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DEP Oil & Gas Advisory Board Meets Sept. 5 On Proposed Permit Fee Changes; Well Plugging Financial Assurances To Prevent Abandonments; Environmental Justice Policy; Injection Well Primacy

DEP’s Oil & Gas Technical Advisory Board is scheduled to meet on September 5 on a variety of critical topics facing the Oil and Gas Management Program.

The agenda includes discussion of--

-- Proposed permit fee changes;

-- Strategies to prevent future conventional, unconventional oil and gas well abandonments;

-- Natural gas storage field regulation changes brought about by the 1.1 billion cubic feet of gas vented at the Rager Mountain Gas Storage Field in Cambria County;

-- Unconventional spill policy;

-- Update on the federal conventional well plugging program;

-- DEP’s new Environmental Justice Policy; and

-- DEP’s application to EPA for primacy for Underground Injection Well permitting.

Shale Gas Permit Fees

At the March state budget hearing, DEP said they projected a $1,581,000 deficit in the account that funds the Oil and Gas Regulatory Program. It is likely more now. Read more here.

In August of 2020 when the last permit fee increase was put in place, DEP estimated it would need the revenue from 2,000 unconventional shale gas permits a year to adequately support the regulatory program for both conventional and unconventional oil and gas drilling.

As of August 18, DEP received 429 unconventional shale gas permit applications. If the pace of applications coming in the door remains the same, DEP may not receive more than 630 applications in 2023, which is less than a third of the income they need to maintain the program.

In February 2022, DEP reported to the Environmental Quality Board an estimated 60 percent of the costs of the Oil and Gas Program are accounted for by activities related to unconventional oil and gas wells-- about $15,988,224 and 40 percent by conventional oil and gas wells-- about $10,658,816. Read more here.

DEP also reported to the Board conventional oil and gas drilling companies only paid $46,100 of the $10,658,816 it cost for DEP to regulate that industry in FY 2020-21. In other words, next to nothing. Read more here.

Strategies To Prevent 400 - 600 New Conventional Well Abandonments

In July 2022, the Pennsylvania legislature passed Act 96, which removed the Pennsylvania Environmental Quality Board authority to adjust well bonding amounts for 10 years and capped the amount for conventional wells at just $2,500 per well. Read more here.

In December, DEP issued the first-ever assessment of how well conventional oil and gas operators comply with state environmental laws. They found continuing to abandon oil and gas wells to be the most frequent violation DEP deals with, saying between 400 and 600 conventional wells continue to be abandoned each year by operators. Read more here.

The report said conventional operators had a “culture of non-compliance” that is “an acceptable norm in the conventional oil and gas industry.” Read more here.

A report issued in April by the Environmental Defense Fund said a new study found 55,000 oil and gas wells owned by operators in Pennsylvania are at high risk of becoming abandoned leaving state taxpayers holding the bag for $3.7 billion in well plugging and cleanup costs. Read more here.

The same report said another 51,000 conventional wells were at risk of being transferred to low solvency owners. Read more here.

A hearing in April by the House Environmental Resources and Energy Committee further documented significant noncompliance by conventional oil and gas well owners, including the pervasive practices of well abandonment. Read more here.

In May, the House Environmental Resources and Energy Committee reported out House Bill 962 (Vitali-D-Delaware) that corrects the flaws in Act 96 by a party-line vote-- Republicans opposing. The bill remains on the House Calendar for action. Read more here.

In July, the Environmental Quality Board voted to accept the Department’s report on a rulemaking petition submitted by the Sierra Club and other groups in September of 2021 that the EQB no longer has the authority to adjust conventional well bonding amounts for 10 years under Act 96 passed and signed into law by Gov. Wolf on July 19, 2022. Read more here.

On August 24, PennFuture, the Sierra Club, Clean Air Council, Protect Penn-Trafford, and Earthworks announced they have filed a joint lawsuit in Commonwealth Court against the Commonwealth of Pennsylvania, including the General Assembly and Gov. Shapiro, challenging the constitutionality of a law that prevents the Commonwealth from protecting communities, public health and the environment from the harm caused by abandoned conventional oil and gas wells.

The groups said thousands of abandoned, unplugged conventional wells in Pennsylvania leak methane and other harmful chemicals into the air and water, harming public health and worsening the climate crisis. Read more here.

Natural Gas Storage Field Regulation

In November 2022, for a period of two weeks, the Equitrans Rager Mountain Underground Natural Gas Storage Facility in Cambria County had an uncontrolled release of over 1.1 billion cubic feet of natural gas, one of the largest methane leaks in the world in 2023. Read more here.

In December, DEP promised a ‘top to bottom review’ of how it regulates natural gas storage areas and would be doing an after action report on its response to the incident. Read more here.

On August 24, Equitrans Midstream Corp. released the results of its root cause investigation into the uncontrolled leak and confirmed that over 1 billion cubic feet of natural gas was vented into the atmosphere from the underground storage facility during the leak. Read more here.

However, they also reported another 127 million cubic feet of natural gas "was diverted to and contained within the geologic formations located at approximately 1,800 and/or 3,000 feet below ground."

Equitrans said the direct cause of the venting from Rager well #2244 was due to water- and oxygen-induced corrosion on the outside diameter of the top joint of the well and the infiltration of organic/inorganic matter into the annulus, which resulted in a failure of the well casing.

The wells serving the Rager Mountain facility were originally drilled in the 1960s.

The analysis was conducted by an independent, third-party company with expertise in reservoir management and well and corrosion engineering.

Equitrans said their investigation results were shared with the federal Pipeline and Hazardous Materials Safety Administration and the state Department of Environmental Protection. Read more here.

Meanwhile efforts continue to clean up conventional well wastewater spills and deal with other violations at the site of the leak. Read the latest here.

New Environmental Justice Policy

On August 17, the Department of Environmental Protection posted an Interim Final Environmental Justice Policy to guide DEP’s permit application reviews and outreach efforts in environmental justice areas throughout the Commonwealth. Read more here.

At the same time, DEP posted a new state-of-the-art mapping tool-- PennEnviroScreen-- that will redefine environmental justice areas using 32 environmental, health and socioeconomic indicators that are spelled out in a 113-page PennEnviroScreen Methodology Document.

DEP said on its Environmental Justice Policy Revision webpage-- “a DEP permit applicant who files a permit application on or after September 16 must use the new PennEnviroScreen tool to determine if the permit’s facility is in an environmental justice area.”

DEP staff has also said it will begin implementing the Interim Final EJ Policy as soon as it is published in the PA Bulletin on September 16. Publication will also begin a formal public comment period that is scheduled to end on October 29. Read more here.

Public Comment Period At Meeting

Individuals interested in providing public comment during the meeting should contact Todd Wallace at least 24-hours in advance of the meeting at twallace@pa.gov or by telephone at 717-783-6395.

Joining The Meeting

The meeting will be held in Room 105 of the Rachel Carson Building in Harrisburg starting at 10:00 a.m. and is expected to last until 3:00 p.m. Instructions for joining the meeting remotely are on the Board’s webpage.

For more information and available handouts, visit DEP’s Oil & Gas Technical Advisory Board webpage. Questions should be directed to Todd Wallace twallace@pa.gov or 717-783-6395.

Related Articles - Agenda Items:

-- Lawsuit Filed Against General Assembly, Governor Challenges Constitutionality Of Law Preventing DEP From Protecting Public Health, Environment From Harm Caused By Abandoning Conventional Oil & Gas Wells [PaEN]

-- Equitrans Determined Leak Of Over 1.1 Billion Cubic Feet Of Natural Gas From Cambria County Storage Facility Was Caused By Corrosion In Conventional Gas Well Casing [PaEN]

-- Republican Rep. Krupa To Introduce Bill To Ban Oil, Gas Wastewater Injection Wells To Protect The Public From Radioactive, Toxic Materials [PaEN]

-- New DEP Interim Final Environmental Justice Policy, Definition Of Environmental Justice Areas Effective Sept. 16; Public Comments Accepted Thru Oct. 29 [PaEN]

-- Scranton Times Editorial: Give Teeth To DEP Environmental Justice Policy [PaEN]

-- 150+ Residents Of Chester Opposed To An LNG Natural Gas Export Facility Proposed In Their Community Let Their Feelings Be Known To The House Philadelphia LNG Export Task Force [PaEN]

-- Delco Times: Chester Bankruptcy Receiver Warns Of Projects That Could Handcuff City Finances And Negatively Impact Residents’ Health On Heels Of Hearing On Proposed LNG Natural Gas Export Project In The City [PDF of article]

PA Oil & Gas Industry Public Notice Dashboards:

-- Pennsylvania Oil & Gas Weekly Compliance Dashboard - Aug. 26 to Sept. 1-- Uncontrolled Venting Of Shale Gas Well; 4,600 Gallon Spill Of Shale Gas Wastewater; Cleanup Of Conventional Oil Wastewater Spill Barely Begins [PaEN]

-- DEP Responds To Emergency Notification Of Uncontrolled Venting Of Natural Gas For Over 10.5 Hours From A Repsol Oil Shale Gas Well; Temporary Evacuation Order Issued In Bradford County [PaEN]

-- EQT Shale Gas Wastewater Truck Rolls Over Spilling More Than 4,600 Gallons Of Wastewater In Lycoming County [PaEN]