Author: Dustin Kuhlman, P.E.
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.
Over 650 stakeholders in Pennsylvania’s rapidly growing oil and gas industry gathered in State College, Pennsylvania on January 11th and 12th of 2010 to participate in the Pennsylvania Department of Environmental Protection’s (PADEP) Regulatory Training for the Oil and Gas Industry. The attendees included, among others, representatives from exploration and production groups, midstream operators, consulting engineering firms, and the PADEP. The purpose of the presentation was to provide industry training and updates on permitting, policy, and regulations in Pennsylvania pertaining to the oil and gas operations.
The 1½ day training session focused on PADEP’s oversight of the following aspects of the industry:
- Erosion and Sedimentation Control Permitting for Oil and Gas Construction Activities
- Impoundment Permitting for Marcellus Shale Gas Wells
- Waste Reporting and Disposal
- Stream and Wetland Protection and Permitting
- Spill Reporting Requirements
- Water Management Plans and Water Use Reporting Requirements
While the training session was intended for Pennsylvania’s oil and gas industry in general, the focus of the presentations and the reason for the overwhelming attendance was the development of the Marcellus Shale play. The Marcellus has presented unique challenges for both operators and regulators in that the process of developing and completing a typical Marcellus well involves many elements and development at a scale atypical of traditional oil and gas exploration in Pennsylvania. Increased well development and vastly increased quantities of gas are spurring the development of gathering lines, transmission lines, and gas treatment, fractionation, and compression facilities across the Commonwealth. Increased current and projected activity and the processes necessary for successful extraction of natural gas from the Marcellus shale have spurred additional regulation and prompted the PADEP to provide training and informational sessions such as the recent event in State College to communicate both new and existing regulatory requirements to stakeholders.
The PADEP has implemented new regulation or applied existing regulations to all aspects of the Marcellus development with the goal of protecting Pennsylvania’s natural resources. Earth disturbance associated with natural gas development projects on sites in excess of five acres is regulated under the ESCGP-1 general permit. The construction of impoundments to hold fresh water for use in the hydraulic fracturing process and to receive produced water from the wells is regulated under PADEP’s Chapter 105 Dam Safety and Waterway Management Program. The permitting of impacts to streams, wetlands and other water bodies is also regulated under the Chapter 105 program and by the US Army Corps of Engineers. Approvals for use of water in the drilling and hydraulic fracturing process must be obtained through the PADEP Bureau of Oil and Gas through the Water Management Plan process and the Susquehanna River Basin Commission or Delaware River Basin Commission, where applicable. Waste disposal and treatment is regulated through the PADEP Bureaus of Oil and Gas and Waste Management. Operators are required to keep records of their waste handling, sampling, transport, and disposal activities and provide annual reporting to PADEP.
Future postings will provide more detailed information on the various aspects of the development of Marcellus Shale gas resources in Pennsylvania and other states. Specific questions about the topics identified in this posting can be answered by directly contacting our experts, Dustin Kuhlman at 800-365-2324 or firstname.lastname@example.org, Paul Kanouff at 800-899-3610 or email@example.com.
Further information on the Marcellus Shale and the regulatory framework for managing the development of this resource is available at the following web sites:
- PADEP Bureau of Oil & Gas – Marcellus Shale Home Page: http://www.dep.state.pa.us/dep/deputate/minres/oilgas/new_forms/marcellus/marcellus.htm
- Marcellus Shale Coalition: http://www.pamarcellus.com/
- Independent Oil and Gas Association of Pennsylvania: http://iogapa.org/
- Pennsylvania Oil and Gas Association: http://www.pogam.org/