Michele Siekerka, the chairman of the Delaware River Basin Commission (DRBC) who represents New Jersey Governor Chris Christie on the commission, recently issued a statement outlining the steps being taken by DRBC to reach a decision on natural gas drilling within the Delaware Basin. DRBC is apparently evaluating scientific studies and new regulations, practices and standards adopted by state and federal agencies. DRBC is also performing water quality and quantity monitoring to establish baseline conditions prior to the start of natural gas drilling activities within the Delaware Basin. Siekerka emphasized that DRBC is continuing to work towards a consensus both within and outside of regularly scheduled business meetings. See our previous posts regarding DRBC’s drilling moratorium for additional information.
West Virginia natural gas operators saw a shift in the permitting and regulation process as new rules governing horizontal drilling went into effect on July 1, 2013. Authorized by the West Virginia Legislature with its passage of the Horizontal Well Act in 2011, the West Virginia Department of Environmental Protection submitted the new regulations to the Legislature for approval after a year of work. The result is a comprehensive and somewhat technical set of regulations that will govern horizontal drilling in West Virginia. While some of the regulations merely recite requirements that are in the Horizontal Well Act, below are some of the new and noteworthy regulations in the newly-effective set:
- Provides for an expedited review process for regulatory approval of replacement bore holes (35-8-5.l.1)
- Supplemental requirements for well site safety plans (35-8-15)
- Increased recordkeeping requirements for water used in the hydraulic fracking process (35-8-9.1.b.3) and
- Additional certifications may be required on plats and plans submitted for permitting review.
A copy of the new horizontal drilling regulations can be found here.
Pennsylvania Governor Tom Corbett recently sent a letter to the Delaware River Basin Commission urging the Commission to end a three-year moratorium on hydraulically fractured wells. Corbett reportedly wrote that “[o]perators interested in developing natural gas have closed offices and laid off employees, lease payments have been withheld . . . and communities have watched their neighbors outside the basin benefit tremendously.” The Delaware River Basin Commission governs water quality in Pennsylvania, New Jersey, Delaware and New York. The Commission released proposed rules addressing oil and gas activity in the Basin but these have yet to be finalized. A vote on the proposed rules was scheduled in November 2011, but was cancelled when Delaware Governor Jack Markell withdrew his support and New York expressed that it wanted to complete its own environmental and health studies, which are still ongoing.
The Ohio Supreme Court accepted jurisdiction over the closely watched “home rule” case State ex rel. Morrison v. Beck Energy Corp. At issue are the state laws which give the Ohio Department of Natural Resources sole and exclusive authority to regulate oil and gas permitting, stimulation, production and completion over local ordinances to the contrary. Initially a trial court in Summit County determined that the City of Monroe Falls had the right to enforce its own application and permit requirements for oil and gas wells. The court of appeals disagreed and ruled that only ODNR had such powers. The Ohio Supreme Court is poised to make the final determination in a ruling that can be expected in the next year.
The U.S. Department of the Interior has extended the comment period by 60 days for the revised proposed rules for hydraulic fracturing on federal lands. Interior Secretary Sally Jewell indicated that various interest groups had requested more time to review the 171-page proposal issued in May. The comment period was set to expire on June 24, 2013, but comments will now be accepted through late August.
On May 16, 2013, the U.S. Department of Interior announced the release of its updated draft rules for hydraulic fracturing on federal lands. The 30-day deadline for submitting comments on the new proposal will run from the date of publication of the draft rules in the Federal Register. Additional information on the development of the updated rules is available here.
Journalist Pam Kasey suggested, in a print article in the West Virginia State Journal dated May 2, 2013, that while it is possible for a surface owner to attempt to insist that a driller become certified under new certification standards set by the Center for Sustainable Shale Development (as described last week in our blog), the standards are more likely to benefit minerals owners as bargaining tools for parties signing leases for oil and gas development. If the mineral interests are severed from the surface estate, then the surface owner will have little ability to use the standards for their own benefit. Per the article, the surface landowner will derive the most benefit from the new standards in situations when the minerals and the surface estate are owned by the same party, allowing the landowner can attempt to negotiate the standards into a lease or other agreement affecting the property.
As Pam Kasey explains in her May 2, 2013 article in the print edition of the West Virginia State Journal, the industry has voluntarily come together to be “good actors” in mineral development by incorporating input from oil and gas industry leaders, environmental groups and philanthropic organizations to design a certification program for gas producers in Appalachia, including West Virginia and Pennsylvania, under a new organization called the Center for Sustainable Shale Development based in Pittsburgh. This two year CCSD certification, while voluntary, examines 15 of the most critical areas in natural gas production to ensure producers are following the highest standards and comply with efforts to make production of natural gas in Appalachia as ‘green’ as possible.
The West Virginia legislature has passed Senate Bill 243, the legislation which authorizes the Department of Environmental Protection, Office of Oil and Gas (OOG), to promulgate the pending Horizontal Well Act regulations. According to the West Virginia Legislature’s bill tracking tool, Senate Bill 243 currently awaits Governor Tomblin’s signature. Notably, this bill includes a measure that would allow an operator to designate certain information regarding hydraulic fracturing chemicals as trade secret when filling out a well completion report. The trade secret measure compels the operator to share the information designated as trade secret with health professionals or the OOG in the event of a medical emergency or an investigation by the OOG.