They argue that conventional drilling has been overlooked in the rush to develop horizontal wells to extract natural gas.
According to the legislators, the proposed substantial re-write of the state’s Oil and Gas Act, Act 13, P.L. ___, 58 Pa. C.S. §§2301-3504, puts small-scale drilling companies that provide “good, family-sustaining jobs” at risk financially.
For conventional wells, the Environmental Quality Board (EQB), part of the state’s Department of Environmental Protection (DEP), estimated annual costs between $5 and $12 million, while the Pennsylvania Grade Crude Oil Coalition puts the estimate at between $181 million and $387 million.
Even the state’s Independent Regulatory Review Commission (IRRC) has expressed concerns over the gap in these estimates, stating that “there appears to be a basic misunderstanding of what this proposal will require and when those requirements will become effective.”
To analyze and clarify the financial and regulatory differences, the IRRC suggests that the EQB meet with trade organizations, oil and gas operators, and any interested stakeholders.
For conventional wells, the Environmental Quality Board (EQB), part of the state’s Department of Environmental Protection (DEP), estimated annual costs between $5 and $12 million, while the Pennsylvania Grade Crude Oil Coalition puts the estimate at between $181 million and $387 million.
Even the state’s Independent Regulatory Review Commission (IRRC) has expressed concerns over the gap in these estimates, stating that “there appears to be a basic misunderstanding of what this proposal will require and when those requirements will become effective.”
To analyze and clarify the financial and regulatory differences, the IRRC suggests that the EQB meet with trade organizations, oil and gas operators, and any interested stakeholders.
For information on Act 13, see “Pennsylvania Supreme Court strikes down major portions of Act 13 as unconstitutional.” For briefs filed in the remanded lawsuit, Robinson Township, et al v. Commonwealth of Pennsylvania, et al, 284 MD 2012, In the Pennsylvania Commonwealth Court, click here and here.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
