PA Environmental Regulators Propose New Drilling Rules

On March 9, 2015, the Pennsylvania Department of Environmental Protection released a revised rulemaking proposal that would toughen drilling regulations for shale-gas producers. The proposed regulations apply to both conventional and nonconventional wells, and include expanding the review process for proposed drilling sites near schools, playgrounds, and wetlands; requiring operators to demonstrate that streams and wetlands would be protected if the edge of a well pad is within 100 feet of the resource; requiring centralized wastewater impoundments to be permitted through more appropriate residual waste regulations; creating standards for noise control and mitigation; and requiring electronic filing of notices and reports.

The proposed regulations on impoundment of wastewater were the main area of concern for the department and were likely prompted by large fines the department has levied against operators in the region. In 2014, the department levied fines of over $4 million each against Fort Worth-based Range Resources and Pittsburgh-based EQT Corp. due to leaks from impoundment pools that the companies were maintaining. As part of its settlement with the state, Range agreed to upgrade its impoundments with liners and leak-detection equipment on par with what landfill operators must use. This is the standard the department would like to employ for all producers. Additionally, an impoundment would need to be shut down in three years or comply with these tougher standards. Finally, if a gas well pollutes nearby water supplies, the new rules would require that the operator restore the water quality to a higher level.

This new round of proposals will be subject to a 30-day comment period beginning April 4, 2015. The department initially released its proposed drilling regulations for public comment in December 2013 and received over 24,000 comments. However, state lawmakers asked the department to further revise the rules to write separate rules for traditional, shallow oil and gas operations and for deeper, unconventional extraction methods, leading to these revised rules.

Keywords: energy litigation, Pennsylvania, Pennsylvania Department of Environmental Protection, DEP, shale gas, fracking, wastewater impoundment

_{Courtney Scobie is with Ajamie LLP in Houston, Texas.}

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