MSC files suit against sections of new gas operations rules
A trade group representing natural gas drilling companies and their supply chain partners is petitioning Commonwealth Court to declare portions of a recently passed rule regarding surface activities for gas production as unlawful.
The Marcellus Shale Coalition said in a news release Friday it has filed a petition for declatory judgement seeking a declaration from the court that certain sections of Chapter 78a are against the law.
The final rules went into effect following their publication in the Pennsylvania Bulletin on Oct. 8.
The state Department of Environmental Protection began drafting revisions to the rules shortly before Act 13 became effective in 2012. Chapter 78 applies to surface activities related to oil and gas production, such as water replacement standards, waste handling, site restoration and spill reporting.
In its most recent form, the act also applies to pipelines and impoundments.
The MSC said it participated in two rounds of public comment periods as language was being considered, and said it also regularly engaged with DEP in an effort to create revisions that were “both operationally practical and necessary for protection of the environment.”
According to MSC, the new provisions affect well permitting, siting, pollution prevention control plans, pre-hydraulic fracturing diligence, waste processing, handling and reporting, primary and secondary containment, impoundments, pipelines, site and water restoration, and replacement and spill remediation.
The trade group said each of the new provisions “has a substantive change from existing law that will affect operations over the life of the well” and requires 27 new electronic notification requirements; 24 new/revised forms; three new technical guidance documents; and 14 new and/or revised plans.
The MSC said the provisions it is challenging have the potential to impose an initial cost of the industry of between $40 million and $70 million, and as much as $16 million annually thereafter. The MSC estimates the totality of the rulemaking may raise operational costs by as much as 30 percent, or $2 million per well.
“This comes at a time of historically low natural gas prices – all for little, if any, tangible environmental benefit,” the coalition stated. “These unnecessary costs threaten additional job losses and further discourage capital investment in Pennsylvania.”
During a news conference Friday with reporters, MSC President David Spigelmyer said his group is challenging specific sections of the rule.
“It’s a huge body of work that went into Rule 78a,” he said. “We’re challenging about a half-dozen issues.”
Those include:
• Sections that define new public resource agencies to include schools, playground owners, municipalities, water supply owners who, along with state agencies, have been provided “new opportunities to comment on the location of wells prior to permits being issued by DEP.”
• Sections that require well operators to identify active, inactive, orphan, abandoned and plugged wells before drilling, to monitor certain identified wells during drilling and hydraulic fracturing, and to plug orphan and abandoned wells that an operator alters by hydraulic fracturing. Spigelmyer noted that the DEP produced a 48-page document to explain the language, which he said is complex and contradictory to the regulatory language itself.
• Extensive new requirements for freshwater impoundments, which must be upgraded or closed within 12 months and include no grandfathering of synthetic liners, fencing or distance from seasonal high groundwater. MSC argues that Act 13 does not authorize DEP to promulgate regulations for impoundments off the well site.
The trade group also argues that another section “requires a duplicative site restoration plan in addition to a site restoration plan required under the Clean Streams Law for well sites over 5 acres, and imposes obligations on well sites less than 5 acres that conflict with Clean Streams Law programs.
It also objects to a section that requires operators to submit monthly waste generation reports, even though the Unconventional Well Report Act requires operators to report oil and gas production only, not waste, on a monthly basis.
Spigelmyer said the suit filed is the first time MSC has taken legal action against rules governing the natural gas industry.
“Our industry is being held to a different standard than other industries operating in the commonwealth,” Spigelmyer said.