CLEARFIELD – On Wednesday well over 100 people turned out to listen to testimony at public hearing held by the Environmental Resources and Energy Committee at the Knights of Columbus. The hearing was held to solicit testimony on the proposed House Bill 2213, which would amend the existing Oil and Gas Act of 1984. The purpose of the bill is to provide further protection to surface land and water supplies from natural gas drilling activities.
HB 2213 would:
-Require the DEP to inspect Marcellus well sites during each drilling phase;
-Extend to 2,500 feet, from 1,000 feet, the presumed liability of a well polluting a water supply;
-Require disclosure of the chemicals used in the hydraulic fracturing – fracing – of the natural gas from the earth;
-Update bonding requirements to cover the costs of decommissioning a well;
-Clarify local governments’ traditional authority to regulate oil and gas activities.
The meeting opened with members of the committee giving comments on HB 2213, gas well drilling and Pennsylvania’s water system.
State Rept. Camille “Bud” George, majority chair of the committee, said that Pennsylvania is no stranger to drilling. He added that the size and magnitude of Marcellus Shale drilling adds new challenges in ensuring that the both the environment and industry are protected.
“I think it’s important we do it right,” said state Rep. Scott E. Hutchinson, minority chair.
John Hines, deputy secretary for water management for the state Department of Environmental Protection and other DEP representatives were first to testify.
“Pennsylvania is blessed with water,” said Hines. “We live with it, but sometimes we don’t respect it.
“We are at a crossroads,” added Hines. He asked how they will deal with energy production and protecting watersheds.
Hines touched on the process of fracing, where water, salt, sand and chemicals are used to fracture shale formations that hold natural gas. Hines pointed out that this water must be treated before it can be released back into the watershed. He said the DEP uses a number of existing regulations in monitoring wastewater treatment.
He also said that contrary to popular belief, DEP does have a list of chemicals used in the fracing process. He said the department has obtained material data sheets from mining companies. He added that these lists are then circulated to emergency management agencies in the event of an emergency.
Hines admitted that while the DEP knows what chemicals are in the fracing fluid, it does not know what the concentrations of chemicals are. He indicated that each company uses a different solution, in essence, a trade secret.
He also noted that total dissolved solids, or TDS, is a very real problem in the states waterways. He stated that there is a permitting process to deal with TDS in gas well drilling.
State Rep. Mike Carroll asked how many treatment facilities in the state are currently permitted to handle frac water. One of the DEP representatives said around 17 or 18 and noted that they are almost all in the northwest and southwest parts of the state.
“We really do have to get this right,” said Carroll. He added that they can’t repeat the anthracite coal problems of the past. “We’ve come a long way, but we have to get this right.”
Another issue touched on was an incident involving gas well drilling and water wells in Dimock Township. A DEP representative indicated that the water was tainted by gas from a shallow gas well, not Marcellus Shale gas. Later in the meeting, however, there was some discussion that the overall incident occurred because of Marcellus Shale drilling.
State Rep. Matt Gabler questioned the DEP representatives about gas migration and the use of concrete for casing material. The DEP representatives said that gas migration can occur when a shallow pocket of gas is hit in the drilling process or when a casing goes bad. They noted that concrete, while porous, has been effective as a casing material and that it is uncommon for a concrete casing to fail.
George told the DEP representatives that he’s amazed the material used in fracing is a trade secret. He questioned how they will know that water’s treated when they don’t know the ratios of chemicals in the frac water. He also questioned allowing for prolonged usage of open pits.
“We have very strict standards for pits and impoundments,” said Hines.
Also testifying was Thomas W. Beauduy, deputy director and counsel for the Susquehanna River Basin Commission. He praised the committee for their attempts on improving the Oil and Gas Act of 1984. He said the mining activity of today was not foreseen in 1984. He commented on the bonding issue, noting that bonds should reflect the cost of remediation.
Beauduy said he had some issues with some of the drafting in the bill, and that the provisions and disclosures should not only affect Marcellus Shale drilling, but all hydrofracture operations.
He said the SRBC’s business is in water resource management, not drilling regulations, flowbacks or brines. He said they regulate water withdrawal.
“In the past we’ve seen mineral exploitation at the risk of society,” Said Beauduy. He added that they need to use the lessons of the past.
“For this industry, we start at gallon one.”
He touched on the amount of water used in the gas well drilling industry and compared it with other industries. He said a scrubber at a power plant cooling tower uses an average of five million gallons of water a day; the golf industry over 3 billion gallons of water a day is used; in an 18-month span in the Susquehanna River basin, 262 million gallons was used.
Beauduy also added that real-time water data monitoring is in the works, and will be available on the SRBC’s Web site.
Under questioning he noted that the SRBC is concerned about smaller, older streams. He said they will look at habitat and use, among other things, both up and downstream before issuing permits. He also said that water will be available should the industry expand over the next few years.
George asked Beauduy if it was reasonable for drilling companies to use water from other industrial origins, such as acid mine drainage.
“Absolutely,” said Beauduy. He indicated that if a firm uses AMD in their process, they will waive the fees on applications.
John Baillie, senior attorney for Citizens for Pennsylvania’s Future (PennFuture) also testified at the hearing. PennFuture is a statewide public interest membership organization with offices in Harrisburg, Pittsburgh, Philadelphia, West Chester and Wilkes-Barre. The organization’s purposes include advocating and litigating on behalf of the environment and public health on a state-wide basis. This includes water quality issues and issues arising out of gas drilling activities.
In his testimony Baillie pointed out that techniques used in Marcellus Shale drilling are also used in other gas extraction instances. He noted that these techniques are likely to raise similar water pollution concerns. He asked that HB 2213 be revised so its protections not only cover Marcellus Shale gas wells, but to any gas extraction activity that uses fracing and horizontal drilling.
Baillie also pointed out that the Oil and Gas Act does not require gas well companies to disclose information regarding the chemicals used in the drilling process. He noted that DEP requires companies to disclose the ingredients of frac fluid, but not the ratios.
“…It also appears that the manufacturers of fracturing fluids can legitimately claim that the concentration of the fluids’ various ingredients are confidential trade secrets,” said Baillie. “Well operators purchase fracturing fluids but may not be privy to the concentrations of the ingredients the fluids contain.”
He asked that the sponsors of HB 2213 consider removing requirements that well operators disclose the concentrations or ratios of ingredients in their frac fluids. Baillie indicated this would avoid imposing obligations on drillers that they may fight.
George asked Baillie if he disagreed with other organizations that believed the drillers should disclose the ratios/concentrations. Baillie said he did not.
“We’d like to get this bill passed as close to current form as it is,” said Baillie. He added that he would rather see 99 percent of the bill passed than nothing.
Baillie also touched on the Pennsylvania Municipalities Planning Code and the Flood Plain Management Act. Both take a back seat to the Oil and Gas Act. He asked that HB 2213 amend section 602, “to clarify that such local ordinances are preempted only to the extent they purport to regulate oil and gas well operations and that to the extent local ordinances would regulate certain other aspects of oil or gas well operations – including time and place of operations – the ordinances are not preempted.”
He also pointed that the bill needs to recognize ordinances under the Second Class City Code of Pittsburgh, so the city can assert its traditional zoning powers on gas well drilling in the same way other municipalities might.
Kathryn Klaber, president and executive director of the Marcellus Shale Coalition and David Spigelmyer, vice chairman of the MSC and vice president of government relations for Chesapeake Energy were the last to testify.
“I certainly recognize your historic commitment to conservation and the environment and appreciate the committee’s review of this subject,” said Klaber. “And you have been very clear about the need to maximize the real economic opportunities from the Marcellus development without jeopardizing the environment.
“On that goal, we are on the same page.”
She, like Carroll and Hutchinson, said they needed to get it right. She touched on casing and the cementing of well borings, hydraulic fracturing fluids and equipment disinfection.
She noted an advisory board of regulators, industry representatives, academia and representatives of the public interest who worked toward updating the PA Code concerning gas oil well construction. She cited it as an example of how the natural gas industry is developing the Marcellus Shale while working with regulators. She also pointed to a recent announcement by Gov. Ed Rendell regarding the hiring of 60-plus new DEP staffers to monitor oil and gas wells. She said the MSC has “consistently supported the hiring of additional DEP staff to monitor natural gas wells in the commonwealth.”
Klaber also touched on frac fluid.
“With respect to the disclosure of the components of the fracturing fluid, and notwithstanding the misleading statement to the contrary by those who would appear to want to see this Marcellus opportunity for Pennsylvania fail, this information is available in multiple places. Just like in other regulated industries, the natural gas industry complies with the federal Occupational Safety and Health Administration rules that require up-to-date Material Safety Data Sheets to be on site, disclosing the components of the products in use.”
Klaber and Spigelmyer were asked about using AMD in the mining process as well as companies recycling their water. Spigelmyer said the company he’s with has almost 100 percent recycling when it comes to their waste water. Klaber stated that companies use AMD when they are in the right locations.
Throughout the hearing members of the Environmental Resources and Energy Committee urged the DEP and industry to work together.
In one example, state Rep. Bryan Barbin indicated that if the DEP worked with the industry to use AMD and other industrial uses water, then maybe tax credits could be earned.
“Companies would like to see disposal options continue to develop,” added Spigelmyer.
Carroll noted that he did not hear much in their testimony against HB 2213.
“Are we getting a quiet endorsement,” he asked.
Klaber said no, and that elements of the bill were already on the books.
Spigelmyer went on to state that the industry is building toward future endeavors, and indicated that additional taxation would only harm them.
George took umbrage with some of the SMC representatives’ statements. He questioned them on groundwater pollution and equipment cleaning.
“We welcome you, the industry,” said George. “But this belongs to the people.”
George thanked those gathered and said that more public hearings will be held in the future.