Bills treat different wells differently

A pair of bills aimed to separate conventional oil and gas operations from regulations governing Shale gas producers and allow industry representatives to review and comment on proposed regulations and form a plan to increase production have moved out of committee in the House and Senate.

The Senate Environmental Resources and Energy Committee approved legislation Senate Bill 1310 introduced by Senator Scott Hutchinson that would create the Pennsylvania Grade Crude Development Advisory Council.

Known as the Pennsylvania Grade Crude Development Advisory Council Act, the bill would create a 17-member council consisting of members appointed by the governor including two members from the Pennsylvania Independent Oil and Gas Association; two members from the Pennsylvania Grade Crude Oil Coalition; a member from a nonprofit corporation organization relating to the industry; a member from academia who is a geologist; a member from academia who is a hydrologist; a member appointed by the secretary of Community and Economic Development or a designee; the DEP secretary or a designee; a member of the Senate appointed by the Senate minority leader; a member of the Senate appointed by Senator Joe Scarnati; a member of the House of Representatives appointed by the speaker of the house; and a member of the house of representatives appointed by the minority leader of the House of Representatives.

Hutchinson said he worked closely with many small oil producers and the ARG refinery in Bradford to create a council similar to the Pennsylvania Hardwood Development Commission.

“In that case it was timber, in this case it is Pennsylvania grade crude.We want to promote what we believe is a valuable asset, retain jobs and grow jobs within that industry,” he said. “I think there’s some great opportunities here. I was happy to work with the industry to kick this off and start down the path to fruition.”

The council will assist the secretary of the DEP with comments on departmental policy that impact the industry “including economic consequences,”; review and comment on the formulation and drafting “of all technical regulations” under Act 58; “recommend appropriate measures relating to the promotion and development of the conventional oil and gas industry of this commonwealth”; and develop a plan to increase grade crude oil production “in an environmentally reasonable way to more adequately supply the refineries which depend on Pennsylvania Grade Crude Oil.

The Department of Community and Economic Development will provide administrative support, office space and “any other technical assistance required by the council to carry out its duties” the bill said.

Members will not be compensated for their time on the council but will “be reimbursed for all necessary travel and other reasonable expenses incurred in connection with the performance or their duties as members,” the bill said.

Hutchinson said the bill will protect the conventional oil and gas industry from regulations intended for companies extracting gas from the Marcellus Shale.

“I think there’s a lot of support for it and people see this as a unique and valuable industry and hopefully we can get this across the finish line,” he said.

House Bill 2350 would require by law the DEP Environmental Quality Board – a 20-member independent board chaired DEP Secretary Chris Abruzzo to propose the department’s regulations and consider petitions to change the oil and gas regulations – to differentiate regulations between conventional oil and gas producers and Shale gas producers.

Conventional oil and gas producers had voiced their opposition to proposed regulations during a public hearing with the EQB at the Warren County Courthouse on Feb. 12.

For over five hours, 62 commenters, mostly multi-generational shallow well producers and ancillary businesses from Warren County and the surrounding area testified the proposed regulations are suited for large multinational corporations drilling for natural gas in the Marcellus shale, not for conventional well producers who have been operating in the Pennsylvania oil patch for over 150 years.

Hutchinson said the regulatory process on the proposed regulations to surface activities will continue and House Bill 2350 would “say that regulations have to be separate for conventional producers and Marcellus producers.”

“The conventional oil and gas industry has had a benign impact on human health and the environment in this Commonwealth” since the Oil and Gas Act was passed in 1984, House Bill 2450 said.

Hutchinson said he was confident the bill will pass, and noted there was only one opposing vote to the bill. Both bills will now move to the floor for consideration.