On December 12, conventional oil and gas well owners said they now build and operate as many as 95% of conventional wells to vent methane that could trigger quarterly methane monitoring and capture requirements under the new US EPA methane reduction regulations making it too expensive for owners to comply.

Conventional well owners made these comments at a meeting of DCED’s PA Grade Crude [Oil] Development Advisory Council in a response to a DEP presentation on what conventional well owners will be required to do to meet requirements under the new EPA methane rule.

Conventional well owners said, “A very large proportion, perhaps as high as 95% of Pennsylvania conventional gas wells and Pennsylvania conventional oil wells and oil/gas wells which are constructed with a production string of casing, are purposely constructed as to allow the release of methane which methane may not be a steady flow and are constructed that way by regulation.

“Further, the Pennsylvania mechanical integrity process contemplates this construction.”

During the discussion, members of CDAC noted “while it may be technically possible to install a compressor and piping to collect the natural gas, the amount of gas gathered would be very small. The combined revenue of the oil and gas would not be sufficient to justify the capital expenditure of the collection.”

[In addition, DEP’s oil and gas inspection reports show all newly drilled conventional wells are left to vent gas for days or weeks as part of what is now the normal process used now to develop a well in Pennsylvania.

[As part of adopting state oil and gas methane reduction regulations in 2022, DEP has estimated conventional oil and gas facilities account for 80% of methane emissions from the oil and gas industry in Pennsylvania because they have done little or nothing to control them.  Read more here.

[Three industry groups representing the conventional oil and gas industry filed a lawsuit in Commonwealth Court December 5, 2022 in an attempt to block implementation of DEP’s first VOC/methane limits regulation on conventional oil and gas facilities.  [Read more here.]]

EPA’s new methane rule makes no distinction between conventional and unconventional shale gas wells and related facilities covered by its regulation because all the wells and infrastructure are significant sources of methane, a potent greenhouse gas.

But it is a distinction in Pennsylvania’s Oil and Gas Act and regulatory program.

At its meeting, the PA Grade Crude [Oil] Development Advisory Council adopted a motion to send an initial set of comments and questions to DEP on the EPA methane rule that asked about the statutory authority for the regulation in Pennsylvania, whether DEP was planning to adopt separate requirements for conventional and shale gas wells, how DEP would assess the cost of compliance on conventional well owners and Pennsylvania’s two oil refineries and others.

DEP agreed further discussions on these and other questions would be helpful in developing the plan to implement EPA’s methane rule in Pennsylvania.

Click Here for DEP’s presentation on the new methane rule.

Visit DCED’s PA Grade Crude [Oil] Development Advisory Council webpage for more information on the Council.  Questions should be directed to Adam Walters 717-214-6548 or adwalters@pa.gov.

Implementation Of The EPA Rule

In November 2023, Gov. Shapiro instructed DEP to take action to adopt oil and gas emission reduction measures aligned with federal policy as part of his administration’s work to address climate change and protect Pennsylvania’s Constitutional right to clean air and pure water.  Read more here.

DEP has a deadline of March 8, 2026 to submit a plan to EPA to implement the new methane reduction rule and well owners have a deadline of March 2029 to comply with its requirements.

DEP does not plan to adopt new regulations incorporating the EPA rule because state regulations automatically adopt federal requirements.

DEP does have to develop a plan and an amendment to the State Air Quality Implementation Plan to implement the methane rule that must go through a public development and comment process.

In addition to the PA Grade Crude [Oil] Development Advisory Council, DEP has solicited comments from the Air Quality Technical Advisory Committee, Small Business Compliance Advisory Committee, Citizens Advisory Council, Environmental Justice Advisory Board and the Oil and Gas Technical Advisory Board.

Visit DEP’s Methane Reduction Strategy webpage to learn more.

Non-Compliance An Acceptable Norm

DEP should keep in mind the compliance history of the conventional oil and gas industry when building a program to regulate road dumping, rather than simply banning it--

--  86% of conventional oil and gas well owners-- 4,265-- failed to submit the 2023 annual production and waste generation and disposal report to DEP covering 33,505 wells.  Read more here.

-- 89% of conventional oil and gas well owners-- 4,359-- failed to submit the 2023 annual well integrity reports for 34,455 wells.  Read more here.

So far in 2024, conventional oil and gas well owners were issued 7,119 violations by DEP, far exceeding all of 2023.  The violations included 830 for abandoning their wells.  Read more here.

A December 2022 DEP assessment of conventional well owner compliance found there is a “culture of non-compliance” in the industry that is the “acceptable norm” that will need to “significantly change” “before meaningful improvement can happen.”  Read more here.

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - Dec. 7 to 14 - Failed To Restore Shale Gas Well Pad, Impoundment For 12 Years; Spills On Top Of Spills  [PaEN] 

-- What The Shale Gas Industry Is Leaving Behind: DEP: Nucomer Energy LLC Fails To Restore Shale Gas Well Pad, Water Impoundment In Forest County For More Than 12 Years After Drilling Was Completed  [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - December 14 [PaEN]

-- DEP Invites Comments On 2 PA General Energy Company Pipeline Projects Impacting Exceptional Value Streams And Wetlands In Lycoming County To Support Shale Gas Development  [PaEN]

-- DEP To Hold Jan. 28 Hearing On Title V RACT 3 Air Quality Permit For Monroe Energy LLC Trainer Refinery In Delaware County  [PaEN]

-- DEP Posted 107 Pages Of Permit-Related Notices In December 14 PA Bulletin  [PaEN]

Related Articles This Week:

-- DEP Forms Internal Work Group To Develop Position On Road Dumping Conventional Oil & Gas Wastewater; Shapiro Administration Supports Legislative Ban On Road Dumping  [PaEN]

-- Conventional Oil & Gas Well Owners Now Operate As Many As 95% Of Conventional Wells To Vent Methane Gas Making It Too Expensive To Comply With New EPA Methane Emission Reduction Regulations  [PaEN]

-- EPA, Justice Dept., DEP Settlement With PennEnergy Resources LLC Requires Payment Of $2 Million Penalty, $3.6 Million Investment In Reducing Oil & Gas Facility Air Pollution Emissions  [PaEN]

-- Independent Fiscal Office Estimates Act 13 Drilling Impact Fee Revenue Of $163.8 Million In 2024, Down $115 From 2022  [‘Lower Expectations’ Of Shale Industry Support]  [PaEN]

-- Baker Hughes: PA Natural Gas Drilling Rigs Down 1 From Last Week To 15; 21 On Aug. 21

-- Susquehanna River Basin Commission Approves New Fee Schedule, Water Withdrawals, Including 4 Shale Gas Withdrawals, Contribution To Abandoned Mine Drainage Remediation Project  [PaEN]

-- Rep. Martin Causer Returns As Republican Chair Of House Environmental Committee; Priority- Getting Government 'Out Of The Way' Of Energy Production  [PaEN]

NewsClips:

-- Farm & Dairy: Western PA Residents Fight For Increase In Shale Gas Well Pad Setbacks

-- Pittsburgh Business Times: PA’s Shale Gas Impact Fee Project To Drop This Year

-- WTAE: PennEnergy Resources Agrees To Settlement After Alleged Environmental Law Violations

-- The Allegheny Front: PennEnergy Shale Gas Company Agrees To Reduce Harmful Emissions From Oil & Gas Sites In Western PA

-- Mountain State Spotlight: WV Landowners Lawsuit Settlement With Diversified Energy Company, EQT Corporation Will Result In Plugging 2,600 Wells In WV, Ohio, Kentucky, Virginia, Tennessee, Pennsylvania Over 10 Years

-- AP: Fatal Natural Gas Explosion At Reading Chocolate Factory Caused By Faulty Gas Pipeline Fitting, Federal Safety Board Finds

-- PUC: Investigation Into Reading Chocolate Factory Natural Gas Explosion Can Help Drive Gas Pipeline Safety

-- PUC Approves PECO 12.5% Natural Gas Rate Increase, 7.1% Electric Rate Increase

-- WHYY: PECO To Hike Gas Rates 12.5%, Electric Rates 10%  Starting In January

-- NPR: Proposed Federal Rule Requires Gas Utilities To Find and Fix More Climate-Warming Leaks

-- AAA Gasoline Prices: National- $3.02  Ohio- $3.05  PA- $3.24 

-- TribLive Guest Essay: Republican Administration’s Big Oil/Gas Cronies Poised To Prop Up Fossil Fuels With $17 Billion In Subsidies, Incentives To Export Gas To China, Other Overseas Markets

-- Bloomberg: No Winners Seen In Republican Administration’s ‘Destructive’ Energy Tariffs

-- PA Capital-Star: It’s Do Or Die Time For Philly Hydrogen Hub, Green Groups Are Rallying Against It

-- Beaver Times: Shell Petrochemical Plant To Host Free Smoke Detector Distribution Dec. 12 

-- The Guardian: Locals In Beaver County Pennsylvania Feel ‘Sacrificed’ For Shell Petrochemical Plastics Plant

-- Pittsburgh Business Times: Northern Oil & Gas To Invest In Appalachian Natural Gas Drilling

-- WHYY: New Jersey, Home To Many Oil And Gas Producers, Eyes Fees To Fight Climate Change

[Posted: December 13, 2024]

12/16/2024