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Agency facing $58M loss to monitor gas drilling
Teresa Candori said she couldn't be specific about the number of positions that might be cut at DEP. While some sources have speculated that as many as 300 positions could be cut, Candori said Tuesday that the estimates are not those of the agency.
"There are no numbers or positions at this time," she said, adding that the staff of the agency's oil and gas bureau, which has oversight of drilling activities, is not being targeted.
Candori noted that the oil and gas staff is undergoing a 50 percent increase, growing from 61 employees to 98 at DEP offices in areas where Marcellus Shale drilling occurs.
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On Oct. 28, the agency announced it began collecting higher permit application fees for all traditional vertical, non-Marcellus Shale oil and natural gas wells drilled in Pennsylvania to cover the cost of its permitting and enforcement work.
DEP Secretary John Hanger said the new fees, which went into effect Oct. 26, are based on well length and type, and replace a flat $100 fee established in 1984. Under the new structure, vertical wells with a bore length of up to 2,000 feet will now have a base permit cost of $250 with an additional $50 applied for each additional 500 feet of length.
The agency said a new fee structure was required to support the cost of permitting and inspecting both conventional and horizontal drilling projects.
"The money generated from the new permit fees is allowing us to hire new staff at our Pittsburgh, Meadville and Williamsport offices to better manage and monitor the drilling industry as it expands into new areas of the state," Hanger said.
The new fee structure for vertical wells follows new fees the department imposed in April for Marcellus Shale wells, which use a horizontal drilling technology. Marcellus Shale and non-vertical wells have a base permit cost of $900 for the first 1,500 feet of bore, with an additional levy of $100 for every 500 feet beyond that length.
Range Resources spokesman Matt Pitzarella said the company went from paying about $80 for a drilling permit to about $2,000.
"It was set up in such a way so that as drilling levels go up, the inspector numbers go up," he said. "It's a self-funding mechanism."
He said Range has its own staff of field employees to monitor drilling.
"We want to make sure we're following the rules. We don't want to get slapped with a bunch of fines."
While drilling in the Marcellus Shale has continued to grow over the past several years, the majority of gas wells drilled in the state continue to be vertical wells, according to DEP's numbers.
Through Oct. 23, DEP said it has issued 5,333 oil and natural gas drilling permits this year, 1,516 of which are for the Marcellus Shale formation. Of the 1,944 gas wells drilled so far this year, 403 are Marcellus Shale wells. The department said it has performed 10,365 inspections of drilling sites during that period.
But drilling in the Marcellus Shale strata continues to grow.
The agency said that since 2005, it has issued 2,112 Marcellus Shale permits, with a total of 660 Marcellus Shale wells drilled. Atlas Energy Inc. said last week it plans to drill 30 wells in 2010 in Fayette and Greene counties, while CNX Gas has set its projection at 24 wells next year and Range, 90 wells.
N.Y. drilling waste may be dumped here
While the three companies are the biggest players in the Marcellus Shale locally, the DEP could eventually find itself busy with inspections related to Marcellus Shale drilling from New York.
According to proposed Marcellus drilling regulations in New York now being circulated for public comment, the state's Department of Energy Conservation is recommending that wastewater from drilling sites be sent to Pennsylvania for processing.
The draft proposal lists 11 out-of-state treatment plants for disposal of New York flowback water. Two of the plants are in Washington and Waynesburg, with others throughout Western Pennsylvania and one in Wheeling, W.Va.
The DEC also says wastewater could be taken to publicly owned municipal sewage treatment plants in New York, requiring them to notify it of any new industrial waste they plan to receive. The proposed rules also allow for the construction of private wastewater treatment plants that the DEC would regulate.
Candori said the increased drilling in the Marcellus prompted DEP to set standards for the first time this year for total dissolved solids in the wastewater. The wastewater returning to the surface from drilling operations, termed flowback, represents about 30 percent of the water used to fracture the Marcellus Shale to release the gas.
According to Candori, for a driller to receive a permit, "they have to tell us where they're going to get their water and where they're going to dispose of it."
She said DEP is also permitting the construction of new wastewater treatment plants for the Marcellus Shale drilling. One of those plants under construction in Masontown is facing a legal challenge. An environmental law firm, Earthjustice, filed an appeal last week on behalf of Clean Water Action against a deal between DEP and Shallenberger Construction that Earthjustice claims is being fast-tracked without formal notice in the official Pennsylvania Bulletin.
"We know that Pennsylvania is facing enormous pressure from gas drillers who are generating contaminated water faster than the state's treatment plants can handle," said attorney Deborah Goldberg in a press release. "Still, the health of the 350,000 people who depend on the Monongahela River for their drinking water should come first. We're asking the state not to skimp on its due diligence." DEP says it does not comment on pending litigation.
Earthjustice notes that while DEP requires other proposed treatment plants that expect to handle gas well wastewater to limit or monitor the amounts of toxic chemicals they discharge into drinking water, the Masontown plant agreement "would allow dumping of untreated fluids into the Monongahela River without any testing for most of the dangerous chemicals common in gas wastes, including known carcinogens such as benzene."
Range Resources said last month it is now recycling 100 percent of its flowback water from its drilling projects.
Chief Operating Officer Jeff Ventura described the recycling as "an exciting breakthrough" for the Marcellus region.
Unlike the Barnett Shale region in Texas, where Ventura said drillers can send much of the wastewater into "deep zone" wells, the Appalachian Basin has few deep zone wells.
According to Ventura, in horizontal drilling, between 15 and 30 percent of wastewater is returned to the surface, while the remainder stays in the ground.
"We can get back 30 percent and add 70 percent fresh water," he said. "It's better environmentally and it's better economically." According to the company, about 3 million gallons of fresh water are added to 1 million gallons of salty flowback water per well. With the new method, Range said it has reduced its water consumption by about 30 million gallons during the last six months. It said the new measure also reduces its operating costs since it doesn't have to buy as much water or pay to truck the water or to treat it, and said recycling also has eliminated about 7,500 trucks from the road that would have been needed to haul the flowback water to disposal facilities.
While water recycling is a "huge breakthrough," Ventura said, "we still think water disposal wells are needed."
He explained that recycling works well when the company is employing "pad drilling," which is when it drills a horizontal well that reaches the shale beneath multiple properties.
Ventura said Range is sharing information about its recycling method.
"Ultimately, it's going to force everybody to step up," he said.
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Five years on, Marcellus Shale play a booming business
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An exciting breakthrough? : 11/8/2009
As far as “stepping up” Range should be the first to take their own advice. The “exciting breakthrough” that Mr. Ventura speaks of, pumping recycled wastewater through 3 miles of temporary pipelines, has been the cause of two fish kills in five months by his company (their Cross Creek Lake fine will soon be announced by the DEP). So who’s fooling who? And whose backyard will be next to have one these wastewater pits holding millions of gallons of stinky fluids? For a host of reasons, DEP is not doing an effective job. One local township official learned that each gas well site only averages one DEP inspection during the entire well drilling process. Compare that to construction industry oversights. Concrete in gas well casings doesn’t require any inspection and these casings are the sole defenders of water aquifer contamination. Some estimates indicate 50% of gas well casings will fail within 15-years. It also appears there is no pre-drilling research done on where old oil and gas wells are located, and whether they are adequately capped. These old wells can easily serve as conduits for frac fluids to reach the surface and drinking water sources. Regarding the wastewater from New York getting dumped into our 3 rivers, hey, Washington County has taken a bunch of their trash to build “Mount Arden” landfill, so why shouldn’t we further contaminate our rivers with their wastewater. You may love New York, but do you love them that much?
Regulation? : 11/8/2009
I find it very troubling that Range says it "has its own staff of field employees to monitor drilling". What’s the point of having an independent regulatory agency, if the drillers don’t need regulated? Isn’t that like letting the fox guard the hen house? Wake up PA. We are asking for decade’s worth of water problems. Whether it’s water wells or public water systems. Range is busy hiring people from the DEP and the Governor’s office. Why is this? Who needs regulation, when the drillers just show up and do what they want. The DEP rarely ever issues violations for any of the damage that is done. Look at the Cross Creek fish kill and the Brush Run fish kill. Come out to Mt. Pleasant Twp., Cross Creek Twp., Hopewell Twp., and Buffalo Twp. See what regulation has done for these people. Why are their people all over these areas with water tanks in their yards or garages? Look at how the drillers have left the landscape. Smell what use to be fresh country air. Now there is the smell of chemicals. To all the drillers and processors of natural gas operating in Southwest PA: How do you sleep at night? How do you look at your selves in the mirror? Don’t you feel any remorse for what you are doing to these communities and their residents? Forget the “millions” you are going to pay out this year! What about the children exposed to your “cocktails” in their water. The toxins that are now air born. Are you going to leave PA in the same condition you have left Western Colorado, Southern Wyoming, Northern Mexico and most of Texas? Are we going to have the cancer clusters here too? You go ahead and make your millions and then spend your millions lobbying our elected officials. Your bribes will help shape our elections in years to come. Not only locally, but across the country. For the few residents that actually benefit from this drilling, there are many more who suffer.
Another good piece : 11/8/2009
I'm glad to see some balance at the OR and that all of th einvolved parties are at the table. I've worked in this new industry for a short while now an dlearned a lot and this can be done right and I'm happy to see the OR keeping us informed. If a bad player enters the tate, the DEP should enforce appropriately.
$58M Loss (Funding Cut) : 11/8/2009
300 poitions cut, oil & gas bureau not being targeted, very confident, higher permit fee"s, #'s horz. % vertical, hire NEW staff, Range also has it OWN staff, #'s flowback, Masontowns into Mon. Riv. recyecling 100% of flowback, get 30% back & add 70% to fresh water, disposal wells needed, NY to send its waste! ! So.....how does less add up to more? GIVE ME A BREAK! ! $'s out weigh what is going to be the future!
HUGE BREAKTHROUGH? : 11/9/2009
how advanced can this "technology" be when they tell us that recycling fract fluids and water "revolutionary". If this is the best this industry has to offer then they should be sticking with legos and color by number books.
PA-is stupid : 11/9/2009
Ok we have the highest polution rate and don't want to do anything about it. We haven't even used the stimulus money for things like this...no wonder the budget is getting cut. PA won't conform to the new energy laws and use this money to clean our already dirty air and water. USE the DARN STIMULUS MONEY THEN!!!!
: 11/11/2009
Tax the gas companies in order to fund the DEP, is it that hard? Our governor really don't want tight regulations on the gas companies, you can guess as to the reason why.
what do you want? : 11/16/2009
First it was "don't drill because the well heads are too ugly". The industry changed to be able to harvest resources from a massive area with one hole and you still complain. Natural gas is the cleanest form of energy that is CURRENTLY VIABLE. In case you havent nothced, Our corner of PA gets about 60 sunny days a year according to NOAA. Solar won't work here. obama canceled the Yucca Mountain nuclear waste disposal site. So nuclear power is off the table unless you're a terrorist state. Windmills grind up the bats and birds. So why don't you offer a solution instead of roadblocks. Drill HERE. Drill NOW. End our dependence on OPEC.
Monitor this! : 1/12/2010
Send the DEP to the borders to watch for illegals. They leave more trash behind when crossing into this country than the drillers do.
