Delaware • New Jersey • Pennsylvania
New York • United States of America
- June 2008 - DRBC Notifies Company that Water Used for Developing Natural Gas Wells in Delaware River Basin Needs Approval
- May 2009 - DRBC Eliminates Review Thresholds for Gas Extraction Projects in Shale Formations in Delaware Basin's Special Protection Waters
- May 2010 - DRBC Will Review Natural Gas Well Pad Projects After Adoption of New Regulations
- June 2010 - DRBC Executive Director Determination Expanded to Include Natural Gas Exploratory Wells
- July 2010 - DRBC Executive Director Amends Supplemental Determination
- December 2010 - Status of Exploratory Well Administrative Adjudicatory Hearing
In mid-2008, the Pennsylvania Department of Environmental Protection (PADEP) notified the commission of Stone Energy Corporation's proposal to extract gas from the Marcellus Shale formation in Clinton and Mount Pleasant townships, Wayne County, Pa. The project is located within the boundaries of the Delaware River Basin.
On June 9, 2008, the commission announced in a news release that it had informed Stone Energy Corporation that it will need to apply for and receive approval from the commission before it can extract natural gas in the Delaware River Basin.
DRBC Executive Director Carol R. Collier on May 19, 2009 announced a determination notifying natural gas extraction project sponsors that they may not commence any natural gas extraction project located in shale formations within the drainage area of the basin's Special Protection Waters without first applying for and obtaining commission approval.
"This determination explains DRBC regulatory requirements on an interim basis and asserts commission review over all aspects of natural gas extraction projects in shale formations within the drainage area of the basin's Special Protection Waters, regardless of the amount of water withdrawn or the capacity of domestic sewage treatment facilities accepting fracking wastewater," Collier said.
In taking this action, Collier considered and determined that as a result of water withdrawals, wastewater disposal, and other activities, natural gas extraction projects in shale formations may individually or cumulatively affect the water quality of Special Protection Waters by altering their physical, biological, chemical or hydrological characteristics. This finding is in accordance with Section 2.3.5 B.18 of the commission's Rules of Practice and Procedure, which provide that any project "that the Executive Director may specially direct by notice to the project sponsor or land owner as having a potential substantial water quality impact on waters classified as Special Protection Waters" may be required to undergo review.
"The intent behind this executive director determination is to provide directional signals, not put up roadblocks," Collier said. "Each of these activities, if not properly performed, may cause adverse environmental effects on water resources. The bottom line for the DRBC is to ensure that proper environmental controls are provided to safeguard our basin's water resources that are used by 15 million people."
Most of the shale formations that may be subject to horizontal drilling and hydraulic fracturing techniques requiring large volumes of water in the basin are located within the drainage area to DRBC's designated Special Protection Waters (SPW). The commission's SPW program is designed to prevent degradation in streams and rivers considered to have exceptionally high scenic, recreational, ecological, and/or water supply values through stricter control of wastewater discharges, non-point pollution control, and reporting requirements. Coverage of the DRBC's SPW anti-degradation regulations includes the 197-mile non-tidal Delaware River from Hancock, N.Y. south to Trenton, N.J. and the land draining to this stretch.
Under this determination, a natural gas extraction project encompasses the drilling pad upon which a well intended for eventual production is located, all accompanying facilities and related activities, and all locations of water withdrawals used or to be used to supply water to the project.
Exploratory wells are subject to state regulation. Fracturing of shale formations cannot be conducted on exploratory wells and they cannot be used as or converted to production wells until the project sponsor has obtained DRBC approval.
"To determine whether the Rules of Practice and Procedure require DRBC review of any projects falling outside this determination, we continue to recommend that any company proposing natural gas extraction activities anywhere in the basin contact DRBC staff to schedule a pre-application meeting," Collier said.
The DRBC recognizes that each natural gas extraction project also will be subject to the review of the environmental agency of the state in which the project is located and, in some cases, subject to federal agency review. The commission intends to coordinate with and, where feasible, to utilize the review process and approvals of the applicable state or federal agency to minimize duplication of effort and redundant requirements imposed on project sponsors.
The commissioners at their May 5, 2010 meeting unanimously approved the following Resolution for the Minutes to clarify the commission's intentions with respect to the development of new regulations and consideration of pending applications for projects associated with natural gas development:
We direct staff to develop draft regulations on well pads in the shales for notice and comment rulemaking;
We will postpone the commission's consideration of well pad dockets until regulations are adopted; and
We will move forward with water withdrawal dockets in due course.
May 5, 2010 Meeting Minutes (pdf 107 KB; please refer to pages 4-5)
Please Note: The Commissioners at the December 8, 2011 meeting unanimously approved a Resolution for the Minutes (pdf 10 KB) to postpone the Commission's consideration of applications for water withdrawals within the State of New York to serve natural gas development activities, pending completion of New York's environmental quality review process. As to such proposed withdrawals, this resolution supersedes the third element of the Commission's Resolution of May 5, 2010 cited above.
DRBC Executive Director Carol R. Collier announced on June 14, 2010 that she supplemented her May 19, 2009 determination to include natural gas exploratory wells.
"My 2009 determination that sponsors of natural gas extraction projects in shale formations must obtain commission approval before commencing such projects expressly did not cover wells intended solely for exploratory purposes," Collier said. "Today, I am extending the provisions of my 2009 determination to include exploratory wells, subject to reservations for exploratory well projects already approved by the states on or before June 14, 2010."
By this supplemental determination, all natural gas well project sponsors, including the sponsors of natural gas well projects intended solely for exploratory purposes, must first apply for and obtain commission approval before commencing any natural gas well project for the production from or exploration of shale formations within the drainage area of Special Protection Waters in the Delaware River Basin.
"For the purpose of this determination, any natural gas well drilled in or through shale is assumed to be targeting a shale formation and is subject to this determination, unless the project sponsor proves otherwise," Collier added. All other aspects of the 2009 determination remain in effect.
Today's action recognizes the risks to water resources, including ground and surface water that the land disturbance and drilling activities inherent in any shale gas well pose. "In light of the commission's May 5, 2010 decision to finalize natural gas regulations before considering project approvals, this supplemental determination removes any regulatory incentive for project sponsors to classify their wells as exploratory wells and install them without DRBC review before the commission's natural gas regulations are in place," Collier said. "It thus supports the commission's goal that exploratory wells do not serve as a source of degradation of the commission's Special Protection Waters."
"Where entities have invested in exploratory well projects in reliance on my May 2009 determination and information from DRBC staff, there are countervailing considerations that favor allowing these projects to move ahead," Collier stated in her supplemental determination. "I am informed that since May of 2009, Pennsylvania has issued a limited number of natural gas well drilling permits within the Delaware River Basin targeting shale formations, while New York State has not issued any natural gas well permits targeting shales in the basin since that date. In contrast to the thousands of wells projected to be installed in the basin over the next several years, the risk to basin waters posed by only the wells approved by Pennsylvania since May 2009 are comparatively small. Not only are these wells subject to state regulation as to their construction and operation, but they continue to require commission approval before they can be fractured or otherwise modified for natural gas production. In light of these existing safeguards and the investment-backed expectations of the sponsors of these projects, this supplemental determination does not prohibit any exploratory natural gas well project from proceeding if the applicant has obtained a state natural gas well permit for the project on or before June 14, 2010."
On July 23, 2010, Executive Director Collier announced that she amended her June 14, 2010 supplemental determination to allow two additional natural gas exploratory wells in Wayne County, Pa. to proceed.
Both Hess Corporation vertical exploratory wells, known as Davidson 1V and Hammond 1V, are proposed to be located in the north-northwest portion of the county. Collier already publicly announced her intention to take this action at the July 14 commission meeting. The Davidson 1V and Hammond 1V wells received Pennsylvania Erosion and Sediment Control General Permits (ESCGP-1) prior to June 14, although the company's well drilling applications already filed with the state's Department of Environmental Protection (PADEP) were still under active review by PADEP and awaiting a permitting decision on that date.
The July 23, 2010 amended supplemental determination covers only the Davidson 1V and Hammond 1V exploratory wells, both of which remain subject to all applicable PADEP regulatory requirements, including state well drilling permits. The state-approved Erosion and Sediment Control General Permits provide specific information regarding siting of these exploratory wells and set forth in detail the erosion and sediment control measures to be implemented during and after their construction to protect water resources. All other aspects of the May 2009 and June 2010 determinations remain in full effect. Exploratory wells may not be fractured or otherwise modified for natural gas production without prior DRBC approval. As per the May 5, 2010 decision, commission consideration of natural gas development projects will occur after new DRBC regulations are adopted.
The commissioners at the December 8, 2010 meeting approved a resolution and order for the minutes terminating the administrative adjudicatory hearing unless Kevin Schrader (B & E Wells 1 OG Well) entered an appearance in the hearing by submitting a written notice to the hearing officer within 10 days of receipt of a notice provided by commission staff. Mr. Schrader did not enter an appearance in the hearing by submitting a written response to the hearing officer within the stipulated time period, so the administrative adjudicatory hearing on natural gas exploratory wells has effectively been terminated.
The commission made its December 8, 2010 decision in accordance with the recommendation of the hearing officer (view letter dated December 6, 2010 from the Honorable Edward N. Cahn, pdf 188 KB). The complete resolution and order for the minutes is available for viewing (pdf 30 KB), but in summary:
The commission granted the request from Northern Wayne Property Owners Alliance LLC (NWPOA) to withdraw without prejudice its contention that the commission is without authority to require natural gas exploratory well projects to obtain commission approval. "Without prejudice" means that NWPOA may reassert this contention in conjunction with the new natural gas regulations or if any future request for an exploratory well submitted before regulations are promulgated is denied or not processed.
Newfield Appalachia PA, LLC and Hess Corporation voluntarily agreed to submit their grandparented exploratory wells to commission review. As a result, there is no need for a hearing on the validity of the grandfathering provision regarding these wells.
The following chronology briefly explains preceeding events for background:
The commissioners at the July 14, 2010 meeting granted written requests submitted by several persons, a municipality, landowners' organizations, and environmental groups to schedule an administrative adjudicatory hearing on whether to modify the executive director's June 14, 2010 decision to require natural gas companies to obtain commission approval before installing natural gas exploratory wells, except for those exploratory wells that had received state drilling permits as of June 14, 2010. Some of the interested parties would like all exploratory wells to be excluded from commission review while other interested parties would like all exploratory wells to be reviewed. The requests were consolidated and the Honorable Edward N. Cahn, a former U.S. District Court Judge for the Eastern District of Pennsylvania, was appointed as the hearing officer.
The commissioners at the September 15, 2010 meeting granted a written request submitted by the Delaware Riverkeeper Network and Damascus Citizens for Sustainability for an administrative hearing on the July 23, 2010 amendment to the supplemental executive director determination that allowed two exploratory wells sponsored by the Hess Corporation to proceed without commission review; this request was consolidated with Judge Cahn's ongoing proceeding.
The hearing initially was scheduled for the week of December 13, 2010. Expert reports and witness affidavits were to serve as direct testimony at the hearing. Counsel for several parties requested additional time to prepare expert reports. Judge Cahn determined that an extension of one month was appropriate to ensure the fairness of the hearing process and issued a revised scheduling order on November 2, 2010 announcing that the hearing would begin January 19, 2011. However, as explained above, the hearing was terminated by action of the commission at its public meeting on December 8, 2010 and by fulfillment of the subsequent condition.
Reports of Expert Witnesses Filed by DRBC as Testimony for Administrative Adjudicatory Hearing
Please Note: Questions concerning the scope of the testimony were raised by some parties. If the hearing had gone forward, it is possible that a portion of the testimony offered by experts would have been deemed by the hearing officer to be irrelevant, inadmissable and/or beyond the scope of the hearing. It should be noted that these reports support arguments that had not yet been fully articulated or briefed by the parties. Thus, for instance, expert reports filed by the DRBC go only to the question of whether the Executive Director properly extended to natural gas exploratory wells the requirement for DRBC review in accordance with Section 3.8 of the Compact on grounds that they have the potential for a substantial effect on water resources of the basin. The question of whether the Executive Director acted properly in "grandfathering" some one dozen exploratory well projects is a question that would have been addressed in briefs (if requested), oral argument, and through testimony offered by the project sponsors and other parties if the hearing had proceeded.
Erik Silldorff, Ph.D. (pdf 1.1 MB)
Patrick M. O'Dell, P.E. (pdf 726 KB)
Robert M. Anderson and Danielle A. Kreeger, Ph.D. (pdf 326 KB)
Conrad Daniel Volz, DrPH, MPH (pdf 1.4 MB)
John K. Jackson, Ph.D. and Bernard W. Sweeney, Ph.D. (pdf 2.3 MB)