PROPOSED RULEMAKING
[25 PA. CODE CH. 78]
Oil and Gas Wells
[30 Pa.B. 3065] The Environmental Quality Board (Board) proposes to amend Chapter 78 (relating to oil and gas wells). The amendments are needed to reflect the statutory amendment of May 15, 1998 (P. L. 358, No. 57) (Act 57), which eliminated the bonding requirement for oil and gas wells drilled prior to April 18, 1985. These amendments also clarify several sections, including brine spill reporting, notification requirements, permit requirements, disposal options and requirements for drilling through a gas storage reservoir.
This proposal was adopted by the Board at its meeting of April 18, 2000.
A. Effective Date
These amendments will go into effect upon publication in the Pennsylvania Bulletin as final rulemaking.
B. Contact Persons
For further information, contact James Erb, Director of the Bureau of Oil and Gas Management, P.O. Box 8765, Rachel Carson State Office Building, Harrisburg, PA 17105-8765, (717) 772-2199, or Marylou Matas, Assistant Counsel, Bureau of Regulatory Counsel, P.O. Box 8464, Rachel Carson State Office Building, Harrisburg, PA 17105-8464, (717) 787-7060. Information regarding submission of comments on this proposal appears in Section I of this Preamble. Persons with a disability may use the AT&T Relay Service by calling (800) 654-5984 (TDD users) or (800) 654-5988 (voice users). This proposal is available electronically through the Department of Environmental Protection (Department) Web site (http://www.dep.statepa.us).
C. Statutory Authority
The proposed rulemaking is being made under the authority of section 604 of the Oil and Gas Act (58 P. S. § 601.604) (act), which directs the Board to adopt regulations to implement the provisions of the act; section 5(b) of The Clean Streams Law (35 P. S. § 691.5(b)) (law), which grants the Department the power and duty to formulate, adopt, promulgate and delete rules and regulations necessary to implement the provisions of the act; section 304 of the law (35 P. S. § 691.304), which grants the Department the power to adopt, prescribe and enforce rules and regulations as may be necessary for the protection of the purity of the waters of this Commonwealth, or parts thereof, and to purify those now polluted, and to assure the proper and practical operation and maintenance of treatment works approved by the Department; section 402(a) of the law (35 P. S. § 691.304(a)), which grants the Department the authority to require by rules and regulations that activities be conducted under a permit or other conditions established by the Department whenever the Department finds that the activity creates a danger of pollution of the waters of the Commonwealth or that regulation is necessary to avoid pollution; section 105(a) of the Solid Waste Management Act (SWMA) (35 P. S. § 6018.105(a)), which grants the Board the power and duty to adopt the rules and regulations of the Department to carry out the provisions of the SWMA; and sections 1901-A, 1917-A and 1920-A of The Administrative Code of 1929; and sections 30 and 31 of the act of December 3, 1970 (P. L. 834, No. 275 (71 P. S. §§ 510-103 and 510-104)).
D. Background and Purpose
The proposal is required to update the current regulations to reflect the legislated changes in Act 57 regarding bonding for wells drilled prior to April 18, 1985. It incorporates recommendations received during the Oil and Gas Customer Needs Project regarding standardizing the use of pits, clarifying terms, organization of the sections of the regulations, and the placement of design criteria in the regulations. It also includes an additional recommendation regarding notification requirements for de minimis brine spill reporting. The Oil and Gas Technical Advisory Board suggested additional precautions regarding notification requirements to coal owners and gas storage operators as well as advance notice of procedures when drilling is proposed in relation to gas storage operations.
E. Summary of Regulatory Requirements
Numerous nonsubstantive changes have been made throughout these proposed amendments to correct typographical errors, to eliminate redundancy and to clarify language where appropriate. The substantive changes are described in the following by section.
§ 78.1. Definitions.
The proposed changes add a definition for ''reportable release of brine.'' This change will provide clarification as to the quantity of spilled brine that must be reported. This definition is being added in conjunction with § 78.66 (relating to release of polluting substances).
§ 78.17. Permit renewal.
The proposed changes add affected coal owners and gas storage operators to the persons who must be notified when an operator requests a permit renewal. This change provides consistency with other sections of the regulation that allow coal owners and gas storage operators the opportunity for notification and objection of well permits.
§ 78.53. Erosion and sedimentation control.
The proposed change references the best management practices for oil and gas well operators as part of the technical guidance found in the Oil and Gas Operators Manual.
§ 78.56. Pits and tanks for temporary containment.
Subsection (a) is being changed to recognize additional operations that may result in the discharge of pollutional substances, as well as include additional pollutional substances, which must be contained. This section eliminates the permitting requirement for recompletion, servicing and plugging pits, which are temporary in nature.
Subsection (a)(4) is being changed to recognize another substance, drill cuttings from below the casing seat, that shall sidered when an operator is installing, constructing or maintaining the temporary pit.
Subsection (a)(4)(v) is added to clarify the maintenance requirement for pit liners.
Subsection (d) is amended to include pits used during servicing and plugging.
§ 78.59. Pits used during servicing and plugging.
This section is deleted because the proposed changes to § 78.56 regulate the same pits.
§ 78.60. Discharge requirements.
Subsection (b)(5) is being changed to clarify that tophole water may include accumulated precipitation, and is more appropriately characterized as the discharge.
§ 78.61. Disposal of drill cuttings.
Subsections (a)--(c) are being changed to add a leading description to each subsection.
Subsection (b)(8) is being added to clarify that liquid fraction is disposed of in accordance with the proper discharge requirements. This subsection is added for consistency with subsection (a).
§ 78.62. Disposal of residual waste--pits.
§ 78.63. Disposal of residual waste--land application.
Sections 78.62(a)(3) and 78.63(a)(3) are being clarified to reflect the legislative changes that Act 57 created. Act 57 eliminated the bonding requirement for onsite disposal of residual wastes at oil and gas wells drilled prior to April 18, 1985.
§ 78.66. Release of polluting substance.
This section is being added to clarify when a brine spill shall be reported to the Department. This section also details the notification requirements for a brine release.
§ 78.75. Alternative methods.
Subsections (c) and (d) are being changed to clarify who is to be notified when an alternate method of casing, plugging or equipping a well is proposed by the well operator. The proposed amendment includes all potentially impacted parties, such as coal owners and gas storage operators. This amendment clarifies that these owners and operators also have the opportunity to evaluate the impact the alternate method may have on their interests.
§ 78.76. Drilling within a gas storage reservoir area.
Subsection (a) is being changed to clarify that when a well operator proposes to drill within a gas storage area or reservoir protective area, the Department and the gas storage operator are to receive copies of the drilling proposal to allow them the opportunity to evaluate the impact on gas storage operations. Subsection (b) clarifies that the storage operator may object to the drilling, casing or cementing plan of the proposed well. The proposed amendments delete subsection (c) because the provision is included in the new § 78.87(a)(4).
§ 78.78. Pillar permit applications.
Subsection (a) is being added to recognize the Department's use of the most current coal pillar study when considering a coal pillar permit application. The most recent coal pillar study was developed in 1957 and is still valid. Several other states also use this study in determining pillar adequacy.
Subsection (b) is being added to allow coal mine operators the opportunity to demonstrate alternative adequate methods for developing a coal pillar.
§§ 78.81 and 78.87. General provisions and gas storage reservoir protective casing and cementing procedures.
Section 78.81(d) is being relocated and rewritten as new § 78.87 to improve clarity of the regulation.
The subject matter of § 78.87 is similar to that of § 78.81(d). The proposed amendments reformat the requirement in § 78.81(d) into various subsections in § 78.87, making it more understandable.
§§ 78.91--78.93. General provisions; wells in coal areas--surface or coal protective casing is cemented; wells in coal areas--surface or coal protective casing anchored with a packer or cement.
These three sections are being amended to delete the word ''expanding'' throughout. The word ''expanding'' was used as an adjective to describe ''cement.'' Cement expands upon curing; therefore, the use of the adjective is not necessary.
§ 78.302. Requirement to file a bond.
This section is being revised to reflect the legislative change of Act 57, which eliminated the bonding requirement for oil and gas wells drilled prior to April 18, 1985.
§ 78.303. Form, terms and conditions of the bond.
Subsections (a)(3) and (e)(3) are being deleted to reflect the legislative changes of Act 57.
§ 78.309. Phased deposit of collateral.
Subsection (a)(1) is being revised to reflect the legislative changes of Act 57. This proposal clarifies that an operator who has a phased deposit of collateral bond in effect as of the date of Act 57 (November 26, 1997) may maintain that bond. Due to the elimination of the bonding requirement for oil and gas wells drilled prior to April 18, 1985, operators can no longer qualify for a new phased deposit of collateral bond.
Subsection (a)(1)(iv) is being changed to clarify that all of the operator's wells are included in the number of wells considered for the purpose of calculating an operator's annual deposit amount. This proposal reflects the legislative changes of Act 57.
Subsection (b)(1)(ii) is being deleted because it only applied to pre-Act wells. This proposal reflects the legislative changes of Act 57.
§ 78.310. Replacement of existing bond.
This section is being changed to delete the fee-in-lieu of bond option since new fee-in-lieu of bonding is not allowed. This proposal reflects the legislative changes of Act 57.
§ 78.901. Definitions.
This section is being deleted as the only definition listed is for the Natural Gas Policy Act (15 U.S.C.A. §§ 3301--3432 and 42 U.S.C.A. § 7255), a Federal program no longer delegated to the Department.
§ 78.903. Frequency of inspections.
Paragraph (17) is being deleted in accordance with the Department's operation under the act, and not the Natural Gas Policy Act. The Federal program was discontinued.
F. Benefits, Costs and Compliance
Executive Order 1996-1 requires a cost/benefit analysis of the proposed regulations.
Benefits
These amendments are proposed to reduce unnecessary permitting and reporting requirements, standardize the use of pits, clarify terms, organize the sections of the regulation, and provide information as to where to find design criteria. It includes a recommendation regarding notification requirements for de minimis brine spill reporting. The Oil and Gas Technical Advisory Board suggested additional precautions regarding notification requirements to coal owners and gas storage operators as well as advance notice of procedures when drilling is proposed in relation to gas storage operations. It also reflects the legislative changes of Act 57. The oil and gas industry and the Department should realize savings in the form of reduced time and reduced costs due to decreased permitting and reporting requirements and improve clarity by making the regulations easier to read and interpret. The proposal regarding elimination of the permit requirement for temporary pits will affect operators with active drilling or plugging programs. The renewal notification requirements will benefit coal owners and gas storage operators. The spill reporting proposal will benefit about 2,000 operators with active wells as well as reduce the Department's staff time to address reported de minimis spills.
Compliance Costs
Operators proposing to drill a well in a gas storage area will have to provide the storage well operator the details of how the operator intends to construct the well. There will be fewer than 20 occurrences each year. The proposed changes are procedural and administrative in nature and will result in minimal additional compliance costs to the Department and the regulated community. These costs are not quantifiable.
Compliance Assistance Plan
The technical guidance for the coal pillar permit criteria is made available on the Department web site. The best management practices for erosion and sedimentation control is made available in the Oil and Gas Operators Manual. Both of these documents are available from the contact persons listed in section B.
Paperwork Requirements
These proposed amendments will reduce certain paperwork required for brine spill reporting and the elimination of permits for certain pits.
G. Sunset Review
These regulations will be reviewed in accordance with the sunset review schedule published by the Board to determine whether the regulations effectively fulfill the goals for which they were intended.
H. Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 31, 2000, the Board submitted a copy of these proposed amendments to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House and Senate Environmental Resources and Energy Committees. In addition to submitting the proposed amendments, the Board has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Board in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available upon request.
Under section 5(g) of the Regulatory Review Act, if IRRC has objections to any portion of the proposed amendments, it will notify the Board within 10 days of the close of the Committees' review period. The notification shall specify the regulatory review criteria which have not been met by that portion of the proposed amendments to which an objection is made. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the amendments, by the Board, the General Assembly and the Governor of objections raised.
I. Public Comments
Written Comments--Interested persons are invited to submit comments, suggestion or objections regarding the proposed amendments to the Environmental Quality Board, P. O. Box 8477, Harrisburg, PA 17105-8477 (express mail: Rachel Carson State Office Building, 15th Floor, 400 Market Street, Harrisburg, PA 17101-2301). Comments submitted by facsimile will not be accepted. Comments, suggestions or objections must be received by the Board by July 17, 2000 (within 30 days of publication in the Pennsylvania Bulletin). Interested persons may also submit a summary of their comments to the Board. The summary may not exceed one page in length and must also be received by July 17, 2000 (within 30 days of publication in the Pennsylvania Bulletin). The one-page summary will be provided to each member of the Board in the agenda packet distributed prior to the meeting at which the final regulation will be considered.
Electronic Comments--Comments may be submitted electronically to the Board at RegComments@dep.state. pa.us and must also be received by the Board by July 17, 2000. A subject heading of the proposal and a return address must be included in each transmission. If an acknowledgment of electronic comments is not received by the sender within 2 working days, the comments should be retransmitted to ensure receipt.
JAMES M. SEIF,
ChairpersonFiscal Note: 7-353. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 25. ENVIRONMENTAL PROTECTION
PART I. DEPARTMENT OF ENVIRONMENTAL PROTECTION
Subpart C. PROTECTION OF NATURAL RESOURCES
ARTICLE I. LAND RESOURCES
CHAPTER 78. OIL AND GAS WELLS
Subchapter A. GENERAL PROVISIONS § 78.1. Definitions.
* * * * * (b) The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Reportable release of brine--Spilling, leaking, emitting, discharging, escaping or disposing of one of the following:
(i) More than 5 gallons of brine within a 24-hour period on or into the ground at the well site where the total dissolved solids concentration of the brine is equal or greater than 10,000 mg/l.
(ii) More than 15 gallons of brine within a 24-hour period on or into the ground at the well site where the total dissolved solids concentration of the brine is less than 10,000 mg/l.
* * * * *
Subchapter B. PERMITS, TRANSFERS AND OBJECTIONS
PERMITS AND TRANSFERS § 78.17. Permit renewal.
An operator may request a 1-year renewal of a well permit. The request shall be accompanied by a permit fee, the surcharge required in section 601 of the act (58 P. S. § 601.601), and an affidavit affirming that the information on the original application is still accurate and complete, that the well location restrictions are still met and that the surface owners, coal owners and operators, gas storage operators and water supply owners within [1000] 1,000 feet have been notified of this request for renewal. The request shall be received by the Department at least 15-calendar days prior to the expiration of the original permit.
Subchapter C. ENVIRONMENTAL PROTECTION PERFORMANCE STANDARDS § 78.53. Erosion and sedimentation control.
During and after earthmoving or soil disturbing activities, including the activities related to siting, drilling, completing, producing, servicing and plugging the well, constructing, utilizing and restoring the access road and restoring the site, the operator shall construct, install and maintain erosion and sedimentation control measures and facilities in accordance with [the requirements of] Chapter 102 (relating to erosion and sediment control) and an erosion and sedimentation control plan prepared under that chapter. Best management practices for oil and gas well operations are listed in the Oil and Gas Operators Manual, Commonwealth of Pennsylvania, Department of Environmental Protection, Guidance No. 550-0300-001 (April 1997), as amended and updated.
§ 78.56. Pits and tanks for temporary containment.
(a) Except as provided in §§ 78.60(b) and 78.61(b) (relating to discharge requirements; and disposal of drill cuttings), the operator shall contain pollutional substances and wastes from the drilling, altering [or], completing, recompleting, servicing and plugging the well, including brines, drill cuttings, drilling muds, oils, stimulation fluids, well treatment and servicing fluids, plugging and drilling fluids other than gases in a pit, tank or series of pits and tanks. The operator shall install or construct and maintain the pit, tank or series of pits and tanks in accordance with the following requirements:
* * * * * (4) A pit or tank that contains drill cuttings from below the casing seat, pollutional substances, wastes or fluids other than tophole water, fresh water and uncontaminated drill cuttings shall be impermeable and comply with the following:
* * * * * (v) If the liner drops below the 2 feet of freeboard, the pit shall be managed to prevent the pit contents from leaking from the pit and the 2 feet of lined freeboard shall be restored.
* * * * * (d) Unless a permit under The Clean Streams Law (35 P. S. §§ 691.1--691.1001) or approval under § 78.57[,] or § 78.58 [or § 78.59] (relating to control, storage and disposal of production fluids; and existing pits used for the control, storage and disposal of production fluids [; and pits used during servicing and plugging]) has been obtained for the pit, the owner or operator shall remove or fill the pit within 9 months after completion of drilling [or recompletion of the well], or in accordance with the extension granted by the Department under section 206(g) of the act (58 P. S. § 601.206(g)). Pits used during servicing, plugging and recompleting the well shall be restored within 90 days of construction.
§ 78.59. [Pits used during servicing and plugging] (Reserved).
[Pits used for servicing and plugging a well shall comply with § 78.57 (relating to control, storage and disposal of production fluids), except that:
(1) A variance may be requested from the standard of § 78.57(c)(2)(iii) for a pit that exists only during dry times of the year and is located above groundwater.
(2) The requirement that the liner thickness be at least 30 mils does not apply.
(3) The pit shall be restored within 90 days of construction of the pit.]
§ 78.60. Discharge requirements.
* * * * * (b) The owner and operator may not discharge tophole water or water in a pit as a result of precipitation by land application unless the discharge is in accordance with the following requirements:
* * * * * (3) The specific conductance of the discharge is less than 1,000 µmHos/cm.
* * * * * (5) [Tophole water] The discharge shall be spread over an undisturbed, vegetated area capable of absorbing the tophole water and filtering solids in the discharge, and spread in a manner that prevents a direct discharge to surface waters and complies with § 78.53 (relating to erosion and sedimentation control).
* * * * * § 78.61. Disposal of drill cuttings.
(a) Drill cuttings from above the casing seat--pits. The owner or operator may dispose of drill cuttings from above the casing seat determined in accordance with § 78.83(b) (relating to surface and coal protective casing and cementing procedures) in a pit at the well site if the owner or operator satisfies the following requirements:
* * * * * (b) Drill cuttings from above the casing seat--land application. The owner or operator may dispose of drill cuttings from above the casing seat determined in accordance with § 78.83(b) by land application at the well site if the owner or operator satisfies the following requirements:
* * * * * (8) The liquid fraction is disposed of in accordance with § 78.60 (relating to discharge requirements).
(9) * * *
[(9)] (10) * * *
(c) Drill cuttings from below the casing seat. [Drill cuttings and liquids from below the casing seat determined in accordance with § 78.83(b) shall be contained in a pit, tank or a series of pits and tanks in accordance with § 78.56(a) (relating to pits and tanks for temporary containment).] After removal of the free liquid fraction and disposal in accordance with § 78.60 (relating to discharge requirements), [the remaining] drill cuttings from below the casing seat determined in accordance with § 78.83(b) may be disposed of as follows:
* * * * * § 78.62. Disposal of residual waste--pits.
(a) After the removal and disposal of the free liquid fraction of the waste under § 78.60(a) (relating to discharge requirements), the owner or operator may dispose of residual waste, including contaminated drill cuttings, in a pit at the well site if the owner or operator satisfies the following requirements:
* * * * * (3) The requirements of section 215 of the act (58 P. S. § 601.215) are satisfied by filing a surety or collateral bond for [the well and well site] wells drilled after April 18, 1985.
* * * * * § 78.63. Disposal of residual waste--land application.
(a) The owner or operator may dispose of residual waste, including contaminated drill cuttings, at the well site by land application of the waste if the owner or operator satisfies the following requirements:
* * * * * (3) The requirements of section 215 of the act (58 P. S. § 601.215) are satisfied by filing a surety or collateral bond for [the well and well site] wells drilled after April 18, 1985.
* * * * * § 78.66. Release of polluting substances.
(a) A release of a polluting substance causing or threatening pollution of the waters of this Commonwealth, shall comply with the reporting and corrective action requirements of § 91.33 (relating to incidents causing or threatening pollution).
(b) If a reportable release of brine on or into the ground occurs at the well site, the owner or operator shall notify the appropriate regional office of the Department as soon as practicable, but within 2 hours after detecting or discovering the release.
(c) The notice required by subsection (b) shall be by telephone and describe:
(1) The name, address and telephone number of the company and person reporting the incident.
(2) The date and time of the incident or when it was detected.
(3) The location and cause of the incident.
(4) The quantity of the brine involved.
(5) Available information concerning the contamination of surface water, groundwater or soil.
(6) Remedial actions planned, initiated or completed.
(d) If, because of an accident, an amount of brine less than the reportable amount as described in § 78.1 (relating to definitions), spills, leaks or escapes, such an incident does not have to be reported.
(e) Upon the occurrence of any release, the owner or operator shall take necessary corrective actions:
(1) To prevent the substance from reaching the waters of this Commonwealth.
(2) To recover or remove the substance which was released.
(3) To dispose of the substance in accordance with this subchapter or as approved by the Department.
Subchapter D. WELL DRILLING, OPERATION
AND PLUGGING
GENERAL § 78.75. Alternative methods.
* * * * * (c) The well operator shall notify all coal owners and operators [affected by] and gas storage operators of record of the proposal, by certified mail. The well operator shall state in the application that he has sent the certified mail notice to the coal [operator] owners and operators and gas storage operators of record, either simultaneously with or prior to submitting the proposal to the Department.
(d) The coal owners and operators and gas storage operators of record shall have up to 15 days from their receipt of the notice to file objections or to indicate concurrence with the proposed alternative method or material.
* * * * * § 78.76. Drilling within a gas storage reservoir area.
(a) An operator proposing to drill a well within a gas storage reservoir area or a reservoir protective area to produce gas or oil shall forward by certified mail a copy of the well location plat, the drilling, casing and cementing plan and the anticipated date drilling will commence to the gas storage reservoir operator and shall submit proof of notification to the Department with the well permit application.
(b) The storage operator may file an objection with the Department to the drilling casing and cementing plan or the proposed well location within 15 days of receipt of the notification and request a conference in accordance with section 501 of the act (58 P. S. § 601.501).
[(c) When cementing casing in a well drilled through a gas storage reservoir, the operator shall insure that no gas is present in the drilling fluids in an amount that could interfere with the integrity of cementing the casing.]
§ 78.78. Pillar permit applications.
(a) The Department will use recommendations for coal pillar size and configuration set forth in the coal pillar study, listed in the Department's Coal Pillar Technical Guidance Number 550-2100-006 (October 31, 1998) and any updates or revisions, as a basis for approval or disapproval of coal pillar permit applications submitted by underground coal mine operators.
(b) Where proposed coal pillar size and configuration does not conform to the recommendations of the most current coal pillar study, the underground coal mine operator may request Department approval for an alternate coal pillar size and configuration.
CASING AND CEMENTING § 78.81. General provisions.
(a) The operator shall conduct casing and cementing activities under this section and §§ 78.82--[78.86] 78.87 or an approved alternate method under § 78.75 (relating to alternative methods). The operator shall case and cement a well [in order] to accomplish the following:
* * * * * [(d) A well drilled through a gas storage reservoir or a reservoir protective area shall be drilled, cased and cemented as follows:
(1) An operator shall use drilling procedures capable of controlling anticipated gas storage reservoir pressures at all times when drilling through a gas storage reservoir horizon. Operators shall use blow-out prevention equipment with a pressure rating in excess of the allowable maximum storage pressure for the gas storage reservoir before drilling into the gas storage reservoir or gas storage horizon.
(2) An operator shall run intermediate or production casing from a point located at least 100 feet below the gas storage horizon to the surface. The operator shall cement this casing by circulating cement to a point at least 200 feet above the gas storage reservoir or gas storage horizon. This casing which is intended to protect the gas storage reservoir and the well shall be installed according to a procedure approved by the Department and established by mutual agreement between the well operator and the gas storage reservoir operator.]
§ 78.87. Gas storage reservoir protective casing and cementing procedures.
(a) In addition to the other provisions in this subchapter, a well drilled through a gas storage reservoir or a reservoir protective area shall be drilled, cased and cemented as follows:
(1) An operator shall use drilling procedures capable of controlling anticipated gas flows and pressures when drilling from the surface to 200 feet above a gas storage reservoir or gas storage horizon.
(2) An operator shall use drilling procedures capable of controlling anticipated gas storage reservoir pressures and flows at all times when drilling from 200 feet above a gas storage reservoir horizon to the depth at which the gas storage protective casing will be installed. Operators shall use blow-out prevention equipment with a pressure rating in excess of the allowable maximum storage pressure for the gas storage reservoir.
(3) To protect the gas storage reservoir, an operator shall run intermediate or production casing from a point located at least 100 feet below the gas storage horizon to the surface. The operator shall cement this casing by circulating cement to a point at least 200 feet above the gas storage reservoir or gas storage horizon.
(4) When cementing casing in a well drilled through a gas storage reservoir, the operator shall insure that no gas is present in the drilling fluids in an amount that could interfere with the integrity of the cement.
(b) A request by an operator for approval from the Department to use an alternative method or material for the casing, plugging or equipping of a well drilled through a gas storage reservoir under section 211 of the act (58 P. S. § 601.211) shall be made in accordance with § 78.75 (relating to alternative methods).
PLUGGING § 78.91. General provisions.
* * * * * (c) When a well is being plugged from attainable bottom, the operator shall install a 50-foot plug of [expanding] cement at the attainable bottom and plug the remainder of the well under §§ 78.92--78.98.
* * * * * § 78.92. Wells in coal areas--surface or coal protective casing is cemented.
(a) In a well underlain by a workable coal seam, where the surface casing or coal protective casing is cemented and the production casing is not cemented or the production casing is not present, the owner or operator shall plug the well as follows:
(1) The retrievable production casing shall be removed and the well shall be filled with nonporous material from the total depth or attainable bottom of the well, to a point 20 feet above the top of the lowest stratum bearing or having borne oil, gas or water. At this point there shall be placed a plug of [expanding] cement, which shall extend for at least 50 feet above that point. Between this sealing plug and a point 20 feet above the next higher stratum bearing or having borne oil, gas or water, the hole shall be filled with nonporous material and at that point there shall be placed another 50-foot plug of [expanding] cement which will completely seal the hole. In like manner, the hole shall be filled and plugged, with reference to each of the strata bearing or having borne oil, gas or water. The operator may treat multiple strata as one stratum and plug as described in this subsection with a single column of [expanding] cement or other materials approved by the Department. Where the production casing is not retrievable, the operator shall plug that portion of the well under § 78.91(d) (relating to general provisions).
(2) After plugging strata bearing or having borne oil, gas or water, the well shall be filled with nonporous material to a point approximately 100 feet below the surface or coal protective casing seat, whichever is deeper. At this point, a 100-foot plug of [expanding] cement shall be installed.
* * * * * (b) The owner or operator shall plug a well, where the surface casing, coal protective casing and production casing are cemented, as follows:
* * * * * (2) [Expanding cement] Cement plugs shall be set in the cemented portion of the production casing so that the plugs will extend from at least 50 feet below each stratum bearing or having borne oil, gas or water, to a point at least 100 feet above each stratum bearing or having borne, oil, gas or water. A Department approved mechanical plug may be set 20 feet above each stratum bearing or having borne oil, gas or water as a substitute for the plug of [expanding] cement. Nonporous material shall separate each [expanding] cement plug or mechanical plug. The operator may treat multiple strata as one stratum and plug as described in this subsection with a single column of cement or other materials as approved by the Department.
(3) Following the plugging of the cemented portion of the production casing, the uncemented portion of the production casing shall be separated from the cemented portion and retrieved. The maximum distance the stub of the uncemented portion of the production casing may extend is 100 feet below the surface or coal protective casing whichever is lower. In no case may the uncemented portion of the casing left in the well extend through a formation bearing or having borne oil, gas or water. Other stratum above the cemented portion of the production casing bearing or having borne oil, gas or water shall be plugged by filling the hole with nonporous material to 20 feet above the stratum and setting a 50-foot plug of [expanding] cement. The operator may treat multiple strata as one stratum and plug as described in this subsection with a single column of cement or other material as approved by the Department. When the uncemented portion of the production casing is not retrievable, the operator shall plug that portion of the well under § 78.91(d).
(4) After plugging all strata bearing or having borne oil, gas or water, the well shall be filled with nonporous material to a point approximately 100 feet below the surface or coal protective casing seat, whichever is deeper. At this point a 200-foot [expanding] cement plug shall be placed so that the plug extends from 100 feet below the casing seat to a point at least 100 feet above the casing seat.
* * * * * § 78.93. Wells in coal areas--surface or coal protective casing anchored with a packer or cement.
(a) In a well where the surface casing or coal protective casing and production casing are anchored with a packer or cement, the owner or operator shall plug the well as follows:
(1) The retrievable production casing shall be removed and the well shall be filled with nonporous material from the total depth or attainable bottom of the well, to a point 20 feet above the top of the lowest stratum bearing or having borne oil, gas or water. At this point there shall be placed a plug of [expanding] cement, which shall extend for at least 50 feet above that point. Between this sealing plug and a point 20 feet above the next higher stratum bearing or having borne oil, gas or water, the hole shall be filled with nonporous material and at that point there shall be placed another 50-foot plug of [expanding] cement which will completely seal the hole. In this manner, the hole shall be filled and plugged, with reference to each of the strata bearing or having borne oil, gas or water. The operator may treat multiple strata as one stratum and plug as described in this subsection with a single column of cement or other material as approved by the Department. When the production casing is not retrievable, the operator shall plug this portion of the well under § 78.91(d) (relating to general provisions).
(2) The well shall then be filled with nonporous material to a point approximately 200 feet below the lowest workable coal seam, or surface or coal protective casing seat, whichever is deeper. Beginning at this point a 100-foot plug of [expanding] cement shall be installed.
* * * * * (b) The owner or operator shall plug a well, where the surface casing and coal protective casing is anchored with a packer or cement and the production casing is cemented, as follows:
(1) If the total depth or attainable bottom is deeper than the cemented production casing seat, the operator shall plug that portion of the well under subsection (a)(1).
(2) An [expanding] cement plug shall be set in the cemented portion of the production casing so that the plugs extend from at least 50 feet below each stratum bearing or having borne oil, gas or water, to a point at least 100 feet above each stratum bearing or having borne, oil, gas or water. A Department approved mechanical plug may be set 20 feet above the stratum bearing or having borne oil, gas or water as a substitute for the plug of [expanding] cement. Nonporous material shall separate each [expanding] cement plug or mechanical plug. The operator may treat multiple strata as one stratum and plug as described in this subsection with a single column of cement or other materials as approved by the Department.
(3) Following the plugging of the cemented portion of the production casing, the uncemented portion of the production casing shall be separated from the cemented portion and retrieved. The maximum distance the stub of the uncemented portion of the production casing may extend is 100 feet below the surface or coal protective casing whichever is lower. In no case may the uncemented portion of the casing left in the well extend through a formation bearing or having borne oil, gas or water. Other stratum above the cemented portion of the production casing bearing or having borne oil, gas or water shall be plugged by filling the hole with nonporous material to 20 feet above the stratum and setting a 50-foot plug of [expanding] cement. The operator may treat multiple strata as one stratum and plug as described in this paragraph with a single column of cement or other material approved by the Department. When the uncemented portion of the production casing is not retrievable, the operator shall plug that portion of the well under § 78.91(d).
(4) The well shall be filled with nonporous material to a point approximately 300 feet below the bottom of the surface casing or coal protective casing, whichever is deeper. In this case, a 100-foot plug of [expanding] cement shall then be placed in the well beginning at that point and extending to a point approximately 200 feet below the bottom of the casing seat.
* * * * *
Subchapter G. BONDING REQUIREMENTS § 78.302. Requirement to file a bond.
For a well that has not been plugged, the owner or operator shall file a bond or otherwise comply with the bonding requirements of section 215 of the act (58 P. S. § 601.215) and this chapter. A bond or bond substitute is not required for a well drilled before April 18, 1985.
§ 78.303. Form, terms and conditions of the bond.
(a) The following types of security are approvable:
* * * * * (3) [For operators who meet the requirements of section 215(d)(1) of the act (58 P. S. § 601.215(d)(1)), a phased deposit of collateral bond as provided in § 78.309(a) (relating to phased deposit of collateral).
(4)] For individuals who meet the requirements of section 215(d.1) of the act, a phased deposit of collateral bond as provided in § 78.309(b).
* * * * * (e) The bond amounts required under section 215 of the act are as follows:
* * * * * [(3) For a fee in lieu of providing a bond one of the following:
(i) Fifty dollars annual nonrefundable payment per single well for one to nine wells.
(ii) Five hundred dollars annual nonrefundable payment for ten to twenty wells.
(iii) One thousand dollars annual nonrefundable payment for 21 to 200 wells.]
§ 78.309. Phased deposit of collateral.
(a) Operators.
(1) Eligibility. An operator who [seeks to satisfy the collateral bond requirements of the act by submitting phased deposit of collateral under section 215(d)(1) of the act (58 P. S. § 601.215(d)(1)), shall meet the following eligibility requirements:] had a phased deposit of collateral in effect on November 26, 1997, may maintain that bond for wells requiring bonding, for new well permits and for wells acquired by transfer.
* * * * * [(ii) An operator shall have at least one well drilled prior to April 18, 1985.
(iii) An operator shall certify that the operator is unable to obtain a bond for a well drilled prior to April 18, 1985.
(iv)] (ii) Under the following schedule, an operator shall make [an initial] a deposit with the Department of approved collateral prior to the issuance of a permit for a well or the transfer of a permit for a well, and shall make subsequent annual deposits and additional well payments[:]. For the purpose of calculating the required deposit, all of the operator's wells are included in the number of wells.
Number of wells [Initial Deposit] Annual Deposit per Additional Well 1-10 with no intention to operate more than 10 [$250/well] $50/well N.A. 11-25 or 1-10 and applies for additional well permits [$2,000] $1,150 $150 26-50 [$3,000] $1,300 $400 51-100 [$4,000] $1,500 $400 101-200 [$8,000] $1,600 $1,000 [(v)] (iii) An operator shall make the phased deposits of collateral as required by the bond.
* * * * * (b) Individuals.
(1) Eligibility.
(i) An individual who seeks to satisfy the collateral bond requirements of the act by submitting phased deposit of collateral under section 215(d.1) of the act (58 P. S. § 601.215(d.1)), may not drill more than ten new wells per calendar year. A well in which the individual has a financial interest[,] is to be considered one of the wells permitted under this section. A partnership, association or corporation is not eligible for phased deposit of collateral under this subsection.
(ii) [An individual who seeks to submit phased collateral deposits shall attest to the individual's inability to obtain a bond.
(iii)] * * *
[(iv)] (iii) * * *
[(v)] (iv) * * *
* * * * * § 78.310. Replacement of existing bond.
(a) An owner or operator may replace an existing surety or collateral bond with another surety or collateral bond that satisfies the requirements of this chapter, if the liability which has accrued against the bond, the owner or operator who filed the first bond and the well operation is transferred to the replacement bond. An owner or operator may not substitute [a fee in lieu of a bond or] a phased deposit of collateral bond under section 215(d) and (d.1) of the act (58 P. S. § 601.215(d) and (d.1)) for a valid surety bond or collateral that has been filed and approved by the Department.
* * * * *
Subchapter X. STATEMENTS OF POLICY
INSPECTION POLICY REGARDING OIL AND GAS WELL ACTIVITIES § 78.901. [Definitions] (Reserved).
[The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
NGPA--Natural Gas Policy Act of 1978 (15 U.S.C.A. §§ 3301--3432 and 42 U.S.C.A. § 7255).]
§ 78.903. Frequency of inspections.
The Department, its employes and agents intend to conduct inspections at the following frequencies:
* * * * * [(17) At lease once prior to the issuance of an NGPA determination.]
[Pa.B. Doc. No. 00-1043. Filed for public inspection June 16, 2000, 9:00 a.m.]
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