Pennsylvania drilling rules face different fates

Posted By: Steven Townsend

PHILIPSBURG — Leaders of the Pennsylvania Department of Environmental Protection’s oil and gas bureau met with their advisory boards last week in neutral territory — a district mining office behind a bowling alley in the center of the state about 20 miles west of State College.

The meeting was planned months ago, but it was an appropriate setting for a fresh start after a bruising few weeks for the agency that brought both a milestone and a setback. After five years of drafting and review, one set of DEP’s updated drilling rules is soon to take effect, while another is in the recycling bin.

New restrictions on Marcellus and Utica shale gas operations that regulators began sketching in 2011 are expected to be published later this summer after they are submitted to the attorney general’s office for a final review.

But Democratic Gov. Tom Wolf signed a bill on Thursday that cancels proposed rules for the state’s conventional drilling industry, which operates oil wells and shallower gas wells. Mr. Wolf agreed to endorse the bill. In exchange, drilling advocates in the legislature from both parties agreed to drop an attempt to block both sets of rules.

The impassioned debate over the rules package was a factor in John Quigley’s resignation as DEP secretary in May and the Wolf administration has since adopted a more conciliatory tone.

A DEP spokesman said the agency “supports the collaborative effort to move forward with the regulations in a bipartisan way,” but the law cancelling the conventional drilling rules was clearly a disappointment to the regulators who worked to write them and who were at a loss last week to describe what comes next.

“I’m not exactly sure where we’re going to go from here,” Todd Wallace, assistant to the deputy secretary for DEP’s oil and gas office, told the advisory boards.

DEP’s oil and gas advisory boards — one for technical issues related to shale gas development and the other for the state’s conventional drilling operations — usually meet separately every few months in Harrisburg. A central location was picked this time to make it easier for members who drive from the corners of the state. 

The first joint meeting of the boards coincidentally came just as the governor was signing the bill that directed DEP to create a greater separation in its regulation of the two industries.

The new law requires DEP to draft any new rules for the conventional industry independently of any rules for the unconventional industry and to consult with a new advisory council whose mandate includes promoting the conventional industry and the production of Pennsylvania oil.

Mr. Wolf’s spokesman Jeffrey Sheridan said it is “premature to comment on what new conventional regulations might look like.

“We reached a compromise with the legislature and we will continue working with them to draft the conventional regulations,” he said.

The new law cancelling the revised conventional rules does not prohibit DEP from simply starting the rule-making process over with the draft regulations it has already written, which is a path environmental advocates are urging the agency to take.

Trade groups for conventional drillers said ideally DEP will drop its efforts to apply new regulations to their operations.

“We’re hoping that they don’t start over again,” said Mark Cline, president of the Bradford-based Pennsylvania Independent Petroleum Producers Association. “We’re hoping that they realize there’s no need to do these.”

Department officials said at the meeting Thursday that some sections of Act 13, the state’s 2012 update to its drilling law, already apply to conventional operators and the new law scrapping revisions to the conventional drilling rules will not erase those standards or any existing rules for the traditional industry.

For example, all drillers must comply with a provision of Act 13 that requires them to restore water supplies damaged by drilling operations to safe drinking water standards or better, DEP officials said. Conventional operators said they plan to contest that interpretation because legislators have said they never intended Act 13 to apply to the traditional industry.

The Pennsylvania Environmental Council, an environmental group, wants the department to take the opportunity to reevaluate bonding requirements for the conventional industry to ensure that the financial guarantees cover the cost of properly plugging and cleaning up well sites that might otherwise be abandoned, like the tens of thousands of wells that have already been orphaned in the state over a century.

“Especially if you are looking at further relaxing environmental protection regulations on the industry, you should have a very honest discussion about whether the financial assurance mechanisms and bonding are adequate,” said John Walliser, the group’s senior vice president for legal and government affairs.

The department has not yet set a clear date for when it expects to publish the updated Marcellus Shale rules.

Key sections of the rules require unconventional operators to survey areas around their planned well sites for hazards — like old, abandoned wells — and protected features — like parks and playgrounds — and then take steps to reduce disruptions and minimize risks.

Other sections of the rules add stricter controls for waste handling and cleanup, and prohibit the use of some waste pits at well sites.

The department’s shale gas advisers are pushing DEP to articulate what will be expected of companies as they transition from the current rules to the new ones, which take effect the day they are published.

In the meantime, efforts to cancel some provisions of the new shale rules have already been introduced in the courts and the legislature.

The new rules will require shale companies to report how much waste their wells produce and where they send it every month instead of every six months, after regulators found wide discrepancies between the waste records submitted by drilling companies and landfills.

A bill sponsored by state Sen. Elder Vogel Jr., R-New Sewickley, and introduced on May 25, would mandate twice-yearly waste reporting and forbid DEP from requiring more frequent reports.

Laura Legere: llegere@post-gazette.com.

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