Comments on the Delaware River Basin Proposed Regulations

February 17, 2011



Commission Secretary
Delaware River Basin Commission
PO Box 7360
25 State Police Drive
West Trenton, NJ 08628
RE: Preliminary Comments on Draft Copy of “Natural Gas Development Regulations” – dated December 9, 2010 – Article 7 of Part III – Basin Regulations
Dear Commissioners,

My name is Mr. Brian Oram and I am a licensed professional geologist by the Commonwealth of Pennsylvania and the principle of B.F. Environmental Consultants Inc. based in Dallas, Pennsylvania. I am a lifelong resident of Northeastern Pennsylvania and over the past 20 years I had the opportunity to work with the Commission on a number of water and wastewater related projects. For the record, this is my personal and professional opinion and I have never been employed, retained, or conducted work on behalf of a natural gas company, royalty owner group, or Association for the natural gas/oil industry. Also, I am a royalty owner of my 0.3 acres in Northeastern Pennsylvania.

1. I agree that the purpose of the regulation appears to be consistent with the historic mission of the Delaware River Basin Commission, but it appears that some of the reasons for the changes are based on speculation and assumptions and not based on fact or science. This is a significant departure from the normal standard operating procedure for the Commission.

2. Because of the cumulative volumes and extent of the potential development for the natural gas industry, I support the decision of the Delaware River Basin Commission (“Commission”) in managing all water used for the development of Marcellus Shale Wells or other Oil & Gas Development as a consumptive water use that requires review and approval by the Commission. This process provides for the evaluation of a resource and the establishment of operational protocols and procedures that are actionable and easier to monitor, control, and management for the benefit of all users in the basin.

3. I disagree that all natural gas development projects have a “substantial effect” on the water resources of the Basin, but I would agree that if the water withdrawal and usage was not managed it would be more likely for problems to occur. To be honest – it is fact that the water quality of a stream changes and becomes impacted as soon as the impervious area increases above 10% and by 25 % the water is degraded no matter the type or nature of the development. Since most drilling pads are reclaimed very quickly compared to a strip mall, commercial development, or industrial complex, the natural gas pad and pad design is not where the Commission should be concentrating its expertise.

4.I do not agree that Commission has the authority to establish principles and practices regarding watershed management on the basin or local level. This would appear to be inconsistent with the laws of the individual states and local agencies and result in the Commission actually attempting to control land-usage and land-use planning. These activities have historically been controlled by the states and local municipalities in Pennsylvania. In recent years, we have implemented Best Management Practices to further reduce the potential impacts of land development through the use of innovative and more complex engineering controls and best practices.

5. It is my professional opinion that the Commission should base it decisions on sound Water Resource Management and not land-use control. This could be accomplished by lowering your threshold for review and approval to projects with a proposed consumptive use of 20,000 gpd.

6.Because of the historic work of the Commission, it would be my professional opinion that the “Approval-By-Rule” provides a mechanism to first use water from sources where allocations have already been approved, permitted, and have a history of not adversely impacting the community or environment. It may be necessary to update dockets to ensure adequate and accurate monitoring and reporting, but at no time should an ABR be permitted when an increase in the withdrawal is needed or where the operator is out of compliance with the docket. All “Approval-By-Rule” should require the installation of real-time monitoring devices related to water flow, volume, and water quality. Water quality monitoring should at least include pH, conductivity, turbidity, mv, and dissolved oxygen.

7. With respect to the working relationship between the “Host State” and the Commission, the document suggests that the agencies have cooperative agreements, but it is clear that the purpose of this Article is to impose regulations and requirements that go beyond the requirements for Oil and Gas Regulation in the respective “Host State”. I would agree that the PA Oil and Gas Regulations need to be updated, but it is not the role of the Commission to implement new regulations for the citizens of Pennsylvania. The Commission should be proactive in the areas of water management, consumptive use, wastewater disposal, and proper stormwater management, but the Commission should not be regulating Oil & Gas Development in Pennsylvania or other host states.

8.Therefore, the Commission should not be involved with well pad requirements or Natural Gas Development Plan requirements.

9.Well Pad Design – I would agree that the Oil & Gas Regulations in Pennsylvania need to be updated and we need better bonding requirements, technical staff, and monitoring, but I do not believe it is the role for the Commission to tell Pennsylvania how to implement these changes in Pennsylvania. These changes are the responsibility of the citizens and our elected officials in Pennsylvania or other host states.

10. Natural Gas Development Plan requirements – this sounds like a wonderful idea that could be implemented on the state level, but the primary problem is that the industry is in the process of “exploratory drilling” to determine the extent of the resource. The requirements of this Article are the equivalent of asking me to plan and layout a water supply system before any wells have been drilled to determine yield and quality of the water. This provision or requirement should be removed, but the project sponsor should submit a comprehensive water and wastewater management plan and obtain the necessary documents to implement these plans as per the Consumptive Use and Wastewater Dockets historically managed by the Commission.

11. The fees collected under this Article should be used to help the host states implement, administer, and inspect all phases and aspects of natural gas exploration, development, and operation with the exception of the dockets required for consumptive water use and wastewater dockets.

Comment – The Commission could use some of the funding to host and facilitate un-biased local workshops for landowners, royalty owner groups, gas companies, and municipalities on “Best Management Practices for Natural Gas Development” and “Host Education Sessions for Local Government on Land-Use Planning, Sourcewater Protection and Watershed Management”.

12. Definitions
The definitions for the following are not adequate and in some cases have no place in a document related to water resource and wastewater management for natural gas development. This is not a zoning document and this is not an Environmental Impact Assessment.
1. Agricultural land- this is a very poor definition.
2. Domestic Water Supply Well- this definition is not correct.
3. Final Site Restoration – the Commission does not have the authority to tell a private landowner how to restore an area post-drilling. The area needs to be reclaimed to the condition that is stated in the permit application.
4. Forest Site- this should be removed.
5. High and Low Volume Fractured Wells – this should be removed because the Commission should not be involved in permitting the location of well pads, drilling processes, or any aspect of Oil & Gas Development that is regulated and enforced by the state.
6. Natural Gas Development Plan – should be removed. Commission should not be involved in permitting the location of well pads, drilling processes, or any aspect of Oil & Gas Development that is regulated and enforced by the state.
7. Freshwater – definition – remove the words – “ most often salt”.
8. Groundwater – I do not believe the Commission has the ability to regulate brine water. If a term is used, this term should be consistent with EPA and the UIC program. The EPA protects water with a TDS of less than 10,000 mg/L.
9. Setback – this should be removed because these distances are and should be established by the host state as part of “Oil and Gas Law” in the respective states. In really the combination of provisions establish by set-back will result in nearly every project not being able to use the “Approval-by-Rule” process or will not permitted. The provisions in most cases will result in wells sites being located in the headwaters and primary recharge areas for are watersheds. This is exactly were we do not want to push this activity, but this is the result of the “Setback”.
10. Wetlands – this is a very poor definition.

13. Section 7.3
1. Types of Natural Gas Development Projects – Items 1 and 4 should be reviewed and approved by a Docket. Items 2 and 3 should be removed these are the responsibility of the “Host State” and not the DRBC.
2. Remove Section 7.3 ( c) ii and remove the words “well pad”. The Commission should be regulate “well pads” or “well pad layout”.
3. Remove Section 7.3 (e) 2, 3, 4 – The Commission should not approve or deny well pads or Natural Gas Development Plans – this is the role of the “Host State”.
4. Section 7.3 (f) – the timing should be consistent with the original terms of the permit, i.e., 10 years and this should this should only apply to water withdrawals and wastewater permits. If the facility is not built – then the Executive Director could deny or approve an extension.
5. Section 7.3 (h) This is only applicable to water consumptive uses – other actions should be implemented for wastewater discharges.
6. Section 7.3 (i) (1) this is governed by the “Host State” and this provision should be deleted. The project sponsor should provide notice for water withdrawals and treatment plan discharges as required by the host state and the Commission.
7. Section 7.3 (j) – This provision is short-sided and does not adequately address safety issues- this section should be edited or reworded. The Commission should have access to water withdrawal points and wastewater treatment plants, but the Commission should not be inspecting well sites or other accessory features unless there is a complaint related to an activity they permitted or created a docket. This is the role of the “Host State”.
8. Section 7.3 (k) – this is the responsibility of the “Host State”, but the Commission can require a bond related to the water and wastewater dockets. Most of this section cites activities that are the responsibility of the “Host State”, and not the Commission.
9. Section 7.3 (I) Fees – the fees collected by the Commission should be used to implement a real-time water quality monitoring network for the basin, cover the cost of reviewing water withdrawal and wastewater dockets, provide funding to the “Host State” in the on-site inspection of natural gas drilling operations, cover the cost for inspection of water withdrawal and wastewater dockets, operations, and filings, and developing a central location to track water usage in the basin. Some sections need to be removed because the Commission should not permit well pad sites or require Master Planning for Natural Gas Development, this is the responsibility of the “Host State”.
10. Section 7.3 – Water Supply Charge – it would be advisable to charge a reduced fee or no fee for the use of reclaimed or degraded waters, if the applicant provides financial assistance in the implementation of long-term best management practices to remediate or improve Community Water Management Challenges or if the applicant plans to use a water reuse approach. For example, an applicant that is planning to use a portion of the discharge from a wastewater treatment plant updates the level of treatment for the facility and then uses this water for hydrofracturing should not be required to pay the “Consumptive Water Use Charge” for the water that is used or if they are charged these monies should be put into a fund to help upgrade wastewater treatment plants and stormwater facilities in the basin or sub-basin.

11. Section 7.4 –Natural Diversity Inventory Assessment – the Commission should request the applicant to conduct a new NDIA only when the original was conducted over 365 days of submission or if peer reviewed scientific research has demonstrated a change requiring a NDIA. The way it is written the requirement is arbitrary.

12. Hydrologic Report – it should be a requirement that the applicant submit for review a “Proposed Pumping Test Plan” for review, comment, and approval.

13. Use of recovered flowback and production water - removed the wording well pad docket and the use of flowback and production water should be encouraged and not discouraged. The Commission should require the use of flowback and production water to the maximum extent technically feasible as part of the consumptive use docket and the applicant should be charged only once for the use of the water.
14. Storage of recovered flowback and production water – must be consistent with the requirements of the “Host State” – not Section 7.5(h)(2)(iv).
15. Section 7.5 – in general this section should be removed because this is regulated by the Oil and Gas Law in the Host State”, but portions of this section related to water use sources, reporting, charges for water, encouraging conservation/reuse, and wastewater management should be integrated into other dockets or require the submission of a water management and metering plan. It is critical that the “wastes are tracked from cradle to grave”.

16. Section 7.5 – Non-point source pollution control plan – is already integrated into the regulations and requirements for the Host State” and I believe that the Commission is given the opportunity to review and comment on these permits.
17. Mitigation, Remediation and Restoration – again the lead agency is the “Host State” and not the Commission. The company should be required to contact the Host State” and the “Host State” should contact the Commission. The Host State” should be the lead agency. The Commission should not be regulating and determining impacts from or associated with Oil & Gas Development in the “Host State” – This is the role of the “Host State”. The Commission should be directly involved in cases where the ‘suspect impact’ is associated with a water withdrawal or a water treatment docket.
18. Groundwater and Surfacewater Monitoring and Post-Drilling Monitoring – this should be addressed as part of the Oil and Gas Law for the “Host State” and not regulated, required, or managed by the Commission, except where it is part of a treatability or stream assessment or a water withdrawal docket.
19. The Commission could require more comprehensive monitoring and reporting associated with water withdrawal and wastewater disposal dockets. The funds collected as part of the review fees should be used to install and maintain a real-time water quality monitoring network of the surfacewater and groundwater and other stream assessments.
20. Drilling Fluids and Drill Cuttings – this is regulated by the Oil and Gas Laws for the Host State”.

21. Wastewater Treatment and Disposal Plan – this should be part of the docket and permitting process for treatment facilities proposing to treat fracwater or production water and then dispose of the water via a stream, surface, or subsurface discharge, but not used to operate Water Reuse Treatment Facilities (WRTF). WRTF will need to obtain approval for the disposal of any solids, sludge, or brine solutions and should complete a waste disposal plan.

22. Section 7.6 – The approval for well pads should be deleted, but the approvals, treatability studies, water testing, and effluent limits seem reasonable.

23. The Basin Wide TDS level does not appear to be based on any water quality modeling, scientific data, or fact. The DRBC should base all decisions and permit conditions based on fact and sound science.

In general, the Commission should remove any provisions within Article 7 that appear to do the following:
1. Establish standards and protocols that go beyond the requirements of the Oil & Gas Law within the “Host State”.
2. Pre-exempt local zoning or planning requirements or establish set-backs that go beyond the provisions set by state law and are shown to be exclusionary.

3. The Commission should not be involved with the design of the well, selection of drilling practices, permitting individual well pad sites, inspecting well pads, evaluating potential impacts associated with Oil & Gas Development, or any of the provisions that are regulated by laws within the “Host State”.
4. If the Commission wants to be involved with monitoring activities that are a significant impact to the basin, the Commission should be monitoring and investigating combined sewer overflows, large permanent industrial sites, major water consumes, and encourage the water reuse. After reading this Article, I realized that the Commission wants to regulate the siting of each individual Marcellus Shale Well Pad, but has no interest in managing the placement of fuel storage tanks, gasoline stations or chemical storage facilities that exist within the basin and in many cases within the floodplains of the Delaware River and its tributaries.
The Commission should expand its role and take leadership in the following areas:
1. Developing a network of real-time stream and groundwater monitoring stations to monitor and track water quality in the basin.
2. Funds collected during the review process and continued operations should cover the cost to maintain the monitoring network and fund the hiring of additional inspectors for the “Host State” and local community.
3.Working with the “Host State” to implement new and updated Oil & Gas Law that provides protection for each host community and the basin and implements Best Management Practices and help the host communities develop State-Specific Sourcewater Management Plans / Wellhead/Aquifer Management Plans that control and regulated by the host state and not the Commission. Fund projects related to environmental education in topics related to stormwater management, water conservation, septic system management, and hazardous waste disposal for the citizens in the basin. For the municipalities and water authorities, the Commission should work with the “Host State” to develop more comprehensive zoning and subdivision ordinances, stormwater and water resource management plans, wellhead protection, and sourcewater protection plans.
4. Act as the unbiased scientific researcher and agency that helps the “Host State” base decisions based on scientific fact and not “suspected” “potential” concerns and undefined risk.
5. Be the community leader and expert in water allocation, water and wastewater management, and establishing stream or subsurface discharge standards that will NOT adversely impact the environment based on science.
6. Adding a provision that requires the approval of the Commission when an other project has proposed a consumptive water usage of more than 20,000 gpd (30 day average).
7. The document lacks any mention of review times for projects and obtaining dockets for approval.

I think the Commission has done an outstanding job in the basin for the citizens of Pennsylvania and has worked in cooperation with the host community. Article 7, as proposed, is a significant deviation from this cooperative and mutually beneficial agreement and understanding.















I submit these comments with great respect to the Commission, it staff, commissioners, and field personal. If you have any questions, please do not hesitate to call me at (570) 335-1947 or email me at bfenviro@ptd.net.



Respectfully submitted,









Mr. Brian Oram, Professional Geologist / Soil Scientist

Citizen of the Commonwealth of Pennsylvania

Delaware River Basin Commission proposed Marcellus Shale rules- my thoughts

"By Sandy Bauers and Tom Avril

Inquirer Staff Writers
http://www.philly.com/inquirer/front_page/20101210_Delaware_River_Basin_Commission_posts_proposed_Marcellus_Shale_rules.html?viewAll=y
The Delaware River Basin Commission on Thursday proposed natural gas drilling rules in its four-state watershed that are tougher than those in the rest of Pennsylvania but that promise to do little to stem the intense wrangling over how to regulate the growing industry.

The commission anticipates as many as 10,000 wells could be drilled in the watershed it oversees, primarily in northeastern Pennsylvania and southern New York state, and its action inches those wells closer to reality.
A drilling moratorium that began in May stays in force until the rules become final, after a 90-day comment period, hearings, and likely changes.
The proposal aims to address concerns over the powerful technique called "fracking," which companies have used elsewhere in the state to extract the bountiful gas reserves trapped in a rock formation called the Marcellus Shale. With this proposal, the commissioners waded further into a debate with a raft of environmental and economic issues.
Fracking provides access to a fuel that is cleaner burning than coal, for example, and landowners say the lease payments from drillers enable them to maintain open space. Yet the technique, in which large amounts of water are used to dislodge gas deposits, involves the use of chemicals that can contaminate waterways.
As part of the 83-page rule proposal:
Companies would have incentives to drill away from forested areas and farther back from stream banks.
Contaminated wastewater from fracking would have to be held in tanks rather than open ponds, as is done elsewhere in the state.
Drilling refuse - called "cuttings" - could not be buried onsite, as Pennsylvania allows. It would have to be "beneficially used" or disposed of properly off the site.

Moreover, the commission would require water-quality monitoring plus water and wastewater tracking to keep tabs on the volumes used and where it all goes for treatment and disposal, said Carol R. Collier, the commission's executive director.
The rules also propose a $125,000 fee per well as financial "assurance" for the plugging and restoration of natural gas wells.
Among the more unusual steps, the commission would allow "natural gas development plans" for broad lease areas rather than individual wells. "

Another article
http://www.nytimes.com/gwire/2010/12/09/09greenwire-northeast-regulator-eases-proposed-natural-gas-77567.html

Portion of article posted - I am in the process of reviewing:

In general
1. I like the idea of no burial - but this is not a common practice for Marcellus Shale.
2. I like the idea of planning for regional drilling and permitting mulitple sites - allows for evaluating overall concerns.
3. I am not sure if the DRBC is duplicating things that the PADEP or other state agencies would handle.
4. I like the monitoring concept - but we currently do monitoring - Unless they mean establishing long-term monitoring stations.
5. Waste tracking and water tracing is part of the PADEP and SRBC system.
6. I like closed loop storage rather than open ponds- I think the industry has already moved in this direction.
7. The bond  or it is a fee- if it is a bond this is minimal and it is not their job or responsiblity.  If it is a fee - they better be planning to put some people on the ground and use the money in the local community.   Bonding contamination - this is the state and local agency requirement not the role of a river basin commission.

Draft Regulations
http://www.state.nj.us/drbc/naturalgas.htm

Full Text
http://www.state.nj.us/drbc/naturalgas-draftregs.pdf

Conservation Pooling Forced Pooling in Pennsylvania - What is the Debate

" Landowners without gas leases could be compelled to allow companies to drill in the Marcellus Shale beneath their land under a procedure outlined in legislation proposed by two members of the state House of Representatives.


The Conservation Pooling Act, sponsored by state representatives Marc Gergely, D-Allegheny County, and Garth Everett, R-Lycoming County, which has not yet been introduced, would establish how gas companies form orderly units of land for developing the gas from the shale - a priority issue for the growing Marcellus Shale industry in the state."  llegere@timesshamrock.com

The draft legislation would
1. Create an Office to oversee the process, develop a procedure that would put in place "forced pooling".
2. It is likely that this process - would provide some general provisions in the lease including bonus payments and royalities.
3. Industry indicates this is needed to minimize environmental issues  (???) - They are not specific about chemical usage.
4. The current bill requires an operator to have leases to drill on 75 percent of the land in a proposed unit .
5. Defines a standard drilling unit as 640 acres, establishes a notification and hearing procedure for objectors, sets a royalty of 12.5 percent for the gas produced, and protects an unleased landowner from having any surface impacts from the drilling.   (Guess what - royality payment is low - there has been deals that are as high as 25% - this is one of the problems- this approach prevents negotiation and in some cases could be used to force the hand of a private land owner that has access to a critical area - remember real estate is all about location, location, location.)
6.Three choices to unleased landowners who will be forced to join the pool-
a.  accept the terms of the lease offered to others in the pool;
b. pay their share of the costs of developing the well up front  (Really Now we are paying development costs) and
c. share in any profits; or share in the profits of the well after a penalty worth 400 percent of their share of the costs is deducted from their payments (Legisators are WORKING For Who?).

Guess What - I do not like forced pooling -and this proposal I like even less.
 
My thoughts
 
1. Forced Pooling - Ok may be needed but - the gas company should be required to own 90 % of the plot and not be permitted to use the surface for this additional area - no pipelines, compression stations, and not well sites.
2. Royality Payments - the payments should be market rate and be at a premium to the landowner.  This premium should be at least 25 %.
3. The landowner should not have to reimburse for cost of development.  Especially if the landowner is only getting wellhead price.
4. This right should not include other minerals or gas, have a depth provision, and the company should be prevented from any form of injection other than hydrofracing.
5. Agreement would need to have additional provisions and require the company to pay all growing greener fees or cost or fees, require long-term monitoring of surfacewater resources, and long-term assumed liability for the life of the well, plus 25 %.
6. Shut in fees need to be higher - and really account for the fact the company is using the well as a storage reservoir.  The fee should be based on a percentage of production prior to be shut in.  The minimum fee should be 25 % of production or should be a fee that approaches the storage cost for the gas.   They are leasing the space by shutting in the well and not paying rent.  Since the gas rights owner is only getting a portion of the wellhead price, the mineral rights holder is not truely benefiting from the value of storage.
7. Land owner should be given free gas or a flat check for the free gas provisions.
8. In addition to a bonus payment - land owner should receive a supplementary payment (tax free) to account for the landowner given access to something the landowner does not want to release but is being forced to release for the benefit of the community- This should not be a taking.
 
This is a working blog concept on forced pooling  - I would prefer not to have forced pooling.   Also, I do not think we need this regulation to promote horizontal wells.