HARRISBURG – The Environmental Quality Board approved a Department of Environmental Protection request today to impose new fees for Marcellus Shale drilling permits that will replace the flat $100 permit fee with a variable fee structure based on well depth.
The new fee structure will help ensure adequate funding to cover program expenses for permit reviews and well site inspections. The fee increase will also allow the department to hire additional staff in Meadville, Pittsburgh and Williamsport to process permits and monitor drilling activities in the northcentral and northeastern areas of the commonwealth.
“Due to technological advances in drilling and rising natural gas prices, gas exploration in the commonwealth has increased significantly with 40,000 new drilling permits anticipated during the next three years,” Environmental Protection acting Secretary John Hanger said. “Despite this substantial increase in workload, including permit review and inspection of oil and gas well sites, the department has not increased the $100 permit fee for oil and gas well permits since 1984.
“These permit fee increases will allow us immediately to hire additional staff to properly review Marcellus Shale permit applications and monitor drilling activities to ensure that our regulations are being enforced and our natural resources are being protected.”
Pennsylvania’s oil and gas act established a $100 permit fee for oil and gas well permits in 1984 and gives the department the authority to increase that fee to cover the cost of regulating the drilling industry.
The new fee structure sets a base permit cost of $900 for all Marcellus Shale wells up to 1,500 feet deep, and imposes an additional cost of $100 for every 500 feet of depth past 1,500 feet. The increased fees will take effect in early spring.
Permit applications for Marcellus Shale gas wells must be thoroughly evaluated before a permit can be issued. Extracting natural gas from the Marcellus Shale formation requires significant amounts of water to hydraulically fracture the shale formation.
The department requires permit applicants to submit water management plans that outline how and where the water will be gathered, how it will be stored at the site, and how waste water will be processed and treated.
“With nearly 8,000 drilling permits issued so far this year and drilling taking place in areas of the state outside our traditional oil and gas region, we need to make sure that we have sufficient personnel to properly manage development of Pennsylvania’s Marcellus Shale natural gas reserves,” Hanger said.
Among other actions taken at today’s meeting, the Environmental Quality Board:
-Approved a separate proposed rulemaking for public comment that revises fees for Marcellus Shale and traditional oil and gas wells.
-Approved a final rule to strengthen public notification requirements for community water systems to notify the public of imminent threats and situations that may impact public health and the safety of water obtained from a public water system.
-Approved publication in the Pennsylvania Bulletin of a 30-day public comment regarding a proposed storage tank rulemaking that would require tank operators to complete training on their duties and responsibilities, in accord with recent federal regulations. Properly trained operators will help to reduce and prevent future releases from underground storage tanks, and improve compliance with state and federal regulations.
-Agreed to provide notice in the Pennsylvania Bulletin for three public meetings and a 60-day public comment period on a proposed rulemaking limiting emissions of volatile organic compounds from adhesives, sealants, primers and solvents. The new rules would apply to manufacturing, sale and use of such products. VOCs are a precursor of groundlevel ozone. Reducing groundlevel ozone would benefit people with respiratory problems and help the state meet federal air quality standards.
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