On January 21, the Environmental Quality Board approved final regulations putting in place an increase in the oil and gas drilling permit fees and lowering the sulfur content of heating oil.

Oil & Gas Permit Fees

“The final rulemaking increases the current well permit application fees from $5,000 for nonvertical unconventional wells and $4,200 for vertical unconventional wells, to $12,500 for all unconventional well permit applications to administer the 2012 Oil and Gas Act.”

These amounts are the same as the proposed fee package adopted by the EQB in May of 2018 for comment.

During a presentation on the regulation, Scott Perry, DEP Deputy Secretary for Oil and Gas Management said the revenue projections were based on receiving 2,000 permits a year.  He pointed out in the last 6 months DEP received only about 600 new permits..

“Since the last unconventional well permit application fee increase in 2014, well permit application fees have not generated the revenue needed to fund Program costs because of declining unconventional well permit application numbers.

“Nonetheless, the Program’s workload has increased due to the additional well inventory, development activity, and the need for guidance and technical tools to stay current with industry environmental standards.

“As a result of declining unconventional well permit application fee revenues, the Oil and Gas Program reduced staff over time from 226 employees to 190 employees today.

“The Oil and Gas Program also reduced operating costs by 38%. Operating expenses only account for approximately 10 percent of total program costs, therefore any future cost savings would primarily come from a reduction in staff.

“At the current disparity between fee revenues and expenditures, the Oil and Gas Program would need to reduce its complement by over 100 additional positions to continue administering the Program.

“With the significant reduction in staff, the Oil and Gas Program now struggles to meet its gas storage field inspection goals, consistently achieve permit review time frames, adequately fund training opportunities for staff and provide training for the industry.

“Important Program development initiatives, such as policies, best practices and technical guidance documents, have been put on hold indefinitely due to the lack of sufficient staff to develop and update these important pieces of the Program necessary to administer the 2012 Oil and Gas Act.

 “In short, the Program has been challenged to provide an adequate level of high quality service to the public and to the industry.”

Heating Oil Sulfur Content

Also approved was a final regulation to reduce the allowable sulfur content of heating oil from 500 ppm to 15 ppm to match most of the states surrounding Pennsylvania.

With a reduced sulfur content and the use of bio-heating oil and today’s efficient heating oil furnaces, the emissions from heating oil equal those of natural gas, in terms of home heating.

Final-Omitted Hazardous Waste Rule

The Board approved a final-omitted regulation adopted federal requirements covering hazardous waste generators.

Click Here for copies of the regulations and supporting documents.

For more information, visit the Environmental Quality Board webpage.  Questions should be directed to Laura Edinger by calling 717-772-3277 or sending email to: ledinger@pa.gov.

NewsClips:

Laura Legere: EQB Votes To Raise Unconventional Shale Well Permit Fees 150%

Stephen Caruso: DEP: We’re Failing To Meet Many Of Our Goals In Drilling Oversight; Board Passes Hefty Fee Hike

Op-Ed: Raising Drilling Permit Fees 150% Will Hurt PA’s Economy - Marcellus Shale Coalition

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[Posted: January 21, 2020]

1/27/2020