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On July 10, the Pennsylvania Department of Environmental Protection (DEP) released its 2018 Oil and Gas Annual Report. The DEP acts as Pennsylvania’s permitting and inspection body, responsible for ensuring that the construction, drilling and operation of oil and gas well sites comply with approved permits. The annual report provides a highlight of the data and trends related to the DEP’s permitting and inspection programs, as well as statistics of areas such as production and plugging activities. In addition, 2018 initiative results are presented as well as an outlook of 2019 initiatives and their current progress.
The main goals of the DEP in 2018, which can be seen in its permitting process and technology changes, were to improve efficiency within the permit and inspection processes, improve consistency among the districts within the DEP, and provide greater transparency to the public. In early 2018, the permit process was streamlined into two programs: Surface Permitting and Subsurface Programming. Technical reviewers located within the district offices now report to a central manager, rather than three separate district managers.
In addition, the DEP focused on overhauling the permitting process, to reduce the backlog of submitted permits that were open for review. Within the Surface Permitting program, review timeframes decreased from an average of 230 days to 157 days within the Southwest District, with the Northwest and Eastern districts averaging 85 days. The Subsurface Permitting program now averages a review timeframe of 39 days.
The DEP has also focused on continuing to update its inspection process, launching the Surface Activities Inspection Report (SAIR) app. The mobile app allows inspections to be conducted onsite through tablet computers, allowing for greater accuracy and the ability to provide information to the public within days of inspections taking place. A total of 38,673 compliance inspections were conducted during 2018, a 2% increase from 2017.
The DEP is still working towards tackling its biggest issue related to the wells, the large number of orphaned and abandoned wells in the state. There are currently 12,164 identified orphaned and abandoned wells, including 8,752 unplugged wells, but the DEP estimates there to be approximately 200,000 abandoned oil and gas wells unaccounted for in PA. Due to the significant cost of locating the wells and the subsequent remediation, the DEP developed the “Good Samaritan” initiative to encourage private-sector partners to plug abandoned wells and in turn be protected from liability, for their role in reducing environmental hazards. In April 2018, one of the first proposals submitted to the program was a proposal to plug an abandoned well in the Allegheny National Forest. There had been no plans of remediation for the well due to budget constraints. Plugging was completed in September 2018. With the successful outcome of this proposal, the DEP continues work towards locating and plugging the large number of unaccounted-for and abandoned wells in the state, in a more efficient manner.
In 2018, 6.1 trillion cubic feet of natural gas was produced from unconventional gas wells in PA, making the state the second largest producer of natural gas in the nation, behind Texas. This was the largest volume of natural gas on record that has been produced in Pennsylvania in a single year, a 14% increase from 2017. The DEP strives to continue this production trend, with the hopes that improvements in efficiency and technology within the permitting process will promote more drilling and production. As the DEP continues to streamline its processes, the increase in unconventional well permits can be seen over the last five years, and has influenced the DEP’s 2019 initiatives and outlook.
The DEP’s main initiative for wells is changes to unconventional well permit application fees. Current fees to apply for an unconventional vertical and non-vertical well permit are $4,200 and $5,000, respectively. In May 2018 the DEP presented to the Environmental Quality Board, a proposal to increase fees to $12,500 for all unconventional well permits. The DEP is preparing responses to comments and intends to advance its final proposal before the end of the year.
Work also began in 2019 on the Geologic Hazard Mitigation Plan, which enforces stronger erosion and sediment control requirements. Operators must perform due diligence including investigating and identifying formations and soil conditions as well as prior surface and subsurface uses. The intent is to provide a consistent approach to hazard mitigation investigation and reporting. 2019 also continues the DEP’s focus on data and technological improvements, with a focus on enhancing current electronic applications and developing new applications to increase transparency, with the hopes that more efficient and transparent processes will promote stronger compliance.
For the full 2018 annual report, please visit: