PROPOSED RULEMAKING
ENVIRONMENTAL
QUALITY BOARD
[25 PA CODE CHS. 78--80]
Oil and Gas Amendments
[27 Pa.B. 2126] The Environmental Quality Board (Board) proposes to amend Chapters 78--80 (relating to oil and gas wells; oil and gas conservation; and gas well classification). The proposed amendments to Chapter 78 simplify notification and reporting requirements, clarify requirements for the discharge to land surface of tophole water, clarify surface casing and cementing procedures and clarify plugging procedures for wells in coal areas. The proposed amendment to Chapter 79 provides consistency with the requirements of Chapter 78. Chapter 80 is proposed to be deleted since the gas well classification program under the Federal Natural Gas Policy Act of 1978 has been terminated.
This proposed rulemaking was adopted by the Board at its meeting of March 18, 1997.
A. Effective Date
These proposed amendments will go into effect upon publication in the Pennsylvania Bulletin as final rulemaking.
B. Contact Persons
For further information contact James E. Erb, Director, Bureau of Oil and Gas Management, P. O. Box 8765, Rachel Carson State Office Building, Harrisburg, PA 17105-8765, (717) 772-2199, or Kurt Klapkowski, Assistant Counsel, Bureau of Regulatory Counsel, P. O. Box 8464, Rachel Carson State Office Building, Harrisburg, PA 17105-8464, (717) 787-7060. Information regarding submitting comments on this proposal appears in Section J of this Preamble. Persons with a disability may use the AT&Ts 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's (Department's) Web site (http://www.dep.state.pa.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), which directs the Board to adopt regulations to implement the provisions of that act; section 5 of the Oil and Gas Conservation Law (58 P. S. § 405), which authorizes the Department to promulgate and enforce rules and regulations to effectuate the purposes and intent of that act; section 105 of the Solid Waste Management Act (35 P. S. § 6018.105), which requires the Board to adopt rules and regulations to carry out the provisions of that act; section 5 of The Clean Streams Law (35 P. S. § 691.5), which authorizes the Department to adopt rules and regulations for the purpose of implementing that act; and section 1920-A of The Administrative Code of 1929 (71 P. S. § 510-20) which authorizes the Board to adopt regulations necessary for the Department to perform its work.
D. Background and Purpose
This proposed rulemaking is a result of the Department's Regulatory Basics Initiative. The Regulatory Basics Initiative was announced in August 1995 as an overall review of the Department's regulations and policies. The Department solicited public comments in August 1995 by giving the regulated community, local governments, environmental interests and the general public the opportunity to identify specific regulations and guidance which were either more stringent than Federal standards, served as barriers to innovation, were obsolete or unnecessary, which imposed costs beyond reasonable environmental benefits or served as barriers to adopting new environmental technologies, recycling and pollution prevention.
In February 1996, the Governor executed Executive Order 1996-1 (Regulatory Review and Promulgation) establishing standards for the development and promulgation of regulations. This proposal meets the requirements of Executive Order 1996-1.
As a result of the request for public comments, six commentators submitted 40 comments on the regulations pertaining to the Oil and Gas Program. The Department prepared a comment and response document responding to the comments received. Copies of the comment and response document are available from the Department. Those comments, plus internal staff review of the regulations, resulted in these proposed amendments.
This proposal has been reviewed by the Oil and Gas Technical Advisory Board (OGTAB). The OGTAB reviewed the proposal at its September 19 and November 7, 1996, meetings. The OGTAB developed a written report containing comments on December 19, 1996. That report was presented to the Board as part of the proposed regulatory package.
E. Summary of Regulatory Requirements
The proposed rulemaking amends the regulations as follows:
§ 78.14. Transfer of well ownership or change of address.
The proposed amendments allow notification to the Department of the sale or transfer of a well by the new owner or operator. Prior procedures also required the prior owner or operator to also sign the transfer form. This caused difficulties in cases where prior owners or operators were unavailable or otherwise unable to sign the transfer document. Simplification of this notification procedure should result in more timely notification of well transfers and result in less burden to prior owners.
§ 78.52. Predrilling or prealteration survey.
Predrilling surveys are used to establish the background quality of water wells in the area where an oil or gas well is to be drilled. These surveys are optional under the Oil and Gas Act (58 P. S. §§ 601.101--601.605). Results of the predrilling survey can be used by an operator to defend against the presumption of guilt that a water supply was affected by the drilling activity. Operators were required to submit the results of the survey to the landowner and Department within 45 days of conducting the survey. Most oil and gas wells are drilled without affecting water supplies. The proposed amendments provide the operator who wishes to preserve its defense 10 days after being notified by the Department to submit a copy of the survey results. Survey results will not have to be routinely copied or reported.
§ 78.60. Discharge requirements.
Operators who are drilling wells may discharge uncontaminated water to the land surface. The quality of water allowed to be discharged is stipulated in § 78.60. Two changes are proposed by these amendments. The first removes the requirement that the water be characteristic of the natural background quality of the groundwater. This requirement, and associated testing of groundwater in the area, is unnecessary due to the standards the water must meet in order to be discharged. The second amendment would allow the Department to approve the use of makeup water to buffer the pH of the water in the pit prior to discharge of the water to the land surface.
§ 78.83. Surface and coal protective casing and cementing procedures.
When Chapter 78 was adopted in August 1987, staff of the Department felt that the annulus of the surface or coal protective casing should be left open if cement could not be circulated to surface due to geologic conditions. This was based on the potential for gas to migrate up the well bore into fresh water zones. It was believed that the open annulus would provide an escape for the gas to the atmosphere. This belief was not shared by the industry, which felt that the open annulus would provide a conduit for pollution of groundwater from the surface and preclude proper support of the casing above the zone of lost circulation.
Since 1987, these gas migration concerns have not been realized. Industry has requested to be able to use a cement basket to support cement above the zone of lost circulation in the manner they are permitted if the well penetrates a mine void. After further discussion with the OGTAB, the Department concurs that this proposed change is appropriate.
§ 78.91. General provisions.
Well plugging procedures in this section allow an operator to fill the well with cement from the bottom of the well to the surface. The Coal and Gas Resource Coordination Act (58 P. S. §§ 501--518), and §§ 78.92 and 78.93 (relating to wells in coal areas--surface or coal protective casing is cemented; and wells in coal areas--surface or coal protective casing anchored with a packer or cement) require that a well plugged in a coal area be provided with a vent to prevent a buildup of gas in a coal seam. These proposed amendments clarify the need for the vent if the well is being filled with cement.
§ 78.123. Logs and additional data.
These proposed amendments correct a typographical error regarding a subsection number and delete reference to an expired program for determining gas well classifications under the Federal Natural Gas Policy Act. These proposed changes will reduce confusion.
§ 78.125. Disposal and enhanced recovery well reports.
Operators of disposal wells or enhanced recovery wells are required to submit to the Department copies of annual monitoring reports submitted to the Environmental Protection Agency (EPA). These reports are part of the Underground Injection Control Program administered by EPA (the Commonwealth did not seek delegation). The proposed amendments would have operators submit copies of the reports to the Department only upon request. The Department uses these reports, on occasion, when investigating complaints. These proposed amendments reduce for operators unnecessary copying and mailing of reports to the Department.
§ 79.15. Fire prevention.
Operators are required, under Federal regulations (40 CFR 112) to construct and maintain a dike or other method of secondary containment around oil storage tanks of a certain size to prevent oil pollution. In December 1994, these requirements were adopted by the Board by reference as part of § 78.64 (relating to containment around oil tanks). These proposed amendments to Chapter 79 adopt the same standard by reference for oil tanks at conservation wells. The proposed amendments provide consistent State and Federal standards in place of outdated standards adopted at 1 Pa.B. 1726 (August 12, 1971), which required earthen dikes with capacity of one and one-half times the capacity of the tank it surrounds.
Chapter 80. Gas Well Classification.
These amendments delete Chapter 80 in its entirety. Chapter 80 was adopted by the Board at 9 Pa.B. 3634 (November 2, 1979), to allow the Department to conduct gas well classifications under the Federal Natural Gas Policy Act of 1978 (15 U.S.C.A. §§ 3301--3432; and 42 U.S.C.A. § 7255). This program provided incentive well head gas prices to certain classifications of gas wells which might otherwise not be drilled. Due to deregulation of portions of the natural gas industry by the Federal Energy Regulatory Commission, this program was discontinued on January 1, 1993. Consequently, Chapter 80 is outdated and no longer needed.
F. Benefits, Costs and Compliance
Executive Order 1996-1 requires a cost/benefit analysis of the proposed amendments.
Benefits
The proposed amendments will benefit oil and gas operators by reducing reporting requirements, clarifying technical requirements pertaining to casing and cementing procedures and plugging procedures, providing standards for oil spill prevention that are consistent with Federal requirements, and eliminating outdated and obsolete requirements.
Compliance Cost
The proposed amendments impose no additional compliance costs on the oil and gas operator. The proposed changes to the reporting requirements should decrease compliance costs to oil and gas operators by $12,500 per year. The Department's costs of administering and enforcing these requirements will not change significantly.
Paperwork Requirements
The proposed amendments will not result in additional forms or reports. Since reports of predrilling surveys and annual monitoring reports for disposal or enhanced recovery wells will only be submitted upon request of the Department, paperwork requirements are being reduced.
G. Sunset Review
These regulations will be reviewed in accordance with the sunset review schedule published by the Department 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 April 21, 1997, the Department submitted a copy of the proposed rulemaking to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the Senate and House Environmental Resources and Energy Committees. In addition to submitting the proposed amendments, the Department has provided IRRC and the Committees with a copy of a detailed regulatory analysis form prepared by the Department. A copy of this material is available to the public upon request.
If IRRC has objections to any portion of the proposed amendments, it will notify the Department within 30 days of the close of the comment period. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review by the Department, the Governor and the General Assembly before final publication of the regulations.
I. Public Comment
Written Comments--Interested persons are invited to submit comments, suggestions 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 June 2, 1997 (within 30 days of publication in the Pennsylvania Bulletin). Interested parties 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 June 2, 1997 (within 30 days following 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 regulations will be considered.
Electronic Comments--Comments may be submitted electronically to the Board at RegComments@A1.dep.state.pa.us and must also be received by the Board by June 2, 1997. A subject heading of the proposal and a return name and 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: 7-318. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 25. ENVIRONMENTAL PROTECTION
PART I. DEPARTMENT OF ENVIRONMENTAL PROTECTION
CHAPTER 78. OIL AND GAS WELLS
Subchapter B. PERMITS, TRANSFERS AND OBJECTIONS
PERMITS AND TRANSFERS § 78.14. Transfer of well ownership or change of address.
(a) Within 30 days after the sale, assignment, transfer, conveyance or exchange of a well, [the former and] the new owner or operator shall notify the Department, in writing, of the transfer of ownership.
* * * * *
Subchapter C. ENVIRONMENTAL PROTECTION PERFORMANCE STANDARDS § 78.52. Predrilling or prealteration survey.
* * * * * (d) [The] An operator electing to preserve its defenses under section 208(d)(1) of the act shall provide a copy of the results of the survey to the Department and the landowner or water purveyor within [45] 10-calendar days of [conducting the survey] being notified by the Department to submit a copy of the survey results.
* * * * * § 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:
(1) [The water is characteristic of the natural background quality of the groundwater.
(2)] No additives, drilling muds, pollutional materials or drilling fluids other than gases or fresh water have been added to or are contained in the water, unless otherwise approved by the Department. [The Department may approve treatment prior to discharge as a condition to approving additives in the water.
(3)] (2) * * *
[(4)] (3) * * *
[(5)] (4) * * *
[(6)] (5) * * *
[(7)] (6) * * *
[(8)] (7) * * *
[(9)] (8) If the water does not meet the requirements of paragraph [(3)] (2) or [(5)] (4), [it shall be contained and treated to meet the requirements prior to land application. Treatment may not include dilution] the Department may approve treatment prior to discharge to the land surface.
Subchapter D. WELL DRILLING, OPERATION AND PLUGGING
CASING AND CEMENTING § 78.83. Surface and coal protective casing and cementing procedures.
* * * * * (j) If [the] it is anticipated that cement used to permanently cement the surface casing [is] can not be circulated to the surface [due to lost circulation in the wellbore, except as provided in subsection (h) and in enhanced recovery injection wells and disposal wells, no] a cement [baskets] basket may be installed [and no additional] immediately above the depth of the lost circulation zone. The casing shall be permanently cemented by the displacement method. Additional cement may be added above the cement basket, if necessary, by pumping through a pour string from the surface [into] to fill the annular space. [Under these conditions, the annular space shall be kept open and vented.]
PLUGGING § 78.91. General provisions.
* * * * * (h) In lieu of the plugging requirements of §§ 78.92--78.95 and 78.97, an operator may cement a well from the total depth or attainable bottom to the surface. Wells in coal areas still shall meet the venting requirements of § 78.92 or § 78.93 (relating to wells in coal areas--surface or coal protective casing is cemented; and wells in coal areas--surface or coal protective casing anchored with a packer or cement).
Subchapter E. WELL REPORTING § 78.123. Logs and additional data.
* * * * * (c) The information requested by the Department under subsections (a) [--(c)] and (b) shall be provided to the Department by the operator, within 3 years after completion of the well unless the Department has granted an extension or unless the Department has requested information as described in subsection (d). If the Department has granted an extension, the information shall be submitted in accordance with the extension, but in no case may the extension exceed 5 years from the date of completion of the well.
(d) In accordance with the request of the Department, the operator shall submit the information described in this section for use in investigation or enforcement proceedings, [in making designations or determinations under the Natural Gas Policy Act of 1978 (15 U.S.C.A. §§ 3301--3432 and 42 U.S.C.A. § 7255) and section 1927-A of The Administrative Code of 1929 (71 P. S. § 510-27)] or in aggregate form for statistical purposes.
§ 78.125. Disposal and enhanced recovery well reports.
(a) The operator of a disposal or enhanced recovery well shall submit to the Department, upon request, a copy of the annual monitoring report submitted to the EPA summarizing the results of the operator's monitoring as required by 40 CFR Part 146 (relating to underground injection control program) when these reports are submitted to the EPA. This summary, at a minimum, shall include the following:
* * * * *
CHAPTER 79. OIL AND GAS CONSERVATION
WELL DRILLING AND USE § 79.15. Fire prevention.
* * * * * (b) When it is deemed necessary by the Department to protect life, health or property, the Department may require any [lease or] oil storage [tanks] tank to [be surrounded by an earthen dike which shall have a capacity of 1 1/2 times the capacity of the tanks or tanks it surrounds, which dike shall be continually maintained; and the reservoir within shall be kept free from vegetation, water or oil] have a method of secondary containment which meets the requirements of § 78.64 (relating to containment around oil tanks).
* * * * *
CHAPTER 80. (Reserved). (Editor's Note: As part of the regulatory package, the Department is proposing to delete the existing text of Chapter 80, which appears at 25 Pa. Code pages 80-1--80-17, serial pages (158659)--(158675).)
§ 80.1. (Reserved).
§ 80.11. (Reserved).
§ 80.12. (Reserved).
§§ 80.21--80.26. (Reserved).
§§ 80.31--80.34. (Reserved).
[Pa.B. Doc. No. 97-678. Filed for public inspection May 2, 1997, 9:00 a.m.]
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