Tuesday, August 23, 2011

West Virginia Issues New Horizontal Well Rules

The West Virginia Department of Environmental Protection has issued a new rule that applies to horizontal wells, which are generally associated with the Marcellus Shale formation. The Governor issued an Executive Order a month ago requiring the DEP to issue the rule, so this rulemaking is not unexpected. 

A couple of points about the rule.   The first is that the emergency rule has to be approved by the Secretary of State, or the rule becomes effective 42 days after filing, if the Sec. of State takes no action. However, the Secretary of State has been known to reject emergency rules where there was no emergency (I believe Ken Hechler rejected some out-of-cycle water quality standard changes several years ago.)  There really is no emergency here, and this rule could be taken up by the Legislative Rule-making Review Committee during the Legislative Session that starts in January. 

The second point is that the rule arguably includes provisions that are not derived from the statutory sections cited as the authority for the rule. Sections 22-1-3 (the DEP Secretary's authority to issue rules); 22-6-2 (the powers and duties of the DEP Secretary to regulate certain aspects of the oil and gas industry); and 22-11-4(a)(16) (authority to issue rules to implement the WV Water Pollution Control Act) do not seem to provide a basis for some of the more far-reaching aspects of the rule, particularly the water withdrawal provisions. 

The DEP's press release follows with more detail.  Here is a link to the rule. 

The West Virginia Department of Environmental Protection, as directed on July 12 by Gov. Earl Ray Tomblin in Executive Order No. 4-11, filed an emergency rule today with the Secretary of State’s Office to increase the DEP’s regulatory oversight of horizontal well development in the state.

The rule, which adds new permit application requirements for operators drilling horizontal gas wells, as well as new operational rules to protect the state’s water quality and quantity, will become effective after approval by the Secretary of State and remain in effect for 15 months. 

The emergency rule is intended to help the DEP better regulate the state’s growing natural gas industry, which is benefitting from improved horizontal drilling techniques that allow operators to more easily access deep shale gas, such as that found in the Marcellus Shale. Those same drilling techniques involve significant surface area disturbances and large-volume hydraulic fracturing that uses millions of gallons of water per well.

The rule adds specific language to the state Office of Oil and Gas regulatory program that requires operators to include an erosion and sediment control plan and site construction plan, certified by a registered professional engineer, and a well site safety plan for well work permit applications involving well sites that disturb three acres or more of surface.

The rule also requires permit applicants to submit a water management plan if they intend to use more than 210,000 gallons of water during any one-month period. The water management plan shall include information such as type of water source -- surface or ground water; the counties from which water withdrawals will be taken; latitude and longitude of each anticipated withdrawal location; anticipated volume of each withdrawal and anticipated months withdrawals will be made; planned management and disposition of wastewater from fracturing and production activities; a listing of anticipated additives to be used in the water for fracturing; and, upon well completion, the listing of actual additives that were used.

Permit applicants, drilling within the boundaries of any municipality, are also required to place a legal newspaper advertisement in the area where the well is proposed. No well work permit will be issued until 30 days notice has been provided to the public.

In addition to permit application requirements, the rule adds operational language that instructs companies to protect the quality and quantity of surface and ground water systems both during and after drilling operations and during reclamation; requires operators to comply with record-keeping requirements for the quantity of flowback water from hydraulic fracturing and the method of management or disposal of the flowback; stipulates that all drill cuttings and drilling mud be disposed of in an approved solid waste facility; and adds casing and cementing standards to prevent the migration of gas and other fluids into fresh ground water and coal seams.

Gov. Tomblin said he remains optimistic about the potential of West Virginia’s emerging natural gas industry as a plentiful energy source for the state and nation, as well as its potential to create thousands of good-paying jobs and revitalizing the state’s chemical and manufacturing industries.

“Still, we must work hard to make sure our efforts to capitalize on opportunities such as the Marcellus Shale are regulated responsibly and done in ways that protect our citizens and the environment,” Tomblin said. “I believe this emergency rule is a key first step to accomplishing that goal, but there is much work to be done.”
DEP Cabinet Secretary Randy Huffman said: “As Gov. Tomblin has pointed out, this is not the end of the debate, but only the first step in addressing the myriad of concerns our citizens have regarding this practice. There is much discussion and debate yet to take place. And we look forward to working with the legislature to ensure a comprehensive approach to regulating horizontal drilling is addressed.”

To view the rule go to www.dep.wv.gov and click on Oil and Gas.

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