Fracking Insider Readers: We are pleased to bring you Volume 28 of our State Regulatory Roundup, including updates in Colorado, Illinois, and Pennsylvania. As we explained in earlier volumes, we designed the Roundup to provide quick overviews on state regulatory activity. If you have any questions on any of these summaries, please do not hesitate to ask.
Colorado – Governor John Hickenlooper (D) has proposed new rules that would make the state the first in the country to directly regulate methane emissions from oil and gas drilling. The rules were developed in a collaborative process between the Environmental Defense Fund and energy companies Anadarko, Encana, and Noble Energy. The proposed rules would require leak detection for a variety of hydrocarbons, including volatile organic compounds and methane, and an established timeline for leak repairs. The leak detection requirements would apply to pipelines, tanks, and other drilling and production processes, and would be accomplished with infrared cameras and other sensitive equipment that could detect leaks that would otherwise remain undiscovered. Instrument-based monthly inspection of large emission sources would also be required. Colorado estimates that the proposed rule would reduce volatile organic compound emissions by 34% in the state with an annual compliance cost of about $30 million on industry. The Air Quality Control Commission scheduled the proposed rules for formal rulemaking on November 21st, and a public hearing is expected in February 2014.
Illinois – The Department of Natural Resources published draft rules on November 15th to implement the Hydraulic Fracturing Regulatory Act, which was enacted over the summer as Public Act 098-0022. The rules impose a non-refundable $13,500 fee on exploration companies to obtain hydraulic fracturing permits, and also require companies to obtain a $50,000 bond per permit, or a $500,000 “blank bond” for multiple permits. The companies must also obtain insurance coverage of at least $5 million. Environmental groups object that the rules limit public access to chemical information, do not adequately regulate wastewater retention systems, and do not adequately regulate high-volume hydraulic fracturing using nitrogen and nitrogen-infused water. The public comment period on the proposed rules extends until January 3rd, 2014, and will include public hearings in Chicago on November 26th and Ina on December 3rd.
Pennsylvania – The Marcellus Shale Coalition and the Pennsylvania Oil and Gas Association announced on November 4th that they will jointly study radioactive material associated with the exploration and production of shale oil and gas. The industry groups said that their study will complement the study currently being conducted by the Pennsylvania Department of Environmental Protection, which was initiated in early 2013 and is expected to be completed in August 2014. Naturally-occurring radioactive materials are commonly found in drill cuttings extracted at oil and gas sites, mining sites, and water wells. The samples that will be analyzed in the industry study will come from drill cuttings, on-site pits and impoundments, pipes, equipment, vapor capture systems, hydraulic fracturing sand, landfill leachate, and wastewater facility sludge and water.