oil & gas industry
Significant changes are on the way for oil and gas waste management facilities in Ohio with the upcoming Oil and Gas Waste Facilities Rules (Draft Rules, OAC 1501:9-X, revised 12/9/16). Oil and gas waste facilities, as currently defined in the Draft Rules, are operations that store, recycle, treat, or process brine and other waste substances associated with oil and gas exploration and production operations but are not part of well operations that are otherwise permitted by Ohio Department of Natural Resources’ (ODNR’s) Division of Oil and Gas Resources Management (such as a production well or Class II brine disposal well). The purpose of these Draft Rules will be to prevent injury or damage to public health, safety, and the environment and to ensure that brine and other waste substances are properly managed and disposed. The Draft Rules include definitions for oil and gas waste substances, treatment, recycling, storage, repurposing, stabilization, and processing. While the statutory definition of Technologically Enhanced Naturally Occurring Radioactive Material (TENORM) is retained, the Draft Rules appear to expand TENORM materials to include seven (7) specific waste types. The Draft Rules also require that the permit applicant shall be responsible for all utility connections of the facility. ODNR issued the Draft Rules asking that written comments from the industry be submitted by January 20, 2017, and held an industry meeting on January 30, 2017.
Until the Draft Rules are finalized, such facilities have been granted temporary authorization via a Chief’s Order from ODNR. At this point, it is not known as to when these Draft Rules will be final and effective; however, oil and gas waste facilities that currently have a Chief’s Order will be required to re-submit a permit to construct and/or a permit to operate once the Oil and Gas Waste Facilities Rules are promulgated. Constructed/operating facilities will be required to meet the location restrictions and construction specifications in the final rules.
Are the Draft Rules Requirements Similar to the Ohio Horizontal Well Site Construction Rule?
The Draft Rules are very similar to the Ohio Horizontal Well Site Construction Rule with respect to surface location and siting criteria, permit application/form and supporting documents, review procedures, construction activities, permit modifications, and certification. A significant difference is the definition of secondary containment, including tanks, vessels, berms, dikes, pipes, liners, vaults, curbing, drip pans, sumps, etc. The definition of material modification is equivalent to the definition in the Ohio Horizontal Well Site Construction Rule with the exception of substituting the name “Oil and Gas Waste Facility” for “Horizontal Well Site” and “Oil and Gas Waste Facility Boundary” with “Well Site Boundary.” The Draft Rules outline processes for permit modifications, requirements during construction activities, and construction certification, all of which are similar to requirements in the Ohio Horizontal Well Site Construction Rule.
The following exhibits will be required with the applications:
- Design and construction drawings,
- Containment integrity document,
- Emergency release conveyance map,
- Stormwater hydraulic report,
- Sediment and erosion control plan,
- Geotechnical report/plan,
- Oil and gas waste facility boundary GIS files, and
- Dust control plan.
These exhibit requirements are very similar to the requirements stipulated under the Ohio Horizontal Well Site Construction Rule, with the exception of the Containment Integrity requirement in the Draft Rules.
What Does the Oil and Gas Waste Facility Permitting Process Look Like Under the Draft Rules?
The permit application process will require the completion of a Permit to Construct (PTC) and a Permit to Operate (PTO). The Draft Rules state that the permits are not transferable and are issued only for a specific location. Thus, mobile facilities cannot be permitted in the current version of the Draft Rules. Application forms, prescribed by ODNR, will require specific facility and/or owner/industry information. Completeness and pre-construction site review time frames are also outlined, and those may take between fifty (50) and seventy (70) business days under normal circumstances.
One of the most contentious components of the Draft Rules is the public notice requirement once the permit application is deemed complete. Written objections to the permit application, if deemed relevant by ODNR, will require a public hearing. The Draft Rules stipulate that ODNR’s Division of Oil and Gas Resources Management provide public notice of the application by posting the application on the division’s website. The question regarding this public notice requirement has to do with its timing and/or its order with respect to the Technical Review Procedure (i.e., whether it is appropriate for the public notice to happen before Technical Review is completed).
A pre-construction site review will be completed by ODNR within fifteen (15) days of notification of a complete PTC application. ODNR is required to complete its technical review of the PTC application within 60 days following the completion of the public notice process. The PTO application will be reviewed within 60 days following the pre-construction site review.
The permittee shall notify ODNR at least forty-eight (48) hours prior to commencement of construction, following permit issuance. 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 Draft Rules outline processes for addressing permit modifications, requirements during construction activities, and requirements for certification of the constructed site to be operated, similar to what are included in the Ohio Horizontal Well Site Construction Rule.
No later than two (2) years after the effective date of the PTC, the permittee is required to submit a signed and sealed certification from the Ohio-registered professional engineer to ODNR, certifying that the oil and gas waste facility was constructed in reasonably close conformity with the approved application and documented modifications.
What are the Impacts and Implications?
Obviously, finalization and implementation of the Draft Rules will result in higher costs for permitting, construction, and operation of oil and gas waste facilities in Ohio due to increased regulatory requirements.
Oil and gas waste facility owners/operators will need to plan longer lead-times for site selection, plan development, field investigations, and compliance with the permitting, construction, and operation requirements. Increased costs for oil and gas waste facility permits, construction, and operations will likely trickle down through the Exploration and Production industry.
Clear and timely communication and clarifications to ODNR inquiries, along with well-structured and assembled plan sets and application materials will all be critical to navigating the permitting and review process and in securing permits to construct and operate oil and gas waste facilities.
Implementation of an effective construction quality assurance and quality control (QA/QC) program will be critical for facility construction in accordance with the permit conditions, site design plans, and specifications. The Draft Rules also require that all modifications (material or application) are well documented and communicated with ODNR.
Critical Items Requiring Further Consideration:
- The baseline environmental assessment, containment integrity, dust control plan, and geotechnical investigation requirements are more prescriptive than requirements in West Virginia and Pennsylvania rules for similar facilities.
- There is no distinction in the factors of safety requirements for slope stability between cut slope and fill slope. The Draft Rules require the same factor of safety of 1.5 for both types of slopes and a factor of safety for bearing capacity of not less than 3.0. These restrictive factors of safety and bearing capacity requirements are likely to increase the effort and costs for site selection, limiting the options for site development.
- The application and technical review procedures will extend the time frame for permitting, design, construction, and operation of oil and gas waste facilities. The overall permitting process could range from ten (10) weeks to as many as nineteen (19) weeks, depending on relevant objections during the public notification process.
Promulgation and execution of Oil and Gas Waste Facilities Rules will result in additional procedures and requirements for the Oil and Gas industry. The rules will not address all site-specific design, construction, and operational issues; thus, anticipation of permitting issues and optional solutions must be effectively communicated to the owner for a complete and compliant permit application. The planning and permitting process will require assembling effective and well-coordinated environmental, ecological, civil/geotechnical engineering, and land surveying teams. During the ODNR rule-making process, CEC will continue to be actively involved, representing industry and stakeholder concerns.
If you have any questions or concerns regarding how these Draft Rules may affect your business, please contact Ababu Gelaye at email@example.com or (614) 310-2079, or Roy Stanley at firstname.lastname@example.org or (614) 425-6324.
2011 was a busy year for those attempting to stay abreast of air quality issues affecting the oil and gas industry in Pennsylvania. In recent presentations to the PA Chamber of Business and Industry and the Marcellus Shale Coalition, Joyce Epps, PADEP’s Director of Air Quality, discussed PADEP’s intent to require natural gas facility owner/operators to submit an atmospheric emission inventory data by March 1, 2012. This is just the latest in a series of state and federal air quality compliance issues that have been pertinent to the oil and gas industry. As 2012 gets underway, expect to hear more about emission inventories, general permits, plan approval exemptions, source aggregation, NSPS/NESHAPS, and greenhouse gas reporting. If your head is spinning, here is an update on some key air topics:
1) PADEP Atmospheric Emission Inventories
PADEP is rolling out its first emissions inventory program for the natural gas industry. Initial indications are that it will be modeled after the Wyoming Department of Environmental Quality approach. PADEP sent initial notification letters to 99 operators on 12/6/11 with the intent that 2011 inventories be submitted by 3/1/12. Criteria pollutants (e.g., carbon monoxide and nitrogen dioxide) and hazardous air pollutants (e.g., benzene and formaldehyde) from point sources (e.g., dehydrators and heaters), fugitive or area sources (e.g., leaking components and impoundments), and mobile sources (e.g., on- and off-road engines) are expected to be included. An Excel-based Shale Air Emissions Data Management System is being developed and the publicly-available Oil and Gas Reporting Electronic (OGRE) System will be modified to accommodate the reporting of this information. Training is expected to be offered by PADEP in February 2012. Additional materials can be found on PADEP’s website here. Industry representatives are hopeful that an extension will be granted for delivery of the first reports.
2) General Permit GP-5 – Natural Gas Production Facilities
Use of GP-5 expedites the permitting of certain natural gas activities. The permit was last updated on 3/17/11 although no changes were made to the applicability of the permit or the associated emission limits. The main change to the permit was a new condition that allows the applicant to limit the maximum emissions (i.e., potential to emit) of a source. The biggest changes though were to the application itself which expanded from two pages to nine. The new application requires significantly more detail including serial numbers for equipment, design parameters for control devices, and compliance demonstration methods. With the development of EPA’s new NSPS and NESHAPS (see Item 6 below), PADEP plans to issue more substantive changes to GP-5 in early 2012. Watch for the opportunity to submit comments during another 45-day window when proposed modifications are published.
3) General Permit GP-11 – Nonroad Engines
Proposed changes to GP-11 were published in the PA Bulletin on 10/30/10. PADEP included a provision to operate engines at temporary locations provided written notification is made to the municipality and PADEP five days prior to the change in location. PADEP also proposed to require that an operations report be submitted within 30 days of completing work at each temporary location. PADEP received comments from 1,122 parties prior to the comment period that closed on 5/26/11 and PADEP is still in the process of developing a comment and response document. Possible changes to GP-11 are closely tied to proposed revisions to Exemption #38 on the PADEP Plan Approval Exemption List.
4) Plan Approval Exemption #38
Certain oil and gas exploration and production facilities were exempt from Plan Approval requirements under Exemption #38 of the 7/26/03 list of Plan Approval exemptions. A draft revision to that list was published on 4/16/10 which included the addition of several caveats to Exemption #38 that make it more difficult to obtain the exemption. The public comment period closed on 5/26/11 by which time the agency had received comments on Exemption #38 from 1,225 parties. Industry advocates are hopeful that the exemption will be tailored to enable nonroad engines that would otherwise be subject to GP-11 to be exempt from permitting requirements altogether. PADEP is considering its response to these comments in combination with its work on GP-11.
5) Source Aggregation Guidance
PADEP published its final Guidance for Performing Single Stationary Source Determinations for Oil and Gas Industries on 10/22/11 (41 Pa.B. 5719). The comment period for that guidance closed on 11/21/11. PADEP is in the process of responding to comments from 364 parties, perhaps most notable among them being Diana Esher, U.S. EPA Region III Air Protection Division Director. Ms. Esher stated that, “We disagree with the policy pronouncements in the PADEP guidance which differ from established federal law and the Commonwealth’s own State Implementation Plan (SIP) and regulations by attempting to emphasize proximity and ‘common sense notion of a plant’ above other factors including conducting case-by-case analysis.” Through six pages of detailed comments, EPA delineates multiple disagreements with PADEP’s guidance. Ms. Esher states that PADEP indicates an intent “…to change the manner in which regulations that have been adopted as part of the…SIP and that are now federal law will be implemented.” Ms. Esher states that “this is problematic,” in that the SIP becomes federal law once approved by EPA, not state law. In concluding, Ms. Esher was clear that EPA will be paying close attention to PADEP’s source aggregation determinations.
Proposed air emission standards for the oil and natural gas industry were published in the Federal Register on 8/23/11. As drafted, these rules will apply to production and processing (drilling and well completions following hydraulic fracturing, producing wells, gathering lines, gathering and boosting compressors, gas processing plants) and transmission and storage (transmission compressor stations, transmission pipeline, underground storage). Various industry groups including the American Petroleum Institute, the Gas Processors Association, and the Marcellus Shale Coalition submitted comments prior to the close of the comment period in late November 2011. Final rules, expected by 2/28/12, will be automatically adopted in their entirety in the Pennsylvania Code.
7) 40 CFR 98, Subpart W Greenhouse Gas Reporting
Subpart W was published at the end of 2010 and obliged affected facilities to begin gathering data in 2011 for initial GHG reports due in 2012 (see CEC’s prior blog posting). The Subpart has gone through several modifications since it was originally published, the most significant of which was an allowance for the use of best available monitoring methods (BAMM) for all of 2011. Use of BAMM is currently permitted through June of 2012 providing the designated representative e-filed a Notice of Intent prior to 1/3/12. Affected parties are encouraged to monitor changes in the rule for revisions to emission estimation methodologies and other technical revisions. The current due date for the 2011 reports is 9/28/12.
CEC will be following these topics and will provide periodic updates as they develop. In the meantime, if you are unclear as to how any of these issues may affect your operations, please contact CEC’s natural gas air quality expert Kris Macoskey at 800-365-2343 or by email at email@example.com.