Oil and Gas Update Citizens Advisory Council April 21, 2015 - PowerPoint PPT Presentation

Oil and Gas Update Citizens Advisory Council April 21, 2015

Roadmap • Overview • Enforcement • Integrity and Transparency • Surface Activities Rulemaking • Vision for the Future • Question and Answer Session

Total Well Applications Received 03/12/2015 9,000 8,557 8,500 8,000 7,599 7,429 7,500 7,084 7,000 6,500 6,251 5,976 5,904 6,000 5,500 4,780 5,000 4,278 4,500 3,991 4,000 3,500 3,000 2,500 2,000 1,500 1,000 491 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year

Unconventional Shale Well Permits Issued 03/12/2015 4,000 3,560 3,500 3,364 3,182 2,965 3,000 2,649 2,500 # of Permits 2,044 2,000 1,500 1,000 576 500 369 185 58 19 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year

Conventional Well Permits Issued 03/12/2015 8,000 7,494 7,368 7,102 7,000 6,053 6,000 5,000 # of Permits 4,197 4,000 3,232 3,000 2,185 2,000 1,645 1,564 1,268 1,000 112 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year

Unconventional Shale Well Drilled 03/12/2015 1960 2000 1599 1500 1372 1351 # of Wells Drilled 1207 1000 818 500 332 128 116 37 8 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Conventional Wells Drilled 03/12/2015 6000 4838 5000 4657 4663 3987 4000 # of Wells Drilled 3000 2026 2000 1733 1271 1019 956 1000 789 54 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year

Department of Environmental Protection Office of Oil and Gas Management Unconventional Wells Drilled in 2014

Department of Environmental Protection Office of Oil and Gas Management Conventional Wells Drilled in 2014

Compliance Inspections January - February 03/12/2015 Total Inspections Unconventional Inspections Conventional Inspections Client/Site Inspections 26,936 26,940 26,770 27,000 25,500 24,275 24,000 22,500 21,000 19,500 18,000 16,504 16,500 14,651 15,000 12,489 13,500 12,680 12,589 12,391 12,226 11,762 11,713 12,000 11,332 11,265 10,703 10,563 10,058 10,500 9,000 7,500 6,000 5,245 4,500 3,665 3,186 2,666 2,494 2,350 3,000 1,814 1,445 1,262 1,123 1,500 556 406 75 12 0 2008 2009 2010 2011 2012 2013 2014 2015

Wells Inspected 03/12/2015 January - February Total Wells Inspected Unconventional Wells Inspected Conventional Wells Inspected 16,000 14,000 13,367 13,152 12,726 12,603 12,000 9,766 10,000 9,642 8,841 8,796 8,152 7,808 7,765 7,639 8,000 7,508 7,250 7,163 7,129 6,349 6,311 6,198 6,185 6,000 5,559 5,000 4,838 3,930 4,000 2,515 2,003 2,000 1,313 1,202 925 379 87 13 38 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Compliance Violations 03/12/2015 January - February Total Violations Unconventional Violations Conventional Violations Client/Site Violations 4,400 4,104 4,200 4,000 3,800 3,600 3,372 3,368 3,400 3,200 3,000 2,873 2,800 2,626 2,632 2,600 2,445 2,400 2,200 2,089 2,055 2,000 1,800 1,590 1,520 1,600 1,449 1,400 1,281 1,265 1,261 1,225 1,200 1,000 790 707 800 682 606 584 530 512 600 412 331 400 237 197 200 81 64 70 46 18 0 2008 2009 2010 2011 2012 2013 2014 2015

Unconventional Shale Wells Gas Production (MCF) 2,129,829,933 2,150,000,000 1,940,749,367 1,697,464,205 1,650,000,000 1,405,371,222 1,146,799,269 1,150,000,000 894,940,091 629,236,438 650,000,000 435,039,135 270,501,154 193,494,838 150,000,000 78,417,407 747,149 1,901,221 9,770,775 Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jul 2009- Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul - Dec 2006 2007 2008 2009 June 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 -350,000,000

Unconventional Shale Wells Reporting 7,000 6,068 6,000 5,406 4,944 5,000 4,237 4,000 3,564 2,878 3,000 2,248 2,000 1,643 1,215 1,000 848 0 Jul 2009-June Jul-Dec 2010 Jan-Jun 2011 Jul-Dec 2011 Jan-Jun 2012 Jul-Dec 2012 Jan-Jun 2013 Jul-Dec 2013 Jan-Jun 2014 Jul - Dec 2014 2010

Unconventional Shale Well 2013 – 2014 (Jan-Jun) Liquid Waste Summary Other (2.2%) Injection Disposal Well 10.0% Treatment Prior To Recycling 5.8% 82.0% Recycled Total: 48,614,321.1 Bbls

Enforcement • Compliance and Enforcement Policy – “Standards and Guidelines for Identifying, Tracking, and Resolving Oil and Gas Violation” – Finalized: January 17, 2015 • Recent Enforcement Actions 16

Surface Activities Rulemaking • Background of Rulemaking • Bifurcation • Current Status • Conventional and Unconventional Changes 17

Surface Activities Rulemaking • Proposed regulation published 12/14/2013 • 90-day public comment period • Nine public hearings – 300+ persons testified • Public Comments – Around 25,000 letters, emails, petitions, etc. – 1,200-1,500 unique comments/commentators – Around 22,000 form letters, petition signatures 18

Bifurcation • Act 126 of 2014 requires regulations relating to conventional oil and gas wells to be promulgated separately from regulations relating to unconventional wells. • DEP is proceeding with one process to promulgate separate rules. • Chapter 78 – Conventional • Chapter 78a – Unconventional 19

Current Status • March 20, 2015 – Oil and Gas Technical Advisory Board (TAB) – Ch. 78a (unconventional) • March 26, 2015 – Conventional Oil and Gas Advisory Committee (COGAC) – Ch. 78 (conventional) • April 4, 2015 – Advanced Notice of Final Rulemaking – 45 days public comment, 3 public hearings. 20

Protects Water Resources • Requires operators to demonstrate that streams and wetlands will be protected if the edge of the pad is within 100 feet of the resource • Eliminates the use of waste storage pits for unconventional operators 21

Protects Water Resources (cont.) • Requires centralized wastewater impoundments to be permitted through more appropriate Residual Waste Regulations • Requires existing centralized wastewater impoundments to be upgraded and re- permitted, or closed within 3 years of the rule’s effective date • Adds a new section to create a centralized tank storage permit 22

Adds Public Resources Considerations • Expands impacts analysis of public resources • Includes additional public resources for consideration:  Schools  Playgrounds  DEP-approved wellhead protection areas 23

Protects Public Health and Safety • Requires operators to identify active and inactive wells within a specific area of the well bore and submit a report and plan to DEP at least 30 days prior to drilling • Adds a monitoring plan component • Makes explicit that water supply must be restored to the better of pre-drill conditions or Safe Drinking Water Act standards 24

Addresses Landowner Concerns • Creates new Noise Mitigation section for unconventional only • Requires operators to prepare and implement a site-specific noise mitigation plan for drilling, stimulation and servicing activities • Gives DEP the ability to suspend operations and modify the plan • Adds requirements to inform surface landowners of certain activities 25

Enhances Transparency and Data Management • Adds new notification requirements • Requires all notifications to be submitted electronically • Requires all documents and reports to be filed electronically • Provides efficiencies for DEP inspections • Sets the stage for more use of Internet-based submission and management 26

Next Steps • March/April 2015: Advisory committee review • April 4, 2015: Advanced Notice of Final Rulemaking • Summer 2015: Additional advisory committees discussions • Late 2015: Final form to Environmental Quality Board • Spring 2016: Rules become effective 27

Subchapter D Rulemaking • Conceptual Changes Presentation – June 2014 • Proposed Rulemaking – Fall 2015 • Purpose: To update the Department’s regulations relating to well construction and operation, including new casing and cementing standards, new inactive status requirements, as well as new plugging standards. 28

Future Projects • Policy Initiatives – Data Management – Health and Environment Studies – Staff and Industry Training – Public Engagement 29

Questions? Scott Perry scperry@pa.gov 717-778-9438 Elizabeth Nolan elnolan@pa.gov 717-787-7060 These materials do not necessarily reflect the views of the Commonwealth, the Office of General Counsel or the PA Department of Environmental Protection.