Natural Gas Drilling
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Please Note: Commission consideration of natural gas production projects will occur after new DRBC regulations are adopted. Draft natural gas regulations are expected to be published by the end of summer 2010, with a public rulemaking process to follow.
Stone Energy Approved Water Withdrawal Docket and Related Information
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Extent of Marcellus Shale Formation in the Delaware River Basin |
Backgroundnu
Much of the new drilling interest taking place in northeastern Pennsylvania and southern New York is targeted at reaching the natural gas found in the Marcellus Shale formation, which underlies about 36 percent of the Delaware River Basin. Because Marcellus Shale is considered a tight geologic formation, natural gas deposits were not previously thought to be practically and economically mineable using traditional techniques. New horizontal drilling and extraction methods, coupled with higher energy costs, have given energy companies reason to take a new interest in mining the natural gas deposits within the Marcellus Shale.
However, these new extraction methods require large amounts of fresh water to fracture the formation to release the natural gas. A significant amount of water used in the extraction process is recovered, but this "frac water" includes natural gas and chemicals added to facilitate the extraction process, as well as brine and other contaminants released from the formation.
Why Is The DRBC Involved?
The DRBC is a federal-interstate compact government agency that was formed by concurrent legislation enacted in 1961 by the United States and the four basin states (Pennsylvania, New York, New Jersey, and Delaware). Its five members include the basin state governors and a federal government representative appointed by the president. The commission has legal authority over both water quality and water quantity-related issues throughout the basin.
In connection with natural gas drilling, the commission has identified three major areas of concern:
DRBC Eliminates Review Thresholds for Gas Extraction Projects in Shale Formations in Delaware Basin's Special Protection Waters
DRBC Executive Director Carol R. Collier on May 19, 2009 announced that she has issued a determination notifying natural gas extraction project sponsors that they may not commence any natural gas extraction project located in shale formations within the drainage area of the basin's Special Protection Waters without first applying for and obtaining commission approval.
"This determination explains DRBC regulatory requirements on an interim basis and asserts commission review over all aspects of natural gas extraction projects in shale formations within the drainage area of the basin's Special Protection Waters, regardless of the amount of water withdrawn or the capacity of domestic sewage treatment facilities accepting fracking wastewater," Collier said. "The commissioners intend to adopt regulations pertaining to the subject matter contained in this determination after public notice and a full opportunity for public comment, but this rulemaking process can be lengthy. In the meantime, DRBC will apply this determination in combination with its existing regulations."
In taking this action, Collier considered and determined that as a result of water withdrawals, wastewater disposal, and other activities, natural gas extraction projects in shale formations may individually or cumulatively affect the water quality of Special Protection Waters by altering their physical, biological, chemical or hydrological characteristics. This finding is in accordance with Section 2.3.5 B.18 of the commission’s Rules of Practice and Procedure, which provide that any project "that the Executive Director may specially direct by notice to the project sponsor or land owner as having a potential substantial water quality impact on waters classified as Special Protection Waters" may be required to undergo review.
"The intent behind this executive director determination is to provide directional signals, not put up roadblocks," Collier said. "“Each of these activities, if not properly performed, may cause adverse environmental effects on water resources. The bottom line for the DRBC is to ensure that proper environmental controls are provided to safeguard our basin's water resources that are used by 15 million people."
Most of the shale formations that may be subject to horizontal drilling and hydraulic fracturing techniques requiring large volumes of water in the basin are located within the drainage area to DRBC's designated Special Protection Waters (SPW). The commission's SPW program is designed to prevent degradation in streams and rivers considered to have exceptionally high scenic, recreational, ecological, and/or water supply values through stricter control of wastewater discharges, non-point pollution control, and reporting requirements. Coverage of the DRBC's SPW anti-degradation regulations includes the 197-mile non-tidal Delaware River from Hancock, N.Y. south to Trenton, N.J. and the land draining to this stretch.
Under this determination, a natural gas extraction project encompasses the drilling pad upon which a well intended for eventual production is located, all accompanying facilities and related activities, and all locations of water withdrawals used or to be used to supply water to the project.
Exploratory wells are subject to state regulation. Fracturing of shale formations cannot be conducted on exploratory wells and they cannot be used as or converted to production wells until the project sponsor has obtained DRBC approval.
"To determine whether the Rules of Practice and Procedure require DRBC review of any projects falling outside this determination, we continue to recommend that any company proposing natural gas extraction activities anywhere in the basin contact DRBC staff to schedule a pre-application meeting," Collier said.
The DRBC recognizes that each natural gas extraction project also will be subject to the review of the environmental agency of the state in which the project is located and, in some cases, subject to federal agency review. The commission intends to coordinate with and, where feasible, to utilize the review process and approvals of the applicable state or federal agency to minimize duplication of effort and redundant requirements imposed on project sponsors.
DRBC Executive Director Determination Extended to Include Natural Gas Exploratory Wells (June 14, 2010)
DRBC Executive Director Carol R. Collier announced on June 14, 2010 that she has supplemented her May 19, 2009 determination to include natural gas exploratory wells.
"My 2009 determination that sponsors of natural gas extraction projects in shale formations must obtain commission approval before commencing such projects expressly did not cover wells intended solely for exploratory purposes," Collier said. "Today, I am extending the provisions of my 2009 determination to include exploratory wells, subject to reservations for exploratory well projects already approved by the states on or before June 14, 2010."
By this supplemental determination, all natural gas well project sponsors, including the sponsors of natural gas well projects intended solely for exploratory purposes, must first apply for and obtain commission approval before commencing any natural gas well project for the production from or exploration of shale formations within the drainage area of Special Protection Waters in the Delaware River Basin.
"For the purpose of this determination, any natural gas well drilled in or through shale is assumed to be targeting a shale formation and is subject to this determination, unless the project sponsor proves otherwise," Collier added. All other aspects of the 2009 determination remain in effect.
Today's action recognizes the risks to water resources, including ground and surface water that the land disturbance and drilling activities inherent in any shale gas well pose. "In light of the commission's May 5, 2010 decision to finalize natural gas regulations before considering project approvals, this supplemental determination removes any regulatory incentive for project sponsors to classify their wells as exploratory wells and install them without DRBC review before the commission's natural gas regulations are in place," Collier said. "It thus supports the commission's goal that exploratory wells do not serve as a source of degradation of the commission's Special Protection Waters."
"Where entities have invested in exploratory well projects in reliance on my May 2009 determination and information from DRBC staff, there are countervailing considerations that favor allowing these projects to move ahead," Collier stated in her supplemental determination. "I am informed that since May of 2009, Pennsylvania has issued a limited number of natural gas well drilling permits within the Delaware River Basin targeting shale formations, while New York State has not issued any natural gas well permits targeting shales in the basin since that date. In contrast to the thousands of wells projected to be installed in the basin over the next several years, the risk to basin waters posed by only the wells approved by Pennsylvania since May 2009 are comparatively small. Not only are these wells subject to state regulation as to their construction and operation, but they continue to require commission approval before they can be fractured or otherwise modified for natural gas production. In light of these existing safeguards and the investment-backed expectations of the sponsors of these projects, this supplemental determination does not prohibit any exploratory natural gas well project from proceeding if the applicant has obtained a state natural gas well permit for the project on or before June 14, 2010."
DRBC Amended Supplemental Executive Director Determination - July 23, 2010 (72 KB*)
DRBC Supplemental Executive Director Determination - June 14, 2010 (54 KB*)
DRBC Executive Director Determination - May 19, 2009 (67 KB*)
The commission does not get involved in the private negotiations taking place between natural gas drilling companies and private property owners. However, property owners are advised to seek appropriate technical and legal representation to ensure that they obtain adequate protection of their property.
Questions? |
Last Updated: July 28, 2010
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