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Conventional Oil & Gas Industry Compliance With 2022 DEP Methane Reduction Regulation Put On Hold Pending Outcome Of Litigation

On January 28, the Department of Environmental Protection said compliance with a 2022 state Air Quality regulation to reduce methane emissions from oil and gas facilities was put on hold for the conventional oil and gas industry as a result of an agreement to stay a legal challenge to the regulations in Commonwealth Court.

DEP spokesperson Neil Shader said a key compliance reporting requirement is “on hold for the conventional operators until the litigation concludes.”

“The Commonwealth Court has granted a joint motion [between the industry and DEP] to stay the litigation proceedings while the parties explore settlement options,” explained Shader.

During the process of adopting the 2022 regulations, DEP estimated conventional oil and gas facilities would account for 80 percent of the total methane emission reductions expected under the regulations which covered both conventional and unconventional shale gas facilities. Read more here.

Groups representing the conventional oil and gas industry filed a lawsuit in Commonwealth Court in December 2022 in an attempt to block implementation of DEP’s regulation. Read more here.

The regulations were adopted to comply with US Environmental Protection Agency requirements which do not distinguish between conventional and unconventional shale gas oil and gas facilities.

At one point, EPA threatened to impose the sanction of withhold federal highway funds from Pennsylvania until the regulation was adopted. Read more here.

Both conventional and unconventional shale gas oil and gas facility owners were required to file a compliance report by June 1, 2024 to cover calendar year 2023 as required by 25 Pa Code 129140(k)(1).

This was actually an extension of the original reporting deadline which was December 2, 2023 that was intended to cover calendar year 2022 information. This first report was eliminated by DEP under its “enforcement discretion” in a January 24, 2024 PA Bulletin notice.

Conventional facility owners were required to report information on their wells and specific types of equipment, including storage tanks, pneumatic controllers, diaphragm pumps, reciprocating compressors, closed venting systems and other control devices.

Click Here for a copy of DEP’s suggested Excel reporting template.

Air emissions for the facilities were submitted separately to DEP’s Air Quality Emission Inventory.

As a result of a Right To Know request, DEP said as of January 21, 2025 only 27 conventional well facility owners out of an estimated 4,719 owners who were required to submit reports did submit those reports-- less than 1%.

Of those 27, DEP’s Air Quality Emission Inventory [select conventional gas well as facility type and 2023] includes methane and VOC emissions reported by only four companies with conventional facilities-- Blackhawk Energy, LLC; Consol PA Coal Co. LLC; Diversified Production, LLC; and Iron Cumberland LLC.

Together they reported only 1,901 tons of methane and 204.3 tons of VOCs in 2023.

In contrast, 112 of the 130 unconventional shale gas facility owners required to submit compliance reports did comply-- 86%-- 18 shale gas owners have still not submitted reports or contacted DEP.

Of those 112, 63 unconventional shale gas companies reported emissions in DEP’s Air Quality Emission Inventory [select unconventional gas well as facility type and 2023] which shows methane emissions of 47,486.2 tons and VOC emissions of 2,393.1 tons.

DEP expected up to a 175,788 ton reduction of methane from conventional sources [Read more here.] and a 45,278 ton reduction in methane from unconventional shale gas sources [Read more here], according to the Regulatory Analysis Forms for the regulations.

DEP estimated total 2020 methane emissions from conventional sources to be 365,103 tons and 102,297 tons from unconventional shale gas sources, according to the Regulatory Analysis Forms.

Visit DEP’s Annual Reporting For Oil & Natural Gas Sources webpage for more information on reporting requirements.

New Oil & Gas Methane Emissions Rule

At a December 12 meeting of DCED’s PA Grade Crude [Oil] Development Advisory Council, DEP’s Air Quality Program briefed the conventional oil and gas industry about a new program DEP was developing to comply with a new EPA methane reduction rule. Read more here.

The EPA rule again does not differentiate between conventional and unconventional shale gas wells.

Conventional well owners again claimed they could not comply with that rule either saying, “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.”

There was no discussion of the “hold” on conventional oil and gas industry compliance with the 2022 regulation and what it might mean for conventional compliance with any new methane regulations. Read more here.

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

Non-Compliance In Conventional Industry

A December 2022 DEP compliance report found conventional oil and gas well owners have a “culture of non-compliance” that is an “acceptable norm.” Read more here.

DEP reported last year--

-- 86% of conventional well owners failed to submit annual production and waste generation reports [Read more here]

-- 89% failed to submit annual well integrity reports [Read more here]

Conventional oil and gas well owners also continue to illegally dump production wastewater on dirt and paved roads in conventional drilling areas, according to citizens who monitor the practice. Read more here.

In 2024, DEP issued a record 860 new or continued violations to conventional well owners for abandoning and not plugging their wells, many more than the 512 violations it issued in 2023. Read more here.

With this record, it is clear the culture of non-compliance needs to be taken into account by DEP in any program meant to regulate the conventional oil and gas industry.

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - February 1 [PaEN]

-- DEP Posted 89 Pages Of Permit-Related Notices In February 1 PA Bulletin [PaEN]

Related Articles This Week - Natural Gas:

-- PUC: Calendar Year 2024 Act 13 Drilling Impact Fees To Remain Same As 2023; Dramatic Decline In Financial Support From Shale Gas Industry Continues [PaEN]

-- Range Resources And MarkWest Liberty Midstream File Legal Challenges To The 2,500 Foot Shale Gas Facility Setback Ordinance Adopted By Cecil Township, Washington County [PaEN]

-- Conventional Oil & Gas Industry Compliance With 2022 DEP Methane Reduction Regulation Put On Hold Pending Outcome Of Litigation [PaEN]

-- DEP Releases 2 Contracts For Bidding In Next Round Of Conventional Oil & Gas Well Plugging: 12 Wells In Kinzua State Park, McKean County, 18 Wells In Warren County [PaEN]

-- Rep. Vitali Introduces Bill To Restore DEP Authority To Increase Conventional Oil & Gas Well Plugging Bonds To Prevent Hundreds Of New Well Abandonments A Year [PaEN]

-- PA Republican Senator To Introduce Bill Suspending State Taxes On Natural Gas Producers; Cut DEP Permit Fees; End Drilling Moratorium On DCNR Lands; Exempt Coal-Fired Power Plants From EPA Regulations [PaEN]

-- DEP Invites Comments At March 5 Hearing On Title V RACT 3 Air Quality Permit For Hazleton Generation Natural Gas Power Plant In Luzerne County [PaEN]

-- Gov. Shapiro Proposes ‘Lightning’ Energy Plan To Increase & Diversify Energy Generation; Reduce Climate Changing Pollution; Lower Energy Costs; Create Jobs [PaEN]

-- Gov. Shapiro Reaches Agreement With PJM To Prevent Unnecessary Price Hikes And Save Consumers Over $21 Billion On Utility Bills [PaEN]

-- PA Senate Republican Leader: ‘Every Consumer Of Electricity In This Commonwealth Is Going To Pay More;’ ‘What You’re Going To Face Is Going To Be Really Unpleasant’ [PaEN]

-- Republicans On PA Senate Environmental Committee Report Out Bills To Eliminate Carbon Pollution Reduction Program Covering Power Plants, Establish Independent Energy Office [PaEN]

-- Inquirer: President Wants US To Be ‘Leading’ Producer Of Non-Fuel Minerals; Here’s How PA Could Help; Rare Earth Elements Could Be More Important Than Expansion Of Fracking [PDF of Article]

NewsClips:

-- The Energy Age Blog: Range Resources & MarkWest Liberty Midstream File Legal Challenges Against 2,500 Foot Shale Gas Setback Ordinance In Cecil Twp., Washington County

-- The Energy Age Blog: EQT Should Plug These Abandoned Conventional Wells In Peters Twp., Washington County Before Fracking From Mingo Well Pad

-- PennLive Guest Essay: Natural Gas Industry Operations [Wastewater Pipelines] Are Strongly Regulated In PA - By Marcellus Shale Gas Coalition [Shale Gas Wastewater Pipelines are NOT regulated by the PUC for construction, operations and safety. Read more here. ]

-- Inquirer: President Wants US To Be ‘Leading’ Producer Of Non-Fuel Minerals; Here’s How PA Could Help; Rare Earth Elements Could Be More Important Than Expansion Of Fracking [PDF of Article]

-- NYT: Oil, Gas Companies Embrace New President, But Not ‘Drill, Baby, Drill’ [No Plans To Increase Production Unless Prices Rise Significantly]

-- US EIA: Electric Power Sector Has Driven Rising PA Natural Gas Consumption Since 2013

-- UGI Gas Division Filed A Request With PUC To Increase Residential Gas Rates By 10.8%

-- Scranton Times: UGI Seeking To Raise Natural Gas Rates 10.8% For Residential Customers

-- Utility Dive: Calpine To Sell 2 PA Gas Power Plants To Avoid Market Power Concerns From Constellation Merger

-- Reuters: Diversified Energy To Buy Permian Basin Oil & Gas Producer Maverick In $1.3 Billion Deal [Diversified Specializes In Buying Old Wells]

-- Bloomberg: US Natural Gas Producers Likely To Gain Asian Market Share [China Buying 50% More US LNG, Cap Price At $10 - Currently $3.89]

-- Bloomberg: Europe’s Gas Traders Now Fear Summer More Than Winter

-- Reuters: Venture Global Given FERC OK To Start Up Another Louisiana LNG Gas Export Plant

-- Reuters: US EIA Sees 7% Higher US Wholesale Power Prices In 2025; Residential Increase Of 2%

-- Wall Street Journal: New Federal Administration Memo Orders Agencies To Broadly Pause All Federal Grants, Loans, Financial Assistance Programs Pending Review [PDF of Article]