oil and natural gas regulations (Chapter 78 and 78a) to the Environmental Hearing Board [Note: Should be Environmental Quality Board.]:

“The development of these regulations over the past four years has been flawed to the point of being fraudulent. The modernization of environmental controls was required by Act 13 for the unconventional industry and yet, despite working on these regulations since 2011, DEP has still not explained or shown the need to make them applicable to the conventional industry.

“The reasonableness of these rulemaking packages is not determined by the volume of materials accompanying them, and DEP’s touting its responses to ‘every one of the almost 28,000 comments’ received is disingenuous because many of those comments were form letters and, more importantly, DEP’s responses come too late in the process to have any legitimacy or merit.

“Just as disingenuous is DEP’s reference to the ’20 meetings with the Oil and Gas Technical Advisory Board and Conventional Oil and Gas Advisory Committee’ as some type of evidence this has been an ‘exercise in transparency in rulemaking.’  One must remember that in the middle of this rulemaking process this administration quietly replaced all of the long-serving and dedicated TAB members and violated the Oil and Gas Act by trying to add new ‘non-voting’ members, and yet still failed to engage TAB and the Conventional Oil and Gas Advisory Committee in the required ‘consultation’ or to provide both with the required ‘reasonable opportunity to review and comment prior to submission of the packages to the EQB.

“Repeated references by this administration to whatever it proposes as ‘common sense’ cannot magically transform any of them, especially these rulemakings.  We look forward to pressing on with our fight against this abuse of process and extreme regulatory overreach these rulemakings represent.”

For more information on Chapter 78, visit the Environmental Quality Board webpage.  For more background information on how the Chapter 78 regulations were developed, visit DEP’s Oil and Gas Management Regulations webpage.

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1/11/2016