Revised Pennsylvania Oil and Gas Regulations Expected to be Finalized in 2016

January 25, 2016
Todd D. Kantorczyk, Esq.
MGKF Special Alert - Forecast 2016

On January 6, 2016, the Pennsylvania Department of Environmental Protection released its Final Regulations for Oil and Gas Surface Activities.  The release of the final regulations is the latest step in a process that began in 2010 as an effort to revise these regulations to address more specifically the expansion of oil and gas exploration and production activities in Pennsylvania associated with the Marcellus Shale formation.

The final regulations incorporate changes required by Act 13 of 2012 as well as other rules that the Department believes are necessary to address “gaps” identified through reviews of the current Pennsylvania regulatory program.  Highlights include: 

  • Separate regulations applicable to “conventional” oil and gas operations and “unconventional” oil and gas operations (i.e., shale drilling that requires the combination of  horizontal drilling and high volume hydraulic fracturing);
  • Allowing the Department to consider and protect “public resources” (such as schools, playgrounds, and critical habitat communities) as part of the well permitting process;
  • Requiring operators to identify abandoned or orphaned wells within a certain radius before hydraulic fracturing begins;
  • Mandating secondary containment for all regulated substances at unconventional well sites;
  • Subjecting centralized storage impoundments to residual waste permitting requirements; and
  • Prohibiting the use of temporary waste storage pits at unconventional well sites.

The Environmental Quality Board is scheduled to consider these regulations at its February 3, 2016 meeting, after which the regulatory package will move on to the Independent Regulatory Review Commission and then the Environmental Resources & Energy committees in the House and Senate.  The Department believes that this process may conclude by summer 2016, but both the conventional and unconventional gas industry have raised significant objections to the new rule, in particular the additional costs for what the industry believes are questionable benefits.  Between the industry objections and the ongoing budget disputes in Harrisburg, it is possible that this rulemaking will continue to drag on through 2016.