Environmental Challenges in Oil and Gas Production by Gary E. Slagel
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This document summarizes environmental challenges and regulations related to oil and gas production. It discusses issues at the federal level like endangered species protections and methane emissions standards. It also examines state legislative actions and regulations in Pennsylvania, Ohio, West Virginia, Kentucky, Virginia and Illinois governing hydraulic fracturing, water management, spill prevention and well permitting requirements. The document concludes that environmental activism is high in the Appalachian Basin and Midwest, requiring state regulators to impose strict rules on industry operations.
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Environmental Challenges in Oil and Gas Production by Gary E. Slagel
- 1. ENVIRONMENTAL CHALLENGES IN OIL AND GAS PRODUCTION Gary E. Slagel Steptoe & Johnson PLLC September 23, 2015
- 2. Federal Issues • Endangered Species Act – Indiana and Northern Long Eared Bats • Waters of the United States • Methane Emissions • BLM – Federal leases • Clean Power Plan
- 3. State Legislative Actions • Pennsylavania – Act 13, The Oil and Gas Act • Ohio – Senate Bill 315 of 2012 • West Virginia – Horizontal Well Act – Aboveground Storage Tank – Legislative studies on noise, light, dust, VOCs
- 4. State Legislative Actions • Kentucky – Senate Bill 186 of 2015 - Oil and Gas Modernization Act • Virginia – Oil and Gas Act • Illinois – Oil and Gas Act – November, 2014 – Hydraulic Fracturing Regulatory Act – Nov., 2014
- 5. State Regulatory Issues • Pennsylvania – Chapters 78 and 78a • T&E and Other Critical Communities • Water management • Spill prevention and control • Erosion and Sediment control – TENORM – Stray Gas – Air Quality
- 6. State Regulatory Issues • Pennsylvania – Cuttings disposal • Ohio – Senate Bill 315 of 2012 - framework for a strong regulatory program – Horizontal Well Site Construction Rule • Illinois – HF Regulatory Act – extremely prescriptive
- 7. Regulatory Issues - PA • What must be filed by the operator – Well permit – Well permit transfer application – Water management plans – Inactive status request – ESCGP transfer – ESCGP noncompliance reports – ESCGP NOI for major modifications – ESCGP notice of termination – Centralized impoundment permit
- 8. Regulatory Issues - PA – OG-71 (drill cuttings disposal) – 26R Chemical analysis for residual waste – Variance approval – Coal pillar approval – Road spreading approval – Proposed alternate method – casing, venting etc – Stray gas report – Spill reports – NOV responses – Spud notice
- 9. Regulatory Issues - PA – Cementing casing notice – Pressure test notice – Stimulation notice – Plugging notice – Completion of stimulation notice – Preconstruction conference notice – Seven day earth disturbance notice – Three day bulk earth disturbance – 911 emergency plan – Emergency response plan – Wastewater reduction plan – Containment plan
- 10. Regulatory Issues - PA – PPC plan – E&S plan – PCSM plan – Water management plan – Waste reports – Mechanical integrity assessment – Centralized impoundment certification – Well record – Country of origin – steel – Completion report – Completion report – CPI & trade secrets – Production report
- 11. Regulatory Issues - PA – Inactive status report – NOI to plug certificate – 26RW chemical characterization – Site restoration report – FracFocus chemical disclosure – Industry logs – Other industry data – Centralized impoundment quarterly reports – Centralized impoundment monitoring reports – Pre-drill surveys – Well locations
- 12. Conclusions • Appalachian Basin & Midwest – environmental activism is high • State Regulators – either willingly or are ordered (via legislative action) to give the industry little leeway in permitting and operating • Industry is judged by the actions of its weakest links
- 13. PA Act 214 Coal and Gas Resource Coordination Act Amended 2011
- 14. Overview • Sets new standards for addressing the development and location of multiple gas well pads over active coal mine areas and on surface areas over workable coal seams. • Redefines workable coal seams and active coal mines, establishes new gas well spacing requirements and new coal operator consent requirements. • Calls for a new gas well pillar study.
- 15. New Definitions • Operating Coal Mine – that portion of a workable coal seam which is covered by an underground mining permit issued by the Department of Environmental Protection.
- 16. New Definitions (cont) • Active Coal Mine – now refers to the five (5) year mining area shown on a timing map prepared by the mine operator that extends beyond the current permit area of operating coal mine. (This should include the area reasonably expected to be mined in the five (5) years beyond completion of mining in the current permit area). These maps must initially be submitted to the Department by June 12, 2011
- 17. New Definitions (cont) • Workable Coal Seam: – A coal seam in fact being mined in the area in the question under this act by underground mining methods. – A coal seam which, in the judgment of the Department of Environmental Protection, can reasonably be expected to be mined by underground methods.
- 18. New Definitions (cont) • Well Cluster – means an area within a well pad intended to host multiple horizontal wells in an area no greater than 5000 square feet. – Maximum area of a well cluster may be modified based on the pillar study required under Section 12.1 of the Act.
- 19. Mine Operator Consent • All permit applications under the Oil and Gas Resource Coordination Act that will penetrate an “operating coal mine” – essentially any portion of the mine covered by an underground mining permit – must be accompanied by the written consent of the mine operator relative to the proposed location of the well. This is not appealable by the well operator.
- 20. Mine Operator Right to Object • When a proposed gas well or well cluster is located above an “active coal mine”, the owner of the coal may file objections in writing within ten (10) days of receipt of the required notice and plat to such proposed drilling. Must set out in detail the grounds for the objection. • If well operator and coal owner/operator can’t agree on a location, their differences are submitted to a panel.
- 21. Objection Resolution • Panel shall be convened consisting of one person selected by the coal operator, one person selected by the gas operator and one selected by the two above. • Panel shall choose a location, if any that – Permits gas well to be drilled without endangering the safety of persons in the coal mine – Allows for maximum recovery of the gas and coal
- 22. Gas Well Spacing • No permit for a gas well that is part of a well cluster shall be issued unless the well cluster is at least 2000’ from the nearest well cluster as measured from the center of the nearest well bore, unless the owner of the workable coal seam and gas operator consent in writing to a lesser spacing of the clusters
- 23. Gas Well Spacing (cont) • Where the gas operator and coal operator cannot agree on the spacing of well clusters, either party may invoke the panel procedures in the Act to reach an agreement. • Where the well cluster will penetrate a workable coal seam that is not part of an active coal mine, the gas operator must provide a copy of the plat to the coal owner who will then have fifteen (15) days to provide recommendations on the location.
- 24. Gas Well Spacing (cont) • The 1000’ minimum spacing requirement still applies to single wells not in a cluster. These wells must be at least 1000’ from any other single well and any other well cluster. However, with coal operators consent, this spacing requirement can be waived – the 900’ absolute minimum has been deleted. All new consent provisions for operating coal mines and active coal mines are applicable to these single wells.
- 25. Additional Measures • Any applicant for a gas well permit must send to the coal owner, where the coal has been severed from the surface, a copy of the plat, regardless of whether the seam is workable. • Within sixty (60) days of completion of drilling, the well operator will supply to the coal operator a copy of the well deviation survey, if one was done.
- 26. Points to Consider – Planning Ahead • For Coal Operators – update the 5 year map (Active Coal Mine) whenever the permit area is revised or amended. • For Coal Operators – the “Operating Coal Mine” includes all previously permitted areas of the mine as well as future longwall/full extraction areas that are currently approved for development mining only.
- 27. Points to Consider – Planning Ahead • Copies of 5 year map should be sent to the DEP Oil and Gas office in Pittsburgh. Submit by June 12. • Some confusion on how or when “workable” coal seams will be designated by DEP under the new definition. DEP (California) believes a thickness standard will likely be used – 28” is the current standard – but is that reasonable?
- 28. Points to Consider – Planning Ahead • For Gas Operators – current Conservation Well permits will have to be revised to drill under the new amendments. • For Coal and Gas Operators – both industries need to consider potential participants in the coal pillar study that should commence in July. • Pillar Study – set new minimum standards but allow flexibility where coal and gas interests agree.
- 29. Points to Consider – Planning Ahead • The ability to drill wells under the Conservation Act still exists, so …….?