Energy Law Update: Marcellus Well Permits: PA Addendum Out; Susquehanna & Delaware River Basin Rules Still Apply; Update for WV & NY
In a victory for the industry, Pennsylvania has eliminated its Marcellus well permit addendum. The elimination will generally streamline the application process in Pennsylvania; however, it will not impact pre-existing rules for development in the Susquehanna and Delaware river basins. Development in these areas is subject to more stringent water use rules promulgated by two federal river basin commissions, one of which recently expanded its jurisdiction with the announcement of new permit approval requirements.
Under the prior application procedure in Pennsylvania, the Marcellus well permit addendum required permittees to identify water sources and treatment options for each individual well permit application, which resulted in permittees submitting large swaths of identical water source and handling documentation for multiple wells proposing to use the same water source and handling method. The new streamlined approach will require each Marcellus driller to submit a single water management plan for review and approval by the Pennsylvania Department of Environmental Protection. The plans will address overall water needs and proposed wastewater handling for individual drillers rather than for individual wells, thus streamlining the application and approval process. Importantly, permittees may modify plans upon request as circumstances change. This new approach is credited to ongoing discussions between the state and the oil and gas industry on how to improve the permitting process; it represents a positive step forward for the industry in Pennsylvania.
While this new development should assist the industry in Pennsylvania, it will not impact pre-existing rules for development of wells in the Susquehanna and Delaware river basins where two federal river basin commissions, particularly the Delaware River Basin Commission ("DRBC"), have separate and more stringent requirements for use of water resources. In fact, the DRBC recently announced a new directive that will require any proposed shale well, except exploratory wells, regardless of whether the well will use water from the river basin, to obtain commission approval prior to commencement of drilling. This directive further extends the DRBC jurisdiction and will impact the timing of well permits, which will now need both state and commission approval.
In West Virginia, state regulators are proposing a new guidance policy for Marcellus wells. The West Virginia permit addendum would require drillers to (1) estimate and report the anticipated amount of water needed to fracture a well; (2) identify the proposed source of the water; and (3) identify the proposed method of wastewater handling for each well. Presently, the state only requires a water user to report any use above 750,000 gallons over a given month after the withdrawal has taken place; it does not require state approval of the water use.
Finally, more than a year after the process began, New York regulators continue their efforts to draft a supplemental Generic Environmental Impact Statement (GEIS) to address issues specific to horizontal drilling and high volume hydraulic fracturing in the state. Once the amended GEIS is issued, there will be an additional notice and comment period before the GEIS becomes final. Until that time, drillers proposing high volume hydraulic fracturing and horizontal wells in the state will continue to experience delays.
Armando Benincasa
P.O. Box 1588
Charleston, WV 25326-1588
Phone (304) 353-8000
Fax (304) 353-8147
armando.benincasa@steptoe-johnson.com
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