DEPARTMENT OF ENVIRONMENTAL PROTECTION 8000-RE-DEP-4621 6/2016 G1936 Message from the Acting Secretary In 2015, Pennsylvania maintained its place as the second largest producer of natural gas in the na on. Despite a general downturn in new oil and gas drilling ac vi es across the country, the total annual natural gas produc on rate in Pennsylvania actually increased to a record 4.6 trillion cubic feet. This is enough natural gas to power more than 62 million U.S. households annually. With our historic natural gas produc on comes new challenges and opportuni es for DEP and those who live and work in Pennsylvania. For example, we must plan for the effec ve build-out of Pennsylvania's pipeline infrastructure in a way that promotes our energy security, strengthens the economy and protects our natural resources for this and future genera ons. With this in mind, in May 2015, Governor Wolf announced the crea on of the Pipeline Infrastructure Task Force. DEP and other agencies will spend the next year bringing the Task Force’s recommenda ons to frui on. DEP's “2015 Oil and Gas Annual Report” not only summarizes the accomplishments of the 48-member Pipeline Infrastructure Task Force, but it includes other examples of what DEP is doing to ensure Pennsylvania's oil and gas resources are produced in a manner that is protec ve of our land, air and water resources. This report highlights ongoing data trends, outlines significant accomplishments and provides a view of what to expect from DEP during this coming year. As oil and gas ac vi es con nue to expand, our jobs at DEP do not get easier. We will con nue to work with all of our stakeholders to balance the needs of our new energy economy with the impera ve that we protect our resources. DEP staff have been hard at work advancing new ini a ves and promo ng transparency in the way we do business. Fortunately, the men and women at DEP con nually seek new ways to solve environmental problems while be er serving the ci zens of Pennsylvania. Please take some me to review the cri cal work outlined in this report, see what has been accomplished during this past year, and learn what we are focusing on in 2016. Sincerely, Patrick McDonnell Ac ng Secretary Table of Contents DEP's Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 DEP's Office of Oil and Gas Management . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Pennsylvania's Oil and Gas Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Pennsylvania's Shale Plays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Natural Gas Production in Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Permitting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Natural Gas Drilling Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Well Plugging Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Compliance and Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Stray Gas Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Regulatory and Policy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Notable Accomplishments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 What's next for 2016? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Disclaimer: The informa on contained in this report is based on the data contained in DEP informa on systems at the me of the publica on of this report, including, but not limited to, DEP's enterprise-wide permi ng and compliance database called eFACTS (Environment Facility Applica on Compliance Tracking System). As some data contained in these systems are self-reported by operators and other permitees, data in this report reflects the data as reported to the department. 2 DEP's MISSION The mission of the Pennsylvania Department of Environmental Protec on (DEP) is “to protect Pennsylvania's air, land and water from pollu on and to provide for the health and safety of its ci zens through a cleaner environment. We will work as partners with individuals, organiza ons, governments and businesses to prevent pollu on and restore our natural resources.” In Pennsylvania, DEP is responsible for issuing permits and conduc ng inspec ons at oil and gas well sites, pipelines and compressor sta ons. The Public U lity Commission (PUC) and the federal Department of Transporta on's Pipeline and Hazardous Materials Safety Administra on (PHMSA) also play a vital role in the inspec on of natural gas gathering and transmission pipelines in Pennsylvania for safety purposes. DEP'S OFFICE OF OIL AND GAS MANAGEMENT DEP's Office of Oil and Gas Management employs 227 professionals who are dedicated to administering an interna onally recognized oil and gas program. The office consists of two bureaus. The organiza on chart for the Office of Oil and Gas Management is depicted to the right. The Bureau of Oil and Gas Planning and Program Management is located in DEP's central office (Harrisburg) and is responsible for administra ve, policy and regulatory development func ons. The Bureau of District Oil and Gas Opera ons consists of three district oil and gas offices and is responsible for permi ng, inspec on, compliance and enforcement func ons. The Bureau of Oil and Gas Planning and Program Management includes the following three divisions: Well Development and Surface Ac vi es – This division is responsible for developing policies and guidance related to surface ac vi es associated with oil and gas well site design and construc on. This includes engineered well pad components such as erosion and sediment control structures, pits and impoundments. 3 · Well Plugging and Sub-Surface Ac vi es – This division consists of the Subsurface Ac vi es Sec on and the Well Plugging Sec on. The Subsurface Ac vi es Sec on is responsible for the management of subsurface oil and gas related program services and ac vi es and offers exper se in the subjects of drilling, casing, cemen ng, comple on, s mula on, workover, and produc on ac vi es and opera ons associated with conven onal and unconven onal hydrocarbon forma ons in Pennsylvania. The Well Plugging Sec on maintains and implements the Orphaned and Abandoned Well Plugging Program. · Compliance and Data Management – This division works closely with DEP's Bureau of Informa on Technology to oversee the opera on and maintenance of data management systems and databases that track produc on data and other data that are submi ed to DEP by the regulated community. The Bureau of District Oil and Gas Opera ons includes three district offices that implement the opera onal programs in the eastern, northwest, and southwest areas of the state. Staff in the district offices are responsible for permi ng and inspec ng oil and gas well sites and gathering lines and responding to complaints. The district staff are also responsible for compliance and enforcement ac vi es. The district offices are located in Williamsport, Meadville and Pi sburgh. PENNSYLVANIA'S OIL AND GAS RESERVES For centuries, Pennsylvania has been recognized for its abundant natural resources. During the early days of this na on, the vast forests of “Penn's woods” provided mber that was used to construct buildings and homes in towns across the Commonwealth and neighboring states. Pennsylvania's coal resources fueled industries during the late 1800s and was used in the produc on of steel that was cri cal to development of this country's infrastructure. More recently, Pennsylvania's oil and gas reserves have played a vital role in mee ng the energy demands of this country. Conven onal vs. Unconven onal Oil and Gas Drilling The terms “conven onal” and “unconven onal” can refer to either the type of well that is drilled or the geologic forma on into which drilling occurs. Both terms are specifically defined in Chapter 78, Subchapter A of Pennsylvania's oil and gas regula ons. 4 In general, a “conven onal” well is a well that is drilled into a shallow pocket of oil or gas, thereby allowing the oil or gas to flow to the surface. An “unconven onal” well typically refers to a well that is drilled much deeper into the earth's crust into a layer of shale rock that contains natural gas. Another dis nc on of an unconven onal well is that a large amount of water is forced into the well bore under high pressure to fracture the shale to enhance the ability to capture natural gas that would otherwise be trapped in the shale rock forma on. This extrac on method is called hydraulic fracturing. Hydraulic fracturing is also commonly used to develop conven onal wells, although there are significant differences between conven onal and unconven onal well fracturing. The amount of water required to hydraulically fracture a conven onal well is less on a per-well basis and the geologic forma ons targeted are not nearly as deep below the surface. DEP produced a short video to educate the public about the method of unconven onal drilling. To view this video, go to the following link: https://www.youtube.com/channel/UCHeQQljjdZGP4VarKQ0_VxQ/feed?view_as=public Oil The explora on and produc on of oil is not new to Pennsylvania. In fact, the first commercial oil well was successfully drilled in 1859 by Edwin Drake in Titusville. This was the birth of what was to become the na on's petroleum industry. Today, much of the na on's oil produc on occurs in states such as Texas, North Dakota, Oklahoma, California and Alaska. However, Pennsylvania's conven onal “oil patch” in the northwest corner of the state con nues to yield Pennsylvania Grade crude oil. This par cular oil is paraffin-based, renowned for its lubrica ng quali es and is used in the manufacture of petroleum lubricants such as motor oils and as an ingredient in consumer products such as cosme cs, ointments and lo ons. Natural Gas In addi on to historic oil reserves, Pennsylvania has also been a source of natural gas for more than a century. Although it had been suspected that deposits of natural gas existed within vast ght shale forma ons deep under Pennsylvania's surface, conven onal extrac on methods were unable to effec vely unlock the natural gas from its source and the actual quan es were not well understood. By 2005, horizontal drilling methods combined with high-volume hydraulic fracturing techniques were beginning to be successfully and economically deployed to capture natural gas from Pennsylvania's shale deposits. Today, Pennsylvania is the second largest producer of natural gas in the na on. PENNSYLVANIA'S SHALE PLAYS Unconven onal shale basins are commonly characterized according to the geologic forma on that serves as the source of the shale gas. The term “shale play” is used by the oil and gas explora on and development industry to iden fy areas of shale basins that appear to be par cularly suitable for shale gas development. The current predominant shale play in Pennsylvania is the Marcellus Shale Play. However, interest is beginning to increase in the explora on and produc on of the U ca Shale Play and Point Pleasant Shale Play that are located well below the Marcellus Shale Play. Other less familiar shale plays in and around Pennsylvania include the Rhinestreet, Huron and a collec on of less extensive forma ons that comprise the Upper Devonian shale forma on. 5 NATURAL GAS PRODUCTION IN PENNSYLVANIA Since 2008, Pennsylvania's natural gas produc on has increased drama cally, resul ng in increased energy security due to less dependence on fossil fuels from other parts of the world. Increased shale gas produc on has resulted in a number of significant benefits including less expensive energy costs and improvements to Pennsylvania's air quality as a result of the increased use of cleaner burning natural gas. Today, vast areas of black shale deposits in Pennsylvania are yielding tremendous amounts of natural gas. Pennsylvania is the second largest supplier of natural gas in the na on, second only to the state of Texas. Annual Natural Gas Produc on In 2015, more than 4.6 trillion cubic feet of natural gas was produced in Pennsylvania. Despite the reduc on in the number of natural gas wells being drilled in Pennsylvania during 2015, the overall volume of natural gas produced con nued to increase. 6 Monthly Produc on Repor ng for 2015 The Unconven onal Well Report Act of October 2014 amended the 2012 Oil and Gas Act to require operators of unconven onal wells to submit to DEP natural gas produc on reports on a monthly basis. Prior to this statutory amendment, operators of unconven onal wells were only required to submit a report on resource produc on to DEP semi-annually. Unconven onal operators must now report their produc on 45 days a er the end of the month of produc on. The Unconven onal Well Report Act did not affect the frequency of produc on repor ng for operators of conven onal wells. Conven onal well operators con nue to report their produc on data on an annual basis. Produc on data is self-reported to DEP by operators and reported data is submi ed to DEP electronically. DEP conducts limited data verifica on of reported data mainly to ensure that data is submi ed mely as required and that no gross errors are iden fied. DEP conducts compliance oversight of operators who fail to comply with these repor ng requirements. All produc on data is available to the public on DEP's website at: https://www.paoilandgasreporting.state.pa.us/publicreports/Modules/Welcome/Welcome.aspx Waste that is generated at unconven onal well sites must be reported semi-annually, on Feb. 15 and Aug. 15 each year and operators of conven onal well sites report its waste on an annual basis. 7 Natural Gas Produc on by Geologic Forma on There are more than a dozen geologic forma ons below Pennsylvania's land surface that contain rich deposits of natural gas. To date, the most produc ve forma on has been the Marcellus shale forma on from which almost 4.5 trillion cubic feet of natural gas was generated in 2015 alone. Although the Marcellus shale forma on currently eclipses all other geologic forma ons combined, several other shale forma ons including the U ca and Point Pleasant forma ons may contain similar, if not larger, quan es of untapped natural gas. The table to the right lists the volume of natural gas produced from major geologic forma ons in Pennsylvania during 2015. Top 25 Natural Gas Producers The table to the right iden fies the Top 25 producers of natural gas in Pennsylvania during the 2015 calendar year, based on produc on data reported to DEP. A technical analysis of gas produc on trends was conducted by staff in DEP's Bureau of Oil and Gas Planning and Program Management that resulted in the publica on of a poster presenta on. The poster publica on tled “Using Gas Produc on and Produced Water Trends to Explore Marcellus Forma on Development in Pennsylvania” can be viewed on DEP's website at: http://files.dep.state.pa.us/OilGas/BOGM/ BOGMPortalFiles/Annual_Report/2014/G SA_Poster_5_23_14_optimized.pdf 8 Produc on by Geologic Forma on FormationForma on MARCELLUS UTICA SHALE POINT PLEASANT BURKET GENESEE GENESEO RHINESTREET SHALE CABOT HEAD SHALE MAHANTANGO ELK GRIMSBY Grand Total Grand Total Gas Quan ty (Mcf) Gas Quantity 4,474,572,964 53,844,990 26,700,402 21,482,972 19,949,102 4,135,861 1,624,133 41,891 7,672 3,160 971 4,602,364,119 4,602,364,119 2015 Top 25 Producers of Natural Gas Oil and Gas Operator CHESAPEAKE APPALACHIA LLC CABOT OIL & GAS CORP RANGE RESOURCES APPALACHIA LLC EQT PRODUCTION CO CHIEF OIL & GAS LLC SWN PRODUCTION CO LLC TALISMAN ENERGY USA INC CHEVRON APPALACHIA LLC SOUTHWESTERN ENERGY PROD CO CNX GAS CO LLC RICE DRILLING B LLC ANADARKO E&P ONSHORE LLC SENECA RESOURCES CORP SWEPI LP XTO ENERGY INC VANTAGE ENERGY APPALACHIA II LLC PA GEN ENERGY CO LLC RE GAS DEV LLC ALPHA SHALE RES LP CARRIZO (MARCELLUS) LLC EXCO RESOURCES PA LLC ENERGY CORP OF AMER WARREN E & P INC NOBLE ENERGY INC HILCORP ENERGY CO Volume (Mcf) 675,870,599 636,021,824 415,052,274 380,914,991 271,540,067 267,759,997 195,542,662 172,360,020 171,360,193 161,593,282 153,171,759 148,288,457 132,940,825 127,591,068 68,485,721 66,019,621 63,947,198 63,495,992 47,480,458 47,399,909 46,513,553 43,998,812 39,105,121 38,303,982 35,458,939 PERMITTING Types of Oil and Gas Permits The Office of Oil and Gas Management is responsible for the review and approval of permit authoriza ons related to the construc on of oil and gas wells and development of the sites on which they are constructed. Although there are many types of permit authoriza ons that are issued by permi ng staff within the Office of Oil and Gas Management, those most commonly issued by DEP include the Erosion and Sediment Control General Permit, individual and various general permits for stream crossings and encroachments and the Drill and Operate a Well permit (commonly called the Well Drilling Permit). The Office of Oil and Gas Management also operates a well plugging program that requires en es that intend to plug an orphan or abandoned well to submit formal no fica on to DEP. Erosion and Sediment Control General Permit-2 The Erosion and Sediment Control General Permit-2 (ESCGP-2) is designed to address earth disturbances at oil and gas sites where more than five acres of land are disturbed. This general permit is typically used to authorize an operator to construct unconven onal gas well pads and associated pipelines. The standard permit review meframe for an ESCGP-2 permit is 43 business days. DEP offers an expedited review process whereby a permit decision can be reached in 14 business days provided the project achieves specific permit standards and ensures protec on of the environment. In certain situa ons, such as when a well site is in close proximity to high quality or excep onal value waters, the expedited review process is not available to the permit applicant. In 2015, DEP issued 203 standard ESCGP-2 permits and 258 expedited ESCGP-2 permits compared to 250 standard ESCGP-2 permits and 474 expedited ESCGP-2 permits in 2014, respec vely. Since 2013 was the first year that the ESCGP-2 permit was created and in use, the department will con nue to evaluate the long-term permit trends for these types of permits. Individual and General Permits for Stream Crossings and Encroachments Tradi onally, DEP's Office of Water Management is responsible for the oversight of the permi ng program related to stream crossings and encroachments that are regulated by Chapter 105 of Pennsylvania's water obstruc ons and encroachments regula ons. In the case of pipelines, bridges and other structures associated with oil and gas ac vi es that cross or encroach on waters of the Commonwealth, DEP's Office of Oil and Gas Management has been delegated responsibility to review and issue such permits. Depending on the nature of the stream crossing or encroachment, an oil and gas operator must either obtain an individual permit or authoriza on under one of several types of general permits that have been established for similar types of projects. In some cases, the U.S. Army Corps of Engineers also reviews the same encroachment permits where it maintains authority. In 2015, DEP's oil and gas program issued 82 individual permits and 600 general permit authoriza ons for stream crossings and encroachment ac vi es compared to about 100 individual and 800 general permits in 2014. 9 Drill and Operate a Well Permit As the name implies, the Drill and Operate a Well Permit authorizes an operator to construct and operate a conven onal or unconven onal well. An unconven onal well site and well pad is typically constructed to accommodate mul ple wells. An operator must obtain an individual permit for each well that is constructed. A Drill and Operate a Well Permit must be submi ed to DEP for each addi onal well that is intended to be drilled on the well pad or when an exis ng well is drilled deeper into the geologic forma on. The Oil and Gas Act requires DEP to render a permit decision within 45 calendar days of receiving a complete permit applica on. Permit Trends Unconven onal Well Drilling Permits Issued In 2015, DEP issued a total of 2,520 well drilling permits including both conven onal and unconven onal wells in Pennsylvania. Of this amount, DEP issued 2,081 well drilling permits for the construc on of unconven onal wells and 439 well drilling permits for the construc on of conven onal wells. The graph below shows the total number of unconven onal well drilling permits issued by DEP since 2006. The number of unconven onal well drilling permits issued by DEP increased significantly from 2007 un l it reached its height in 2011. A er a market pull-back in 2012, the number of drilling permits con nued to trend upward through 2014. In 2015, the number of unconven onal drilling permits issued decreased to 2,081. This reduc on is primarily due to the overall curtailment of oil and gas drilling opera ons in Pennsylvania. DEP expects the number of unconven onal well drilling permits received during 2016 to remain low. 10 Conven onal Well Drilling Permits Issued Since 2008, conven onal oil and gas well development has been trending steadily downward as seen in the graph below: Well Drilling Permits Issued (by Type and Loca on) Unconven onal Well Drilling Permits The geographic region of the state where operators have obtained well drilling permits to construct unconven onal wells generally correlates to the loca ons of the unconven onal shale plays. However, not all loca ons within the unconven onal shale plays are equal in terms of the volume of available gas or the produc vity of the wells that are constructed. The map below iden fies the distribu on, by county, of the 2,081 well drilling permits issued in calendar year 2015 for the purpose of construc ng unconven onal gas wells. The majority of all unconven onal well drilling permits issued in 2015 were for projects located in northeast and southwest Pennsylvania coun es. 11 During 2015, the top five coun es with the highest number of unconven onal permits issued by DEP were: Top 5 Coun es - Unconven onal Permits County Number of Unconven onal Permits Issued Conven onal Well Drilling Permits The map below iden fies the distribu on, by county, of the 439 well drilling permits issued in calendar year 2015 for the purpose of construc ng conven onal oil and gas wells. As evidenced in the map below, the majority of all well drilling permits for conven onal well sites were issued to operators in Venango, Warren, McKean and Forest coun es. This area is commonly called Pennsylvania's “oil patch” where Pennsylvania Grade crude oil is most prevalent. 12 During 2015, the top five coun es with the highest number of conven onal permits issued by DEP were: Top 5 Coun es - Conven onal Permits County Number of Conven onal Permits Issued NATURAL GAS DRILLING ACTIVITIES Well Drilling Trends In 2015, operators drilled a total of 1,070 wells in Pennsylvania, including both conven onal and unconven onal wells. Of this amount, 785 were unconven onal wells and 285 were conven onal wells. The number of wells drilled in Pennsylvania during 2015 dropped significantly from 2014. In 2014, operators drilled a total of 2,163 wells in Pennsylvania, including both conven onal and unconven onal wells. Of this amount, 1,372 were unconven onal wells and 789 were conven onal wells. This represents more than a 50 percent reduc on in the total number of wells drilled from 2014 to 2015. The actual number of unconven onal and conven onal wells that are drilled in Pennsylvania varies from the number of well drilling permits that are issued by DEP. One reason for this is that a well drilling permit is valid for a full year and can be extended if approved by DEP. An operator may commence drilling at any me during the period that the permit is in effect. Depending on individual business prac ces, oil and gas operators may secure a well drilling permit far in advance of commencing actual drilling opera ons. In some cases, an operator may also determine that a site is not suitable for drilling. Due to these reasons, it is common that the number of permits issued by DEP exceeds the number of wells drilled in any given year. 13 Wells Drilled (by Type and Loca on) Unconven onal Wells The following map iden fies the distribu on, by county, of the 785 unconven onal wells that were drilled in calendar year 2015. 14 During 2015, the top five coun es with the highest number of unconven onal wells drilled in Pennsylvania include: Top 5 Coun es - Unconven onal Wells Drilled County Number of Unconven onal Wells Drilled U ca and Point Pleasant Wells Of the 785 unconven onal wells that were drilled in 2014, only 23 of these wells were drilled into the U ca Shale Play and 32 wells were drilled into the Point Pleasant Shale Play. The U ca and Point Pleasant Shale Plays are much deeper below the surface than the Marcellus Shale Play, but also hold significant volumes of natural gas available for future produc on. It is likely that as market forces stabilize, there will be increased interest in drilling wells into the U ca and Point Pleasant shale forma ons. The map below depicts the unconven onal wells that were drilled into the U ca and Point Pleasant shale forma ons during 2015. 2015 ca &&Point Point Pleasant Wells Drilled 2015UUtica Pleasant Wells Drilled County County Elk Greene Lawrence Mercer Potter Tioga Washington Total by Formation Total POINT PLEASANT 0 5 4 23 0 0 0 32 32 Formation UTICA SHALE 2 2 3 0 5 9 2 23 23 Total Wells Drilled (by county) 2 7 7 23 5 9 2 55 55 15 Conven onal Wells The following map iden fies the distribu on, by county, of the 285 conven onal wells that were drilled in calendar year 2015. Of all conven onal wells drilled in Pennsylvania in 2015, more than 94 percent were drilled in only four northwestern coun es located in the “oil patch” region of the state. During 2015, the top five coun es with the highest number of conven onal wells drilled in Pennsylvania were: Top 5 Coun es - Conven onal Wells Drilled Country Number of Conven onal Wells Drilled WELL PLUGGING PROGRAM It is es mated that more than 350,000 wells have been drilled in Pennsylvania, since drilling began over a century ago. Some wells that are drilled produce oil and gas for many years while others do not produce enough oil or gas to be profitable over the long term. When a well ceases to produce oil or gas, it must be properly plugged. Although stringent requirements currently exist regarding the proper methods to plug wells, this was not always the case. In fact, it was not un l the passage of the Oil and Gas Act of 1984 that laws and regula ons were created to ensure the safe plugging of orphan and abandoned wells. Today, Pennsylvania's oil and gas laws and regula ons require wells to be properly plugged when they are no longer able to serve their intended purpose. Also, operators are now required to post bonds with DEP to ensure that wells are properly plugged at the end of their useful life. 16 DEP tracks all known orphan and abandoned wells; however, many thousands of wells con nue to exist and their exact loca ons may not be known. Currently, there are 8,363 orphan and abandoned wells that are known to exist and are on record with DEP. To date, the DEP's Well Plugging Program has overseen the plugging of a total of 3,036 wells. When a responsible owner is known to exist or is iden fied, the owner is legally responsible to plug a well when it is no longer capable of producing oil or gas. When orphan and abandoned wells are discovered and no responsible owner exists, those wells are placed on DEP's list of orphan and abandoned wells. DEP inspects and evaluates each newly-discovered orphan and abandoned well, and then ranks and priori zes those wells for future plugging. Priori za on is based on health and safety criteria, environmental degrada on and other poten al impacts. Wells that present a high risk to human health and safety and the environment are plugged first. DEP inspectors rou nely follow up to ensure that wells are plugged in accordance with DEP's regulatory requirements. Funding for Well Plugging Projects The cost to plug a well varies widely depending on the type, depth and condi on of the orphan or abandoned well. The table displays the total number of wells that have been plugged annually since 1989 as well as the cost incurred for the plugging of these wells. Funding for DEP's Orphan and Abandoned Well Plugging Program is derived from surcharges established by Sec on 3271 of the Oil and Gas Act of 2012. Well plugging contracts are funded by permit surcharges that are collected in addi on to the well drilling permit applica on fee. The orphan well surcharge is $100 for an oil well or $200 for a natural gas well. A separate addi onal abandoned Footnote: Amount encumbered for 2015 is subject to change based on actual well surcharge of $50 applies to both oil and gas project/site condi ons and poten al contract amendments. wells. The Orphan Well Plugging Fund and the Abandoned Well Plugging Fund are dependent on the number of new drilling permits submi ed to DEP from oil and gas operators. These permit surcharge revenues have enabled DEP to plug only a limited number of wells that are known to exist in Pennsylvania. From calendar year 2000 through 2013, DEP's Growing Greener funds were used to supplement the permit surcharge revenues; however, this funding source has also dwindled. Act 13 of 2012 allocates funds to the Commonwealth Financing Authority (CFA) and can be used to administer a grant program that includes the plugging of orphan and abandoned wells. Though DEP is currently working with the CFA to promote the plugging of high-priority orphan and abandoned wells, it is unlikely that these funds will be sufficient to address the full universe of orphan and abandoned wells that exist in Pennsylvania. 17 DEP Plugging Program Highlights for 2015 Although funding was constrained due to the downturn in drilling permit fees received in 2015, staff in DEP's Division of Well Plugging and Subsurface Ac vi es were able to award five new plugging contracts that year. Three of the well plugging contracts were awarded to plug a total of 36 abandoned oil wells in O o Township, McKean County. The abandoned wells were leaking oil and the contaminated soil required site remedia on. The well plugging projects also addressed ongoing contamina on of a surface water body. Since work commenced, one property that was previously impacted has been placed back into produc ve use as pasture land. The fourth well plugging contract involves the plugging of an abandoned gas well in South Faye e Township, Allegheny County, that is in close proximity of a residen al property. The area immediately surrounding the well is subsiding, crea ng a hazardous situa on for the homeowner. The well will be plugged to address safety concerns. The fi h well plugging contract involves the plugging of an abandoned gas well in Clarion Borough, Clarion County. The well is located near the county courthouse and county jail property. In addi on to the award of new well plugging contracts, work con nued on exis ng contracts. INSPECTIONS DEP's Office of Oil and Gas Management conducts rigorous inspec ons at oil and gas sites across the state. Inspec ons at well sites are necessary to ensure that the environment is protected, par cularly during well development. Currently, DEP employs about 100 oil and gas inspectors that are responsible for ensuring oil and gas wells and well sites are constructed properly. As depicted in the bar chart below, the total number of all well inspec ons has steadily increased from 2008 through 2015. 18 COMPLIANCE AND ENFORCEMENT DEP has increased its efforts over the past several years to ensure improved regional consistency and con nuous improvement in its compliance and enforcement programs that are administered by DEP's district oil and gas offices. DEP focused its efforts on upda ng its compliance and enforcement policy tled “Standards and Guidelines for Iden fying, Tracking and Resolving Oil and Gas Viola ons.” The department published this policy in the Pennsylvania Bulle n on Oct. 4, 2014 and the public was provided 45 days to provide public comment. DEP responded to all comments and published the final policy in January 2015. This policy is available on the DEP website at: http://www.elibrary.dep.state.pa.us/dsweb/Get/Document-105828/820-4000-001.pdf Although the number of inspec ons has increased since 2008, the number of viola ons associated with unconven onal and conven onal wells has steadily decreased over this same me period. The record suggests that DEP's compliance ini a ves and outreach to operators are working as compliance rates are improving. Compliance Trends The following graph shows the number of viola ons that have occurred at unconven onal and conven onal wells from 2010 through 2015. From 2010 through 2015, the number of viola ons for unconven onal wells decreased from 1,280 to 404. The number of viola ons for conven onal wells decreased from 2,092 to 1,024 from 2011 through 2015. This represents a 67 percent reduc on in viola ons during this five-year period for unconven onal wells and 51 percent reduc on for conven onal wells during this four-year period. Although the total number of viola ons con nue to decline, the graph shows that the number of viola ons at conven onal wells consistently exceeds the number of viola ons at unconven onal wells. DEP is commi ed to vigorously pursuing enforcement ac ons as warranted and to encouraging operators to come into compliance with environmental laws and regula ons. 19 Enhanced Administra ve Inspec on and Enforcement Ini a ve The Unconven onal Well Report Act requires unconven onal operators to report natural gas produc on on a monthly basis and the Oil and Gas Act requires conven onal operators to report natural gas produc on on an annual basis. Addi onally, DEP’s regula ons require unconven onal and conven onal operators to report the results of mechanical integrity assessment inspec ons to DEP annually. These repor ng requirements not only provide transparency about the volume of natural gas that is produced in Pennsylvania, but they also provide cri cal insight into the status of the integrity of natural gas wells throughout the commonwealth. In the fall of 2015, the Office of Oil and Gas Management conducted an enhanced inspec on and enforcement ini a ve that focused on administra ve viola ons. Specifically, DEP conducted enforcement and outreach to operators that failed to submit their 2014 produc on data and annual well integrity reports as required by law. DEP issued 3,363 No ces of Viola on to conven onal operators and 83 No ces of Viola on to unconven onal operators that did not submit produc on reports. Addi onally, DEP issued a total of about 400 No ces of Viola on to unconven onal and conven onal operators for failure to submit well integrity reports. These enforcement ac ons and subsequent compliance assistance from DEP resulted in over 500 new operators becoming registered to use DEP's online electronic oil and gas applica ons via the DEP GreenPort web portal. These newly registered operators account for over 31 percent of the total number of registered oil and gas electronic applica on users. Mul -Agency Compliance and Enforcement Ini a ve Between Oct. 26 - 28, 2015, the Pennsylvania State Police/Motor Carrier Enforcement (PSP/MCE), in conjunc on with DEP's Northeast Regional Waste Management Program and Eastern District Oil and Gas Program, conducted a Rural Roads Detail inspec on in Lackawanna, Susquehanna and Wayne Coun es. On Oct. 27, 2015 Eastern District Oil and Gas staff accompanied the group in an a empt to safely sample contents of trucks reportedly hauling freshwater to oil and gas hydraulic fracturing opera ons in and around the US Route 11, New Milford area. This ini a ve was performed in response to a surge of complaints received that tanker trucks placarded as hauling freshwater were suspected to be back-hauling brine, re-used water, or flowback fluids; which is a viola on of state law. On Nov. 4 - 5, 2015, DEP conducted sampling ac vi es at four freshwater impoundments located in Bradford and Susquehanna Coun es. Analyses of all samples collected as part of this inspec on event suggested that the fluids being dispersed and hauled were indeed freshwater. In order to remain vigilant, DEP intends to par cipate in future Rural Road Detail inspec on events along with the PSP/MCE and PA DEP Northeast Region Waste Management Program to ensure con nued compliance is maintained. Fines and Penal es Collected Since 2009, DEP has collected about $23.2 million as a result of noncompliance at oil and gas sites in Pennsylvania. These fines and penal es are used to reimburse opera ng costs that are incurred by DEP in the oversight of oil and gas and related environmental programs. The following table lists the amount of fines and penal es collected annually from 2009 through 2015. 20 Fines and Penali es Calendar Year Fines and Penal es Collected 2009 2010 2011 2012 2013 2014 2015 $926,346 $2,714,654 $2,671,101 $2,078,373 $2,584,128 $7,138,908 $3,414,102 STRAY GAS INVESTIGATIONS One of the most important issues associated with oil and gas explora on and development is the effec ve engineering and construc on of oil and gas wells. If wells are not constructed or operated properly, there is a poten al risk for natural gas to escape from the well bore into subsurface geologic strata or groundwater sources. If this happens, it is called “stray gas” migra on and the responsible operator is required by law to correct the situa on. DEP's Office of Oil and Gas Management responds to stray gas complaints and conducts inves ga ons to determine the source of gas when it occurs. DEP has the ability to conduct extensive threedimensional modeling to visualize the site and determine the nature and source of methane contamina on. DEP staff developed a technical poster tled “Applica on of 3D Modeling to Differen ate Naturally Occurring Methane and Methane Migra on Associated with Natural Gas Development” that can be viewed on the DEP website at: http://files.dep.state.pa.us/OilGas/BOGM/BOGMPortalFiles/Annual_Report/2014/App3DMethanePoster _34by46_optimized.pdf (Note: This poster was developed using Adobe so ware and may take a few moments to download). DEP also co-authored a water resources report with the Pennsylvania Department of Conserva on and Natural Resources' Geological Survey tled “W71: Groundwater and petroleum resources of Sullivan County, Pennsylvania.” The report discusses mechanisms contribu ng to stray gas migra on in detail and can be accessed at: http://www.dcnr.state.pa.us/topogeo/publications/pgspub/water/index.htm The following graph iden fies the number of stray gas inves ga ons conducted by DEP from 2008 through 2015. 21 The following bar chart iden fies the number of confirmed posi ve determina ons from 2008 through 2015 for gas migra on cases inves gated by DEP. If a stray gas inves ga on does not result in a confirmed posi ve determina on, then it is not included in this bar graph. If a stray gas inves ga on extends from one calendar year into a future calendar year, the confirmed posi ve determina on is reported in the year in which the inves ga on was ini ated. The Pennsylvania Oil and Gas Regula on at 25 Pa. Code, Chapter 78, Subchapter D provides specific requirements for the construc on of oil and gas wells including, but not limited to, casing and cemen ng prac ces. It also details requirements that operators must fulfill when a poten al gas migra on incident has occurred. DEP updated these subsurface ac vi es regula ons to strengthen well construc on prac ces that are required of operators and place many of the responsibili es of inves ga ng stray gas incidents on the oil and gas industry. The revised rulemaking went into effect on Feb. 5, 2011. DEP intends to further improve these subsurface ac vity regula ons through a subsequent rulemaking package that it plans to ini ate in 2016. 22 The bar chart above iden fies the number of drinking water supplies impacted by confirmed gas migra on events. It is not uncommon for a single confirmed gas migra on case to affect mul ple water sources. The Oil and Gas Act of 2012 presumes that an operator of an unconven onal well is responsible for pollu on of a water supply when the source is located within 2,500 feet of the unconven onal well and when the pollu on occurred within 12 months of the drilling, altering, s mula on or comple on of the unconven onal well. For conven onal wells, an operator is presumed responsible for pollu on of a water supply when the source is located within 1,000 feet of the conven onal well and when the pollu on occurred within six months of drilling or altering the well. Unless, the operator can successfully demonstrate that the pollu on was not caused by its ac ons based on specific statutory defenses, the operator must restore or replace the affected water supply. REGULATORY AND POLICY DEVELOPMENT Regulatory Revisions for Surface Ac vi es DEP's Oil and Gas program ini ated the process of developing a proposed rulemaking to amend the exis ng oil and gas regula ons (25 Pa. Code, Chapter 78, Subchapter C) in April 2011 to address surface-related ac vi es at well sites in Pennsylvania. In par cular, these regula ons will address the requirements for pits, impoundments, temporary site containment, spill repor ng and cleanup, site restora on, pipelines, horizontal direc onal drilling, water management plans and the road spreading of brine from conven onal well sites. This rulemaking also serves to codify environmental provisions mandated by the 2012 Oil and Gas Act. DEP conducted extensive outreach on the proposal, which reflects significant input from statewide environmental organiza ons, local government groups, residents living near well sites and industry representa ves who have met with DEP to share their exper se in shaping the proposal. 23 Over the course of the development of this rulemaking, DEP has incorporated an extraordinary level of transparency and outreach to the public and regulated community. During the proposed rulemaking phase of development, DEP par cipated in nine (9) public hearings and approximately 24,000 public comments were received. Due to the level of interest in this rulemaking and DEP's commitment to transparency, DEP chose to use an Advanced No ce of Final Rulemaking (ANFR) procedure to solicit addi onal feedback on the changes made to the regula on. On April 4, 2015, DEP published no ce of the ANFR for revisions to the rulemaking in the PA Bulle n, opening an addi onal 30-day public comment period. On April 6, DEP announced extension of the public comment period by an addi onal 15 days to close on May 19, and the addi on of three public hearings. During the ANFR comment period, DEP received a total of 4,947 addi onal comments from 4,601 commentators. Of the comments received, 4,516 were form le ers (10 different form le ers), 129 were provided via tes mony at public hearings, and 302 were unique comments. On Oct. 27 - 29, 2015, DEP presented the final form Chapters 78 and 78a Surface Ac vi es rulemaking to the Oil and Gas Technical Advisory Board (TAB) and the Conven onal Oil and Gas Advisory Commi ee (COGAC), respec vely. This represented a culmina on of over 4 years of effort by the Office of Oil and Gas Management to update the exis ng oil and gas regula ons. On Jan. 6, 2016, DEP submi ed the final-form rulemaking to the Environmental Quality Board (EQB) for considera on at its mee ng on February 3, 2016. The EQB approved the final form rulemaking by a vote of 15-4. The final-form rulemaking was approved by the Independent Regulatory Review Commission (IRRC) on April 21, 2016 by a vote of 3-2. This rulemaking will also be reviewed by the Office of the A orney General and the standing commi ees in the Pennsylvania House of Representa ves and Senate. Oil and Gas Compliance and Enforcement Policy On Jan. 17, 2015 the Office of Oil & Gas Management finalized a compliance and enforcement policy tled: Standards and Guidelines for Iden fying, Tracking, and Resolving Oil & Gas Viola ons, Doc. #8204000-01. This guidance provides direc on to oil and gas program staff to ensure a consistent approach for iden fying viola ons of applicable laws. The policy includes direc on on determining appropriate ac ons to assist violators with returning to compliance. This policy also provides program staff with important direc on on ini a ng, documen ng, and resolving water supply inves ga ons and provides guidance on the meframes program staff must adhere to when conduc ng such inves ga ons. NOTABLE ACCOMPLISHMENTS Pipeline Infrastructure Task Force In the next decade, Pennsylvania will undergo a substan al pipeline infrastructure build-out to transport gas and related byproducts from thousands of wells throughout the state. This situa on created an opportunity for Governor Tom Wolf to engage stakeholders in a collabora ve process to achieve a world-class pipeline infrastructure system that adheres to high standards and reduces or avoids environmental and community impacts. 24 On May 27, 2015, Governor Wolf announced the crea on of the Pipeline Infrastructure Task Force (PITF) that consisted of 48 task force members and more than 100 addi onal volunteers serving in 12 workgroups and coordinated closely with federal agencies, state partners, local governments, industry representa ves, landowners and environmental advocates. Specifically, the task force was charged with developing recommenda ons to define a series of best prac ces for: planning, si ng and rou ng pipelines; amplifying and engaging in meaningful public par cipa on; maximizing opportuni es for predictable and efficient permi ng; employing construc on methods that reduce environmental impacts; and developing long-term opera ons and maintenance plans to ensure pipeline safety and integrity. Beginning in July 2015, the PITF met on a monthly basis through January 2016. On Feb. 18, 2016, the PITF submi ed its report to the governor. The report iden fied a dozen top recommenda ons, along with a broader set of 184 sugges ons, to help Pennsylvania achieve responsible development of natural gas pipeline infrastructure in the Commonwealth. The task force presented the recommenda ons in six major categories, designed to drive wider public discussion on the cri cal, complex, and interrelated environmental and community issues that Pennsylvania faces in the development of the infrastructure needed to transport gas to market. During 2016, recommenda ons that fall within the purview of Commonwealth agencies will be further assessed and evaluated for possible implementa on. Industry and other agencies are encouraged to do the same for recommenda ons that lie within their purviews. The final report and a full set of recommenda ons is available on DEP's website at: http://www.dep.pa.gov/Business/ProgramIntegration/PipelineTaskForce/Pages/default.aspx#.V0cnCKPD -Ul Comprehensive Oil and Gas Development Radia on Study Genera on of Technologically Enhanced Naturally Occurring Radioac ve Material (TENORM) in waste generated by the oil and gas industry has increased in Pennsylvania over the past several years due, in part, to the expansion of unconven onal natural gas produc on. In January 2013, DEP undertook a study to assess levels of naturally occurring radioac vity in the byproducts associated with oil and natural gas development. DEP began studying radioac vity levels in flowback waters, treatment solids and drill cu ngs, as well as transporta on, storage and disposal of drilling wastes. This effort included a study of radon levels in natural gas to ensure that public health and the environment con nue to be protected. The Department published the TENORM report on Jan. 15, 2015. While the report outlines recommenda ons for further study, it concluded there is li le poten al for harm to workers or the public from radia on exposure due to oil and gas development. The report was the culmina on of a mul -year effort and represents what may be the most comprehensive radiological study of the oil and gas industry ever conducted. While the recommenda ons for future ac ons contained in the report call for addi onal studies and efforts, DEP now has data to inform the management of natural gas resources and resultant wastes for environmental and health protec on. 25 In summary, the peer-reviewed study concluded that: There is li le poten al for addi onal radon exposure to the public due to the use of natural gas extracted from geologic forma ons located in Pennsylvania. There is li le or limited poten al for radia on exposure to the public and workers from the development, comple on, produc on, transmission, processing, storage, and end use of natural gas. There is li le poten al for radia on exposure to workers and the public at facili es that treat oil and gas wastes. There is li le poten al for radia on exposure to the public and workers from landfills receiving waste from the oil and gas industry. While limited poten al was found for radia on exposure to people using roads treated with brine from conven onal natural gas wells, further study of radiological environmental impacts from the use of brine from the oil and gas industry for dust suppression and road stabiliza on should be conducted. To read the en re report and a complete list of recommenda ons, go to the following link: http://www.dep.pa.gov/Business/Energy/OilandGasPrograms/OilandGasMgmt/Oil-and-Gas-RelatedTopics/Pages/Radiation-Protection.aspx#.VzTgDBzD-po Mechanical Integrity Assessment Repor ng and Audit When an operator constructs a well to deliver oil and gas from deep beneath the ground to the surface, it is cri cal that the well be constructed in a manner that prevents communica on between the well bore and shallower sub-surface geologic strata. A properly constructed well also helps to prevent the poten al migra on of oil and gas into groundwater sources that supply drinking water wells. To ensure well construc on materials are func oning as intended over the life of the well, Pennsylvania's Oil and Gas Regula on (25 Pa. Code, Chapter 78, Sec on 78.88) includes requirements for regular inspec ons of the well components accessible at the surface. Specifically, operators are required to conduct quarterly inspec ons to ensure all opera ng wells are in compliance with well construc on and opera ng standards described in the regula ons. If a well is not in compliance, the responsible operator is required to no fy DEP and take correc ve ac ons to repair or replace defec ve equipment or mi gate any excess pressure on the surface casing strings through which gas is being produced. The quarterly inspec on program began in the fourth quarter of 2013. The due date of the first annual inspec on report, consis ng of quarterly inspec on data for the 2014 calendar year, was Feb. 15, 2015. As of April 2015, reports had been filed for 7,756 unconven onal well sites (99.6% of sites) and 72,365 conven onal well sites (60% of sites). DEP took enforcement ac on against operators who failed to submit these reports as described in the “Compliance and Enforcement” sec on of this annual report. A er program implementa on and to iden fy poten al issues with operator reported Mechanical Integrity Assessment Program data, DEP conducted both office audits and field audits. The office audits involved the review of well records and comple on reports to determine if the correct data was reported on mechanical integrity inspec on forms. The field audits were implemented to verify the actual physical condi on of the wells as compared to what was originally reported by the operator. 26 Well verifica on ac vi es were completed in select coun es for logis cal purposes. A total of 287 wells were randomly selected for review as part of the audi ng program. This included 95 unconven onal well reports and 96 conven onal well reports for the office audits, as well as 48 unconven onal wells in Greene, Lycoming and Washington coun es; and 48 conven onal wells in Indiana and McKean coun es for the field audit. The results of DEP's audi ng program will be published in a separate report in 2016. DEP Secretary's Award for Excellence The development of DEP's Mechanical Integrity Assessment program required the efforts of many staff within the Office of Oil and Gas Management. Several staff members from the Office of Oil and Gas Management received the “Secretary's Excellence Award for Outstanding Team” as a result of the efforts in developing and implemen ng the Mechanical Integrity Assessment program. Enhanced Statewide Seismic Monitoring Network In April 2015, DEP partnered with the Department of Conserva on and Natural Resources (DCNR) and the Pennsylvania State University (PSU) to expand Pennsylvania's statewide seismic monitoring network. The current statewide seismic network in Pennsylvania consists of 18 sta onary seismic monitoring sta ons (10 operated by PSU and 8 operated by other organiza ons). The expanded seismic network will add 20 seismic monitors for a total of 38 permanent sta onary monitoring sta ons. Also, five portable seismic sta ons will be available as part of this partnership and posi oned at strategic loca ons as necessary. An addi onal 19 permanent seismic monitors are located in adjacent states in close proximity to Pennsylvania's border. This expanded seismic network will provide a be er understanding of seismic events that occur throughout Pennsylvania on an annual basis. Area of Review (AOR) Technical Workgroup In October 2015, DEP formed a technical workgroup to address the complexi es associated with implemen ng the Area of Review (AOR) component of the Chapters 78 and 78a Surface Ac vi es rulemaking. The AOR will require operators to iden fy and monitor other oil and gas wells within prescribed distances of their well to prevent environmental impacts from hydraulic fracturing ac vi es. The workgroup consists of conven onal and unconven onal oil and gas industry representa ves, consultants, and DEP staff. A dra technical guidance has been developed and DEP intends to publish the guidance in the Pennsylvania Bulle n in the Spring of 2016 and will invite public comment. Well Comple on Report Within 30 days a er comple on of when a well is capable of produc on, well operators are required to submit a Comple on Report to DEP. Comple on opera ons include, but are not limited to, perfora on ac vi es, notching ac vi es, and/or s mula on ac vi es. Comple on opera ons include both ini al ac vi es and any subsequent ac vi es such as re-s mula on of a wellbore. 27 The Bureau of Oil and Gas Planning and Program Management released a revised Well Comple on Report form that is available on DEP's eLibrary webpage. The form was revised to capture comple on data in a more detailed format and to capture addi onal data elements. This data will be used in DEP's decision making processes to help ensure op mal development of oil and gas resources while protec ng the health, safety, and property of ci zens and the natural resources of the Commonwealth. Addi onally, a new “Registra on of Trade Secret/Confiden al Proprietary S mula on Fluid Chemical Informa on” form has been developed and is also available on the eLibrary webpage. This form is used by well operators, well service providers, and chemical manufacturers to register trade secret/confiden al chemical informa on with DEP. Submi ed chemical registra on forms will be appropriately managed to ensure maintenance of confiden ality and to be er facilitate responses to Right-to-Know requests. DEP's Bureau of Oil and Gas Planning and Program Management will conduct outreach and training to the regulated community regarding the availability and use of these forms throughout 2016. Program Clarifica on Memo Published – Oil and Gas Conserva on Law Waiver Process On July 15, 2015, the Office of Oil and Gas Management published a Program Clarifica on Memo (PCM) outlining the process to be used when a permit applicant requests a waiver from setbacks under the Oil and Gas Conserva on Law (OGCL). The PCM was developed with significant input from DEP's Bureau of District Oil and Gas Opera ons as well as DEP's Office of Chief Counsel. The OGCL became law in 1961 and its fundamental purpose is to prevent waste in the recovery of oil and gas from forma ons below the Onondaga geologic forma on and to protect correla ve rights and the rights of royalty interest owners and producers. Regula ons implemen ng the OGCL exist in 25 Pa. Code Chapter 79. Only wells that penetrate the Onondaga forma on are subject to the OGCL. Because the Onondaga is located directly beneath the Marcellus shale, applica on of the OGCL, to date, has been rela vely infrequent. There is growing interest in explora on and produc on of the U ca shale; however, and any well drilled to the U ca shale forma on will necessarily penetrate the Onondaga and be subject to the OGCL. To meet its purposes, the OGCL requires a 330-foot setback from the nearest outside boundary of the lease on which the well is located, or if the lease is included in a voluntary unit, the well must be located at least 330 feet from the nearest unit line. The OGCL provides that the permit applicant may request a waiver from this setback. The OGCL requires DEP to provide no ce of the request and hold a public hearing before the waiver request can be granted. The PCM outlines the process by which applicants may request waivers, including necessary informa on to be submi ed with the waiver request. The PCM also outlines how DEP will handle no ce of the request, including Pennsylvania Bulle n no ce and direct no ce to all affected property owners, and the process for holding the public hearing and announcing the DEP's decision on the waiver request. DEP conducted outreach to inform and assist the regulated community. The PCM document is available on DEP's Conserva on Law website at http://files.dep.state.pa.us/oilgas/bogm/bogmportalfiles/ConservationLaw/Conservatrion_law_%20Waiv er_Request_Process.pdf 28 Erosion & Sedimenta on Control Model Plan In 2014, DEP ini ated the development of a Model Erosion and Sediment Control Plan (Model E&S Plan) for use by ESCGP-2 permit applicants. The purpose of the model plan is to provide oil and gas operators and their consultants a standardized format for the submission of Erosion and Sediment Control plan informa on to DEP. Use of the Model E&S Plan will increase consistency in the data submi ed to DEP regarding oil and gas ac vi es. During the development of the Model E&S Plan, staff in the Office of Oil and Gas Management collaborated with DEP's Bureau of Waterways Engineering and Wetlands, DEP's District Oil and Gas staff and industry representa ves. The Model E&S Plan was piloted at the end of 2014 to a small number of operators and their consultants and was released for general use in 2015. Public Outreach Regarding Oil and Gas Legacy Issues The Division of Well Plugging and Subsurface Ac vi es staff par cipated in a collabora ve workshop with Penn State's Marcellus Center for Outreach and Research (MCOR) on Sept. 12, 2015 at the Allegheny Na onal Forest (ANF). Division staff gave presenta ons discussing DEP's Plugging Program, Plugged/Abandoned and Orphan Well Study, and field safety. Presenta ons were followed by a field trip to ANF to locate and assess condi ons at plugged wells. Representa ves from DEP, MCOR, Indiana University of Pennsylvania (IUP), Sierra Club, and the community par cipated in the event. Loca ng abandoned wells and ensuring that condi ons at known sites are not changing in a way that could cause environmental impacts is something the Oil and Gas Program has done in the past by coordina ng with well-trained voluntary “ci zen scien st” groups. By taking the me to develop effec ve outreach efforts, DEP is crea ng a way to focus on internal priori es and rely on trained individuals to help address other ma ers. The MCOR group has located a number of plugged wells in ANF that were not previously mapped. DEP staff have also been invited to promote this effort by serving on the steering commi ee with the Shale Network, a Na onal Science Founda on (NSF) funded project at the Pennsylvania State University that coordinates significantly with volunteer ci zen scien st groups throughout the commonwealth. WHAT'S NEXT FOR 2016? Methane Reduc on Ini a ve Methane is a significant contributor to climate change and the warming of the earth's atmosphere. In fact, methane is the second-most prevalent greenhouse gas emi ed in the United States and is es mated to be significantly more potent at warming the earth's atmosphere than carbon dioxide. It is also es mated that about 25 percent of methane emissions na onwide are a result of leaks from pipeline infrastructure and ac vi es associated with the oil and natural gas industry. Governor Wolf announced a plan that is designed to protect the environment and public health, reduce climate change, and help businesses reduce the waste of a valuable product by reducing methane leaks and emissions from natural gas well sites, processing facili es, compressor sta ons and along pipeline routes. The strategy will be implemented in 2016 and will reduce emissions during development and gas produc on, processing, and transmission by requiring leak detec on and repair (LDAR) measures, efficiency upgrades for equipment, improved processes, implementa on of best prac ces, and more frequent use of leak-sensing technologies. DEP an cipates these measures will pay for themselves in recovering saleable product that would otherwise be lost. 29 The four-point plan aims to: 1. Reduce leaks at new unconven onal natural gas well pads. DEP will develop a new general permit for oil and gas explora on, development, and produc on facili es, requiring Best Available Technology (BAT) for equipment and processes, be er record-keeping, and quarterly monitoring inspec ons. 2. Reduce leaks at new compressor sta ons and processing facili es. DEP will revise its current general permit, upda ng BAT requirements and applying more stringent LDAR and other requirements to minimize leaks. A new permit condi on will require the use of Tier 4 diesel engines that reduce emissions of par culate ma er and nitrous oxide by about 90 percent. 3. Reduce leaks at exis ng unconven onal natural gas facili es. DEP will develop a regula on for exis ng sources for considera on by the Environmental Quality Board. 4. Reduce emissions along produc on, gathering, transmission and distribu on lines. DEP will establish best management prac ces, including leak detec on and repair programs. More informa on concerning DEP's methane reduc on ini a ve is available on the DEP website at: http://www.dep.pa.gov/Business/Air/Pages/Methane-Reduction-Strategy.aspx#.V0cGIhzD-pp Regulatory Revisions for Subsurface Ac vi es DEP's Bureau of Oil and Gas Planning and Program Management intends to advance a proposed rulemaking during 2016 to update Subchapters D, E and H of 25 Pa. Code, Chapter 78. The rulemaking will include revisions to these subchapters that regulate the drilling, casing, cemen ng, comple on, opera on, produc on and plugging of wells in Pennsylvania as well as other subsurface ac vi es associated with oil and gas explora on and development. Specifically, the regulatory amendments will include revisions to well plugging procedures, coalbed methane development, and well drilling, cemen ng and hydraulic fracturing procedures. DEP presented a concept paper to the Oil and Gas Technical Advisory Board that outlines the an cipated regulatory changes. The concepts paper is available at: http://www.dep.pa.gov/Business/Energy/OilandGasPrograms/OilandGasMgmt/OilGasTech/2014/Pages/ default.aspx#.V0cCwRzD-po Water Supply Complaint Tracking System Currently, DEP tracks general complaints that are received across all programs through an internal complaint tracking system. In an effort to capture informa on that is solely related to complaints from individuals who suspect that their drinking water supply has been affected by oil and gas related ac vi es, DEP plans to develop and deploy an oil and gas “Water Supply Complaint Tracking System”. This tool will collect a variety of data that is more expansive than the informa on that is currently collected in the DEP's general complaint tracking system. As an interim measure, the Office of Oil and Gas Management developed a list of posi ve water supply determina ons and posted the list on its website. Redacted copies of le ers that were mailed to each affected water supply owner since 2008 are also available to the public through this list of posi ve water supply determina ons. This list of “Water Supply Determina on Le ers” can be accessed at the following web link: http://files.dep.state.pa.us/OilGas/BOGM/BOGMPortalFiles/OilGasReports/Determination_Letters/Regi onal_Determination_Letters.pdf 30 Electronic Comple on Repor ng Within 30 days a er comple on of when a well is capable of produc on, well operators are required to submit a Comple on Report to DEP. Comple on opera ons include, but are not limited to, perfora ng ac vi es, notching ac vi es, and/or s mula on ac vi es. Comple on opera ons include both ini al ac vi es and any subsequent ac vi es (e.g., re-s mula on of a wellbore). During 2016, DEP plans to develop an electronic repor ng tool that will enable operators to submit comple on reports to DEP in an electronic format. Electronic Well Record Repor ng Pennsylvania's oil and gas regula ons require that within 30 days of the end of drilling a well, operators are required to submit a Well Record to DEP. The Well Record includes detailed informa on about the well such as the type and amount of cement used in the construc on of the well, the source, size and depth of various casings used and a driller's log that includes the geologic forma ons that were encountered during the drilling process. Currently, operators are required to submit this record to DEP in a paper format; however, DEP plans to develop an electronic repor ng tool in 2016 that will enable this informa on to be reported more efficiently and accurately. Evalua on of Oil and Gas Permit Fees Pennsylvania oil and gas regula ons require that at least every three years DEP provide the Environmental Quality Board (EQB) an evalua on of the oil and gas fees and recommend regulatory changes to address any disparity between the program income generated by fees and DEP's cost of administering the program. The purpose of the evalua on is to ensure that fees meet all program costs and that the oil and gas program is self-sustaining. During 2016, DEP intends to evaluate the exis ng oil and gas fee structure in comparison to its ongoing program ac vi es. This will enable the Office of Oil and Gas Management to meet its obliga on to conduct a fee evalua on for submi al to the EQB for considera on. Business Process and Program Efficiencies In 2016, tablet computers will be deployed to all oil and gas inspectors in order to enable inspectors the ability to capture inspec on results in a real- me manner. This will significantly increase opera onal efficiencies since it will eliminate the need for inspectors to capture inspec ons via a paper form and then expend addi onal me inpu ng the same data into DEP's enterprise-wide compliance data management system. In addi on to equipping oil and gas inspectors with the latest compu ng technology, DEP also plans to revise its current policy on the home storage of commonwealth vehicles so that oil and gas inspectors will have the flexibility to travel directly to site inspec on loca ons rather than expending unnecessary me traveling to the district or satellite office in order to obtain a commonwealth vehicle before traveling to the site of inspec on. This modifica on to the current policy will result in significant efficiencies in DEP's ability to deploy staff more rapidly to loca ons where daily site inspec ons are scheduled. 31