On February 8, 2012, the Pennsylvania General Assembly passed a sweeping reform of the key environmental protection regime that governs natural gas operations. House Bill 1950 (“HB 1950” or “the bill”), awaiting the Governor’s signature, provides a wide-ranging update to and recodification of the Commonwealth’s Oil and Gas Act (the “Act”). In addition to extensive revisions to the Act’s environmental regulatory provisions, HB 1950 also addresses drilling fees and local regulation of the industry, each discussed in companion alerts.
The prior Oil and Gas Act (58 P.S. §§601.101-601.605) is recodified as a new Chapter 32 in title 58 of Pennsylvania Consolidated Statutes (Pa.C.S.). While the new law still applies to all oil and gas operations in the state, much of the new language in Chapter 32 targets unconventional (i.e., shale) natural gas drilling operations that utilize hydraulic fracturing. The industry should quickly become familiar with the updates to discern their effect on existing operations and enable meaningful participation in forthcoming regulatory revisions. Some of the most important amendments, detailed more fully below, include:
Increased setbacks and well siting restrictions
New chemical disclosure and reporting obligations
Additional well permitting procedures, plans, and approvals
New water supply protections
Increased bonding requirements
Stricter enforcement mechanisms
The Oil and Gas Act
First enacted in 1984, the Oil and Gas Act has long provided many of the key environmental safeguards that shape the operations of natural gas drillers in the Commonwealth. To implement the Act, the Environmental Quality Board (“EQB”) has adopted oil and gas well regulations at 25 Pa. Code Chapter 78, and those rules govern administration of the regulatory program by the Pennsylvania Department of Environmental Protection (“DEP”). The Chapter 78 regulations, which were overhauled in February 2011, fill-out the Act’s currently effective requirements. Thus, changes to the Act will necessarily mean changes to the regulations, at least where the regulations are inconsistent with the Act’s new features...
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