Month: July 2015
Sweeping changes are in store for the Exploration and Production Industry in Ohio with the adoption of the Ohio Horizontal Well Site Construction Rule (Rule). The Rule, which took effect on July 16, 2015, requires that operators obtain a permit from the Ohio Department of Natural Resources (ODNR) to construct a well pad for horizontal drilling in the State of Ohio. While similar requirements have been in place in neighboring Appalachian Basin states for several years, this is a first for Ohio. All sites constructed or modified after the effective date of the Rule will be subject to its requirements. Sites already under construction prior to July 16, 2015, do not require permit coverage.
What are the requirements?
The Rule serves to regulate well site construction activities from project planning through construction and site stabilization. Requirements are specified for the permit application, supporting documents, review procedures, construction activities, permit modifications, certification, and permit transfer.
The application process will involve the completion of forms developed by ODNR and the preparation of a variety of plans and reports to characterize the well site, describe the proposed construction activity, and demonstrate the considerations made for the protection of the health, safety, and welfare of the public and the environment. Required attachments to the application package include:
- Detailed Site Development Drawings
- Emergency Release Conveyance Map
- Sediment and Erosion Control Plan
- Well Site Boundary GIS Files
- Dust Control Plan
- Geotechnical Plan
- Stormwater Hydraulic Report
Application review under the Rule consists of a completeness screening, an on-site field review, and a detailed review of the permit documents. The Rule outlines timeframes for each stage of review and the procedure for addressing deficiencies identified by ODNR. Following permit issuance, construction may begin following 48-hour advance notice to ODNR. Red-line drawings must be kept on site to document deviations from the approved plans, and inspection and maintenance activities must be performed to demonstrate compliance.
The Rule also includes procedures for addressing permit modifications, general requirements during construction activities, requirements for certification of the constructed site, and provisions for ownership transfers.
What it means to industry
In short, the enactment of the Rule means that it will take longer and cost more to build a well pad in Ohio than it had previously.
Operators will need to account for time in their schedules to develop additional plans, conduct more extensive field investigations, and navigate the permit application, review, and certification processes. Additional costs will be incurred for plan preparation and for management of the process.
Some of our key observations:
- The requirement for a geotechnical investigation exceeds the requirements of similar permitting processes in neighboring Appalachian Basin states. In some cases, the specification of safety factors for slope stability and bearing capacity could restrict options based on professional judgment. The safety factor specification could result in more earthwork, more disturbed area, and additional materials and structures being needed.
- The review process will not only add time, but also complexity to well site construction projects. Overall, the process could span from as little as 12 weeks to as many as 29 weeks. Thorough, well-organized applications and timely response to inquiries from ODNR during the review process will be essential to minimizing approval timeframes. This can only happen if the numerous disciplines involved with site planning and permit preparation are effectively coordinated.
- Construction oversight and inspection will be important activities during construction to ensure projects are built in accordance with the approved permit materials and that modifications, if necessary, are well documented. The certification requirements included in the Rule will make this necessary to minimize the risk of encountering unexpected delays just before mobilization of drilling equipment.
The implementation of any new regulation results in evolving processes as grey areas and uncertainties are identified and subsequently resolved. The Ohio Horizontal Well Site Construction Rule will be no different in this respect. It will be important for the industry and ODNR to work together to develop an efficient process, one that will support the construction of well pads that enable safe drilling and production while protecting public health, safety, and the environment.
If you have questions about how this new regulation may affect your business, please contact Dustin Kuhlman in CEC’s headquarters office at firstname.lastname@example.org or by calling (412) 249-1617 or Ababu Gelaye in CEC’s Columbus office at email@example.com or (614) 310-2079.