Legislature Passes Weak Marcellus Shale Bill in Special Session
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by Donald S Garvin, Jr Legislative Coordinator, WV Environmental Coalition |
A good first step for our State Legislature? Or weak beyond repair? Read On!
After more than three years of false starts, the West Virginia Legislature finally passed a bill regulating the drilling of Marcellus shale gas wells in West Virginia.
The final version of the legislation — HB 401 — virtually assures that streams will be muddied, and private water wells and springs that provide drinking water in rural areas will be contaminated by horizontal drilling operations.
HB 401 was passed on Dec 14, 2011, and signed by Governor Earl Ray Tomblin on Dec 22, 2011, following a four-day “Extraordinary” Session called by the Governor.
The Governor “called” the special session after the Legislature’s Select Committee on Marcellus Shale Drilling reported out a bill at the end of the November Legislative Interim meetings.
The bill considered by the Legislature in the special session was a version of the Select Committee bill that was “tweaked” by the Governor to remove some of the industry’s objections to the bill. The Governor then lobbied leadership in both the House and Senate to accept his version of the bill.
While the final bill approved by the Legislature was weaker in several important ways from the Select Committee bill, it also contains some minimum provisions that will help protect the environment and surface owners from horizontal drilling operations.
So, what’s in the bill finally passed by the Legislature?Here’s a partial summary:
♦ Inspectors — The only sections of the new legislation that apply to the drilling of all oil and gas wells are the sections on DEP oil and gas inspectors. The Oil and Gas Inspector’s Examining Board (which was virtually controlled by the industry) is eliminated, and replaced with a system of civil service employees, similar to how other DEP inspectors are hired.
New inspectors must still have at least two years’ work experience in the oil and gas industry, provided that one year of the experience requirement may be satisfied by a relevant college degree or actual relevant environmental experience. This keeps the fox in charge of the hen house.
Salary levels for oil and gas inspectors are set at not less than $35,000 per year, and not less than $40,000 per year for supervising oil and gas inspectors.
The new permit fees for drilling horizontal wells will enable the Office of Oil and Gas to hire approximately 17 additional employees, including 9 new inspectors, basically doubling the current staff size.
♦ New Article §22-6A: Natural Gas Horizontal Well Control Act — The bill establishes a new code section that applies “to any natural gas well ... drilled using a horizontal drilling method, and which disturbs three acres or more of surface, excluding pipelines, gathering lines and roads, or utilizes more than two hundred ten thousand gallons of water in any thirty day period.”
The bill grandfathers in existing or pending horizontal well drilling permits. It does not apply to horizontal wells that disturb less acreage or use less water. It also does not apply to vertical Marcellus shale gas wells that might disturb three acres or more of surface or utilize more than two hundred ten thousand gallons of water.
♦ Legislative Findings — The “legislative findings” section of the new Act sets the tone for the permissive nature of the new legislation. For example, it states that the DEP Secretary “should have broad authority to condition” drilling permits in order to protect the safety of persons, prevent damage to publicly owned lands or resources, and to otherwise protect the environment. But it also states that the Secretary “should also have broad authority to waive certain minimum requirements” of the bill. The bill provides that the Secretary must submit annually a written report to the Legislature detailing the number of waivers granted.
Similar permissive language exists throughout the bill, saying the “the Secretary may”, instead of “the Secretary shall.”
♦ Authority to Regulate and Propose Rules
— The bill gives the DEP authority to propose necessary legislative rules to implement the provisions of the bill, and states that the Secretary “has sole and exclusive authority to regulate the permitting, location, spacing, drilling, fracturing, stimulation, well completion activities, operation, any and all other drilling and production processes, plugging and reclamation of oil and gas wells and production operations within the state.”
This language is obviously aimed at preventing local authorities from attempting to regulate drilling operations. The bill also requires the Secretary to make a monthly written report to the Governor on how long it takes to issue drilling permits (an obvious industry provision).
♦ Drilling Permit Applications — Among other things, the bill requires every permit application to include: an erosion and sediment control plan certified by a registered professional engineer; a site construction plan certified by a registered professional engineer; and a well site safety plan (with a copy provided to the emergency planning district in which the well work will occur at least seven days before commencement of well work).
In addition, “if the drilling, fracturing or stimulating of the horizontal well requires the use of water obtained by withdrawals from waters of this state in amounts that exceed two hundred ten thousand gallons during any thirty day period,” the permit application must include a water management plan. The water management plan provisions are basically the same as those spelled out in DEP’s Emergency Rule. The provisions in the bill do NOT require an operator to obtain an actual water withdrawal permit.
♦ Ability to Deny or Condition Permits — The bill says, “the permit may not be issued, or may be conditioned” if the Secretary determines that: the proposed well work will constitute a hazard to the safety of persons; the plan for soil erosion and sediment control is not adequate; damage would occur to publicly owned lands or resources ; or the proposed well work fails to protect fresh water sources or supplies.
♦ Public Notice and Comment Period — The bill provides for public notice and a 30-day public comment period for each horizontal well drilling permit application.
The Governor had removed this provision from the bill, but it was restored by a Senate amendment. However, the provision in the Select Committee bill to allow the Secretary of DEP to hold a public hearing on permit applications was removed from the bill. The bill also requires the DEP to develop a public web site containing detailed information on horizontal well drilling permits.
♦ Drilling Permit Fees — The bill sets drilling application permit fees at $10,000 for the initial horizontal well drilled at a location and $5,000 for each additional
horizontal well drilled on a single well pad at the same location.
♦ Performance Bonds
— The bill establishes a $50,000 individual well bond to accompany the drilling permit. Unfortunately, it still provides for a $250,000 “blanket” bond to cover a producer’s wells, which is totally inadequate to provide for reclamation of all those wells in the event a producer abandons its operations.
♦ Drill Cuttings and Drilling Pits— For horizontal wells, drill cuttings, drilling mud, and drilling pits must be disposed of in an approved solid waste facility and can no longer be buried on site without the landowner’s permission. This does not apply to conventional shallow wells, and does not address the legacy pollution problems caused by leaking pits that are allowed to be buried on site.
♦ Well Location Restrictions — Horizontal wells may not be drilled within two hundred fifty feet from any existing water well or developed spring used for human or domestic animal consumption. The center of well pads may not be located within six hundred twenty-five feet of an occupied dwelling or a building two thousand five hundred square feet or larger used to house or shelter dairy cattle or poultry husbandry. These limitations may be waived by written consent of the surface owner, and the Secretary may grant the operator a variance to these provisions. No well pad may be prepared or well drilled within one hundred feet measured horizontally from any perennial stream, natural or artificial lake, pond or reservoir, or a wetland, or within three hundred feet of a naturally reproducing trout stream. No well pad may be located within one thousand feet of a surface or ground water intake of a public water supply.
Almost all of the distance restrictions provided in this bill are weaker than those provided in the Select Committee bill. Because the distances are weakened and exclude pipelines and well roads from these setbacks, the bill virtually assures that streams will be muddied and private water wells and springs that provide drinking water in rural areas will be contaminated by horizontal drilling operations.
The bill removed an entire amendment from the Select Committee bill that provided the Secretary the additional authority to deny or condition drilling permits based on a variety of other circumstances.
• Noise, Light, Dust and Volatile Organic Compounds Amendment: The bill includes a House amendment requiring DEP to study the impacts of noise, light, dust and volatile organic compounds generated by the drilling of horizontal wells as they relate to the well location restrictions from occupied houses, and gives DEP the to propose additional legislative rules based on the study.
• Casing and Cement Standards: While the bill contains some minimum casing and cementing standards, it removes more than 20 pages of standards included in the Select Committee bill, and authorizes DEP to promulgate additional standards by rule.
• Drilling in Karst: The bill provides that the Secretary “ may require additional safeguards to protect” karst geological formations and the groundwater in those formations.
The bill requires the Secretary, in consultation with the state geologist, to propose emergency and legislative rules to establish designated geographic regions of the state that include “naturally occurring karst terrain” and to establish standards for drilling horizontal wells in those regions. The bill requires that such rules require “at a minimum” that operators perform pre-drilling testing “to identify the location of caves and other voids, faults and relevant features in the strata and the location of surface features prevalent in naturally occurring karst terrain such as sink holes”, and “may include baseline water testing within an established distance from a drilling site.” The bill’s language specifically states that nothing in the bill “allows the department to prevent drilling in naturally occurring karst terrain.”
• Air Quality Regulation: The bill removed the provisions in the Select Committee bill requiring DEP to regulate air emissions at drilling sites and other natural gas operations. Instead, the bill requires DEP to study air quality issues, including possible health impacts, and to promulgate legislative rules if “necessary.”
• Impoundment and Pit Study: The bill requires DEP to conduct a study of impoundment and pit safety, including the presence of radioactivity from naturally occurring radioactive materials, and to promulgate legislative rules if “necessary.”
There are many other provisions of this complex legislation, including important provisions for surface owners, which I have not detailed here. There were also many provisions that WVEC and our expanded coalition of organizations concerned about Marcellus shale drilling felt should be included in the bill, but were not.
Lawmakers in both the House and Senate called the bill “a goodfirst step,” but acknowledged that there is more work to do.
Whether or not legislators will “have the stomach” to revisit the bill in the upcoming legislative session is, of course, the big question.