Bill Text: PA HB2213 | 2009-2010 | Regular Session | Amended

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Bill Title: Further providing for definitions, for well permits, for well location restrictions, for protection of fresh groundwater and casing requirements and for protection of water supplies; providing for hydraulic fracturing chemicals and surface impoundments, for hydraulic fracture fluids monitoring and for use of surface impoundments for temporary flowback storage; and further providing for bonding, for enforcement orders, for penalties, for civil penalties, for well plugging funds and for local ordinances.

Spectrum: Moderate Partisan Bill (Democrat 42-7)

Status: (Introduced - Dead) 2010-10-04 - Re-reported as committed [HB2213 Detail]

Download: Pennsylvania-2009-HB2213-Amended.html

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CORRECTIVE REPRINT
PRIOR PRINTER'S NOS. 3106, 3794 PRINTER'S NO. 3821
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2213 Session of2010
INTRODUCED BY GEORGE, McILVAINE SMITH, BELFANTI, BRADFORD, CALTAGIRONE, CARROLL, COHEN, CONKLIN, D. COSTA, DeWEESE, GOODMAN, GRUCELA, HORNAMAN, JOHNSON, JOSEPHS, LEVDANSKY, MAHONEY, MUNDY, M. O'BRIEN, SCHRODER, SIPTROTH, K. SMITH, STURLA, THOMAS, YOUNGBLOOD, YUDICHAK, SEIP, VITALI, HARHAI, WAGNER, SANTARSIERO, BRIGGS, PASHINSKI, HESS, FREEMAN, HARPER, HOUGHTON, FRANKEL AND BOBACK, JANUARY 20, 2010
AS REPORTED FROM COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, HOUSE OF REPRESENTATIVES, AS AMENDED, MAY 25, 2010
AN ACT
Amending the act of December 19, 1984 (P.L.1140, No.223),
entitled "An act relating to the development of oil and gas
and coal; imposing duties and powers on the Department of
Environmental Resources; imposing notification requirements
to protect landowners; and providing for definitions, for
various requirements to regulate the drilling and operation
of oil and gas wells, for gas storage reservoirs, for various
reporting requirements, including certain requirements
concerning the operation of coal mines, for well permits, for
well registration, for distance requirements, for well casing
requirements, for safety device requirements, for storage
reservoir obligations, for well bonding requirements, for a
Well Plugging Restricted Revenue Account to enforce oil and
gas well plugging requirements, for the creation of an Oil
and Gas Technical Advisory Board, for oil and gas well
inspections, for enforcement and for penalties," further <--
providing for the definition of "department," for protection
of fresh groundwater, for casing requirements and for
protection of water supplies; providing for hydraulic
fracturing chemicals disclosure; further providing for
bonding and for well plugging funds; preempting certain local
ordinances; and further providing for local ordinances.
further providing for definitions, for well permits, for well <--
location restrictions, for protection of fresh groundwater
and casing requirements and for protection of water supplies;
providing for hydraulic fracturing chemicals and surface
impoundments, for hydraulic fracture fluids monitoring and
for use of surface impoundments for temporary flowback <--
storage; and further providing for bonding, for enforcement
orders, for penalties, for civil penalties, for well plugging
funds and for local ordinances.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "department" in section 103 of <--
the act of December 19, 1984 (P.L.1140, No.223), known as the
Oil and Gas Act, is amended to read:
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Department." The Department of Environmental [Resources]
Protection of the Commonwealth.
* * *
Section 2. Section 207 of the act is amended by adding a
subsection to read:
Section 207. Protection of fresh groundwater; casing
requirements.
* * *
(e) The department shall inspect each permitted well drilled
in the Marcellus Shale formation, during the phases of siting,
drilling, casing, cementing, completing, altering and
stimulating. The department shall allocate an appropriate
portion of the well permit fees to fund the inspection and may
increase the permit fees to meet an increase in the inspection
costs.
Section 3. Section 208(c) and (d) of the act are amended to
read:
Section 208. Protection of water supplies.
20100HB2213PN3821 - 2 -
* * *
(c) Unless rebutted by one of the five defenses established
in subsection (d), it shall be presumed that a well operator is
responsible for the pollution or the diminution of a water
supply that is within [1,000] 2,500 feet of the oil or gas well,
where the pollution occurred within six months after the
completion of drilling or alteration of such well.
(d) In order to rebut the presumption of liability
established in subsection (c), the well operator must
affirmatively prove one of the following five defenses:
(1) The pollution [existed] or the diminution prior to
the drilling or alteration activity as determined by a
predrilling or prealteration survey.
(2) The landowner or water purveyor refused to allow the
operator access to conduct a predrilling or prealteration
survey.
(3) The water supply is not within [1,000] 2,500 feet of
the well.
(4) The pollution or the diminution occurred more than
six months after completion of drilling or alteration
activities.
(5) The pollution or the diminution occurred as the
result of some cause other than the drilling or alteration
activity.
* * *
Section 4. The act is amended by adding a section to read:
Section 208.1. Hydraulic fracturing chemicals disclosure.
(a) Notwithstanding a trade secret claim, a well operator
utilizing the hydraulic fracturing process to extract natural
gas from the Marcellus Shale formation shall disclose to the
20100HB2213PN3821 - 3 -
department the complete list of the chemicals and chemical
compounds used in the fracturing fluid products. The list shall
include the Chemical Abstract Service registry number for each
constituent chemical, the concentration of each constituent
chemical and the formula for each chemical compound. The
department shall publish the list on its Internet website.
(b) If the natural gas well operator fails to comply with
the requirements of section 208(c) and (d), the department may
not issue any permit to the operator and shall revoke an
existing natural gas well permit issued to the operator.
Section 5. Sections 215(a), 601(a) and 602 of the act,
amended July 2, 1992 (P.L.365, No.78), are amended to read:
Section 215. Bonding.
(a) (1) Except as provided in subsection (d) hereof, upon
filing an application for a well permit and before continuing
to operate any oil or gas well, the owner or operator thereof
shall file with the department a bond for the well and the
well site on a form to be prescribed and furnished by the
department. Any such bond filed with an application for a
well permit shall be payable to the Commonwealth and
conditioned that the operator shall faithfully perform all of
the drilling, water supply replacement, restoration and
plugging requirements of this act. Any such bond filed with
the department for a well in existence on the effective date
of this act shall be payable to the Commonwealth and
conditioned that the operator shall faithfully perform all of
the water supply replacement, restoration and plugging
requirements of this act. The amount of the bond required
shall be in the amount of [$2,500] $150,000 per well for any
Marcellus Shale well utilizing hydraulic fracturing process
20100HB2213PN3821 - 4 -
and $12,000 per well for at least two years following the
effective date of this act, after which time the bond amount
may be adjusted by the Environmental Quality Board every two
years to reflect the projected costs to the Commonwealth of
performing well plugging.
(2) In lieu of individual bonds for each well, an owner
or operator may file a blanket bond, on a form prepared by
the department, covering all of its wells in Pennsylvania as
enumerated on the bond form. A blanket bond shall be in the
amount of [$25,000] $240,000 for at least two years following
the effective date of this act, after which time the bond
amount may be adjusted by the Environmental Quality Board
every two years to reflect the projected costs to the
Commonwealth of performing well plugging. No blanket bond is
available for wells drilled in the Marcellus Shale formation.
(3) Liability under such bond shall continue until the
well has been properly plugged in accordance with this act
and for a period of one year after filing of the certificate
of plugging with the department. Each bond shall be executed
by the operator and a corporate surety licensed to do
business in the Commonwealth and approved by the secretary.
The operator may elect to deposit cash, certificates of
deposit or automatically renewable irrevocable letters of
credit from financial institutions chartered or authorized to
do business in Pennsylvania and regulated and examined by the
Commonwealth or a Federal agency which may be terminated at
the end of a term only upon the financial institution giving
90 days prior written notice to the permittee and the
department or negotiable bonds of the United States
Government or the Commonwealth, the Pennsylvania Turnpike
20100HB2213PN3821 - 5 -
Commission, the General State Authority, the State Public
School Building Authority or any municipality within the
Commonwealth, or United States Treasury Bonds issued at a
discount without a regular schedule of interest payments to
maturity, otherwise known as Zero Coupon Bonds, having a
maturity date of not more than ten years after the date of
purchase and at such maturity date having a value of not less
than $25,000, with the department in lieu of a corporate
surety. The cash deposit, certificate of deposit, amount of
such irrevocable letter of credit or market value of such
securities shall be equal at least to the sum of the bond.
The secretary shall, upon receipt of any such deposit of
cash, letters of credit or negotiable bonds, immediately
place the same with the State Treasurer, whose duty it shall
be to receive and hold the same in the name of the
Commonwealth, in trust, for the purpose for which such
deposit is made. The State Treasurer shall at all times be
responsible for the custody and safekeeping of such deposits.
The operator making deposit shall be entitled from time to
time to demand and receive from the State Treasurer, on the
written order of the secretary, the whole or any portion of
any collateral so deposited, upon depositing with him, in
lieu thereof, other collateral of the classes herein
specified having a market value at least equal to the sum of
the bond, and also to demand, receive and recover the
interest and income from said negotiable bonds as the same
becomes due and payable. Where negotiable bonds, deposited as
aforesaid, mature or are called, the State Treasurer, at the
request of the owner thereof, shall convert such negotiable
bonds into such other negotiable bonds of the classes herein
20100HB2213PN3821 - 6 -
specified as may be designated by the owner. Where notice of
intent to terminate a letter of credit is given, the
department shall give the operator 30 days' written notice to
replace the letter of credit with other acceptable bond
guarantees as provided herein and, if the owner or operator
fails to replace the letter of credit within the 30-day
notification period, the department shall draw upon and
convert such letter of credit into cash and hold it as a
collateral bond guarantee.
* * *
Section 601. Well plugging funds.
(a) All fines, civil penalties, permit and registration fees
collected under this act are hereby appropriated to the
Department of Environmental [Resources] Protection to carry out
the purposes of this act.
* * *
Section 602. Local ordinances.
Except with respect to ordinances adopted pursuant to the act
of July 31, 1968 (P.L.805, No.247), known as the Pennsylvania
Municipalities Planning Code, and the act of October 4, 1978
(P.L.851, No.166), known as the Flood Plain Management Act, all
local ordinances and enactments purporting to regulate oil and
gas well operations regulated by this act are hereby preempted
and superseded to the extent the ordinances and enactments
regulate the method of oil and gas well operations. No
ordinances or enactments adopted pursuant to the aforementioned
acts shall contain provisions which impose conditions,
requirements or limitations on [the same features] the method of
oil and gas well operations regulated by this act or that
accomplish the same purposes as set forth in this act. The
20100HB2213PN3821 - 7 -
Commonwealth, by this enactment, hereby preempts and supersedes
the regulation of oil and gas wells as herein defined to the
extent the ordinances and enactments regulate the method of oil
and gas well operations. Nothing in this act shall affect the
traditional power of local government to regulate other aspects
of oil and gas activities such as the time and the place of
operations through local ordinances and enactments.
Section 6. This act shall take effect in 60 days.
Section 1. Section 103 of the act of December 19, 1984 <--
(P.L.1140, No.223), known as the Oil and Gas Act, is amended by
adding definitions to read:
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"12-digit Hydrologic Unit Code." A subwatershed, generally
ranging in size from 10,000 to 40,000 acres, as designated by
the United States Geological Survey and the United States
Department of Agriculture Natural Resources Conservation
Service.
* * *
"Body of water." A natural or artificial lake, pond,
reservoir, swamp, marsh or wetland.
* * *
"Erosion and sediment control permit." A permit issued by
the Department of Environmental Protection and required for
earth disturbance activities associated with oil and gas
activities.
"FEMA." The Federal Emergency Management Agency.
"Flood." A general but temporary condition of partial or
20100HB2213PN3821 - 8 -
complete inundation of normally dry land areas from the overflow
of streams, rivers or other waters of this Commonwealth.
"Floodplain." The lands adjoining a river or stream that
have been or may be expected to be inundated by flood waters in
a 100-year frequency flood. Unless otherwise specified, the
boundary of the floodplain is as indicated on maps and flood
insurance studies provided by the Federal Emergency Management
Agency or equivalent floodplain maps and studies. In an area
where no such maps or studies have defined the boundary of the
100-year floodplain, it is assumed, absent evidence to the
contrary, that the floodplain extends from the stream to 100
feet from the top of the streambank.
"Floodway." The channel of the watercourse and portions of
the adjoining floodplains which are reasonably required to carry
and discharge the 100-year frequency flood. Unless otherwise
specified, the boundary of the floodway is as indicated on maps
and flood insurance studies provided by the Federal Emergency
Management Agency. In an area where no Federal Emergency
Management Agency maps or studies have defined the boundary of
the 100-year frequency floodway, it is assumed, absent evidence
to the contrary, that the floodway extends from the stream to 50
feet from the top of the streambank.
* * *
"Stream." A watercourse.
"Top of streambank." The first substantial break in slope
between the edge of the bed of the stream and the surrounding
terrain.
"Watercourse." A channel or conveyance of surface water
having defined bed and banks, whether natural or artificial,
with perennial or intermittent flow.
20100HB2213PN3821 - 9 -
* * *
"Wild trout stream." A stream classified as supporting
naturally reproducing trout populations by the Fish and Boat
Commission.
"Wilderness trout stream." A surface water designated by the
Fish and Boat Commission to protect and promote native trout
fisheries and maintain and enhance wilderness aesthetics and
ecological requirements necessary for the natural reproduction
of trout.
* * *
Section 2. Section 201(a), (b), (e)(5), (f) and (g) of the
act are amended and the section is amended by adding a
subsection to read:
Section 201. Well permits.
(a) No person shall drill a well or alter any existing well,
except for alterations which satisfy the requirements of
subsection (j), without having first obtained a well permit
pursuant to subsections (b), (c), (d) and (e). A copy of the
permit shall be kept at the well site during preparation or
construction of the well site or access road, or drilling,
operation or alteration of the well. However, no person shall be
required to obtain a permit to redrill a nonproducing well, if:
(1) the redrilling has been evaluated and approved as
part of an order from the department authorizing the cleaning
out and plugging or replugging of a nonproducing well,
pursuant to section 13(c) of the act of December 18, 1984
(P.L.1069, No.214), known as the Coal and Gas Resource
Coordination Act; and
(2) the redrilling is incidental to the plugging or
replugging operation and the well subsequently is plugged
20100HB2213PN3821 - 10 -
within 15 days of redrilling.
(b) The permit application shall be accompanied by a plat
prepared by a competent engineer or a competent surveyor, on
forms to be furnished by the department, showing the political
subdivision and county in which the tract of land upon which the
well to be drilled, operated or altered, is located, the name of
the surface landowner of record and lessor, the name of all
surface landowners or water purveyors whose water supplies are
within [1,000] 2,500 feet of the proposed well location, the
name of the owner of record or operator of all known underlying
workable coal seams, if any, the acreage in the tract to be
drilled, the proposed location of the well determined by survey,
the courses and distances of such location from two or more
permanent identifiable points or landmarks on said tract
boundary corners, the proposed angle and direction of such well,
if the well is to be deviated substantially from a vertical
course, the number or other identification to be given the well,
the workable coal seams, if any, underlying the tract of land
upon which the well is to be drilled, operated or altered, which
are to be cased off in accordance with section 207, and such
information needed by the department to administer this act. The
applicant shall forward, by certified mail, a copy of said plat
to each political subdivision in which the well is to be
located, the surface landowner, all surface landowners or water
purveyors whose water supplies are within [1,000] 2,500 feet of
the proposed well location, the owner and lessee, if any, of
such coal seams, and every coal operator required to be
identified on the well permit application and shall submit proof
of such notification with the well permit application. With
respect to surface owners, notification shall be accomplished
20100HB2213PN3821 - 11 -
under this section by sending notice to the persons to whom the
tax notices for said surface property are sent, as indicated in
the assessment books in the county in which the property is
located. With respect to surface landowners or water purveyors
whose water supplies are within [1,000] 2,500 feet of the
proposed well location, notification shall be made on forms and
in a manner prescribed by the department sufficient to identify,
for such persons, the rights afforded them under section 208 and
the advisability of taking their own predrilling or
prealteration survey. With respect to the political subdivision
in which the well is to be located, notification shall be made
on forms and in a manner prescribed by the department. If the
applicant submits to the department written approval of the
proposed well location by the political subdivision in which the
well is to be located, the surface landowner and the coal
operator, lessee or owner, if any, of the coal underlying the
proposed well location and no objections are raised by the
department within 15 days of filing or if no such approval has
been submitted and no objections are made to such proposed well
location within 15 days from receipt of such notice by the
political subdivision in which the well is to be located, the
surface landowner and the coal operator, lessee or owner, if
any, or by the department, the same shall be filed and become a
permanent record of such location, subject to inspection at any
time by any interested person. The application form to operate
an abandoned or orphan well shall notify the applicant of its
responsibilities to plug the well upon abandonment.
* * *
(e) The department shall issue a permit within 45 days of
the submission of a permit application unless the department
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denies the permit application for one or more of the five
reasons set forth below: Provided, however, That the department
shall have the right to extend such period for 15 days for cause
shown upon notification to the applicant of the reasons for that
extension. The department may impose such permit terms and
conditions as are necessary to assure compliance with this act
and other laws administered by the department. The department
shall have the authority to deny a permit to any person for the
following reasons:
* * *
(5) the applicant, with respect to any other well or
wells which the applicant operates, is in continuing
violation of this act or any other applicable statute
administered by the department. [The right of the department
to deny a permit under this paragraph shall not be effective
until a final administrative determination has been made of
any of these violations and no appeal is pending in which a
stay has been granted.]
(f) Upon issuance of a permit, the well operator may proceed
[with the drilling of] to prepare or construct the well site and
access roads and drill, operate or alter the well at the exact
location shown on the plat after providing the department, the
surface landowner and the local political subdivision in which
the well is to be located 24 hours' notice of the date that
drilling will commence. In noncoal areas where more than one
well is to be drilled as part of the same development project,
only the first well of the project need be located by survey.
The remaining wells of the project shall be shown on the plat in
a manner prescribed by regulation. Prior to drilling each of the
additional project wells, the well operator shall notify the
20100HB2213PN3821 - 13 -
department of his intention and provide reasonable notice of the
date drilling will commence. Whenever, before or during the
drilling of any well which is not within the outside boundaries
of an operating coal mine, the well operator shall encounter
conditions of such a nature as to render drilling of the bore
hole or portions thereof more hazardous than usual, or otherwise
impossible, then the well operator shall have the right, upon
verbal notice to the department, to immediately plug all or
portions of the bore hole, if drilling has occurred, and to
commence a new bore hole not more than 50 feet distant if the
location of the new bore hole does not violate section 205 and
if, for wells subject to the act of July 25, 1961 (P.L.825,
No.359), known as the Oil and Gas Conservation Law, the new
location complies with any existing law, regulation or spacing
order and if the new bore hole is a minimum of 330 feet distant
from the nearest lease boundary. Within ten days of commencement
of the new bore hole, the well operator shall file with the
department a written notice of intention to plug, a well record,
a completion report, a plugging certificate for the original
bore hole and an amended plat for the new bore hole. The well
operator shall forward a copy of the amended plat to the surface
landowner identified on the well permit application within ten
days of commencement of the new well bore.
* * *
(g) The well permit number and operator's name, address and
telephone number shall be posted at the drilling site, in a
conspicuous manner, prior to initiating preparation or
construction of the well site or access road or commencement of
drilling, operation or alteration of the well.
(g.1) The department shall authorize conservation districts
20100HB2213PN3821 - 14 -
to conduct a quarterly review of erosion and sediment control
permit applications issued on an expedited basis for all earth
disturbance associated with oil and gas activities. Conservation
districts shall conduct such review and submit a report to the
department of their findings. The department shall revoke any
permits related to the oil and gas operations for which an
expedited erosion and sediment control permit was issued if a
finding is made in the report that the erosion and sediment
control permit application contained material omission or
misstatement.
* * *
Section 3. Section 205 of the act is amended to read:
Section 205. Well location restrictions.
(a) Wells may not be drilled within [200] 1000 feet measured
horizontally from any existing building or existing water well
without the written consent of the owner thereof. Where the
distance restriction would deprive the owner of the oil and gas
rights of the right to produce or share in the oil or gas
underlying said surface tract, the well operator may be granted
a variance from said distance restriction upon submission of a
plan which shall identify the additional measures, facilities or
practices to be employed during well site construction, drilling
and operations. The variance, if granted, shall include such
additional terms and conditions as the department shall require
to insure the safety and protection of affected persons and
property. The provisions may include insurance, bonding and
indemnification, as well as technical requirements.
(b) No well site may be prepared or well drilled within 100
feet measured horizontally from any [stream, spring or body of
water as identified on the most current 7 ½ minute topographic
20100HB2213PN3821 - 15 -
quadrangle map of the United States Geological Survey]
watercourse, natural or artificial lake, pond or reservoir or
within [100 feet of any wetlands greater than one acre in size.]
the boundary of a wetland or the boundary that affects the
functions and values of a wetland. However, no well may be
drilled using hydraulic fracturing or horizontal drilling within
2,500 feet of a surface water source, and within 1,000 feet of a
groundwater source, that serves a public water system. The
distance from the public water supply source, as identified by
the department, shall be measured as follows:
(1) For a surface water intake on a lake or reservoir,
the distance shall be measured from the boundary of the lake
or reservoir.
(2) For a surface water intake on a flowing stream, the
distance shall be measured from a semicircular radius
extending upstream of the surface water intake.
(3) For a groundwater source, the distance shall be
measured from the wellhead or spring.
The department may waive such distance restrictions upon
submission of a plan which shall identify the additional
measures, facilities or practices to be employed during well
site construction, drilling and operations. Such waiver, if
granted, shall impose such permit conditions as are necessary to
protect the waters of the Commonwealth.
(c) [The] On making a determination on a well permit, the
department shall[, on making a determination on a well permit,]
consider and may deny or condition a well permit based on the
impact of the proposed well on public resources to include, but
not be limited to, the following:
(1) Publicly owned parks, forests, gamelands and
20100HB2213PN3821 - 16 -
wildlife areas.
(2) National or State scenic rivers.
(3) National natural landmarks.
(4) Habitats of rare and endangered flora and fauna and
other critical communities.
(5) Historical and archaeological sites listed on the
Federal or State list of historic places.
(6) Bodies of water and watercourses, including, but not
limited to, wetlands, wild trout streams and wilderness trout
streams.
(d) Prior to submitting a permit application to the
department for a well or well site within a wild trout stream,
High Quality or Exceptional Value watershed as indicated by the
12-digit Hydrologic Unit Code, the applicant shall consult with
the Pennsylvania Fish and Boat Commission.
Section 4. Section 207 of the act is amended by adding a
subsection to read:
Section 207. Protection of fresh groundwater; casing
requirements.
* * *
(e) The department shall inspect each permitted well drilled
in any formation using hydraulic fracturing or horizontal
drilling, or both, during each phase of cementing, completing
and altering. The permittee may not proceed to the next phase of
the drilling operation until an inspection by the department has
been performed. The department shall allocate an appropriate
portion of the well permit fees to fund the inspection and may
increase the permit fees to meet an increase in the inspection
costs.
Section 5. Section 208(c) and (d) of the act are amended and
20100HB2213PN3821 - 17 -
the section is amended by adding subsections to read:
Section 208. Protection of water supplies.
* * *
(b.1) Upon a written request by any landowner residing
within 5,500 feet but farther than 2,500 feet of a proposed gas
well using hydraulic fracturing, the well permit applicant shall
conduct a predrilling or prealteration survey, using a facility
or laboratory certified by the department, and send a copy of
the survey by certified mail to the requestor. A predrilling or
prealteration survey shall provide at a minimum the testing
results for chemicals or chemical compounds known to be commonly
used for hydraulic fracturing including, but not limited to, the
following: all major cations and anions, arsenic, benzene,
toluene, ethylbenzene, xylenes, manganese, dissolved methane,
total dissolved solids, chlorides, nutrients and radionuclides.
(c) Unless rebutted by one of the five defenses established
in subsection (d), it shall be presumed that a well operator is
responsible for the pollution of a water supply that is within
[1,000] 2,500 feet of the oil or gas well, where the pollution
occurred within [six] 12 months after the completion of drilling
or alteration of such well.
(c.1) In case of horizontal drilling, the presumption under
subsection (c) covers the entire length of the horizontal
drilling and extends an additional 2,500 feet from the end or
ends of the horizontal well bore.
(d) In order to rebut the presumption of liability
established in subsection (c), the well operator must
affirmatively prove one of the following five defenses:
(1) The pollution existed prior to the drilling or
alteration activity as determined by a predrilling or
20100HB2213PN3821 - 18 -
prealteration survey.
(2) The landowner or water purveyor refused to allow the
operator access to conduct a predrilling or prealteration
survey.
(3) The water supply is not within [1,000] 2,500 feet of
the well.
(4) The pollution occurred more than [six] 12 months
after completion of drilling or alteration activities.
(5) The pollution occurred as the result of some cause
other than the drilling or alteration activity.
* * *
Section 6. The act is amended by adding sections to read:
Section 208.1. Hydraulic fracturing chemicals and surface
impoundments.
(a) Notwithstanding a trade secret claim, a well operator
shall file a report with the department for each well that is
drilled using the hydraulic fracturing process within 30 days of
completion of such well. The report shall include, without
limitation, the complete list of the chemicals and chemical
compounds used in the fracturing fluid products, specifying the
volume of fluid utilized in each separate hydraulic fracturing
operation and the Chemical Abstract Service registry number for
each constituent chemical. The department shall make the report
available to the public upon a written request.
(b) In case of a medical emergency, the operator shall
provide the concentration of each constituent chemical and the
formula for each chemical compound to medical emergency
personnel or local emergency personnel, or both.
(c) The well operator shall keep a copy of the report at the
well site and produce it upon request by the department, local
20100HB2213PN3821 - 19 -
emergency personnel or surface landowners residing within 5,500
feet of the well.
Section 208.2. Hydraulic fracture fluids monitoring.
For each individual hydraulic fracturing operation performed
at a well site, the well operator shall maintain the data
indicating the total volume of fracturing fluids used for the
operation as well as the total volume of fluids that returned to
the surface. The well operator shall compile the data and the
necessary records to support the data, and submit it to the
department on a semi-annual basis.
Section 208.3. Use of surface impoundments for temporary
flowback storage.
Where centralized flowback impoundments are used to
temporarily store flowback water, the department shall require
the use of dual liner systems with a leak detection system
installed between the two liners. The department shall inspect
such impoundments on a monthly basis.
Section 7. Section 215(a), (c), (d), (d.1) and (f) of the
act, amended July 2, 1992 (P.L.365, No.78), are amended to read:
Section 215. Bonding.
(a) (1) Except as provided in subsection (d) hereof, upon
filing an application for a well permit and before continuing
to operate any oil or gas well, the owner or operator thereof
shall file with the department a bond for the well and the
well site on a form to be prescribed and furnished by the
department. Any such bond filed with an application for a
well permit shall be payable to the Commonwealth and
conditioned that the operator shall faithfully perform all of
the drilling, water supply replacement, restoration and
plugging requirements of this act. Any such bond filed with
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the department for a well in existence on the effective date
of this act shall be payable to the Commonwealth and
conditioned that the operator shall faithfully perform all of
the water supply replacement, restoration and plugging
requirements of this act. The amount of the bond required
shall be in the [amount of $2,500 per well for at least two
years following the effective date of this act, after which
time the bond amount] following amounts and may be adjusted
by the Environmental Quality Board every two years to reflect
the projected costs to the Commonwealth of performing well
plugging[.]:
(i) For wells less than 2,500 feet in depth:
(A) $2,500 per well, provided the operator shall
not be required to provide a bond under this item
exceeding $35,000 for 25 wells.
(B) For operating 26 to 50 wells, $35,000 plus
$2,500 per well, provided the operator may not be
required to provide a bond under this item exceeding
$60,000.
(C) For operating 51 to 100 wells, $60,000 plus
$2,500 per well, provided the operator may not be
required to provide a bond under this item exceeding
$100,000.
(D) For operating over 100 wells, $100,000 plus
$2,500 per well, provided the operator may not be
required to provide a bond under this item exceeding
$250,000.
(ii) For wells less between 2,500 feet and 5,000
feet in depth:
(A) $5,000 per well, provided the operator may
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not be required to provide a bond under this item
exceeding $70,000 for 25 wells.
(B) For operating 26 to 50 wells, $70,000 plus
$5,000 per well, provided the operator may not be
required to provide a bond under this item exceeding
$120,000.
(C) For operating 51 to 100 wells, $120,000 plus
$5,000 per well, provided the operator may not be
required to provide a bond under this item exceeding
$200,000.
(D) For operating over 100 wells, $200,000 plus
$5,000 per well, provided the operator may not be
required to provide a bond under this item exceeding
$500,000.
(iii) For wells over 5,000 feet in depth:
(A) $12,500 per well, provided the operator may
not be required to provide a bond under this item
exceeding $220,000 for 25 wells.
(B) For operating 26 to 50 wells, $220,000 plus
$12,500 per well, provided the operator may not be
required to provide a bond under this item exceeding
$375,000.
(C) For operating 51 to 100 wells, $375,000 plus
$12,500 per well, provided the operator may not be
required to provide a bond under this item exceeding
$625,000.
(D) For operating over 100 wells, $625,000 plus
$12,500 per well.
[(2) In lieu of individual bonds for each well, an owner
or operator may file a blanket bond, on a form prepared by
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the department, covering all of its wells in Pennsylvania as
enumerated on the bond form. A blanket bond shall be in the
amount of $25,000 for at least two years following the
effective date of this act, after which time the bond amount
may be adjusted by the Environmental Quality Board every two
years to reflect the projected costs to the Commonwealth of
performing well plugging.]
(3) Liability under such bond shall continue until the
well has been properly plugged in accordance with this act
and for a period of one year after filing of the certificate
of plugging with the department. Each bond shall be executed
by the operator and a corporate surety licensed to do
business in the Commonwealth and approved by the secretary.
The operator may elect to deposit cash, certificates of
deposit or automatically renewable irrevocable letters of
credit from financial institutions chartered or authorized to
do business in Pennsylvania and regulated and examined by the
Commonwealth or a Federal agency which may be terminated at
the end of a term only upon the financial institution giving
90 days prior written notice to the permittee and the
department or negotiable bonds of the United States
Government or the Commonwealth, the Pennsylvania Turnpike
Commission, the General State Authority, the State Public
School Building Authority or any municipality within the
Commonwealth, or United States Treasury Bonds issued at a
discount without a regular schedule of interest payments to
maturity, otherwise known as Zero Coupon Bonds, having a
maturity date of not more than ten years after the date of
purchase and at such maturity date having a value of not less
than $25,000, with the department in lieu of a corporate
20100HB2213PN3821 - 23 -
surety. The cash deposit, certificate of deposit, amount of
such irrevocable letter of credit or market value of such
securities shall be equal at least to the sum of the bond.
The secretary shall, upon receipt of any such deposit of
cash, letters of credit or negotiable bonds, immediately
place the same with the State Treasurer, whose duty it shall
be to receive and hold the same in the name of the
Commonwealth, in trust, for the purpose for which such
deposit is made. The State Treasurer shall at all times be
responsible for the custody and safekeeping of such deposits.
The operator making deposit shall be entitled from time to
time to demand and receive from the State Treasurer, on the
written order of the secretary, the whole or any portion of
any collateral so deposited, upon depositing with him, in
lieu thereof, other collateral of the classes herein
specified having a market value at least equal to the sum of
the bond, and also to demand, receive and recover the
interest and income from said negotiable bonds as the same
becomes due and payable. Where negotiable bonds, deposited as
aforesaid, mature or are called, the State Treasurer, at the
request of the owner thereof, shall convert such negotiable
bonds into such other negotiable bonds of the classes herein
specified as may be designated by the owner. Where notice of
intent to terminate a letter of credit is given, the
department shall give the operator 30 days' written notice to
replace the letter of credit with other acceptable bond
guarantees as provided herein and, if the owner or operator
fails to replace the letter of credit within the 30-day
notification period, the department shall draw upon and
convert such letter of credit into cash and hold it as a
20100HB2213PN3821 - 24 -
collateral bond guarantee.
* * *
(c) If the well owner or operator fails or refuses to comply
with the applicable requirements of this act identified in
subsection (a), the regulations promulgated hereunder or the
conditions of the permit relating thereto, the department may
declare the bond forfeited and shall certify the same to the
Attorney General, who shall proceed to enforce and collect the
full amount of the bond and, where the owner or operator has
deposited cash or securities as collateral in lieu of a
corporate surety, the department shall declare said collateral
forfeited and shall direct the State Treasurer to pay the full
amount of said funds into the Well Plugging Restricted Revenue
Account or to proceed to sell said security to the extent
forfeited and pay the proceeds thereof into the Well Plugging
Restricted Revenue Account. Should any corporate surety or
financial institution fail to promptly pay, in full, a forfeited
bond, it shall be disqualified from writing any further bonds
under the act or any other environmental act administered by the
department. Any person aggrieved by reason of forfeiting the
bond or converting collateral, as herein provided, shall have a
right to appeal to the Environmental Hearing Board in the manner
provided by law. Upon forfeiture of a [blanket] bond for a
violation occurring at one or more well sites, the person whose
bond is forfeited shall submit a replacement bond to cover all
other wells of which he is owner or operator within ten days of
said forfeiture. Failure to submit said replacement bond
constitutes a violation of this section as to each of the wells
owned or operated by said person.
(d) [(1) Any operator of not more than 200 wells who cannot
20100HB2213PN3821 - 25 -
obtain a bond for a well drilled prior to April 18, 1985, as
required under subsection (a), due to an inability to
demonstrate sufficient financial resources may, in lieu of
the bond:
(i) Submit to the department a fee in the amount of
$50 per well, or a blanket fee of $500 for ten to 20
wells, or a blanket fee of $1,000 for more than 20 wells,
which shall be a nonrefundable fee paid each year that
the operator has not filed a bond with the department.
All fees collected in lieu of a bond under this
subsection shall be used for the purposes authorized by
this act. The Environmental Quality Board shall have the
power, by regulation, to increase the amount of the fees
established under this subsection.
(ii) (A) Make phased deposits of collateral to
fully collateralize the bond. Such payment shall be
based on the number of wells the operator owns or
operates. The operator shall make an initial deposit
and shall, thereafter, make annual deposits in
accordance with the schedule in clause (B). Interest
accumulated by the collateral shall become a part of
the bond until such time as the collateral plus
accumulated interest equals the amount of the
required bond. The collateral shall be deposited, in
trust, with the State Treasurer as provided in this
subsection, or with a bank selected by the department
which shall act as trustee for the benefit of the
Commonwealth to guarantee the operator's compliance
with the drilling, water supply replacement,
restoration and plugging requirements of this act.
20100HB2213PN3821 - 26 -
The operator shall be required to pay all costs of
the trust.
(B) An operator of up to ten existing wells who
does not intend to operate additional wells shall
deposit $250 per well and shall, thereafter, annually
deposit $50 per well until the obligations of this
section are fully met. An operator of 11 to 25 wells
or an operator of up to ten wells who applies for one
or more permits for additional wells shall deposit
$2,000 and shall, thereafter, annually deposit $1,150
plus $150 for each additional well to be permitted
that year until the obligations of this section are
fully met. An operator of 26 to 50 wells shall
deposit $3,000 and shall, thereafter, annually
deposit $1,300 plus $400 for each additional well to
be permitted that year until the obligations of this
section are fully met. An operator of 51 to 100 wells
shall deposit $4,000 and shall, thereafter, annually
deposit $1,500 plus $400 for each additional well to
be permitted that year until the obligations of this
section are fully met. Operators of 101 to 200 wells
shall deposit $8,000 and shall, thereafter, annually
deposit $1,600 plus $1,000 for each additional well
to be permitted that year until the obligations of
this section are fully met. Operators of more than
200 wells shall fully bond their wells immediately.
The department shall reduce the amount of phased
collateral payments or the period of time over which
phased collateral payments shall be made on behalf of
owners or operators who, prior to the effective date
20100HB2213PN3821 - 27 -
of this amendatory act, have paid a fee in lieu of
bond pursuant to subparagraph (i), and who, within
one year of the effective date of this amendatory
act, choose to enter the phased collateral program
pursuant to this subparagraph (ii) rather than to
continue to make payments in lieu of bond. Payments
made in lieu of bond prior to the effective date of
this amendatory act shall not be credited in any
other manner, nor shall the department be required to
refund such fees at any time. The Environmental
Quality Board shall have the power, by regulation, to
change the annual deposits established under this
clause if it is found to be necessary to accommodate
a change in the amount of the bond required under
this section.
(2) An operator may continue to pay a fee in lieu of
bond or make phased deposits of collateral to fully
collateralize the bond so long as the operator does not miss
any payments for wells as provided under this subsection and
so long as the operator remains in compliance with the
provisions of this act and regulations and permits issued
thereunder. If an operator has missed any payments for wells
as provided under this subsection, the operator shall:
(i) immediately submit the appropriate bond amount
in full; or
(ii) cease all operations and plug the wells in
accordance with section 210.
(d.1) (1) An individual who cannot obtain a bond to drill
new wells due to an inability to demonstrate financial
resources may meet the collateral bond requirements of
20100HB2213PN3821 - 28 -
subsection (a) by making phased deposits of collateral to
fully collateralize the bond. Such individuals shall be
limited to drilling ten new wells per calendar year. The
individual shall, for each well to be drilled, deposit $500
and shall, thereafter, annually deposit 10% of the remaining
bond amount for a period of ten years. Interest accumulated
by the collateral shall become a part of the bond until such
time as the collateral, plus accumulated interest, equals the
amount of the required bond. The collateral shall be
deposited, in trust, with the State Treasurer as provided in
subsection (a) or with a bank selected by the department
which shall act as trustee for the benefit of the
Commonwealth, to guarantee the individual's compliance with
the drilling, water supply replacement, restoration and
plugging requirements of this act. The individual shall be
required to pay all costs of the trust.
(2) Individuals may continue to use phased collateral to
obtain permits so long as they have not missed any payments
for wells drilled under this provision and so long as they
remain in compliance with this act and regulations and
permits issued thereunder. If an individual has missed any
payments for wells under this subsection, the operator shall:
(i) immediately submit the appropriate bond amount
in full; or
(ii) cease all operations and plug the wells in
accordance with section 210.
For the purposes of this subsection an "individual" is defined
as an applicant who is a natural person doing business under his
own name.] The Environmental Quality Board may, by regulation,
develop an alternative financial assurance requirement in which
20100HB2213PN3821 - 29 -
an operator may voluntarily choose to participate. An operator
participating in the alternative financial assurance requirement
established pursuant to this paragraph may be exempt from a bond
specified under subsection (a). The alternative financial
assurance requirement may require an insurance policy, trust
fund or financial mechanism but must provide for full coverage
of an operator's well plugging liability as determined by the
board. The alternative financial assurance mechanism may only be
utilized to plug wells upon abandonment and may not be forfeited
or otherwise recovered for violations of the act.
* * *
[(f) Owners or operators who have failed to meet the
requirements of this section prior to the effective date of this
amendatory act shall not be required to make payments pursuant
to this section on a retroactive basis as a condition of
obtaining a permit under this act nor shall such failure be
deemed a violation of this act.]
Section 8. Sections 503(c), 505 and 506 of the act are
amended to read:
Section 503. Enforcement orders.
* * *
(c) Prior to the [suspension or] revocation of a well permit
or registration, the department shall serve written notice upon
the well operator or its agent of the intention of the
department to [suspend or] revoke and shall state with
specificity the statutory provisions, appropriate rule or
regulation or other reason and the factual circumstances which
surround the violation upon which the suspension or revocation
is to be based. The well operator shall have 15 days to request
a conference with the department to give such cause why such
20100HB2213PN3821 - 30 -
action should not be taken. Upon receipt of such written notice,
the department shall hold a conference and shall, within 15 days
thereafter, make a decision on whether to [suspend or] revoke
the well permit or registration. The department shall provide
written notice of its decision to revoke to the well operator or
its agent, which shall become effective upon receipt thereof and
the operator shall immediately plug the well.
* * *
Section 505. Penalties.
(a) Any person who violates any provisions of the act is
guilty of a summary offense and, upon conviction thereof, shall
be sentenced to pay a fine of not more than [$300] $10,000 or
undergo imprisonment of not more than 90 days, or both. Each
day's continuance of such violation shall be a separate and
distinct offense.
(b) Any person who willfully violates any provisions of this
act or any order of the department issued pursuant to the
provisions of this act is guilty of a misdemeanor and, upon
conviction thereof, shall be sentenced to pay a fine of not more
than [$5,000] $150,000 or undergo imprisonment of not more than
one year, or both. Each day's continuance of such violation
shall be a separate distinct offense.
(c) The department shall have the authority to institute
prosecutions against any person or municipality under this act.
Section 506. Civil penalties.
In addition to proceeding under any other remedy available at
law or in equity for a violation of a provision of this act or a
rule or regulation of the department or any order of the
department, the Environmental Hearing Board, after hearing, may
assess a civil penalty upon a person for such violation. Such a
20100HB2213PN3821 - 31 -
penalty may be assessed whether or not the violation was
willful. The civil penalty so assessed shall not exceed
[$25,000, PLUS $1,000] $100,000, plus $10,500 for each day of
continued violation. In determining the amount of the civil
penalty, the board shall consider the willfulness of the
violation, damage or injury to the natural resources of the
Commonwealth or their uses, endangerment of the safety of
others, costs of remedying the harm, savings resulting to the
person in consequence of such violation and other relevant
factors. It shall be payable to the Commonwealth and shall be
collectible in any manner provided at law for the collection of
debts. If any person liable to pay any such penalty neglects or
refuses to pay the same after demand, the amount, together with
interest and any costs that may accrue, shall be a lien in favor
of the Commonwealth upon the property, both real and personal,
of such person but only after same has been entered and docketed
of record by the prothonotary of the county where such is
situated. The board may, at any time, transmit to the
prothonotaries of the respective counties certified copies of
all such liens, and it shall be the duty of each prothonotary to
enter and docket the same of record in his office and to index
the same as judgments are indexed, without requiring the payment
of costs as a condition precedent to the entry thereof.
Section 9. Sections 601(a) and 602 of the act, amended July
2, 1992 (P.L.365, No.78), are amended to read:
Section 601. Well plugging funds.
(a) All fines, civil penalties, permit and registration fees
collected under this act are hereby appropriated to the
Department of Environmental [Resources] Protection to carry out
the purposes of this act.
20100HB2213PN3821 - 32 -
* * *
Section 602. Local ordinances.
Except with respect to ordinances adopted pursuant to the act
of July 31, 1968 (P.L.805, No.247), known as the Pennsylvania
Municipalities Planning Code, [and], the act of October 4, 1978
(P.L.851, No.166), known as the Flood Plain Management Act, and
the act of March 31, 1927 (P.L.98, No.69), known as the Second
Class City Zoning Law, all local ordinances and enactments
purporting to regulate oil and gas well operations regulated by
this act are hereby preempted and superseded to the extent the
ordinances and enactments regulate the method of oil and gas
well operations. No ordinances or enactments adopted pursuant to
the aforementioned acts shall contain provisions which impose
conditions, requirements or limitations on the [same features]
method of oil and gas well operations regulated by this act or
that accomplish the same purposes as set forth in this act. [The
Commonwealth, by this enactment, hereby preempts and supersedes
the regulation of oil and gas wells as herein defined.] Nothing
in this act shall affect the traditional power of local
government to regulate zoning and land development of oil and
gas activities as well as other aspects, such as the time and
the place of operations to protect the health, safety and
welfare of the general public through local ordinances and
enactments.
Section 10. This act shall take effect in 60 days.
20100HB2213PN3821 - 33 -