Steptoe & Johnson

Energy Law Update: SRBC Proposes Amendments to Project Review Regulations

On July 2, 2009, the Susquehanna River Basin Commission (SRBC) issued proposed revisions to its rules, some of which will impact oil and gas operations in the Susquehanna River basin. Specifically, the provisions of the rules discussed below address the approval process for the consumptive use of water resources in the river basin for proposed natural gas well development, the ability of parties to reopen previously approved projects for revisions, and the procedure for filing challenges to SRBC decisions. It is important to remember that any proposed project which will utilize water resources or which can impact water resources in the Susquehanna River basin, potentially falls under the jurisdiction of the SRBC and its rules and regulations.
The SRBC has proposed amendments to 18 C.F.R. §§ 806.22(e) and (f), which both presently provide for "Approval by Rule" (ABR) requests for the consumptive use of water resources related to natural gas well development projects. The SRBC hopes that the proposed amendments to the ABR process will clarify existing inconsistencies in the rules and simplify the administration of the natural gas ABR procedure. This amendment would allow project sponsors to utilize all approved sources at any approved drilling pad site without the need to register their own water source approvals or modify each ABR issued for subsequent approvals. The amendment would also permit the registration of other approved sources to allow for use at the project sponsor's approved drilling pad sites.

The SRBC has further proposed amendments to 18 C.F.R. § 806.32, which currently allows for the reopening of a project approval upon the motion of the SRBC or any other interested party for the purpose of making additional orders that may be necessary to avoid adverse impacts or to otherwise protect the public. The SRBC is concerned that parties have been abusing this mechanism for review. In two recent cases, after a § 808.2 administrative appeal had already been denied, the party in each case subsequently tried to use § 806.32 to obtain an administrative review of the same matter. As a result, the SRBC has proposed an amendment that would limit the filing of a petition to reopen where the matter has already been considered by the SRBC in an administrative appeal proceeding under 18 C.F.R. §808.2.

Finally, the SRBC has proposed revisions to 18 C.F.R. § 808.9(a), which governs the time frames for administrative appeal of SRBC actions. The current rule mandates that an administrative appeal be filed within thirty days of receipt of the decision of the SRBC or the Executive Director by the sponsor. The SRBC believes that due process safeguards require that for third parties wishing to challenge a decision of the SRBC, the appeal period should run from the time constructive notice is given by the SRBC to the public. For this reason, the SRBC has proposed an amendment to allow an appeal period of thirty days from the date the notice of project approval appears in the Federal Register. For project sponsors, the appeal would run from the date of receipt of actual notice as has been traditional practice.

For more information on the proposed amendments discussed above and other changes to the rules, visit the SRBC's website at http://www.srbc.net.

Comments to the proposed rules can be submitted to:

Mr. Richard A. Cairo
Susquehanna River Basin Commission
1721 N. Front Street, Harrisburg, PA 17102-2391
or email: rcairo@srbc.net.

Public hearings will be held on Tuesday, August 4, 2009, at 10:00 a.m.at Rachel Carson State Office Building, 400 Market Street, Harrisburg, PA 17101, and Wednesday August 5, 2009, at 7 p.m. at the Holiday Inn, 760 E. Water Street, Elmira, NY 14901. Those wishing to testify are asked to notify the commission in advance, if possible, at the address listed above.

Armando F. Benincasa
707 Virginia Street E.
Charleston, WV 25301
Phone (304) 353-8000
armando.benincasa@steptoe-johnson.com