Marcellus Shale Permitting Feedback Request

[CrystalQuintin]

Just wanted to gauge opinions based on the general membership's environmental experience and expertise on the current DEP regulations and permitting requirements for Marcellus Shale drilling activities. Specifically, the DEP recently raised the permitting rates for companies interested in drilling in PA's vast Marcellus Shale reserves (a summary on these fees is provided from the PA Bulletin below). My question is, are the fees adequate?

Also, I'd like to recieve feedback on whether or not the current regulations are strong enough to protect Pennsylvania's state forests and natural landscapes where this Marcellus formation is found? Feedback on this pressing issue would be greatly appreciated, especially as drilling operations ramp up.

The base fee for vertical wells is $250 with an additional $50 per 500 feet of well bore drilled from 2,000 feet to 5,000 feet and an additional $100 per 500 feet for the well bore drilled past 5,001 feet. Nonvertical wells and Marcellus Shale wells have a base fee of $900 with an additional $100 per 500 feet of well bore drilled past 1,500 feet. An applicant for a vertical well with a well bore length of 1,500 feet or less for home use shall pay a permit application fee of $200.

The initial $100 permit fee did not cover the program costs in 1984. Program staff and most equipment have primarily been funded by the General Fund. Very few positions, equipment, or emergency well plugging has been funded by permit fees. Indeed, revenue provided by permit fees only covered 15% of the Department's administrative costs in 2008 with the remaining 85% funded through the General Fund. Also, permitting has increased by 398% in just the last 10 years with only recent increases in permitting staff and minimal increases in inspection staff. It is also important to note that the well permit fee is not an annual fee. Therefore, the entire program must be funded through new well permits.

[DanAngelo]

In my experience with the Marcellus Shale drilling activities, I do not feel that the fees are high enough. I have no problem with the fees being higher. This increased fee could staff DEP for people to monitoring actvities. Also, if fines were more severe and enforced, perhaps that would make the gas companies be more attentive to their operations. In my opinion, right now its like the west all over PA with gas companies doing what they want. The DEP is/will be cutting jobs, meaning even less enforcement going on thoughout the state.

Some people say that if PA raised they fees that the gas companies would leave. I find that hard to believe given the potential amounts of natural gas located in PA. And if they would leave, that would be less impacts on our natural resources.

Just my opinion.

[JohnWachter]

My understanding is that this fee schedule is supposed to be sufficient to fund the necessary positions in DEP to provide oversight for these Marcellus shale development projects within the state. It is also my understanding that the people that are hired to fill the positions will be assigned to solely to monitoring of shale gas development projects. If that is the case, then the fees may be sufficient.

However, I have a philosophical concern with funding DEP positions in this manner. I believe that the oil and gas drilling operations already had their own DEP groups which are assigned to monitor those operations, even before the Marcellus shale projects began. Based on what I have seen in the field, the rules for those oil and gas drilling were completely different than for any other types of projects. Either that or the enforcement was not being applied. E&S Control didn't seem to be applied with the same commitment as in other types of projects. And other aspects of state regulations were similarly watered down when applied to these operations.

I guess my best example was an industrial development site that I was visiting with representatives of USACE and PaDEP (the regular people, not the oil and gas development people). This happened about 5 years ago, so it didn't involve Marcellus shale operations. The site we were visiting had numerous gas wells that had been developed over the previous 5 or so years. While on the site, we came across a permanent access road that had been built on fill across a small perennial stream. That's it - no culvert, no bridge, just rock and dirt fill pushed across the channel. So the water was seeping through the base of this fill with the results that you might expect. And there was no hint of any mulch or vegetation on this fill at all to suggest that any stabilization had been applied to this structural fill.

Forgetting the environmental regulations for a moment, what I saw was simply no way to construct a stable, permanent road across a stream in the first place. But be that as it may, there is no way that any client that I work for could possibly get away with anything remotely resembling this situation. But the reaction of the guy with me from PaDEP was: "Gas well drillers are regulated by a different division of DEP." And a shrug. Oh, that explains it.