PRIOR PRINTER'S NOS. 2689, 2765, 2777, 2837

PRINTER'S NO.  3048

  

THE GENERAL   ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1950

Session of

2011

  

  

  

Report of the Committee of Conference

  

  

  

To the Members of the House of Representatives and Senate:

  

We, the undersigned, Committee of Conference on the part of the Senate and House of Representatives for the purpose of considering House Bill No. 1950, entitled:

"An act amending Titles 27 (Environmental Resources) and 58 (Oil and P1:L2Gas) of the Pennsylvania Consolidated Statutes, * * *.

Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, * * * and P2:L7making a related repeal,"

  

respectfully submit the following bill as our report:

  

BRIAN L. ELLIS

            

DAVID L. REED

  

       

(Committee on the part of the House of Representatives.)

  

JOSEPH B. SCARNATI

  

MARY JO WHITE

  

  

(Committee on the part of the Senate.)

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AN ACT

  

 


1

Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated

2

Statutes, providing for an unconventional gas well fee and

3

for transfers from the Oil and Gas Lease Fund; providing for

4

distribution of fees and transfers; establishing the Natural

5

Gas Energy Development Program; consolidating the Oil and Gas

6

Act with modifications and additions relating to definitions,

7

well permits, permit objections, comments by municipalities

8

and storage operators, well location restrictions, well site

9

restoration, protection of water supplies, notification to

10

public drinking water systems, containment for unconventional

11

wells, transportation records regarding wastewater fluids,

12

corrosion control requirements, gathering lines, well control

13

emergency response, hydraulic fracturing chemical discharge

14

requirements, bonding, air containment emissions, public

15

nuisances, enforcement orders, well control emergency cost

16

recovery, penalties, civil penalties, inspection and

17

production of materials, witnesses, depositions and rights of

18

entry, third party liability and inspection reports;

19

providing for local ordinances relating to oil and gas

20

operations and for responsibility for fee; making an

21

appropriation; and making a related repeal.

22

The General Assembly of the Commonwealth of Pennsylvania

23

hereby enacts as follows:

24

Section 1.  Title 58 of the Pennsylvania Consolidated

25

Statutes is amended by adding parts to read:

26

PART I

27

(RESERVED)

28

PART II

29

OVERSIGHT AND DEVELOPMENT

30

Chapter

31

23.  Unconventional Gas Well Fee

32

25.  Oil and Gas Lease Fund

33

27.  Natural Gas Energy Development Program

34

CHAPTER 23

35

UNCONVENTIONAL GAS WELL FEE

36

Sec.

37

2301.  Definitions.

38

2302.  Unconventional gas well fee.

39

2303.  Administration.

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1

2304.  Well information.

2

2305.  Duties of department.

3

2306.  (Reserved).

4

2307.  Commission.

5

2308.  Enforcement.

6

2309.  Enforcement orders.

7

2310.  Administrative penalties.

8

2311.  (Reserved).

9

2312.  Recordkeeping.

10

2313.  Examinations.

11

2314.  Distribution of fee.

12

2315.  Statewide initiatives.

13

2316.  Small business participation.

14

2317.  Applicability.

15

2318.  Expiration.

16

§ 2301.  Definitions.

17

The following words and phrases when used in this chapter

18

shall have the meanings given to them in this section unless the

19

context clearly indicates otherwise:

20

"Average annual price of natural gas."  The arithmetic mean

21

of the New York Mercantile Exchange (NYMEX) settled price for

22

the near-month contract, as reported by the Wall Street Journal

23

for the last trading day of each month of a calendar year for

24

the 12-month period ending December 31.

25

"Company."  An entity doing business within this Commonwealth

26

and subject to tax under Article III, IV or VI of the act of

27

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

28

1971.

29

"Commission."  The Pennsylvania Public Utility Commission.

30

"Department."  The Department of Environmental Protection of

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1

the Commonwealth.

2

"Eligible applicant."  Any of the following:

3

(1)  A  county, municipality, council of governments,

4

watershed organization, institution of higher education or

5

nonprofit organization.

6

(2)  An authorized organization as defined in 27 Pa.C.S.

7

§ 6103 (relating to definitions).

8

(3)  A company, other than a producer.

9

"Fee."  The unconventional gas well fee imposed under section

10

2302 (relating to unconventional gas well fee).

11

"Fund."  The Unconventional Gas Well Fund.

12

"Highway mileage."  The number of miles of public roads and

13

streets most recently certified by the Department of

14

Transportation as eligible for distribution of liquid fuels

15

funds under the act of June 1, 1956 (1955 P.L.1944, No.655),

16

referred to as the Liquid Fuels Tax Municipal Allocation Law.

17

"Municipality."  A borough, city, town or township.

18

"Natural gas."  A fossil fuel consisting of a mixture of

19

hydrocarbon gases, primarily methane, and possibly including

20

ethane, propane, butane, pentane, carbon dioxide, oxygen,

21

nitrogen and hydrogen sulfide and other gas species. The term

22

includes natural gas from oil fields known as associated gas or

23

casing head gas, natural gas fields known as nonassociated gas,

24

coal beds, shale beds and other formations. The term does not

25

include coal bed methane.

26

"Number of spud unconventional gas wells."  The most recent

27

numerical count of spud unconventional gas wells on the

28

inventory maintained and provided to the commission by the

29

department as of the last day of each month.

30

"Population."  As follows:

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1

(1)  Population of the Commonwealth and population of a

2

county shall be determined using the United States Census

3

Bureau's most recently released Annual Estimates of the

4

Resident Population for Counties of Pennsylvania.

5

(2)  Population of a municipality shall be determined

6

using the United States Census Bureau's most recently

7

released Annual Estimates for the Resident Population for

8

Incorporated Places in Pennsylvania.

9

(3)  Population of municipalities not included in the

10

report referenced under paragraph (2) shall be determined

11

using the United States Census Bureau's most recently

12

released Annual Estimates of the Resident Population for

13

Minor Civil Divisions in Pennsylvania.

14

"Producer."  A person or its subsidiary, affiliate or holding

15

company that holds a permit or other authorization to engage in

16

the business of severing natural gas for sale, profit or

17

commercial use from an unconventional gas well in this

18

Commonwealth. The term shall not include a producer that severs

19

natural gas from a site used to store natural gas that did not

20

originate from the site.

21

"Spud."  The actual start of drilling of an unconventional

22

gas well.

23

"Stripper well."  An unconventional gas well incapable of

24

producing more than 90,000 cubic feet of gas per day during any

25

calendar month, including production from all zones and

26

multilateral well bores at a single well, without regard to

27

whether the production is separately metered.

28

"Unconventional formation."  A geological shale formation

29

existing below the base of the Elk Sandstone or its geologic

30

equivalent stratigraphic interval where natural gas generally

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1

cannot be produced at economic flow rates or in economic volumes

2

except by vertical or horizontal well bores stimulated by

3

hydraulic fracture treatments or by using multilateral well

4

bores or other techniques to expose more of the formation to the

5

well bore.

6

"Unconventional gas well."  A bore hole drilled or being

7

drilled for the purpose of or to be used for the production of

8

natural gas from an unconventional formation.

9

"Vertical gas well."  An unconventional gas well which

10

utilizes hydraulic fracture treatment through a single vertical

11

well bore and produces natural gas in quantities greater than

12

that of a stripper well.

13

§ 2302.  Unconventional gas well fee.

14

(a)  General rule.--The governing body of a county that has a

15

spud unconventional gas well located within its borders may

16

elect whether to impose a fee on unconventional gas wells that

17

have been spud in the county.

18

(a.1)  Passage of ordinance.--Within 60 days after the

19

effective date of this section, the governing body of a county

20

under subsection (a) may adopt an ordinance to impose an

21

unconventional gas well fee. The governing body of a county must

22

notify the commission and give public notice of its intent to

23

adopt the ordinance.

24

(a.2)  County ordinance.--The ordinance imposing a fee under

25

subsection (a.1) shall be clear and in language that is readily

26

understandable by a layperson and shall be in the following

27

form:

28

The county of (insert name) hereby imposes an unconventional

29

gas well fee on each unconventional gas well spud in this

30

county.

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1

(a.3)  Prohibition.--

2

(1)  A county subject to this section, in which the

3

governing body does not adopt an ordinance imposing an

4

unconventional gas well fee within 60 days of the effective

5

date of this section shall be prohibited from receiving funds

6

under sections 2314(d)(1) (relating to distribution of fee)

7

and 2315(a.1)(3) and (5) (relating to Statewide initiatives).

8

(2)  The prohibition on receiving funds shall remain in

9

effect until the county adopts an ordinance imposing an

10

unconventional gas well fee. The prohibition shall expire and

11

funds may be received for the calendar year following the

12

adoption of an ordinance imposing the fee under this section.

13

(a.4)  Alternate imposition.--

14

(1)  If the governing body of a county does not impose an

15

unconventional gas well fee under subsection (a), the

16

municipalities in the county may compel the imposition of an

17

unconventional gas well fee on each unconventional gas well

18

spud in the county by adopting resolutions under paragraphs

19

(2), (3) and (4).

20

(2)  Following 60 days but not more than 120 days after

21

the effective date of this section, if the governing bodies

22

of at least half of the municipalities located in a county or

23

municipalities representing at least 50% of the population of

24

the county adopt resolutions to impose unconventional gas

25

well fees on all unconventional gas wells spud in the county,

26

the fee shall take effect. If a resolution is adopted, a copy

27

of the resolution shall be transmitted to the governing body

28

of the county and the commission. The governing body of a

29

municipality that is located in more than one county shall

30

transmit a copy of a resolution adopted under this paragraph

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1

to the governing body of each county in which the

2

municipality is located.

3

(3)  The transmittal of resolutions by governing bodies

4

under paragraph (2) shall constitute an imposition of the fee

5

in that county. The population of a municipality that is

6

located in more than one county shall be determined

7

separately for each county on the basis of the municipality's

8

population within each county.

9

(4)  Resolutions adopted under this subsection must be

10

framed in the following form:

11

The (insert name) in the county of (insert name) hereby

12

resolves to have the county impose an unconventional gas

13

well fee on each unconventional gas well spud in the

14

county.

15

(5)  A municipality which is located in a county that

16

does not adopt an ordinance imposing an unconventional gas

17

well fee and which does not adopt a resolution under

18

paragraphs (2), (3) and (4) shall be prohibited from

19

receiving funds under section 2314(d).

20

(b)  Components.--The fee adopted under subsection (a), (a.1)

21

or (a.4) is imposed on every producer and shall apply to

22

unconventional gas wells spud in this Commonwealth regardless of

23

when spudding occurred. Unconventional gas wells spud before

24

the fee is imposed shall be considered to be spud in the

25

calendar year prior to the imposition of the fee for purposes of

26

determining the fee under this subsection. Prior to adjustment

27

under subsection (c), the fee for each unconventional gas well

28

shall be determined as follows:

29

(1)  Year one:

30

(i)  If the average annual price of natural gas is

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1

not more than $2.25, the fee shall be $40,000 for the

2

calendar year in which the unconventional gas well is

3

spud.

4

(ii)  If the average annual price of natural gas is

5

greater than $2.25 and less than $3.00, the fee shall be

6

$45,000 for the calendar year in which the unconventional

7

gas well is spud.

8

(iii)  If the average annual price of natural gas is

9

greater than $2.99 and less than $5.00, the fee shall be

10

$50,000 for the calendar year in which the unconventional

11

gas well is spud.

12

(iv)  If the average annual price of natural gas is

13

greater than $4.99 and less than $6.00, the fee shall be

14

$55,000 for the calendar year in which the unconventional

15

gas well is spud.

16

(v)  If the average annual price of natural gas is

17

more than $5.99, the fee shall be $60,000 for the

18

calendar year in which the unconventional gas well is

19

spud.

20

(2)  Year two:

21

(i)  If the average annual price of natural gas is

22

not more than $2.25, the fee shall be $30,000 for the

23

calendar year following the year in which the

24

unconventional gas well is spud.

25

(ii)  If the average annual price of natural gas is

26

greater than $2.25 and less than $3.00, the fee shall be

27

$35,000 for the calendar year following the year in which

28

the unconventional gas well is spud.

29

(iii)  If the average annual price of natural gas is

30

greater than $2.99 and less than $5.00, the fee shall be

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1

$40,000 for the calendar year following the year in which

2

the unconventional gas well is spud.

3

(iv)  If the average annual price of natural gas is

4

greater than $4.99 and less than $6.00, the fee shall be

5

$45,000 for the calendar year following the year in which

6

the unconventional gas well is spud.

7

(v)  If the average annual price of natural gas is

8

more than $5.99, the fee shall be $55,000 for the

9

calendar year following the year in which the

10

unconventional gas well is spud.

11

(3)  Year three:

12

(i)  If the average annual price of natural gas is

13

not more than $2.25, the fee shall be $25,000 for the

14

second calendar year following the year in which the

15

unconventional gas well is spud.

16

(ii)  If the average annual price of natural gas is

17

greater than $2.25 and less than $3.00, the fee shall be

18

$30,000 for the second calendar year following the year

19

in which the unconventional gas well is spud.

20

(iii)  If the average annual price of natural gas is

21

greater than $2.99 and less than $5.00, the fee shall be

22

$30,000 for the second calendar year following the year

23

in which the unconventional gas well is spud.

24

(iv)  If the average annual price of natural gas is

25

greater than $4.99 and less than $6.00, the fee shall be

26

$40,000 for the second calendar year following the year

27

in which the unconventional gas well is spud.

28

(v)  If the average annual price of natural gas is

29

more than $5.99, the fee shall be $50,000 for the second

30

calendar year following the year in which the

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1

unconventional gas well is spud.

2

(4)  Years 4, 5, 6, 7, 8, 9 and 10:

3

(i)  If the average annual price of natural gas is

4

not more than $2.25, the fee shall be $10,000 for the

5

third through ninth calendar years following the year in

6

which the unconventional gas well is spud.

7

(ii)  If the average annual price of natural gas is

8

greater than $2.25 and less than $3.00, the fee shall be

9

$15,000 for the third through ninth calendar years

10

following the year in which the unconventional gas well

11

is spud.

12

(iii)  If the average annual price of natural gas is

13

greater than $2.99, the fee shall be $20,000 for the

14

third through ninth calendar years following the year in

15

which the unconventional gas well is spud.

16

(5)  Years 11, 12, 13, 14 and 15:

17

(i)  If the average annual price of natural gas is

18

less than $3.00, the fee shall be $5,000 for the 10th

19

through 14th calendar years following the year in which

20

the unconventional well is spud.

21

(ii)  If the average annual price of natural gas is

22

greater than $2.99, the fee shall be $10,000 for the 10th

23

through 14th calendar years following the year in which

24

the unconventional well is spud.

25

(6)  For purposes of this subsection, the fee shall be

26

determined using the average annual price of natural gas for

27

the calendar year in which the fee is imposed.

28

(b.1)  Nonproducing unconventional gas wells.--If a spud

29

unconventional gas well begins paying the fee imposed under this

30

section and is subsequently capped or does not produce natural

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1

gas in quantities greater than that of a stripper well within

2

two years after paying the initial fee, then the fee shall be

3

suspended:

4

(1)  The fee shall be reinstated for a calendar year

5

during which the unconventional gas well produces natural gas

6

in quantities greater than that of a stripper well.

7

(2)  Each calendar year during which a fee is suspended

8

shall not be considered a calendar year following spud for

9

purposes of determining the amount of the fee under

10

subsection (b).

11

(c)  Annual adjustment.--Beginning January 1, 2013, the

12

commission shall annually adjust the fee amounts under

13

subsection (b) to reflect any upward changes in the Consumer

14

Price Index for all Urban Consumers for the Pennsylvania, New

15

Jersey, Delaware and Maryland area in the preceding 12 months

16

and shall immediately submit the adjusted fee amount to the

17

Legislative Reference Bureau for publication as a notice in the

18

Pennsylvania Bulletin. The fee shall be adjusted by multiplying

19

the annual fee amount by any percentage increase to the Consumer

20

Price Index for all Urban Consumers for the Pennsylvania, New

21

Jersey, Delaware and Maryland area, rounded to the nearest $100.

22

The resultant product shall be added to the fee amount and the

23

sum shall become the new annual fee amount under subsection (b).

24

The annual adjustment under this subsection shall take effect if

25

the total number of unconventional gas wells spud in the

26

adjustment year exceeds the total number of unconventional gas

27

wells spud in the prior year.

28

(d)  Restimulated unconventional gas wells.--

29

(1)  An unconventional gas well which after restimulation

30

qualifies as a stripper well shall not be subject to this

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1

subsection.

2

(2)  The year in which the restimulation occurs shall be

3

considered the first year of spudding for purposes of

4

imposing the fee under this section if:

5

(i)  a producer restimulates a previously stimulated

6

unconventional gas well following the tenth year after

7

being spud by:

8

(A)  hydraulic fracture treatments;

9

(B)  using additional multilateral well bores;

10

(C)  drilling deeper into an unconventional

11

formation; or

12

(D)  other techniques to expose more of the

13

formation to the well bore; and

14

(ii)  the restimulation results in a substantial

15

increase in production.

16

(3)  As used in this subsection, the term "substantial

17

increase in production" means an increase in production

18

amounting to more than 90,000 cubic feet of gas per day

19

during a calendar month.

20

(e)  Cessation.--Payments of the fee shall cease upon

21

certification to the department by the producer that the

22

unconventional gas well has ceased production and has been

23

plugged according to the regulations established by the

24

department.

25

(f)  Vertical unconventional gas well fee.--The fee for a

26

vertical unconventional gas well shall be 20% of the fee

27

established in subsections (b) and (c), except that the fee

28

under subsection (b)(5) shall not apply.

29

§ 2303.  Administration.

30

(a)  Fee due date.--

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1

(1)  Except as provided under paragraph (2), the fee

2

imposed under this chapter shall be due by April 1, 2013, and

3

each April 1 thereafter. The fee shall become delinquent if

4

not remitted to the commission on the reporting date.

5

(2)  For wells spud before January 1, 2012, a fee imposed

6

under this chapter shall be due by September 1, 2012.

7

(b)  Report.--By September 1, 2012, and April 1 of each year

8

thereafter, each producer shall submit payment of the fee to the

9

commission and a report on a form prescribed by the commission

10

for the previous calendar year. The report shall include the

11

following:

12

(1)  The number of spud unconventional gas wells of a

13

producer in each municipality within each county that has

14

imposed a fee under this chapter.

15

(2)  The date that each unconventional gas well

16

identified under paragraph (1) was spud or ceased the

17

production of natural gas.

18

(c)  Costs of commission.--

19

(1)  The commission may impose an annual administrative

20

charge not to exceed $50 per spud unconventional gas well on

21

each producer, to be paid with the submission under

22

subsection (a), to pay for the actual costs of the commission

23

to administer and enforce this chapter.

24

(2)  Within 30 days of the effective date of this

25

subsection the commission shall estimate its expenditures

26

through June 30, 2012, that will be directly attributable to

27

the administration and enforcement of this chapter. The

28

commission shall subtract the amount of the administrative

29

charges imposed under paragraph (1) and assess any remaining

30

balance on all producers subject to the administrative charge

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1

in proportion to the number of wells owned by each producer.

2

Producers shall pay the assessments within 30 days of receipt

3

of notice from the commission. The amount of the assessment

4

may be challenged by a producer consistent with 66 Pa.C.S. §

5

510(c), (d) and (e) (relating to assessment for regulatory

6

expenses upon public utilities). Any collections that exceed

7

any of the following shall be used to offset the

8

administrative charges or other funds received for fiscal

9

year 2012-2013:

10

(i)  The budget amount approved by the General

11

Assembly and the Governor for administration and

12

enforcement of this chapter and Chapter 33 (relating to

13

local ordinances relating to oil and gas operations).

14

(ii)  The actual expenditures directly attributable

15

to the administration and enforcement of this chapter and

16

Chapter 33.

17

(3)  By June 30, 2012, and each June 30 thereafter, the

18

commission shall estimate its expenditures for the next

19

fiscal year that will be directly attributable to the

20

administration and enforcement of this chapter. After

21

subtracting any annual administrative charges imposed under

22

paragraph (1), amounts received by the commission under

23

section 2314(c.1)(2) (relating to distribution of fee) and

24

any amounts collected during the prior fiscal year that

25

exceeded actual expenditures directly attributable to the

26

administration and enforcement of this chapter, the

27

commission shall assess the remaining balance on all

28

producers subject to the unconventional gas well fee in

29

proportion to the number of wells owned by each producer.

30

Producers shall pay the assessments within 30 days of the

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1

receipt of notice from the commission. The amount of the

2

assessment may be challenged by a producer consistent with 66

3

Pa.C.S. § 510(c), (d) and (e). Any collections that exceed

4

any of the following shall be used to offset administrative

5

charges or assessments for the next fiscal year:

6

(i)  The budget amount approved by the General

7

Assembly and the Governor for administration and

8

enforcement of this chapter and Chapter 33.

9

(ii)  Actual expenditures directly attributable to

10

the administration and enforcement of this chapter and

11

Chapter 33.

12

§ 2304.  Well information.

13

(a)  List.--Within 14 days of the effective date of this

14

section, the department shall provide the commission and, upon

15

request, a county, with a list of all spud unconventional gas

16

wells from the department. The department shall update the list

17

and provide it to the commission on a monthly basis.

18

(b)  Updates.--A producer subject to the fee shall notify the

19

commission of the following within 30 days after a calendar

20

month in which the change occurs:

21

(1)  The spudding of an unconventional gas well.

22

(1.1)  The initiation of production at an unconventional

23

gas well.

24

(2)  The removal of an unconventional gas well from

25

production.

26

§ 2305.  Duties of department.

27

(a)  Confirmation of payment.--Prior to issuing a permit to

28

drill an unconventional gas well in this Commonwealth, the

29

department shall determine whether the producer has paid all

30

fees owed for an existing unconventional gas well under section

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1

2302 (relating to unconventional gas well fee).

2

(b)  Prohibition.--The department shall not issue a permit to

3

drill an unconventional gas well until all unconventional gas

4

well fees owed under section 2302 that are not in dispute have

5

been paid to the commission.

6

(c)  Payment of fees.--The commission shall provide the

7

department with information necessary to determine that the

8

producer has paid all unconventional gas well fees owed for an

9

unconventional gas well under section 2302.

10

§ 2306.  (Reserved).

11

§ 2307.  Commission.

12

(a)  Powers.--The commission shall have the authority to make

13

all inquiries and determinations necessary to calculate and

14

collect the fee, administrative charges or assessments imposed

15

under this chapter, including, if applicable, interest and

16

penalties.

17

(b)  Notice.--If the commission determines that the

18

unconventional gas well fee has not been paid in full, it may

19

issue a notice of the amount due and demand for payment and

20

shall set forth the basis for the determination.

21

(c)  Address.--Notice of failure to pay the correct fee shall

22

be sent to the producer via certified mail.

23

(d)  Time period.--Except as set forth in subsection (e), the

24

commission may challenge the amount of a fee paid within three

25

years after the date the report under section 2303(b) (relating

26

to administration) is filed.

27

(e)  Intent.--If no report is filed or a producer files a

28

false or fraudulent report with the intent to evade the fee, an

29

assessment of the amount owed may be made at any time.

30

§ 2308.  Enforcement.

- 18 -

 


1

(a)  Assessment.--The commission shall assess interest on any

2

delinquent fee at the rate determined under section 2307(a)

3

(relating to commission).

4

(b)  Penalty.--In addition to the assessed interest under

5

subsection (a), if a producer fails to make timely payment of

6

the fee, there shall be added to the amount of the fee due a

7

penalty of 5% of the amount of the fee if failure to file a

8

timely payment is for not more than one month, with an

9

additional 5% penalty for each additional month, or fraction of

10

a month, during which the failure continues, not to exceed 25%

11

in the aggregate.

12

(c)  Timely payment.--If the commission determines that a

13

producer has not made a timely payment of the fee, the

14

commission shall send written notice of the amount of the

15

deficiency to the producer within 30 days from the date of

16

determining the deficiency. The commission shall notify the

17

department of a producer that has failed to pay the fee for any

18

unconventional gas well under section 2302 (relating to

19

unconventional gas well fee). If the producer does not have a

20

pending appeal related to payment of the fee in process, the

21

department shall suspend the permit for that well until the fee

22

has been paid.

23

(d)  Remedies.--The remedies provided under this chapter are

24

in addition to any other remedies provided by law or in equity.

25

(e)  Lien.--Fines, fees, interest and penalties shall be

26

collectible as authorized by law for the collection of debts. If

27

the producer liable to pay an amount neglects or refuses to pay

28

the amount after demand, the amount, together with costs, shall

29

be a judgment in favor of the Commonwealth upon the property of

30

the producer, but only after the judgment has been entered,

- 19 -

 


1

docketed and recorded by the prothonotary of the county where

2

the property is situated. The Commonwealth shall transmit to the

3

prothonotaries of the respective counties certified copies of

4

the judgments. Each prothonotary shall enter, docket and record

5

the record in the prothonotary's office and index each judgment,

6

without requiring the payment of costs as a condition precedent

7

to the entry of the judgment.

8

§ 2309.  Enforcement orders.

9

(a)  Issuance.--The commission may issue an order as

10

necessary to enforce this chapter. An order issued under this

11

section shall take effect upon notice, unless the order

12

specifies otherwise. A person aggrieved by an order under this

13

section may appeal to the Commonwealth Court under 42 Pa.C.S. §

14

763 (relating to direct appeals from government agencies).

15

(b)  Compliance.--A producer has the duty to comply with an

16

order issued under subsection (a). If a producer fails to

17

proceed diligently to comply with an order within the time

18

required, the producer shall be guilty of contempt and shall be

19

punished by the court in an appropriate manner. The commission

20

shall apply to the Commonwealth Court, which shall have

21

jurisdiction over matters relating to contempt.

22

§ 2310.  Administrative penalties.

23

(a)  Civil penalties.--In addition to any other proceeding

24

authorized by law, the commission may assess a civil penalty not

25

to exceed $2,500 per violation upon a producer for the violation

26

of this chapter. In determining the amount of the penalty, the

27

commission shall consider the willfulness of the violation and

28

other relevant factors.

29

(b)  Separate offense.--Each violation for each separate day

30

and each violation of this chapter shall constitute a separate

- 20 -

 


1

offense.

2

(c)  Limitation of actions.--Notwithstanding any limitation

3

in 42 Pa.C.S. Ch. 55 Subch. B (relating to civil actions and

4

proceedings) an action under this section must be brought within

5

three years of the violation.

6

(d)  Procedure.--A penalty under this chapter is subject to

7

66 Pa.C.S. Ch. 3 Subch. B (relating to investigations and

8

hearings).

9

§ 2311.  (Reserved).

10

§ 2312.  Recordkeeping.

11

A producer liable for the fee under this chapter shall keep

12

records, make reports and comply with regulations of the

13

commission. The commission may require a producer to make

14

reports, render statements or keep records as the commission

15

deems sufficient to determine liability for the fee.

16

§ 2313.  Examinations.

17

(a)  Access.--The commission or its authorized agents or

18

representatives shall:

19

(1)  Have access to the relevant books, papers and

20

records of any producer in order to verify the accuracy and

21

completeness of a report filed or fee paid under this

22

chapter.

23

(2)  Require the preservation of all relevant books,

24

papers and records for an appropriate period not to exceed

25

three years from the end of the calendar year to which the

26

records relate.

27

(3)  Examine any employee of a producer under oath

28

concerning the severing of natural gas subject to a fee or

29

any matter relating to the enforcement of this chapter.

30

(4)  Compel the production of relevant books, papers and

- 21 -

 


1

records and the attendance of all individuals who the

2

commission believes to have knowledge of relevant matters in

3

accordance with 66 Pa.C.S. (relating to public utilities).

4

(b)  Unauthorized disclosure.--Any information obtained by

5

the commission as a result of any report, examination,

6

investigation or hearing under this chapter shall be

7

confidential and shall not be disclosed, except for official

8

purposes, in accordance with judicial order or as otherwise

9

provided by law. A commissioner or an employee of the commission

10

who without authorization divulges confidential information

11

shall be subject to disciplinary action by the commission.

12

§ 2314.  Distribution of fee.

13

(a)  Establishment.--There is established a fund in the State

14

Treasury to be known as the Unconventional Gas Well Fund to be

15

administered by the commission.

16

(b)  Deposit.--All fees imposed and collected under this

17

chapter shall be deposited into the fund and are hereby

18

appropriated for the purpose set forth in this section.

19

(c)  Conservation districts.--

20

(1)  From fees collected for 2011, $2,500,000 from the

21

fund shall be distributed to county conservation districts.

22

(2)  From fees collected for 2012, $5,000,000 from the

23

fund shall be distributed to county conservation districts.

24

(3)  From fees collected for 2013, and each year

25

thereafter, $7,500,000 from the fund shall be distributed to

26

county conservation districts.

27

(4)  Beginning July 1, 2014, each July 1 thereafter, the

28

amount distributed under paragraph (3) shall be increased by

29

any percentage increase in the Consumer Price Index for All

30

Urban Consumers for the most recent 12-month period for which

- 22 -

 


1

figures have been officially reported by the Bureau of Labor

2

Statistics immediately prior to July 1.

3

(5)  Funds under paragraphs (1), (2) and (3) shall be

4

distributed in accordance with the following:

5

(i)  One-half shall be distributed by dividing the

6

amount equally among conservation districts for any use

7

consistent with the act of May 15, 1945 (P.L.547,

8

No.217), known as the Conservation District Law.

9

(ii)  One-half shall be distributed by the State

10

Conservation Commission in a manner consistent with the

11

Conservation District Law and the provisions of the State

12

Conservation Commission's Conservation District Fund

13

Allocation Program—Statement of Policy under 25 Pa. Code

14

Ch. 83 Subch. B (relating to Conservation District Fund

15

Allocation Program—Statement of Policy).

16

(c.1)  Additional distributions.--From fees collected under

17

this chapter and deposited in the fund for 2011 and each year

18

thereafter:

19

(1)  $1,000,000 shall be distributed to the Pennsylvania

20

Fish and Boat Commission for costs relating to the review of

21

applications for permits to drill unconventional gas wells.

22

(2)  $1,000,000 shall be distributed to the Public

23

Utility Commission for costs to administer this chapter and

24

Chapter 33 (relating to local ordinances relating to oil and

25

gas operations).

26

(3)  $6,000,000 to the department for the administration

27

of this act and the enforcement of acts relating to clean air

28

and clean water.

29

(4)  $750,000 to the Pennsylvania Emergency Management

30

Agency for emergency response planning, training and

- 23 -

 


1

coordination related to natural gas production from

2

unconventional gas wells.

3

(5)  $750,000 to the Office of State Fire Commissioner

4

for the development, delivery and sustainment of training and

5

grant programs for first responders and the acquisition of

6

specialized equipment for response to emergencies relating to

7

natural gas production from unconventional gas wells.

8

(6)  $1,000,000 to the Department of Transportation for

9

rail freight assistance.

10

(c.2)  Natural gas energy development.--Following

11

distributions from the fund under subsections (c) and (c.1), the

12

following amounts shall be deposited into the Marcellus Legacy

13

Fund for distribution to the department for the Natural Gas

14

Energy Development Program under Chapter 27 (relating to Natural

15

Gas Energy Development Program):

16

(1)  For 2011, $10,000,000.

17

(2)  For 2012, $7,500,000.

18

(3)  For 2013, $2,500,000.

19

(c.3)  Report.--All agencies or organizations receiving funds

20

under subsections (c), (c.1) and (c.2) shall submit a report by

21

December 31, 2012, and December 31 of each year thereafter to

22

the Secretary of the Budget and the Appropriations Committee of

23

the Senate and the Appropriations Committee of the House of

24

Representatives. The report shall include an itemization and

25

explanation of the use of all funds received under subsections

26

(c), (c.1) and (c.2).

27

(d)  Distribution.--Except as provided in section 2302(a.3)

28

and (a.4) (relating to unconventional gas well fee), following

29

fee distribution under subsections (c), (c.1) and (c.2), from

30

fees collected for 2011 and each year thereafter, 60% of the

- 24 -

 


1

revenue remaining in the fund from fees collected for the prior

2

year are hereby appropriated to counties and municipalities for

3

purposes authorized under subsection (g). Counties and

4

municipalities are encouraged, where appropriate, to jointly

5

fund projects that cross jurisdictional lines. The commission,

6

after making a disbursement under subsection (f), shall

7

distribute the remaining funds appropriated as follows within

8

three months after the date the fee is due:

9

(1)  Except as provided in section 2302(a.3), 36% shall

10

be distributed to counties in which spud unconventional gas

11

wells are located. The amount for each county to which funds

12

will be distributed shall be determined using a formula that

13

divides the number of spud unconventional gas wells in the

14

county by the number of spud unconventional gas wells in this

15

Commonwealth and multiplies the resulting percentage by the

16

amount available for distribution under this paragraph.

17

(2)  Except as provided in section 2302(a.4), 37% shall

18

be distributed to municipalities in which spud unconventional

19

gas wells are located. The amount for each municipality to

20

which funds will be distributed shall be determined using a

21

formula that divides the number of spud unconventional gas

22

wells in the municipality by the number of  spud

23

unconventional gas wells in this Commonwealth and multiplies

24

the resulting percentage by the amount available for

25

distribution under this paragraph.

26

(3)  Except as provided in section 2302(a.4), 27% shall

27

be distributed to municipalities located in a county in which

28

spud unconventional gas wells are located. The amount

29

available for distribution in each county shall be determined

30

by dividing the number of spud unconventional gas wells in

- 25 -

 


1

the county by the number of spud unconventional gas wells in

2

this Commonwealth and multiplying the resulting percentage by

3

the amount available for distribution under this paragraph.

4

The resulting amount available for distribution in each

5

county in which spud unconventional gas wells are located

6

shall be distributed to each municipality in the county to

7

which funds will be distributed as follows:

8

(i)  Except as provided in section 2302(a.4), 50% of

9

the amount available under this paragraph shall be

10

distributed to municipalities in which spud

11

unconventional gas wells are located and to

12

municipalities that are either contiguous with a

13

municipality in which spud unconventional gas wells are

14

located or are located within five linear miles of a spud

15

unconventional gas well. The distribution shall be made

16

as follows:

17

(A)  One-half shall be distributed to each

18

municipality using a formula that divides the

19

population of the eligible municipality within the

20

county by the total population of all eligible

21

municipalities within the county and multiplies the

22

resulting percentage by the amount allocated to the

23

county under this subparagraph.

24

(B)  One-half shall be distributed to each

25

municipality using a formula that divides the highway

26

mileage of the eligible municipality within the

27

county by the total highway mileage of all eligible

28

municipalities within the county and multiplies the

29

resulting percentage by the amount allocated to the

30

county under this subparagraph.

- 26 -

 


1

(ii)  Except as provided in section 2302(a.4), 50% of

2

the amount available under this paragraph shall be

3

distributed to each municipality in the county regardless

4

of whether an unconventional gas well is located in the

5

municipality as follows:

6

(A)  One-half shall be distributed to each

7

municipality using a formula that divides the

8

population of the municipality within the county by

9

the total population of the county and multiplies the

10

resulting percentage by the amount allocated to the

11

county under this subparagraph.

12

(B)  One-half shall be distributed to each

13

municipality using a formula that divides the highway

14

mileage of the municipality within the county by the

15

total highway mileage of the county and multiplies

16

the resulting percentage by the amount allocated to

17

the county under this subparagraph.

18

(e)  Restriction.--The amount allocated to each municipality

19

under subsection (d) shall not exceed the greater of $500,000 or

20

50% of the total budget for the prior fiscal year beginning with

21

the 2010 budget year and continuing every year thereafter,

22

adjusted to reflect any upward changes in the Consumer Price

23

Index for all Urban Consumers for the Pennsylvania, New Jersey,

24

Delaware and Maryland area in the preceding 12 months. Any

25

remaining money shall be retained by the commission and

26

deposited in the Housing Affordability and Rehabilitation

27

Enhancement Fund for the uses specified under subsection (f).

28

(f)  Housing Affordability and Rehabilitation Enhancement

29

Fund.--

30

(1)  From fees collected for 2011, $2,500,000 from the

- 27 -

 


1

fund shall be distributed to the Housing Affordability and

2

Rehabilitation Enhancement Fund under the act of November 23,

3

2010 (P.L.1035, No.105), entitled "An act amending the act of

4

December 3, 1959 (P.L.1688, No.621), entitled, as amended,

5

'An act to promote the health, safety and welfare of the

6

people of the Commonwealth by broadening the market for

7

housing for persons and families of low and moderate income

8

and alleviating shortages thereof, and by assisting in the

9

provision of housing for elderly persons through the creation

10

of the Pennsylvania Housing Finance Agency as a public

11

corporation and government instrumentality; providing for the

12

organization, membership and administration of the agency,

13

prescribing its general powers and duties and the manner in

14

which its funds are kept and audited, empowering the agency

15

to make housing loans to qualified mortgagors upon the

16

security of insured and uninsured mortgages, defining

17

qualified mortgagors and providing for priorities among

18

tenants in certain instances, prescribing interest rates and

19

other terms of housing loans, permitting the agency to

20

acquire real or personal property, permitting the agency to

21

make agreements with financial institutions and Federal

22

agencies, providing for the purchase by persons of low and

23

moderate income of housing units, and approving the sale of

24

housing units, permitting the agency to sell housing loans,

25

providing for the promulgation of regulations and forms by

26

the agency, prescribing penalties for furnishing false

27

information, empowering the agency to borrow money upon its

28

own credit by the issuance and sale of bonds and notes and by

29

giving security therefor, permitting the refunding,

30

redemption and purchase of such obligations by the agency,

- 28 -

 


1

prescribing remedies of holders of such bonds and notes,

2

exempting bonds and notes of the agency, the income

3

therefrom, and the income and revenues of the agency from

4

taxation, except transfer, death and gift taxes; making such

5

bonds and notes legal investments for certain purposes; and

6

indicating how the act shall become effective,' providing for

7

the Pennsylvania Housing Affordability and Rehabilitation

8

Enhancement Program; and establishing the Housing

9

Affordability and Rehabilitation Enhancement Fund." From fees

10

collected for 2012, and each year thereafter, $5,000,000

11

shall be annually distributed to the Housing Affordability

12

and Rehabilitation Enhancement Fund.

13

(2)  Funds under paragraph (1) shall be used for the

14

following purposes:

15

(i)  To provide support to projects in a county in

16

which producing unconventional gas wells are located that

17

increase availability of quality, safe, affordable

18

housing for low-income and moderate-income individuals or

19

families, persons with disabilities or elderly persons.

20

(ii)  To provide rental assistance in a county in

21

which producing unconventional gas wells are located to

22

persons or families whose household income does not

23

exceed the area median income.

24

(3)  No less than 50% of the funds available under this

25

subsection shall be used in fifth, sixth, seventh and eighth

26

class counties.

27

(g)  Use of funds.--A county or municipality receiving funds

28

under subsection (d) shall use the funds received only for the

29

following purposes associated with natural gas production from

30

unconventional gas wells within the county or municipality:

- 29 -

 


1

(1)  Construction, reconstruction, maintenance and repair

2

of roadways, bridges and public infrastructure.

3

(2)  Water, storm water and sewer systems, including

4

construction, reconstruction, maintenance and repair.

5

(3)  Emergency preparedness and public safety, including

6

law enforcement and fire services, hazardous material

7

response, 911, equipment acquisition and other services.

8

(4)  Environmental programs, including trails, parks and

9

recreation, open space, flood plain management, conservation

10

districts and agricultural preservation.

11

(5)  Preservation and reclamation of surface and

12

subsurface waters and water supplies.

13

(6)  Tax reductions, including homestead exclusions.

14

(7)  Projects to increase the availability of safe and

15

affordable housing to residents.

16

(8)  Records management, geographic information systems

17

and information technology.

18

(9)  The delivery of social services.

19

(10)  Judicial services.

20

(11)  For deposit into the county or municipality's

21

capital reserve fund if the funds are used solely for a

22

purpose set forth in this subsection.

23

(12)  Career and technical centers for training of

24

workers in the oil and gas industry.

25

(13)  Local or regional planning initiatives under the

26

act of July 31, 1968 (P.L.805, No.247), known as the

27

Pennsylvania Municipalities Planning Code.

28

(h)  Reporting.--

29

(1)  The commission shall submit an annual report on all

30

funds in the fund. The report shall include a detailed

- 30 -

 


1

listing of all deposits and expenditures of the fund and be

2

submitted to the chairman and the minority chairman of the

3

Appropriations Committee of the Senate, the chairman and the

4

minority chairman of the Environmental Resources and Energy

5

Committee of the Senate, the chairman and the minority

6

chairman of the Appropriations Committee of the House of

7

Representatives and the chairman and the minority chairman of

8

the Environmental Resources and Energy Committee of the House

9

of Representatives. The report shall be submitted by December

10

30, 2012, and by September 30 of each year thereafter.

11

(2)  All counties and municipalities receiving funds from

12

the fund under this section shall submit information to the

13

commission on a form prepared by the commission that sets

14

forth the amount and use of the funds received in the prior

15

calendar year. The form shall set forth that the funds

16

received were committed to a specific project or use as

17

authorized in this section. The reports shall be published

18

annually on the county or municipality's publicly accessible

19

Internet website.

20

(i)  Availability of funds.--Distribution of funds under this

21

section and section 2315 (relating to Statewide initiatives) are

22

contingent on availability of funds in the fund. If sufficient

23

funds are not available, the commission shall disburse funds on

24

a pro rata basis.

25

§ 2315.  Statewide initiatives.

26

(a)  Establishment.--There is established in the State

27

Treasury a fund to be known as the Marcellus Legacy Fund.

28

(a.1)  Deposit and distribution.--Following distribution

29

under section 2314(c), (c.1) and (c.2) (relating to distribution

30

of fee) from fees collected for 2011 and each year thereafter,

- 31 -

 


1

40% of the remaining revenue in the fund shall be deposited into

2

the Marcellus Legacy Fund and appropriated to the commission and

3

distributed within three months after the date the fee is due as

4

follows:

5

(1)  Twenty percent to the Commonwealth Financing

6

Authority for grants to eligible applicants for the

7

following:

8

(i)  Acid mines: damage, abatement and cleanup and

9

mine reclamation, with priority given to projects which

10

recycle and treat water for use in drilling operations.

11

(ii)  Orphan or abandoned oil and gas well plugging.

12

(iii)  Complying with the act of January 24, 1966

13

(1965 P.L.1535, No.537), known as the Pennsylvania Sewage

14

Facilities Act.

15

(iv)  Planning acquisition, development,

16

rehabilitation and repair of greenways, recreational

17

trails, open space, parks and beautification projects.

18

(v)  Programs to establish baseline water quality

19

data on private water supplies.

20

(vi)  Watershed programs and related projects.

21

(vii)  Up to 25% of funds distributed to the

22

Commonwealth Financing Authority under this paragraph may

23

be utilized for flood-control projects.

24

(2)  Ten percent to the Environmental Stewardship Fund.

25

(3)  Twenty-five percent to the Highway Bridge

26

Improvement Restricted Account in the Motor License Fund to

27

counties to be distributed to fund the cost of the

28

replacement or repair of locally owned at-risk deteriorated

29

bridges. Funds shall be distributed to counties

30

proportionately based on the population of the county as

- 32 -

 


1

follows:

2

(i)  In each county, the distribution shall be

3

according to the following formula:

4

(A)  Divide:

5

(I)  the total population of the county; by

6

(II)  the total population of the

7

Commonwealth;

8

(B)  Express the quotient under clause (A) as a

9

percentage.

10

(C)  Multiply:

11

(I)  the percentage under clause (B); by

12

(II)  the amount of money to be distributed

13

under this paragraph.

14

(ii)  Each county shall receive a minimum of $40,000

15

to the extent funds are available.

16

(iii)  The Department of Transportation shall release

17

money under this paragraph upon approval of a plan

18

submitted by a county or municipality to repair an at-

19

risk deteriorated bridge. The plan must include funding

20

for replacement or repair.

21

(iv)  A county of the first or second class may

22

submit a plan to use its funds under this paragraph for

23

at-risk deteriorated bridges owned by a public

24

transportation authority.

25

(4)  Twenty-five percent for water and sewer projects.

26

Fifty percent of the amount distributed under this paragraph

27

shall be transmitted to the Pennsylvania Infrastructure

28

Investment Authority to be used in accordance with the act of

29

March 1, 1988 (P.L.82, No.16), known as the Pennsylvania

30

Infrastructure Investment Authority Act. Fifty percent of the

- 33 -

 


1

amount distributed under this paragraph shall be distributed

2

to the H2O PA program to be used by the Commonwealth

3

Financing Authority in accordance with section 301 of the act

4

of July 9, 2008 (P.L.908, No.63), known as the H2O PA Act.

5

The prohibition on grants for projects located in a city or

6

county of the first or second class under section 301 of the

7

H2O PA Act shall not apply to funds distributed to the H2O PA

8

Program under this paragraph.

9

(5)  Fifteen percent for the planning, acquisition,

10

development, rehabilitation and repair of greenways,

11

recreational trails, open space, natural areas, community

12

conservation and beautification projects, community and

13

heritage parks and water resource management. Funds may be

14

used to acquire lands for recreational or conservation

15

purposes and land damaged or prone to drainage by storms or

16

flooding. Funds shall be distributed to counties

17

proportionately based on the population of the county as

18

follows:

19

(i)  In each county, the distribution shall be

20

according to the following formula:

21

(A)  Divide:

22

(I)  the total population of the county; by

23

(II)  the total population of the

24

Commonwealth.

25

(B)  Express the quotient under clause (A) as a

26

percentage.

27

(C)  Multiply:

28

(I)  the percentage under clause (B); by

29

(II)  the amount of funds available under

30

this paragraph.

- 34 -

 


1

(ii)  Each county shall receive a minimum of $25,000

2

to the extent funds are available.

3

(6)  Five percent for distribution as follows:

4

(i)  From fees collected in 2011, 2012 and 2013, to

5

the Department of Community and Economic Development for

6

projects to provide for the planning, development,

7

remodeling, remediation and construction of projects

8

relating to oil, natural gas or other chemical

9

substances. Projects under this subparagraph may include

10

blending facilities to liquefy or refine natural gas or

11

to convert natural gas to ethane, propane or other

12

substances; facilities to refine oil; or facilities to

13

refine or process oil, heating oil, jet fuel or any other

14

chemical substance. Following 2014, funds not utilized by

15

the Department of Community and Economic Development

16

under this subparagraph shall be deposited in the

17

Hazardous Sites Cleanup Fund.

18

(ii)  After 2013, to the Hazardous Sites Cleanup

19

Fund.

20

(b)  Restriction on use of proceeds.--

21

(1)  Funds distributed under subsection (a.1) shall not

22

be used for the purpose of public relations, outreach not

23

directly related to project implementation, communications,

24

lobbying or litigation.

25

(2)  Funds distributed under subsection (a.1) may not be

26

used by an authorized organization as defined in 27 Pa.C.S. §

27

6103 (relating to definitions) for land acquisition unless

28

the authorized organization has obtained the written consent

29

of the county and municipality in which the land is situated.

30

(c)  Coordination.--The department and the Department of

- 35 -

 


1

Conservation and Natural Resources shall review applications for

2

funding as requested by the Commonwealth Financing Authority and

3

provide recommendations on priority of projects and project

4

approval.

5

§ 2316.  Small business participation.

6

(a)  Requirement.--Producers shall provide maximum

7

practicable contracting opportunities for diverse small

8

businesses, including minority-owned business enterprises,

9

women-owned business enterprises and veteran-owned businesses.

10

(b)  Duties.--Producers shall do all of the following:

11

(1)  Maintain a policy prohibiting discrimination in

12

employment and contracting based on gender, race, creed or

13

color.

14

(2)  Use the database available on the Internet website

15

of the Department of General Services to identify certified

16

diverse small businesses, including minority-owned business

17

enterprises, women-owned business enterprises and veteran-

18

owned businesses, as potential contractors, subcontractors

19

and suppliers for opportunities related to unconventional

20

natural gas extraction.

21

(3)  Respond to the survey under subsection (c) within 90

22

days.

23

(c)  Survey.--Within one year of the effective date of this

24

section, the Department of General Services shall send all

25

producers a survey to report the producers' efforts to provide

26

maximum practicable contracting opportunities related to

27

unconventional natural gas extraction for diverse, small

28

business participation.

29

(d)  Reports.--The Department of General Services shall

30

compile the results and submit an annual report to the State

- 36 -

 


1

Government Committee of the Senate and the State Government

2

Committee of the House of Representatives on the utilization of

3

diverse small business participation related to unconventional

4

natural gas extraction. The report shall be submitted no later

5

than 150 days after the Department of General Services

6

disseminated the survey to producers.

7

(e)  Definition.--As used in this section, the term "diverse

8

small business" means minority-owned business, women-owned

9

business and veteran-owned business as determined by the

10

Department of General Services.

11

§ 2317.  Applicability.

12

The provisions of this chapter shall not negate or limit the

13

responsibilities of any producer under this title, 74 Pa.C.S

14

(relating to transportation) or 75 Pa.C.S. (relating to

15

vehicles).

16

§ 2318.  Expiration.

17

(a)  Notice.--The Secretary of the Commonwealth shall, upon

18

the imposition of a severance tax on unconventional gas wells in

19

this Commonwealth, submit for publication in the Pennsylvania

20

Bulletin notice of the imposition.

21

(b)  Date.--This chapter shall expire on the date of the

22

publication of the notice under subsection (a).

23

CHAPTER 25

24

OIL AND GAS LEASE FUND

25

Sec.

26

2501.  Definitions.

27

2502.  (Reserved).

28

2503.  (Reserved).

29

2504.  Appropriation of money.

30

2505.  Funds.

- 37 -

 


1

§ 2501.  Definitions.

2

The following words and phrases when used in this chapter

3

shall have the meanings given to them in this section unless the

4

context clearly indicates otherwise:

5

"Department."  The Department of Conservation and Natural

6

Resources of the Commonwealth.

7

§ 2502.  (Reserved).

8

§ 2503.  (Reserved).

9

§ 2504.  Appropriation of money.

10

Money in the Oil and Gas Lease Fund is specifically

11

appropriated as provided in this chapter.

12

§ 2505.  Funds.

13

(a)  Priority.--Funds appropriated from the Oil and Gas Lease

14

Fund to the department under the act of April 9, 1929 (P.L.343,

15

No.176), known as The Fiscal Code, or other appropriation act

16

shall be distributed prior to allocations under subsection (b).

17

(b)  Allocations.--Money in the Oil and Gas Lease Fund shall

18

be allocated on an annual basis as follows:

19

(1)  The following amounts shall be transferred from the

20

Oil and Gas Lease Fund to the Marcellus Legacy Fund for

21

distribution to the Environmental Stewardship Fund:

22

(i)  For 2013, $20,000,000.

23

(ii)  For 2014 and each year thereafter, $35,000,000.

24

(2)  The following amounts shall be transferred from the

25

Oil and Gas Lease Fund to the Marcellus Legacy Fund for

26

distribution to the Hazardous Sites Cleanup Fund:

27

(i)  For 2015, $5,000,000.

28

(ii)  For 2016 and each year thereafter, $15,000,000.

29

CHAPTER 27

30

NATURAL GAS ENERGY

- 38 -

 


1

DEVELOPMENT PROGRAM

2

Sec.

3

2701.  Definitions.

4

2702.  Assistance.

5

2703.  Program.

6

2704.  Expiration.

7

§ 2701.  Definitions.

8

The following words and phrases when used in this chapter

9

shall have the meanings given to them in this section unless the

10

context clearly indicates otherwise:

11

"Bi-fuel vehicle."  A motor vehicle equipped to be propelled

12

in part by compressed natural gas fuel and in part by diesel or

13

gasoline fuel.

14

"Company."  An entity doing business in this Commonwealth

15

which is subject to tax under Article III, IV or VI of the act

16

of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

17

1971.

18

"Dedicated compressed natural gas vehicle."  A motor vehicle

19

that is produced by an original equipment manufacturer and

20

operates on 100% compressed natural gas fuel.

21

"Dedicated liquefied natural gas vehicle."  A motor vehicle

22

that is produced by an original equipment manufacturer and

23

operates on 90% or more liquefied natural gas fuel and 10% or

24

less on gasoline or diesel fuel.

25

"Department."  The Department of Environmental Protection of

26

the Commonwealth.

27

"Eligible applicant."  Any of the following:

28

(1)  A Commonwealth authority.

29

(2)  A municipal authority.

30

(3)  The Pennsylvania Turnpike Commission.

- 39 -

 


1

(4)  A local transportation organization.

2

(5)  A nonprofit entity.

3

(6)  A State-owned or State-related university.

4

(7)  A company.

5

"Eligible vehicles."  The following shall constitute an

6

eligible vehicle under this chapter:

7

(1)  Dedicated compressed natural gas vehicles that are

8

fleet vehicles and have a gross vehicle weight rating of at

9

least 14,000 pounds.

10

(2)  Dedicated liquefied natural gas vehicles that are

11

fleet vehicles and have a gross vehicle weight rating of at

12

least 14,000 pounds.

13

(3)  Bi-fuel vehicles that are fleet vehicles.

14

"Fleet vehicle."  A vehicle registered to an eligible

15

applicant.

16

"Incremental purchase cost."  The excess cost of a dedicated

17

compressed natural gas vehicle, a dedicated liquefied natural

18

gas vehicle or a bi-fuel vehicle over the price for a gasoline

19

or diesel fuel motor vehicle of a similar model. The term

20

includes the cost to retrofit a vehicle to operate as a

21

dedicated compressed natural gas vehicle, a dedicated liquefied

22

natural gas vehicle or a bi-fuel vehicle.

23

"Local transportation organization."  Any of the following:

24

(1)  A political subdivision.

25

(2)  A public transportation authority, port authority or

26

redevelopment authority, which is:

27

(i)  organized under:

28

(A)  the laws of this Commonwealth; or

29

(B)  an interstate compact; or

30

(ii)  empowered to render, contract to render or

- 40 -

 


1

assist in rendering transportation services in a limited

2

area in this Commonwealth even though it may also render

3

or assist in rendering transportation service in adjacent

4

states.

5

(3)  A nonprofit entity which directly or indirectly

6

provides public transportation service.

7

(4)  A nonprofit entity of public transportation

8

providers operating within this Commonwealth.

9

"Original equipment manufacturer" or "OEM."  The entity which

10

originally manufactures the natural gas engine or the vehicle

11

for sale.

12

"Start date."  The date on which an eligible applicant first

13

places in service, through purchase or contract, a new or

14

retrofitted new natural gas vehicle.

15

§ 2702.  Assistance.

16

(a)  Funding.--Grants under this chapter shall be made from

17

amounts deposited in the Marcellus Legacy Fund under section

18

2314(c.2) (relating to distribution of fee).

19

(b)  Grants.--

20

(1)  For fiscal year 2012-2013, the total amount of

21

grants approved under this chapter may not exceed

22

$10,000,000. Of that amount, $5,000,000 shall be allocated

23

exclusively for local transportation organizations. If the

24

total amount allocated to either the group of applications

25

exclusive of local transportation organizations or the group

26

of local transportation organization applicants is not

27

approved in fiscal year 2012-2013, the unused portion shall

28

be made available under paragraph (2).

29

(2)  For fiscal year 2013-2014:

30

(i)  The total amount of grants approved under this

- 41 -

 


1

chapter may not exceed the sum of:

2

(A)  $7,500,000; and

3

(B)  any unused portion available under paragraph

4

(1).

5

(ii)  Of the amount under subparagraph (i), 50% shall

6

be allocated exclusively for local transportation

7

organizations.

8

(iii)  If the total amount allocated to either the

9

group of applications exclusive of local transportation

10

organizations or the group of local transportation

11

organization applicants is not approved in fiscal year

12

2013-2014, the unused portion shall be made available

13

under paragraph (3).

14

(3)  For fiscal year 2014-2015, the total amount of

15

grants approved under this chapter may not exceed the sum of:

16

(i)  $2,500,000; and

17

(ii)  any unused portion available under paragraph

18

(2).

19

§ 2703.  Program.

20

(a)  Establishment and purpose.--The Natural Gas Energy

21

Development Program is established. The purpose of the program

22

is to fund projects under this chapter.

23

(b)  Eligible projects.--Funds transferred to the department

24

under Chapter 23 (relating to unconventional gas well fee) shall

25

be utilized for competitive grants to eligible applicants for

26

eligible projects as provided in this subsection. In order to be

27

eligible to receive a grant, an eligible applicant must provide

28

or demonstrate all of the following to the department:

29

(1)  A plan to convert five or more fleet vehicles into

30

eligible vehicles or purchase five or more eligible vehicles.

- 42 -

 


1

The plan must be financially viable within four years of the

2

start date and must include the construction and utilization

3

of a natural gas fueling station in this Commonwealth or the

4

utilization of an existing natural gas fueling station.

5

(2)  A statement of the projected usage of natural gas

6

stated in gasoline or diesel gallon equivalents accompanied

7

by the methodology utilized and how the project will increase

8

use of domestic natural gas in this Commonwealth.

9

(3)  The cost of the project.

10

(4)  The source and amount of any funds to be contributed

11

by the eligible applicant.

12

(5)  The intent to maintain operations in this

13

Commonwealth for a period of not less than six years from the

14

start date.

15

(6)  That all of the eligible vehicles purchased with the

16

grant will be registered in this Commonwealth.

17

(7)  The utilization of Federal funds on the project to

18

the extent that Federal funds are available.

19

(8)  Whether or not the project includes the utilization

20

of a natural gas fueling facility that is accessible to the

21

public.

22

(c)  Guidelines.--Funds under this section shall be used in

23

accordance with guidelines adopted by the department. The

24

guidelines shall do all of the following:

25

(1)  Restrict each grant for an eligible vehicle to cover

26

no more than 50% of the incremental purchase cost.

27

(2)  Limit the amount of the grant so that it shall not

28

exceed $25,000 for each fleet vehicle.

29

(3)  In the case of grants awarded for eligible vehicles

30

which are bi-fuel vehicles, provide for annual reporting to

- 43 -

 


1

the department by the eligible applicant demonstrating the

2

usage of compressed natural gas for a period not to exceed

3

four years after the start date.

4

(4)  Require each eligible vehicle for which a grant is

5

awarded to comply with all Federal and State safety

6

requirements, including rules and regulations promulgated by

7

the Environmental Protection Agency.

8

(d)  Application.--An applicant shall submit an application

9

including supporting information as required by the department.

10

(e)  Project review.--The department shall review and prepare

11

an assessment of each application and determine which projects

12

will best utilize and promote the use of domestically produced

13

natural gas in this Commonwealth.

14

(f)  Administrative costs.--No more than 1% of the funds

15

appropriated to the department shall be used for administrative

16

costs.

17

(g)  Report.--The department shall provide a report to the

18

chairman and minority chairman of the Appropriations Committee

19

of the Senate and the chairman and minority chairman of the

20

Appropriations Committee of the House of Representatives by

21

October 1, 2013, and each October 1 thereafter. The report shall

22

be maintained on the department's official Internet website and

23

shall include:

24

(1)  A list of all grants approved during the previous

25

fiscal year, including the amount of the grant and a

26

description of each approved project.

27

(2)  The estimated domestic energy benefits to date for

28

all projects receiving funding during the fiscal year and the

29

method used to determine estimated benefits.

30

Section 2704.  Expiration.

- 44 -

 


1

This chapter shall expire December 31, 2016.

2

PART III

3

UTILIZATION

4

Chapter

5

31.  (Reserved)

6

32.  Development

7

33.  Local Ordinances Relating to Oil and Gas Operation

8

35.  Responsibility for Fee

9

CHAPTER 31

10

(RESERVED)

11

CHAPTER 32

12

DEVELOPMENT

13

Subchapter

14

A.  Preliminary Provisions

15

B.  General Requirements

16

C.  Underground Gas Storage

17

D.  Eminent Domain

18

E.  Enforcement and Remedies

19

F.  Miscellaneous Provisions

20

SUBCHAPTER A

21

PRELIMINARY PROVISIONS

22

Sec.

23

3201.  Scope of chapter.

24

3202.  Declaration of purpose.

25

3203.  Definitions.

26

§ 3201.  Scope of chapter.

27

This chapter relates to oil and gas.

28

§ 3202.  Declaration of purpose.

29

The purposes of this chapter are to:

30

(1)  Permit optimal development of oil and gas resources

- 45 -

 


1

of this Commonwealth consistent with protection of the

2

health, safety, environment and property of Pennsylvania

3

citizens.

4

(2)  Protect the safety of personnel and facilities

5

employed in coal mining or exploration, development, storage

6

and production of natural gas or oil.

7

(3)  Protect the safety and property rights of persons

8

residing in areas where mining, exploration, development,

9

storage or production occurs.

10

(4)  Protect the natural resources, environmental rights

11

and values secured by the Constitution of Pennsylvania.

12

§ 3203.  Definitions.

13

The following words and phrases when used in this chapter

14

shall have the meanings given to them in this section unless the

15

context clearly indicates otherwise:

16

"Abandoned well."  Any of the following:

17

(1)  A well:

18

(i)  that has not been used to produce, extract or

19

inject any gas, petroleum or other liquid within the

20

preceding 12 months;

21

(ii)  for which equipment necessary for production,

22

extraction or injection has been removed; or

23

(iii)  considered dry and not equipped for production

24

within 60 days after drilling, redrilling or deepening.

25

(2)  The term does not include wells granted inactive

26

status.

27

"Additive."  A hydraulic fracturing chemical.

28

"Alteration."  An operation which changes the physical

29

characteristics of a well bore, including stimulation or

30

removing, repairing or changing the casing. For the purpose of

- 46 -

 


1

this chapter only, the term does not include:

2

(1)  Repairing or replacing of the casing if the activity

3

does not affect the depth or diameter of the well bore, the

4

use or purpose of the well does not change and the activity

5

complies with regulations promulgated under this chapter,

6

except that this exclusion does not apply:

7

(i)  to production casings in coal areas when the

8

production casings are also the coal protection casings;

9

or

10

(ii)  when the method of repairing or replacing the

11

casing would affect the coal protection casing.

12

(2)  Stimulation of a well.

13

"Board."  The Oil and Gas Technical Advisory Board.

14

"Bridge."  An obstruction placed in a well at any depth.

15

"Building."  An occupied structure with walls and roof within

16

which persons live or customarily work.

17

"Casing."  A string or strings of pipe commonly placed in

18

wells drilled for natural gas or petroleum.

19

"Cement" or "cement grout."  Any of the following:

20

(1)  Hydraulic cement properly mixed with water only.

21

(2)  A mixture of materials adequate for bonding or

22

sealing of well bores as approved by regulations promulgated

23

under this chapter.

24

"Chemical."  Any element, chemical compound or mixture of

25

elements or compounds that has its own specific name or

26

identity, such as a chemical abstract service number.

27

"Chemical Disclosure Registry."  The chemical registry

28

website developed by the Ground Water Protection Council and the

29

Interstate Oil and Gas Compact Commission or their successor

30

organizations.

- 47 -

 


1

"Chemical family."  A group of chemicals that share similar

2

chemical properties and have a common general name.

3

"Coal mine."  Any of the following:

4

(1)  Operations in a coal seam, including excavated

5

portions, abandoned portions and places actually being

6

worked.

7

(2)  Underground workings and shafts, slopes, tunnels and

8

other ways and openings, including those which are in the

9

course of being sunk or driven, along with all roads and

10

facilities connected with them below the surface.

11

"Coal operator."  A person that operates or proposes to

12

operate a coal mine as an owner or lessee.

13

"Completion of a well."  The date after treatment, if any,

14

that the well is properly equipped for production of oil or gas,

15

or, if the well is dry, the date that the well is abandoned.

16

"Department."  The Department of Environmental Protection of

17

the Commonwealth.

18

"Drilling."  The drilling or redrilling of a well or the

19

deepening of an existing well.

20

"Fresh groundwater."  Water in that portion of the generally

21

recognized hydrologic cycle which occupies the pore spaces and

22

fractures of saturated subsurface materials.

23

"Gas."  Any of the following:

24

(1)  A fluid, combustible or noncombustible, which is

25

produced in a natural state from the earth and maintains a

26

gaseous or rarified state at standard temperature of 60

27

degrees Fahrenheit and pressure 14.7 PSIA.

28

(2)  Any manufactured gas, by-product gas or mixture of

29

gases or natural gas liquids.

30

"Health professional."  A physician, physician assistant,

- 48 -

 


1

nurse practitioner, registered nurse or emergency medical

2

technician licensed by the Commonwealth.

3

"Hydraulic fracturing chemical."  Any chemical substance or

4

combination of substances, including any chemicals and

5

proppants, that is intentionally added to a base fluid for

6

purposes of preparing a stimulation fluid for use in hydraulic

7

fracturing.

8

"Inactivate."  To shut off the vertical movement of gas in a

9

gas storage well by means of a temporary plug or other suitable

10

device or by injecting bentonitic mud or other equally nonporous

11

material into the well.

12

"Linear foot."  A unit or measurement in a straight line on a

13

horizontal plane.

14

"Natural gas liquids."  Hydrocarbons in natural gas which are

15

separated from the gas as liquids through the process of

16

absorption, condensation, adsorption or other methods in gas

17

processing of cycling plants.

18

"Oil."  Hydrocarbons in liquid form at standard temperature

19

of 60 degrees Fahrenheit and pressure 14.7 PSIA, also referred

20

to as petroleum.

21

"Operating coal mine."  Any of the following:

22

(1)  An underground coal mine which is producing coal or

23

has been in production of coal at any time during the 12

24

months immediately preceding the date its status is put in

25

question, including contiguous worked-out or abandoned coal

26

mines to which it is connected underground.

27

(2)  An underground coal mine to be established or

28

reestablished under paragraph (1).

29

"Operating well."  A well that is not plugged and abandoned.

30

"Operator."  A well operator.

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1

"Orphan well."  A well abandoned prior to April 18, 1985,

2

that has not been affected or operated by the present owner or

3

operator and from which the present owner, operator or lessee

4

has received no economic benefit other than as a landowner or

5

recipient of a royalty interest from the well.

6

"Outside coal boundaries."  When used in conjunction with the

7

term "operating coal mine," the boundaries of the coal acreage

8

assigned to the coal mine under an underground mine permit

9

issued by the Department of Environmental Protection.

10

"Owner."  A person who owns, manages, leases, controls or

11

possesses a well or coal property. The term does not apply to

12

orphan wells, except where the Department of Environmental

13

Protection determines a prior owner or operator benefited from

14

the well as provided in section 3220(a) (relating to plugging

15

requirements).

16

"Person."  An individual, association, partnership,

17

corporation, political subdivision or agency of the Federal

18

Government, State government or other legal entity.

19

"Petroleum."  Hydrocarbons in liquid form at standard

20

temperature of 60 degrees Fahrenheit and pressure 14.7 PSIA,

21

also referred to as oil.

22

"Pillar."  A solid block of coal surrounded by either active

23

mine workings or a mined-out area.

24

"Plat."  A map, drawing or print accurately drawn to scale

25

showing the proposed or existing location of a well or wells.

26

"Reservoir protective area."  The area surrounding a storage

27

reservoir boundary, but within 2,000 linear feet of the storage

28

reservoir boundary, unless an alternate area has been designated

29

by the Department of Environmental Protection, which is deemed

30

reasonably necessary to afford protection to the reservoir,

- 50 -

 


1

under a conference held in accordance with section 3251

2

(relating to conferences).

3

"Retreat mining."  Removal of coal pillars, ribs and stumps

4

remaining after development mining has been completed in that

5

section of a coal mine.

6

"Secretary."  The Secretary of Environmental Protection of

7

the Commonwealth.

8

"Storage operator."  A person who operates or proposes to

9

operate a storage reservoir as an owner or lessee.

10

"Storage reservoir."  That portion of a subsurface geological

11

stratum into which gas is or may be injected for storage

12

purposes or to test suitability of the stratum for storage.

13

"Unconventional formation."  A geological shale formation

14

existing below the base of the Elk Sandstone or its geologic

15

equivalent stratigraphic interval where natural gas generally

16

cannot be produced at economic flow rates or in economic volumes

17

except by vertical or horizontal well bores stimulated by

18

hydraulic fracture treatments or by using multilateral well

19

bores or other techniques to expose more of the formation to the

20

well bore.

21

"Unconventional well."  A bore hole drilled or being drilled

22

for the purpose of or to be used for the production of natural

23

gas from an unconventional formation.

24

"Water management plan."  A plan associated with drilling or

25

completing a well in an unconventional formation that

26

demonstrates that the withdrawal and use of water sources

27

protects those sources as required by law and protects public

28

health, safety and welfare.

29

"Water purveyor."  Any of the following:

30

(1)  The owner or operator of a public water system as

- 51 -

 


1

defined in section 3 of the act of May 1, 1984 (P.L.206,

2

No.43), known as the Pennsylvania Safe Drinking Water Act.

3

(2)  Any person subject to the act of June 24, 1939

4

(P.L.842, No.365), referred to as the Water Rights Law.

5

"Water source."

6

(1)  Any of the following:

7

(i)  Waters of this Commonwealth.

8

(ii)  A source of water supply used by a water

9

purveyor.

10

(iii)  Mine pools and discharges.

11

(iv)  Any other waters that are used for drilling or

12

completing a well in an unconventional formation.

13

(2)  The term does not include flowback or production

14

waters or other fluids:

15

(i)  which are used for drilling or completing a well

16

in an unconventional formation; and

17

(ii)  which do not discharge into waters of this

18

Commonwealth.

19

"Well."  A bore hole drilled or being drilled for the purpose

20

of, or to be used for, producing, extracting or injecting gas,

21

petroleum or another liquid related to oil or gas production or

22

storage, including brine disposal, but excluding a bore hole

23

drilled to produce potable water. The term does not include a

24

bore hole drilled or being drilled for the purpose of, or to be

25

used for:

26

(1)  Systems of monitoring, producing or extracting gas

27

from solid waste disposal facilities, if the bore hole is a

28

well subject to the act of July 7, 1980 (P.L.380, No.97),

29

known as the Solid Waste Management Act, which does not

30

penetrate a workable coal seam.

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1

(2)  Degasifying coal seams, if the bore hole is:

2

(i)  used to vent methane to the outside atmosphere

3

from an operating coal mine; regulated as part of the

4

mining permit under the act of June 22, 1937 (P.L.1987,

5

No.394), known as The Clean Streams Law, and the act of

6

May 31, 1945 (P.L.1198, No.418), known as the Surface

7

Mining Conservation and Reclamation Act; and drilled by

8

the operator of the operating coal mine for the purpose

9

of increased safety; or

10

(ii)  used to vent methane to the outside atmosphere

11

under a federally funded or State-funded abandoned mine

12

reclamation project.

13

"Well control emergency."  An incident during drilling,

14

operation, workover or completion that, as determined by the

15

department, poses a threat to public health, welfare or safety,

16

including a loss of circulation fluids, kick, casing failure,

17

blowout, fire and explosion.

18

"Well control specialist."  Any person trained to respond to

19

a well control emergency with a current certification from a

20

well control course accredited by the International Association

21

of Drilling Contractors or other organization approved by the

22

department.

23

"Well operator."  Any of the following:

24

(1)  The person designated as operator or well operator

25

on the permit application or well registration.

26

(2)  If a permit or well registration was not issued, a

27

person who locates, drills, operates, alters or plugs a well

28

or reconditions a well with the purpose of production from

29

the well.

30

(3)  If a well is used in connection with underground

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1

storage of gas, a storage operator.

2

"Wetland."  Areas inundated or saturated by surface or

3

groundwater at a frequency and duration sufficient to support,

4

and which normally support, a prevalence of vegetation typically

5

adapted for life in saturated soil conditions, including swamps,

6

marshes, bogs and similar areas.

7

"Workable coal seams."  A coal seam which:

8

(1)  is actually being mined in the area in question

9

under this chapter by underground methods; or

10

(2)  in the judgment of the Department of Environmental

11

Protection, can reasonably be expected to be mined by

12

underground methods.

13

SUBCHAPTER B

14

GENERAL REQUIREMENTS

15

Sec.

16

3211.  Well permits.

17

3212.  Permit objections.

18

3212.1.  Comments by municipalities and storage operators.

19

3213.  Well registration and identification.

20

3214.  Inactive status.

21

3215.  Well location restrictions.

22

3216.  Well site restoration.

23

3217.  Protection of fresh groundwater and casing requirements.

24

3218.  Protection of water supplies.

25

3218.1.  Notification to public drinking water systems.

26

3218.2.  Containment for unconventional wells.

27

3218.3.  Transportation records regarding wastewater fluids.

28

3218.4.  Corrosion control requirements.

29

3218.5.  Gathering lines.

30

3219.  Use of safety devices.

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1

3219.1.  Well control emergency response.

2

3220.  Plugging requirements.

3

3221.  Alternative methods.

4

3222.  Well reporting requirements.

5

3222.1.  Hydraulic fracturing chemical disclosure requirements.

6

3223.  Notification and effect of well transfer.

7

3224.  Coal operator responsibilities.

8

3225.  Bonding.

9

3226.  Oil and Gas Technical Advisory Board.

10

3227.  Air containment emissions.

11

§ 3211.  Well permits.

12

(a)  Permit required.--No person shall drill or alter a well,

13

except for alterations which satisfy the requirements of

14

subsection (j), without having first obtained a well permit

15

under subsections (b), (c), (d) and (e), or operate an abandoned

16

or orphan well unless in compliance with subsection (l). A copy

17

of the permit shall be kept at the well site during preparation

18

and construction of the well site or access road during drilling

19

or alteration of the well. No person shall be required to obtain

20

a permit to redrill a nonproducing well if the redrilling:

21

(1)  has been evaluated and approved as part of an order

22

from the department authorizing cleaning out and plugging or

23

replugging a nonproducing well under section 13(c) of the act

24

of December 18, 1984 (P.L.1069, No.214), known as the Coal

25

and Gas Resource Coordination Act; and

26

(2)  is incidental to a plugging or replugging operation

27

and the well is plugged within 15 days of redrilling.

28

(b)  Plat.--

29

(1)  The permit application shall be accompanied by a

30

plat prepared by a competent engineer or a competent

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1

surveyor, on forms furnished by the department, showing the

2

political subdivision and county in which the tract of land

3

upon which the well to be drilled, operated or altered is

4

located; a list of municipalities adjacent to the well site;

5

the name of the surface landowner of record and lessor; the

6

name of all surface landowners and water purveyors whose

7

water supplies are within 1,000 feet of the proposed well

8

location or, in the case of an unconventional well, within

9

3,000 feet from the vertical well bore; the name of the owner

10

of record or operator of all known underlying workable coal

11

seams; the acreage in the tract to be drilled; the proposed

12

location of the well determined by survey, courses and

13

distances of the location from two or more permanent

14

identifiable points or landmarks on the tract boundary

15

corners; the proposed angle and direction of the well if the

16

well is to be deviated substantially from a vertical course;

17

the number or other identification to be given the well; the

18

workable coal seams underlying the tract of land upon which

19

the well is to be drilled or altered and which shall be cased

20

off under section 3217 (relating to protection of fresh

21

groundwater and casing requirements); and any other

22

information needed by the department to administer this

23

chapter.

24

(2)  The applicant shall forward by certified mail a copy

25

of the plat to the surface landowner; the municipality in

26

which the tract of land upon which the well to be drilled is

27

located; each municipality within 3,000 feet of the proposed

28

unconventional vertical well bore; the municipalities

29

adjacent to the well; all surface landowners and water

30

purveyors, whose water supplies are within 1,000 feet of the

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1

proposed well location or, in the case of an unconventional

2

well, within 3,000 feet of the proposed unconventional

3

vertical well bore; storage operators within 3,000 feet of

4

the proposed unconventional vertical well bore; the owner and

5

lessee of any coal seams; and each coal operator required to

6

be identified on the well permit application.

7

(b.1)  Notification.--The applicant shall submit proof of

8

notification with the well permit application. Notification of

9

surface owners shall be performed by sending notice to those

10

persons to whom the tax notices for the surface property are

11

sent, as indicated in the assessment books in the county in

12

which the property is located. Notification of surface

13

landowners or water purveyors shall be on forms, and in a manner

14

prescribed by the department, sufficient to identify the rights

15

afforded those persons under section 3218 (relating to

16

protection of water supplies) and to advise them of the

17

advantages of taking their own predrilling or prealteration

18

survey.

19

(b.2)  Approval.--If the applicant submits to the department

20

written approval of the proposed well location by the surface

21

landowner and the coal operator, lessee or owner of any coal

22

underlying the proposed well location and no objections are

23

raised by the department within 15 days of filing, or if no

24

approval has been submitted and no objections are made to the

25

proposed well location within 15 days from receipt of notice by

26

the department, the surface landowner or any coal operator,

27

lessee or owner, the written approval shall be filed and become

28

a permanent record of the well location, subject to inspection

29

at any time by any interested person. The application form to

30

operate an abandoned or orphan well shall provide notification

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1

to the applicant of its responsibilities to plug the well upon

2

abandonment.

3

(c)  Applicants.--If the applicant for a well permit is a

4

corporation, partnership or person that is not a resident of

5

this Commonwealth, the applicant shall designate the name and

6

address of an agent for the operator who shall be the attorney-

7

in-fact for the operator and who shall be a resident of this

8

Commonwealth upon whom notices, orders or other communications

9

issued under this chapter may be served and upon whom process

10

may be served. Each well operator required to designate an agent

11

under this section shall, within five days after termination of

12

the designation, notify the department of the termination and

13

designate a new agent.

14

(d)  Permit fee.--Each application for a well permit shall be

15

accompanied by a permit fee, established by the Environmental

16

Quality Board, which bears a reasonable relationship to the cost

17

of administering this chapter.

18

(e)  Issuance of permit.--The department shall issue a permit

19

within 45 days of submission of a permit application unless the

20

department denies the permit application for one or more of the

21

reasons set forth in subsection (e.1), except that the

22

department shall have the right to extend the period for 15 days

23

for cause shown upon notification to the applicant of the

24

reasons for the extension. The department may impose permit

25

terms and conditions necessary to assure compliance with this

26

chapter or other laws administered by the department.

27

(e.1)  Denial of permit.--The department may deny a permit

28

for any of the following reasons:

29

(1)  The well site for which a permit is requested is in

30

violation of any of this chapter or issuance of the permit

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1

would result in a violation of this chapter or other

2

applicable law.

3

(2)  The permit application is incomplete.

4

(3)  Unresolved objections to the well location by coal

5

mine owner or operator remain.

6

(4)  The requirements of section 3225 (relating to

7

bonding) have not been met.

8

(5)  The department finds that the applicant, or any

9

parent or subsidiary corporation of the applicant, is in

10

continuing violation of this chapter, any other statute

11

administered by the department, any regulation promulgated

12

under this chapter or a statute administered by the

13

department or any plan approval, permit or order of the

14

department, unless the violation is being corrected to the

15

satisfaction of the department. The right of the department

16

to deny a permit under this paragraph shall not take effect

17

until the department has taken a final action on the

18

violations and:

19

(i)  the applicant has not appealed the final action

20

in accordance with the act of July 13, 1988 (P.L.530,

21

No.94), known as the Environmental Hearing Board Act; or

22

(ii)  if an appeal has been filed, no supersedeas has

23

been issued.

24

(6)  The applicant failed to pay the fee or file a report

25

under section 2303(c) (relating to administration), unless an

26

appeal is pending. The commission shall notify the department

27

of any applicant who has failed to pay the fee or file a

28

report and who does not have an appeal pending.

29

(f)  Drilling.--

30

(1)  Upon issuance of a permit, the well operator may

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1

drill, operate or alter at the exact location shown on the

2

plat after providing the department, the surface landowner

3

and the local political subdivision in which the well is to

4

be located 24 hours' notice of the date that drilling will

5

commence. Notification to the department must be provided

6

electronically. If there is a break in drilling of 30 days or

7

more, the well operator shall notify the department at least

8

24 hours prior to the resumption of drilling.

9

(2)  The unconventional well operator shall provide the

10

department 24 hours' notice prior to cementing all casing

11

strings, conducting pressure tests of the production casing,

12

stimulation and abandoning or plugging an unconventional

13

well.

14

(3)  In noncoal areas where more than one well is to be

15

drilled as part of the same development project, only the

16

first well of the project need be located by survey.

17

Remaining wells of the project shall be shown on the plat in

18

a manner prescribed by regulation.

19

(4)  Prior to drilling each additional project well, the

20

well operator shall notify the department and provide

21

reasonable notice of the date on which drilling will

22

commence.

23

(5)  Whenever, before or during the drilling of a well

24

not within the boundaries of an operating coal mine, the well

25

operator encounters conditions of a nature which renders

26

drilling of the bore hole or a portion thereof impossible, or

27

more hazardous than usual, the well operator, upon verbal

28

notice to the department, may immediately plug all or part of

29

the bore hole, if drilling has occurred, and commence a new

30

bore hole not more than 50 feet from the old bore hole if the

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1

location of the new bore hole does not violate section 3215

2

(relating to well location restrictions) and, in the case of

3

a well subject to act of July 25, 1961 (P.L.825, No.359),

4

known as the Oil and Gas Conservation Law, if the new

5

location complies with existing laws, regulations and spacing

6

orders and the new bore hole is at least 330 feet from the

7

nearest lease boundary.

8

(6)  Within ten days of commencement of the new bore

9

hole, the well operator shall file with the department a

10

written notice of intention to plug, a well record, a

11

completion report, a plugging certificate for the original

12

bore hole and an amended plat for the new bore hole.

13

(7)  The well operator shall forward a copy of the

14

amended plat to the surface landowner identified on the well

15

permit application within ten days of commencement of the new

16

well bore.

17

(g)  Posting.--The well permit number and operator's name,

18

address and telephone number shall be conspicuously posted at

19

the drilling site during site preparation, including the

20

construction of access roads, construction of the well site and

21

during drilling, operating or alteration of the well.

22

(h)  Labeling.--The well operator shall install the permit

23

number issued by the department in a legible, visible and

24

permanent manner on the well upon completion.

25

(i)  Expiration.--Well permits issued for drilling wells

26

under this chapter shall expire one year after issuance unless

27

operations for drilling the well are commenced within the period

28

and pursued with due diligence or unless the permit is renewed

29

in accordance with regulations of the department. If drilling is

30

commenced during the one-year period, the well permit shall

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1

remain in force until the well is plugged in accordance with

2

section 3220 (relating to plugging requirements) or the permit

3

is revoked. A drilling permit issued prior to April 18, 1985,

4

for a well which is an operating well on April 18, 1985, shall

5

remain in force as a well permit until the well is plugged in

6

accordance with section 3220.

7

(j)  Exceptions.--The Environmental Quality Board may

8

establish by regulation certain categories of alterations of

9

permitted or registered wells for which permitting requirements

10

of this section shall not apply. A well operator or owner who

11

proposes to conduct the alteration activity shall first obtain a

12

permit or registration modification from the department. The

13

Environmental Quality Board shall promulgate regulations as to

14

the requirements for modifications.

15

(k)  No transfer permitted.--No permit issued under this

16

section or registration issued under section 3213 (relating to

17

well registration and identification) may be transferred without

18

prior approval of the department. A request for approval of a

19

transfer shall be on the forms, and in the manner, prescribed by

20

the department. The department shall approve or deny a transfer

21

request within 45 days of receipt of a complete and accurate

22

application. The department may deny a request only for reasons

23

set forth in subsection (e.1)(4) and (5). Approval of a transfer

24

request shall permanently transfer responsibility to plug the

25

well under section 3220 to the recipient of the transferred

26

permit or registration.

27

(l)  Regulations.--The Environmental Quality Board may

28

establish by regulation requirements for the permitting and

29

operation of abandoned or orphan wells. A person who proposes to

30

conduct abandoned or orphan well operations shall first obtain a

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1

permit to operate an abandoned or orphan well.

2

(m)  Water management.--The following shall apply to water

3

management:

4

(1)  No person may withdraw or use water from water

5

sources within this Commonwealth for the drilling or

6

hydraulic fracture stimulation of any natural gas well

7

completed in an unconventional gas formation, whether on or

8

off of the land where the gas well is located, except in

9

accordance with a water management plan approved by the

10

department.

11

(2)  The department shall review and approve water

12

management plans based upon a determination that the proposed

13

withdrawal, when operated in accordance with the proposed

14

withdrawal operating conditions set forth in the plan,

15

including conditions relating to quantity, withdrawal rate

16

and timing and any passby flow conditions, will:

17

(i)  not adversely affect the quantity or quality of

18

water available to other users of the same water sources;

19

(ii)  protect and maintain the designated and

20

existing uses of water sources;

21

(iii)  not cause adverse impact to water quality in

22

the watershed considered as a whole; and

23

(iv)  include a reuse plan for fluids that will be

24

used to hydraulically fracture wells.

25

(3)  As to criteria:

26

(i)  The criteria under paragraph (2) shall be

27

presumed to be achieved if the proposed water withdrawal

28

has been approved by and is operated in accordance with

29

conditions established by the Susquehanna River Basin

30

Commission, the Delaware River Basin Commission or the

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1

Great Lakes Commission, as applicable.

2

(ii)  Notwithstanding subparagraph (i), the

3

department may establish additional requirements as

4

necessary to comply with the laws of this Commonwealth.

5

(4)  In addition to the requirements under paragraphs

6

(1), (2) and (3), compliance with a department-approved water

7

management plan shall be a condition of any permit issued

8

under this chapter for the drilling or hydraulic fracture

9

stimulation of any natural gas well completed in an

10

unconventional formation and shall be deemed to satisfy the

11

laws of this Commonwealth.

12

§ 3212.  Permit objections.

13

(a)  General rule.--If a well referred to in section 3211(b)

14

(relating to well permits) will be located on a tract whose

15

surface is owned by a person other than the well operator, the

16

surface landowner affected shall be notified of the intent to

17

drill and may file objections, in accordance with section 3251

18

(relating to conferences), based on the assertion that the well

19

location violates section 3215 (relating to well location

20

restrictions) or that information in the application is untrue

21

in any material respect, within 15 days of the receipt by the

22

surface owner of the plat under section 3211(b). Receipt of

23

notice by the surface owner shall be presumed to have occurred

24

15 days from the date of the certified mailing when the well

25

operator submits a copy of the certified mail receipt sent to

26

the surface owner and an affidavit certifying that the address

27

of the surface owner to which notice was sent is the same as the

28

address listed in the assessment books in the county where the

29

property is located. If no objection is filed or none is raised

30

by the department within 15 days after receipt of the plat by

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1

the surface landowner, or, if written approval by the surface

2

landowner is filed with the department and no objection is

3

raised by the department within 15 days of filing, the

4

department shall proceed to issue or deny the permit.

5

(b)  Special circumstances.--If a well referred to in section

6

3211(b) will penetrate within the outside coal boundaries of an

7

operating coal mine or a coal mine already projected and platted

8

but not yet being operated, or within 1,000 linear feet beyond

9

those boundaries, and, in the opinion of the coal owner or

10

operator, the well or a pillar of coal about the well will

11

unduly interfere with or endanger the mine, the coal owner or

12

operator affected may file objections under section 3251 to the

13

proposed location within 15 days of the receipt by the coal

14

operator of the plat under section 3211(b). If possible, an

15

alternative location at which the proposed well could be drilled

16

to overcome the objections shall be indicated. If no objection

17

to the proposed location is filed or if none is raised by the

18

department within 15 days after receipt of the plat by the coal

19

operator or owner, or, if written approval by the coal operator

20

or owner of the location is filed with the department and no

21

objection is raised by the department within 15 days of filing,

22

the department shall proceed to issue or deny the permit.

23

(c)  Procedure upon objection.--If an objection is filed by a

24

coal operator or owner or made by the department, the department

25

shall fix a time and place for a conference under section 3251

26

not more than ten days from the date of service of the objection

27

to allow the parties to consider the objection and attempt to

28

agree on a location. If they fail to agree, the department, by

29

an appropriate order, shall determine a location on the tract of

30

land as near to the original location as possible where, in the

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1

judgment of the department, the well can be safely drilled

2

without unduly interfering with or endangering the mine as

3

defined in subsection (b). The new location agreed upon by the

4

parties or determined by the department shall be indicated on

5

the plat on file with the department and become a permanent

6

record upon which the department shall proceed to issue or deny

7

the permit.

8

(d)  Survey.--Within 120 days after commencement of drilling

9

operations, the coal operator shall accurately locate the well

10

by a closed survey on the same datum as the mine workings or

11

coal boundaries are mapped, file the results of the survey with

12

the department and forward a copy by certified mail to the well

13

operator.

14

§ 3212.1.  Comments by municipalities and storage operators.

15

(a)  Municipalities.--The municipality where the tract of

16

land upon which the unconventional well to be drilled is located

17

may submit written comments to the department describing local

18

conditions or circumstances which the municipality has

19

determined should be considered by the department in rendering

20

its determination on the unconventional well permit. A comment

21

under this subsection must be submitted to the department within

22

15 days of the receipt of the plat under section 3211(b)

23

(relating to well permits). The municipality shall

24

simultaneously forward a copy of its comments to the permit

25

applicant and all other parties entitled to a copy of the plat

26

under section 3211(b), who may submit a written response. A

27

written response must be submitted to the department within ten

28

days of receipt of the comments of the municipality.

29

(a.1)  Storage operators.--A storage operator located within

30

3,000 feet of a proposed unconventional vertical well bore may

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1

submit written comments to the department describing

2

circumstances which the storage operator has determined should

3

be considered by the department in rendering its determination

4

on the unconventional well permit. A comment under this

5

subsection must be submitted to the department within 15 days of

6

the receipt of the plat under section 3211(b). The storage

7

operator shall simultaneously forward a copy of its comments to

8

the permit applicant and all other parties entitled to a copy of

9

the plat under section 3211(b), who may submit a written

10

response. A written response must be submitted to the department

11

within ten days of receipt of the comments of the storage

12

operator.

13

(b)  Consideration by department.--Comments and responses

14

under subsections (a) and (a.1) may be considered by the

15

department in accordance with section 3215(d) (relating to well

16

location restrictions).

17

(c)  No extension of time period.--The process outlined in

18

this section shall not extend the time period for the issuance

19

or denial of a permit beyond the time period set forth in this

20

chapter.

21

§ 3213.  Well registration and identification.

22

(a)  General rule.--On or before July 5, 1996, each person

23

who owned or operated a well in existence prior to April 18,

24

1985, which has not been registered with the department and for

25

which no drilling permit has been issued by the department,

26

shall register the well with the department. A well owner or

27

operator who registers under this subsection and a well owner or

28

operator who has previously registered a well under this chapter

29

shall, on or before July 5, 1996, identify any abandoned well on

30

property which the well owner or operator owns or leases and

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1

request approval from the department for classification of the

2

well as an orphan well. Information regarding wells to be

3

registered or identified shall be provided on a form, or in a

4

manner prescribed by the department, and shall include:

5

(1)  The name and address of the well operator and, if

6

the well operator is a corporation, partnership or person

7

nonresident of this Commonwealth, the name and address of an

8

agent for the operator upon whom notices, orders, process or

9

other communications issued under this chapter may be served.

10

(2)  The well name and the location of the well indicated

11

by a point on a 7 1/2 minute United States Geological Survey

12

topographic map or any other location description sufficient

13

to enable the department to locate the well on the ground.

14

(3)  The approximate date of drilling and completing the

15

well, its approximate depth and producing horizons, well

16

construction information and, if available, driller's logs.

17

(4)  An indemnity bond, an alternative fee in lieu of

18

bonding or other evidence of financial security submitted by

19

the well operator and deemed appropriate by the department

20

and satisfying the requirements of section 3225 (relating to

21

bonding). No bond, alternative fee or other evidence of

22

financial security shall be required for identification of an

23

orphan well. For wells drilled prior to January 30, 1956,

24

which have not been bonded, the well operator shall have five

25

years to comply with the provisions of this paragraph.

26

(5)  A registration fee of $15 per well or blanket

27

registration fee of $250 for multiple well registration

28

applications submitted simultaneously. The registration fee

29

shall be waived until July 5, 1996, and no fee shall be

30

charged for identification of an orphan well.

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1

(a.1)  Orphan wells.--After July 5, 1996, a well owner, well

2

operator or other person discovering an abandoned well on

3

property purchased or leased by the well owner, well operator or

4

other person shall identify it to the department within 60 days

5

of discovery and advise the department that he is seeking

6

classification of the well as an orphan well. No fee shall be

7

required for identification.

8

(b)  Extension.--The department may extend the one-year time

9

period under subsection (a) for good cause shown. The extension

10

may not exceed a period ending two years from April 18, 1985.

11

The department may adopt and promulgate guidelines designed to

12

ensure a fair implementation of this section, recognizing the

13

practical difficulties of locating unpermitted wells and

14

complying with the reporting requirements of this chapter.

15

(c)  Installation of registration number.--The well operator

16

shall install the registration number issued by the department

17

in a legible, conspicuous and permanent manner on the well

18

within 60 days of issuance.

19

(d)  Definition.--For purposes of subsection (a)(4) and (5),

20

the term "owner" does not include an owner or possessor of

21

surface real property, on which an abandoned well is located,

22

who did not participate or incur costs in, and had no right of

23

control over, the drilling or extraction operation of the

24

abandoned well.

25

§ 3214.  Inactive status.

26

(a)  General rule.--Upon application, the department shall

27

grant inactive status for a period of five years for a permitted

28

or registered well, if the following requirements are met:

29

(1)  the condition of the well is sufficient to prevent

30

damage to the producing zone or contamination of fresh water

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1

or other natural resources or surface leakage of any

2

substance;

3

(2)  the condition of the well is sufficient to stop the

4

vertical flow of fluids or gas within the well bore and is

5

adequate to protect freshwater aquifers, unless the

6

department determines the well poses a threat to the health

7

and safety of persons or property or to the environment;

8

(3)  the operator anticipates construction of a pipeline

9

or future use of the well for primary or enhanced recovery,

10

gas storage, approved disposal or other appropriate uses

11

related to oil and gas well production; and

12

(4)  the applicant satisfies the bonding requirements of

13

sections 3213 (relating to well registration and

14

identification) and 3225 (relating to bonding), except that

15

the department may require additional financial security for

16

a well on which an alternative fee is being paid in lieu of

17

bonding under section 3225(d).

18

(b)  Monitoring.--The owner or operator of a well granted

19

inactive status shall be responsible for monitoring the

20

mechanical integrity of the well to ensure that the requirements

21

of subsection (a)(1) and (2) are met and shall report the same

22

on an annual basis to the department in the manner and form

23

prescribed by departmental regulations.

24

(c)  (Reserved).

25

(d)  Return to active status.--A well granted inactive status

26

under subsection (a) shall be plugged in accordance with section

27

3220 (relating to plugging requirements) or returned to active

28

status within five years of the date inactive status was

29

granted, unless the owner or operator applies for an extension

30

of inactive status which may be granted on a year-to-year basis

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1

if the department determines that the owner or operator has

2

demonstrated ability to continue meeting the requirements of

3

this section and the owner or operator certifies that the well

4

will be of future use within a reasonable period of time. An

5

owner or operator who has been granted inactive status for a

6

well which is returned to active status prior to expiration of

7

the five-year period set forth in subsection (a) shall notify

8

the department that the well has been returned to active status

9

and shall not be permitted to apply for another automatic five-

10

year period of inactive status for the well. The owner or

11

operator may make application to return the well to inactive

12

status, and the application may be approved on a year-to-year

13

basis if the department determines that the owner or operator

14

has demonstrated an ability to continue meeting the requirements

15

of this section and the owner or operator certifies that the

16

well will be of future use within a reasonable period of time.

17

The department shall approve or deny an application to extend a

18

period of inactive status or to return a well to inactive status

19

within 60 days of receipt of the application, and the

20

application shall not be unreasonably denied. If the department

21

has not completed its review of the application within 60 days,

22

the inactive status shall continue until the department has made

23

a determination on the request. If the department denies an

24

application to extend the period of inactive status or to return

25

a well to inactive status, a well owner or operator aggrieved by

26

the denial shall have the right to appeal the denial to the

27

Environmental Hearing Board within 30 days of receipt of the

28

denial. Upon cause shown by a well owner or operator, the board

29

may grant a supersedeas under section 4 of the act of July 13,

30

1988 (P.L.530, No.94), known as the Environmental Hearing Board

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1

Act, so that the well in question may retain inactive status

2

during the period of the appeal.

3

(e)  Revocation of inactive status.--The department may

4

revoke inactive status and order immediate plugging of a well if

5

the well is in violation of this chapter or rules or regulations

6

promulgated under this chapter or if the owner or operator

7

demonstrates inability to perform obligations under this chapter

8

or becomes financially insolvent, or upon receipt by the

9

department of notice of bankruptcy proceedings by the permittee.

10

§ 3215.  Well location restrictions.

11

(a)  General rule.--Wells may not be drilled within 200 feet,

12

or, in the case of an unconventional gas well, 500 feet measured

13

horizontally from the vertical well bore to a building or water

14

well, existing when the copy of the plat is mailed as required

15

by section 3211(b) (relating to well permits) without written

16

consent of the owner of the building or water well.

17

Unconventional gas wells may not be drilled within 1,000 feet

18

measured horizontally from the vertical well bore to any

19

existing water well, surface water intake, reservoir or other

20

water supply extraction point used by a water purveyor without

21

the written consent of the water purveyor. If consent is not

22

obtained and the distance restriction would deprive the owner of

23

the oil and gas rights of the right to produce or share in the

24

oil or gas underlying the surface tract, the well operator shall

25

be granted a variance from the distance restriction upon

26

submission of a plan identifying the additional measures,

27

facilities or practices as prescribed by the department to be

28

employed during well site construction, drilling and operations.

29

The variance shall include additional terms and conditions

30

required by the department to ensure safety and protection of

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1

affected persons and property, including insurance, bonding,

2

indemnification and technical requirements. Notwithstanding

3

section 3211(e), if a variance request has been submitted, the

4

department may extend its permit review period for up to 15 days

5

upon notification to the applicant of the reasons for the

6

extension.

7

(b)  Limitation.--

8

(1)  No well site may be prepared or well drilled within

9

100 feet or, in the case of an unconventional well, 300 feet

10

from the vertical well bore or 100 feet from the edge of the

11

well site, whichever is greater, measured horizontally from

12

any solid blue lined stream, spring or body of water as

13

identified on the most current 7 1/2 minute topographic

14

quadrangle map of the United States Geological Survey.

15

(2)  The edge of the disturbed area associated with any

16

unconventional well site must maintain a 100-foot setback

17

from the edge of any solid blue lined stream, spring or body

18

of water as identified on the most current 7 1/2 minute

19

topographic quadrangle map of the United States Geological

20

Survey.

21

(3)  No unconventional well may be drilled within 300

22

feet of any wetlands greater than one acre in size, and the

23

edge of the disturbed area of any well site must maintain a

24

100-foot setback from the boundary of the wetlands.

25

(4)  The department shall waive the distance restrictions

26

upon submission of a plan identifying additional measures,

27

facilities or practices to be employed during well site

28

construction, drilling and operations necessary to protect

29

the waters of this Commonwealth. The waiver, if granted,

30

shall include additional terms and conditions required by the

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1

department necessary to protect the waters of this

2

Commonwealth. Notwithstanding section 3211(e), if a waiver

3

request has been submitted, the department may extend its

4

permit review period for up to 15 days upon notification to

5

the applicant of the reasons for the extension.

6

(c)  Impact.--On making a determination on a well permit, the

7

department shall consider the impact of the proposed well on

8

public resources, including, but not limited to:

9

(1)  Publicly owned parks, forests, game lands and

10

wildlife areas.

11

(2)  National or State scenic rivers.

12

(3)  National natural landmarks.

13

(4)  Habitats of rare and endangered flora and fauna and

14

other critical communities.

15

(5)  Historical and archaeological sites listed on the

16

Federal or State list of historic places.

17

(6)  Sources used for public drinking supplies in

18

accordance with subsection (b).

19

(d)  Consideration of municipality and storage operator

20

comments.--The department may consider the comments submitted

21

under section 3212.1 (relating to comments by municipalities and

22

storage operators) in making a determination on a well permit.

23

Notwithstanding any other law, no municipality or storage

24

operator shall have a right of appeal or other form of review

25

from the department's decision.

26

(d.1)  Additional protective measures.--The department may

27

establish additional protective measures for storage of

28

hazardous chemicals and materials intended to be used, or that

29

have been used, on an unconventional well drilling site within

30

750 feet of a solid blue lined stream, spring or body of water

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1

identified on the most current 7 1/2 minute topographic

2

quadrangle map of the United States Geological Survey.

3

(e)  Regulation criteria.--The Environmental Quality Board

4

shall develop by regulation criteria:

5

(1)  For the department to utilize for conditioning a

6

well permit based on its impact to the public resources

7

identified under subsection (c) and for ensuring optimal

8

development of oil and gas resources and respecting property

9

rights of oil and gas owners.

10

(2)  For appeal to the Environmental Hearing Board of a

11

permit containing conditions imposed by the department. The

12

regulations shall also provide that the department has the

13

burden of proving that the conditions were necessary to

14

protect against a probable harmful impact of the public

15

resources.

16

(f)  Floodplains.--

17

(1)  No well site may be prepared or well drilled within

18

any floodplain if the well site will have:

19

(i)  a pit or impoundment containing drilling

20

cuttings, flowback water, produced water or hazardous

21

materials, chemicals or wastes within the floodplain; or

22

(ii)  a tank containing hazardous materials,

23

chemicals, condensate, wastes, flowback or produced water

24

within the floodway.

25

(2)  A well site shall not be eligible for a floodplain

26

restriction waiver if the well site will have a tank

27

containing condensate, flowback or produced water within the

28

flood fringe unless all the tanks have adequate floodproofing

29

in accordance with the National Flood Insurance Program

30

standards and accepted engineering practices.

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1

(3)  The department may waive restrictions upon

2

submission of a plan that shall identify the additional

3

measures, facilities or practices to be employed during well

4

site construction, drilling and operations. The waiver, if

5

granted, shall impose permit conditions necessary to protect

6

the waters of this Commonwealth.

7

(4)  Best practices as determined by the department to

8

ensure the protection of the waters of this Commonwealth must

9

be utilized for the storage and handling of all water,

10

chemicals, fuels, hazardous materials or solid waste on a

11

well site located in a floodplain. The department may request

12

that the well site operator submit a plan for the storage and

13

handling of the materials for approval by the department and

14

may impose conditions or amend permits to include permit

15

conditions as are necessary to protect the environment,

16

public health and safety.

17

(5)  Unless otherwise specified by the department, the

18

boundary of the floodplain shall be as indicated on maps and

19

flood insurance studies provided by the Federal Emergency

20

Management Agency. In an area where no Federal Emergency

21

Management Agency maps or studies have defined the boundary

22

of the 100-year frequency floodplain, absent evidence to the

23

contrary, the floodplain shall extend from:

24

(i)  any perennial stream up to 100 feet horizontally

25

from the top of the bank of the perennial stream; or

26

(ii)  from any intermittent stream up to 50 feet

27

horizontally from the top of the bank of the intermittent

28

stream.

29

(g)  Applicability.--

30

(1)  This section shall not apply to a well proposed to

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1

be drilled on an existing well site for which at least one

2

well permit has been issued prior to the effective date of

3

this section.

4

(2)  Nothing in this section shall alter or abridge the

5

terms of any contract, mortgage or other agreement entered

6

into prior to the effective date of this section.

7

§ 3216.  Well site restoration.

8

(a)  General rule.--Each oil or gas well owner or operator

9

shall restore the land surface within the area disturbed in

10

siting, drilling, completing and producing the well.

11

(b)  Plan.--During and after earthmoving or soil disturbing

12

activities, including, but not limited to, activities related to

13

siting, drilling, completing, producing and plugging the well,

14

erosion and sedimentation control measures shall be implemented

15

in accordance with an erosion and sedimentation control plan

16

prepared in accordance with the act of June 22, 1937 (P.L.1987,

17

No.394), known as The Clean Streams Law.

18

(c)  Pits, drilling supplies and equipment.--Within nine

19

months after completion of drilling of a well, the owner or

20

operator shall restore the well site, remove or fill all pits

21

used to contain produced fluids or industrial wastes and remove

22

all drilling supplies and equipment not needed for production.

23

Drilling supplies and equipment not needed for production may be

24

stored on the well site if express written consent of the

25

surface landowner is obtained.

26

(d)  Items related to production or storage.--Within nine

27

months after plugging a well, the owner or operator shall remove

28

all production or storage facilities, supplies and equipment and

29

restore the well site.

30

(e)  Clean Streams Law.--Restoration activities required by

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1

this chapter or in regulations promulgated under this chapter

2

shall also comply with all applicable provisions of The Clean

3

Streams Law.

4

(f)  Violation of chapter.--Failure to restore the well site

5

as required in this chapter or regulations promulgated under

6

this chapter constitutes a violation of this chapter.

7

(g)  Extension.--

8

(1)  The restoration period may be extended by the

9

department for an additional period of time not to exceed two

10

years upon demonstration by the well owner or operator that:

11

(i)  the extension will result in less earth

12

disturbance, increased water reuse or more efficient

13

development of the resources; or

14

(ii)  site restoration cannot be achieved due to

15

adverse weather conditions or a lack of essential fuel,

16

equipment or labor.

17

(2)  The demonstration under paragraph (1) shall do all

18

of the following:

19

(i)  Include a site restoration plan that shall

20

provide for:

21

(A)  the timely removal or fill of all pits used

22

to contain produced fluids or industrial wastes;

23

(B)  the removal of all drilling supplies and

24

equipment not needed for production;

25

(C)  the stabilization of the well site that

26

shall include interim postconstruction storm water

27

management best management practices; or

28

(D)  other measures to be employed to minimize

29

accelerated erosion and sedimentation in accordance

30

with The Clean Streams Law.

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1

(ii)  Provide for returning the portions of the site

2

not occupied by production facilities or equipment to

3

approximate original contours and making them capable of

4

supporting the uses that existed prior to drilling the

5

well.

6

(3)  The department may condition an extension under this

7

subsection as is necessary in accordance with The Clean

8

Streams Law.

9

(h)  Definition.--As used in this section, the term "well

10

site" means areas occupied by all equipment or facilities

11

necessary for or incidental to drilling, production or plugging

12

a well.

13

§ 3217.  Protection of fresh groundwater and casing

14

requirements.

15

(a)  General rule.--To aid in protection of fresh

16

groundwater, well operators shall control and dispose of brines

17

produced from the drilling, alteration or operation of an oil or

18

gas well in a manner consistent with the act of June 22, 1937

19

(P.L.1987, No.394), known as The Clean Streams Law, or any

20

regulation promulgated under The Clean Streams Law.

21

(b)  Casing.--To prevent migration of gas or fluids into

22

sources of fresh groundwater and pollution or diminution of

23

fresh groundwater, a string or strings of casing shall be run

24

and permanently cemented in each well drilled through the fresh

25

water-bearing strata to a depth and in a manner prescribed by

26

regulation by the department.

27

(c)  Procedure when coal has been removed.--If a well is

28

drilled at a location where coal has been removed from one or

29

more coal seams, the well shall be drilled and cased to prevent

30

migration of gas or fluids into the seam from which coal has

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1

been removed in a manner prescribed by regulation of the

2

department. The department and the coal operator, owner or

3

lessee shall be given at least 72 hours' notice prior to

4

commencement of work protecting the mine.

5

(d)  Procedure when coal has not been removed.--If a well is

6

drilled at a location where the coal seam has not been removed,

7

the well shall be drilled to a depth and of a size sufficient to

8

permit placement of casing, packers in and vents on the hole at

9

the points and in the manner prescribed by regulation to exclude

10

gas or fluids from the coal seam, except gas or fluids found

11

naturally in the seam itself, and to enable monitoring the

12

integrity of the production casing.

13

§ 3218.  Protection of water supplies.

14

(a)  General rule.--In addition to the requirements of

15

subsection (c.1), a well operator who affects a public or

16

private water supply by pollution or diminution shall restore or

17

replace the affected supply with an alternate source of water

18

adequate in quantity or quality for the purposes served by the

19

supply. The department shall ensure that the quality of a

20

restored or replaced water supply meets the standards

21

established under the act of May 1, 1984 (P.L.206, No.43), known

22

as the Pennsylvania Safe Drinking Water Act, or is comparable to

23

the quality of the water supply before it was affected by the

24

operator if that water supply exceeded those standards. The

25

Environmental Quality Board shall promulgate regulations

26

necessary to meet the requirements of this subsection.

27

(b)  Pollution or diminution of water supply.--A landowner or

28

water purveyor suffering pollution or diminution of a water

29

supply as a result of the drilling, alteration or operation of

30

an oil or gas well may so notify the department and request that

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1

an investigation be conducted. Within ten days of notification,

2

the department shall investigate the claim and make a

3

determination within 45 days following notification. If the

4

department finds that the pollution or diminution was caused by

5

drilling, alteration or operation activities or if it presumes

6

the well operator responsible for pollution under subsection

7

(c), the department shall issue orders to the well operator

8

necessary to assure compliance with subsection (a), including

9

orders requiring temporary replacement of a water supply where

10

it is determined that pollution or diminution may be of limited

11

duration.

12

(b.1)  (Reserved).

13

(b.2)  Telephone number.--The department shall establish a

14

single Statewide toll-free telephone number that persons may use

15

to report cases of water contamination which may be associated

16

with the development of oil and gas resources. The Statewide

17

toll-free telephone number shall be provided in a conspicuous

18

manner in the notification required under section 3211(b)

19

(relating to well permits) and on the department's Internet

20

website.

21

(b.3)  Responses.--The department shall develop appropriate

22

administrative responses to calls received on the Statewide

23

toll-free number for water contamination.

24

(b.4)  Website.--The department shall publish, on its

25

Internet website, lists of confirmed cases of subterranean water

26

supply contamination that result from hydraulic fracturing.

27

(b.5)  Facility operation qualifications.--The department

28

shall ensure that a facility which seeks a National Pollutant

29

Discharge Elimination System permit for the purposes of treating

30

and discharging wastewater originating from oil and gas

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1

activities into waters of this Commonwealth is operated by a

2

competent and qualified individual.

3

(c)  Presumption.--Unless rebutted by a defense established

4

in subsection (d), it shall be presumed that a well operator is

5

responsible for pollution of a water supply if:

6

(1)  except as set forth in paragraph (2):

7

(i)  the water supply is within 1,000 feet of an oil

8

or gas well; and

9

(ii)  the pollution occurred within six months after

10

completion of drilling or alteration of the oil or gas

11

well; or

12

(2)  in the case of an unconventional well:

13

(i)  the water supply is within 2,500 feet of the

14

unconventional vertical well bore; and

15

(ii)  the pollution occurred within 12 months of the

16

later of completion, drilling, stimulation or alteration

17

of the unconventional well.

18

(c.1)  Requirement.--If the affected water supply is within

19

the rebuttable presumption area as provided in subsection (c)

20

and the rebuttable presumption applies, the operator shall

21

provide a temporary water supply if the water user is without a

22

readily available alternative source of water. The temporary

23

water supply provided under this subsection shall be adequate in

24

quantity and quality for the purposes served by the supply.

25

(d)  Defenses.--To rebut the presumption established under

26

subsection (c), a well operator must affirmatively prove any of

27

the following:

28

(1)  except as set forth in paragraph (2):

29

(i)  the pollution existed prior to the drilling or

30

alteration activity as determined by a predrilling or

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1

prealteration survey;

2

(ii)  the landowner or water purveyor refused to

3

allow the operator access to conduct a predrilling or

4

prealteration survey;

5

(iii)  the water supply is not within 1,000 feet of

6

the well;

7

(iv)  the pollution occurred more than six months

8

after completion of drilling or alteration activities;

9

and

10

(v)  the pollution occurred as the result of a cause

11

other than the drilling or alteration activity; or

12

(2)  in the case of an unconventional well:

13

(i)  the pollution existed prior to the drilling,

14

stimulation or alteration activity as determined by a

15

predrilling or prealteration survey;

16

(ii)  the landowner or water purveyor refused to

17

allow the operator access to conduct a predrilling or

18

prealteration survey;

19

(iii)  the water supply is not within 2,500 feet of

20

the unconventional vertical well bore;

21

(iv)  the pollution occurred more than 12 months

22

after completion of drilling or alteration activities; or

23

(v)  the pollution occurred as the result of a cause

24

other than the drilling or alteration activity.

25

(e)  Independent certified laboratory.--An operator electing

26

to preserve a defense under subsection (d)(1) or (2) shall

27

retain an independent certified laboratory to conduct a

28

predrilling or prealteration survey of the water supply. A copy

29

of survey results shall be submitted to the department and the

30

landowner or water purveyor in the manner prescribed by the

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1

department.

2

(e.1)  Notice.--An operator of an unconventional well must

3

provide written notice to the landowner or water purveyor

4

indicating that the presumption established under subsection (c)

5

may be void if the landowner or water purveyor refused to allow

6

the operator access to conduct a predrilling or prealteration

7

survey. Proof of written notice to the landowner or water

8

purveyor shall be provided to the department for the operator to

9

retain the protections under subsection (d)(2)(ii). Proof of

10

written notice shall be presumed if provided in accordance with

11

section 3212(a) (relating to permit objections).

12

(f)  Other remedies preserved.--Nothing in this section shall

13

prevent a landowner or water purveyor claiming pollution or

14

diminution of a water supply from seeking any other remedy at

15

law or in equity.

16

§ 3218.1.  Notification to public drinking water systems.

17

Upon receiving notification of a spill, the department shall,

18

after investigating the incident, notify any public drinking

19

water facility that could be affected by the event that the

20

event occurred. The notification shall contain a brief

21

description of the event and any expected impact on water

22

quality.

23

§ 3218.2.  Containment for unconventional wells.

24

(a)  Sites.--Unconventional well sites shall be designed and

25

constructed to prevent spills to the ground surface or spills

26

off the well site. Containment practices shall meet all of the

27

following:

28

(1)  Be instituted on the well site during both drilling

29

and hydraulic fracturing operations.

30

(2)  Be sufficiently impervious and able to contain

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1

spilled material or waste until it can be removed or treated.

2

(3)  Be compatible with the waste material or waste

3

stored or used within the containment.

4

(4)  Additional practices as promulgated in regulation by

5

the Environmental Quality Board.

6

(b)  Plan.--The applicant shall submit a plan to the

7

department describing the containment practices to be utilized

8

and the area of the well site where containment systems will be

9

employed. The plan shall include a description of the equipment

10

to be kept onsite during drilling and hydraulic fracturing

11

operations to prevent a spill from leaving the well site.

12

(c)  Materials stored.--Containment systems shall be used

13

wherever any of the following are stored:

14

(1)  Drilling mud.

15

(2)  Hydraulic oil.

16

(3)  Diesel fuel.

17

(4)  Drilling mud additives.

18

(5)  Hydraulic fracturing additives.

19

(6)  Hydraulic fracturing flowback.

20

(d)  Capacity.--Areas where any additives, chemicals, oils or

21

fuels are to be stored must have sufficient containment capacity

22

to hold the volume of the largest container stored in the area

23

plus 10% to allow for precipitation, unless the container is

24

equipped with individual secondary containment.

25

(e)  Definition.--As used in this section, the term "well

26

site" means areas occupied by all equipment or facilities

27

necessary for or incidental to drilling, production or plugging

28

a well.

29

§ 3218.3.  Transportation records regarding wastewater fluids.

30

(a)  Requirements.--A well operator of an unconventional well

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1

that transports wastewater fluids shall do all of the following:

2

(1)  Maintain records for five years, in accordance with

3

regulations under subsection (b) and on a form approved by

4

the department, of the amount and destination of the fluids

5

transported.

6

(2)  Make the records under paragraph (1) available to

7

the department upon request.

8

(b)  Recordkeeping.--Recordkeeping requirements shall be

9

determined by the department and shall include the following:

10

(1)  The number of gallons of wastewater fluids produced

11

in the drilling, stimulation or alteration of a well.

12

(2)  Upon completion of the well, the name of the person

13

of or company that transported the wastewater fluids to a

14

disposal site or to a location other than the well site.

15

(3)  Each location where wastewater fluids were disposed

16

of or transported and the volumes that were disposed of at

17

the location other than the well site.

18

(4)  The method of disposal.

19

§ 3218.4.  Corrosion control requirements.

20

(a)  Pipelines.--All buried metallic pipelines shall be

21

installed and placed in operation in accordance with 49 CFR Pt.

22

192 Subpt. I (relating to requirements for corrosion control).

23

(b)  Tanks.--Permanent aboveground and underground tanks must

24

comply with the applicable corrosion control requirements in the

25

department's storage tank regulations.

26

(c)  Other structures.--For all other buried metallic

27

structures, including well casings, the Environmental Quality

28

Board shall promulgate regulations setting forth methods of

29

determining the need for corrosion protection and installing

30

necessary corrosion protection.

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1

(d)  Procedures.--The corrosion control procedures under

2

subsections (a) and (b) must be carried out by or under the

3

direction of a person qualified in corrosion methods.

4

(e)  Compliance.--An operator of a new, replaced, relocated

5

or otherwise changed pipeline must be in compliance with the

6

applicable requirements of this section by the date the pipeline

7

goes into service.

8

§ 3218.5.  Gathering lines.

9

(a)  Requirement.--Owners and operators of gathering lines

10

shall comply with section 2(5)(i.1) of the act of December 10,

11

1974 (P.L.852, No.287), referred to as the Underground Utility

12

Line Protection Law.

13

(b)  Definition.--As used in this section, the term

14

"gathering line" means a pipeline used to transport natural gas

15

from a production facility to a transmission line.

16

§ 3219.  Use of safety devices.

17

Any person engaged in drilling an oil or gas well shall equip

18

it with casings of sufficient strength, and other safety devices

19

as are necessary, in the manner prescribed by regulation of the

20

department, and shall use every effort and endeavor effectively

21

to prevent blowouts, explosions and fires.

22

§ 3219.1.  Well control emergency response.

23

(a)  Contracts.--The department may enter into contracts with

24

well control specialists in order to provide adequate emergency

25

response services in the event of a well control emergency. The

26

department shall make available upon request by a county

27

information relating to contracts with well control specialists.

28

(b)  Civil immunity.--Except as set forth in subsection (c),

29

a well control specialist with which the department has entered

30

into a contract under subsection (a) shall be immune from civil

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1

liability for actions taken in good faith to carry out its

2

contractual obligations.

3

(c)  Nonapplicability.--Subsection (b) shall not apply to

4

damage arising from any of the following:

5

(1)  Breach of the contract under subsection (a).

6

(2)  An intentional tort.

7

(3)  Gross negligence.

8

§ 3220.  Plugging requirements.

9

(a)  General rule.--Upon abandoning a well, the owner or

10

operator shall plug it in the manner prescribed by regulation of

11

the department to stop vertical flow of fluids or gas within the

12

well bore, unless the department has granted inactive status for

13

the well or it has been approved by the department as an orphan

14

well. If the department determines that a prior owner or

15

operator received economic benefit, other than economic benefit

16

derived only as a landowner or from a royalty interest, after

17

April 18, 1979, from an orphan well or an unregistered well, the

18

owner or operator shall be responsible for plugging the well. In

19

the case of a gas well penetrating a workable coal seam which

20

was drilled prior to January 30, 1956, or which was permitted

21

after that date but not plugged in accordance with this chapter,

22

if the owner or operator or a coal operator or an agent proposes

23

to plug the well to allow mining through it, the gas well shall

24

be cleaned to a depth of at least 200 feet below the coal seam

25

through which mining is proposed and, unless impracticable, to a

26

point 200 feet below the deepest mineable coal seam. The gas

27

well shall be plugged from that depth in accordance with section

28

13 of the act of December 18, 1984 (P.L.1069, No.214), known as

29

the Coal and Gas Resource Coordination Act, and the regulations

30

of the department.

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1

(b)  Areas underlain by coal.--Prior to the plugging and

2

abandonment of a well in an area underlain by a workable coal

3

seam, the well operator or owner shall notify the department and

4

the coal operator, lessee or owner and submit a plat, on a form

5

to be furnished by the department, showing the location of the

6

well and fixing the date and time plugging will commence, which

7

shall be not less than three working days, nor more than 30

8

days, after the notice is received, to permit representatives of

9

the persons notified to be present at the plugging. Notice and

10

the right to be present may be waived by the department and the

11

coal operator, lessee or owner, but waiver by the coal operator,

12

lessee or owner shall be in writing and a copy shall be attached

13

to the notice of abandonment filed with the department under

14

this section. Whether or not representatives attend, if the well

15

operator has fully complied with this section, the well operator

16

may proceed, at the time fixed, to plug the well in the manner

17

prescribed by regulation of the department. When plugging has

18

been completed, a certificate shall be prepared and signed, on a

19

form to be furnished by the department, by two experienced and

20

qualified people who participated in the work setting forth the

21

time and manner in which the well was plugged. One copy of the

22

certificate shall be mailed to each coal operator, lessee or

23

owner to whom notice was given by certified mail and another

24

shall be mailed to the department.

25

(c)  Abandoned wells.--Prior to abandonment of a well, except

26

an uncompleted bore hole plugged immediately upon suspension of

27

drilling in an area not underlain by a workable coal seam, the

28

well operator shall notify the department of the intention to

29

plug and abandon the well and submit a plat, on a form to be

30

furnished by the department, showing the location of the well

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1

and fixing the date and time at which plugging will commence,

2

which shall be not less than three working days, nor more than

3

30 days, after the notice is received, to permit a department

4

representative to be present at the plugging. The notice or

5

waiting period may be verbally waived by the department. In

6

noncoal areas where more than one well has been drilled as part

7

of the same development project and the wells are now to be

8

plugged, the department shall be given three working days'

9

notice prior to plugging the first well of the project, subject

10

to waiver of notice described in subsection (b). In the plugging

11

of subsequent wells, no additional notice shall be required if

12

plugging on the project is continuous. If plugging of subsequent

13

wells is delayed for any reason, notice shall be given to the

14

department of continuation of the project. Whether or not a

15

representative attends, if the well operator has fully complied

16

with this section, the well operator may proceed, at the time

17

fixed, to plug the well in the manner prescribed by regulation

18

of the department. When plugging has been completed, a

19

certificate shall be prepared, on a form to be furnished by the

20

department, by two experienced and qualified people who

21

participated in the work setting forth the time and manner in

22

which the well was plugged. A copy of the certificate shall be

23

mailed to the department.

24

(d)  Wells abandoned upon completion of drilling.--If a well

25

is to be abandoned immediately after completion of drilling, the

26

well operator shall give at least 24 hours' notice by telephone,

27

confirmed by certified mail, to the department and to the coal

28

operator, lessee or owner, if any, fixing the date and time when

29

plugging will commence. Notice and the right to be present may

30

be waived by the department and the coal operator, lessee or

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1

owner, if any. Whether or not representatives of the department

2

or coal operator, lessee or owner, if any, attend, if the well

3

operator has fully complied with the requirements of this

4

section, the well operator may proceed, at the time fixed, to

5

plug the well in the manner provided by regulation of the

6

department. The well operator shall prepare the certificate of

7

plugging and mail copies of the same as provided in subsection

8

(b).

9

(e)  Orphan wells.--If a well is an orphan well or abandoned

10

without plugging, or if a well is in operation but not

11

registered under section 3213 (relating to well registration and

12

identification), the department may enter upon the well site and

13

plug the well and to sell equipment, casing and pipe at the site

14

which may have been used in production of the well in order to

15

recover the costs of plugging. The department shall make an

16

effort to determine ownership of a well which is in operation

17

but has not been registered and provide written notice to the

18

owner of pending action under this subsection. If the department

19

cannot determine ownership within 30 days, it may proceed under

20

this subsection. Costs of plugging shall have priority over all

21

liens on equipment, casing and pipe, and the sale shall be free

22

and clear of those liens to the extent that the cost of plugging

23

exceeds the sale price. If the amount obtained for casing and

24

pipe salvaged at the site is inadequate to pay for plugging, the

25

owner or operator of the abandoned or unregistered well shall be

26

liable for the additional costs.

27

(f)  Definition.--For purposes of this section, the term

28

"owner" does not include the owner or possessor of surface real

29

property, on which an abandoned well is located, who did not

30

participate or incur costs in and had no right of control over

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1

the drilling or extraction operation of the abandoned well.

2

§ 3221.  Alternative methods.

3

A well operator may request permission to use a method or

4

material other than those required by this chapter and

5

applicable regulations for casing, plugging or equipping a well

6

in an application to the department which describes the proposed

7

alternative in reasonable detail and indicates the manner in

8

which it will accomplish the goals of this chapter. Notice of

9

filing of the application shall be given by the well operator by

10

certified mail to any affected coal operators, who may, within

11

15 days after the notice, file objections to the proposed

12

alternative method or material. If no timely objections are

13

filed or raised by the department, the department shall

14

determine whether to allow use of the proposed alternative

15

method or material.

16

§ 3222.  Well reporting requirements.

17

(a)  General rule.--Except as provided in subsection (a.1),  

18

each well operator shall file with the department, on a form

19

provided by the department, an annual report specifying the

20

amount of production, on the most well-specific basis available,

21

along with the status of each well, except that in subsequent

22

years only changes in status must be reported. The Commonwealth

23

may utilize reported information in enforcement proceedings, in

24

making designations or determinations under section 1927-A of

25

the act of April 9, 1929 (P.L.177, No.175), known as The

26

Administrative Code of 1929, or in aggregate form for

27

statistical purposes.

28

(a.1)  Unconventional wells.--Each operator of an

29

unconventional well shall file with the department, on a form

30

provided by the department, a semiannual report specifying the

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1

amount of production on the most well-specific basis available.

2

The initial report under this subsection shall be filed by

3

August 15 and shall include production data from the preceding

4

calendar year and specify the status of each well. In subsequent

5

reports, only changes in status must be reported. Subsequent

6

semiannual reports shall be filed with the department on or

7

before February 15 and August 15 of each year and shall include

8

production data from the preceding reporting period. The

9

Commonwealth may utilize reported information in enforcement

10

proceedings, in making designations or determinations under

11

section 1927-A of The Administrative Code of 1929 or in

12

aggregate form for statistical purposes. Beginning November 1,

13

2010, the department shall make the reports available on its

14

publicly accessible Internet website. Costs incurred by the

15

department to comply with the requirements of this subsection

16

shall be paid out of the fees collected under section 3211(d)

17

(relating to well permits).

18

(b)  Collection of data.--

19

(1)  Well operators shall maintain a record of each well

20

drilled or altered.

21

(2)  A record containing the information required by the

22

department shall be filed within 30 days after drilling of a

23

well.

24

(3)  Within 30 days after completion of the well, when

25

the well is capable of production, a completion report

26

containing any additional required information shall be filed

27

and shall be maintained by the department.

28

(4)  Upon request of the department, the well operator

29

shall, within 90 days of completion or recompletion of

30

drilling, submit a copy of any electrical, radioactive or

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1

other standard industry logs which have been run.

2

(5)  Upon request by the department within one year, the

3

well operator shall file a copy of drill stem test charts,

4

formation water analysis, porosity, permeability or fluid

5

saturation measurements, core analysis and lithologic log or

6

sample description or other similar data as compiled. No

7

information shall be required unless the well operator had it

8

compiled in the ordinary course of business, and

9

interpretation of data under this paragraph is not required

10

to be filed.

11

(b.1)  Report contents.--

12

(1)  The completion report shall contain the operator's

13

stimulation record. The stimulation record shall include all

14

of the following:

15

(i)  A descriptive list of the chemical additives in

16

the stimulation fluids, including any acid, biocide,

17

breaker, brine, corrosion inhibitor, crosslinker,

18

demulsifier, friction reducer, gel, iron control, oxygen

19

scavenger, Ph adjusting agent, proppant, scale inhibitor

20

and surfactant.

21

(ii)  The trade name, vendor and a brief descriptor

22

of the intended use or function of each chemical additive

23

in the stimulation fluid.

24

(iii)  A list of the chemicals intentionally added to

25

the stimulation fluid, by name and chemical abstract

26

service number.

27

(iv)  The maximum concentration, in percent by mass,

28

of each chemical intentionally added to the stimulation

29

fluid.

30

(v)  The total volume of the base fluid.

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1

(vi)  A list of water sources used under the approved

2

water management plan and the volume of water used.

3

(vii)  The pump rates and pressure used in the well.

4

(viii)  The total volume of recycled water used.

5

(2)  The well record shall identify all of the following:

6

(i)  Whether methane was encountered in other than a

7

target formation.

8

(ii)  The country of origin and manufacture of

9

tubular steel products used in the construction of the

10

well.

11

(b.2)  Trade secret or confidential proprietary

12

information.--When an operator submits its stimulation record

13

under subsection (b.1), the operator may designate specific

14

portions of the stimulation record as containing a trade secret

15

or confidential proprietary information. The department shall

16

prevent disclosure of a designated trade secret or confidential

17

proprietary information to the extent permitted by the act of

18

February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law 

19

or other applicable State law.

20

(c)  Drill cuttings and core samples.--Upon notification by

21

the department prior to commencement of drilling, the well

22

operator shall collect any additional data specified by the

23

department, including representative drill cuttings and samples

24

from cores taken and any other geological information that the

25

operator reasonably can compile. Interpretation of the data is

26

not required to be filed.

27

(d)  Retention and filing.--Data required under subsection

28

(b)(5) and drill cuttings required under subsection (c) shall be

29

retained by the well operator and filed with the department no

30

more than three years after completion of the well. Upon

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1

request, the department shall extend the deadline up to five

2

years from the date of completion of the well. The department

3

shall be entitled to utilize information collected under this

4

subsection in enforcement proceedings, in making designations or

5

determinations under section 1927-A of The Administrative Code

6

of 1929 and in aggregate form for statistical purposes.

7

§ 3222.1.  Hydraulic fracturing chemical disclosure

8

requirements.

9

(a)  Applicability.--This section applies to hydraulic

10

fracturing of unconventional wells performed on or after the

11

effective date of this section.

12

(b)  Required disclosures.--

13

(1)  Except as provided under subsection (d), a service

14

provider who performs any part of a hydraulic fracturing

15

treatment and a vendor who provides hydraulic fracturing

16

additives directly to the operator for a hydraulic fracturing

17

treatment shall furnish the operator with the information

18

required under paragraph (2) not later than 60 days after the

19

commencement of the hydraulic fracturing.

20

(2)  Within 60 days following the conclusion of hydraulic

21

fracturing, the operator of the well shall complete the

22

chemical disclosure registry form and post the form on the

23

chemical disclosure registry in accordance with regulations

24

promulgated under this chapter in a format that does not link

25

chemicals to their respective hydraulic fracturing additive.

26

(3)  If the vendor, service provider or operator claims

27

that the specific identity of a chemical or the concentration

28

of a chemical, or both, are a trade secret or confidential

29

proprietary information, the operator of the well must

30

indicate that on the chemical disclosure registry form, and

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1

the vendor, service provider or operator shall submit a

2

signed written statement that the record contains a trade

3

secret or confidential proprietary information. If a chemical

4

is a trade secret, the operator shall include in the chemical

5

registry disclosure form the chemical family or similar

6

description associated with the chemical.

7

(4)  At the time of claiming that any of the following

8

are entitled to protection under paragraph (3), a vendor,

9

service provider or operator shall file a signed written

10

statement that the record contains a trade secret or

11

confidential proprietary information:

12

(i)  A hydraulic fracturing additive.

13

(ii)  A chemical.

14

(iii)  A concentration.

15

(iv)  Any combination of subparagraphs (i), (ii) and

16

(iii).

17

(5)  Unless the information is entitled to protection as

18

a trade secret or confidential proprietary information,

19

information submitted to the department or posted to the

20

chemical disclosure registry shall be a public record.

21

(6)  By January 1, 2013, the department shall determine

22

whether the chemical disclosure registry allows the

23

department and the public to search and sort Pennsylvania

24

chemical disclosure information by geographic area, chemical

25

ingredient, chemical abstract service number, time period and

26

operator. If the department determines that there is no

27

reasonable assurance that the registry will allow for

28

searches by geographic area, chemical ingredient, chemical

29

abstract service number, time period and operator, at a date

30

acceptable to the department, the department shall

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1

investigate the feasibility of making the information under

2

paragraph (2) available on the department's Internet website

3

in a manner that will allow the department and the public to

4

search and sort the information by geographic area, chemical

5

ingredient, chemical abstract service number, time period and

6

operator, and shall report to the General Assembly whether

7

additional resources may be needed to implement the searches

8

and sorting.

9

(7)  A vendor shall not be responsible for any inaccuracy

10

in information that is provided to the vendor by a third-

11

party manufacturer.

12

(8)  A service provider shall not be responsible for any

13

inaccuracy in information that is provided to the service

14

provider by the vendor.

15

(9)  An operator shall not be responsible for any

16

inaccuracy in information provided to the operator by the

17

vendor or service provider or manufacturer.

18

(10)  A vendor, service company or operator shall

19

identify the specific identity and amount of any chemicals

20

claimed to be a trade secret or confidential proprietary

21

information to any health professional who requests the

22

information in writing if the health professional executes a

23

confidentiality agreement and provides a written statement of

24

need for the information indicating all of the following:

25

(i)  The information is needed for the purpose of

26

diagnosis or treatment of an individual.

27

(ii)  The individual being diagnosed or treated may

28

have been exposed to a hazardous chemical.

29

(iii)  Knowledge of information will assist in the

30

diagnosis or treatment of an individual.

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1

(11)  If a health professional determines that a medical

2

emergency exists and the specific identity and amount of any

3

chemicals claimed to be a trade secret or confidential

4

proprietary information are necessary for emergency

5

treatment, the vendor, service provider or operator shall

6

immediately disclose the information to the health

7

professional upon a verbal acknowledgment by the health

8

professional that the information may not be used for

9

purposes other than the health needs asserted and that the

10

health professional shall maintain the information as

11

confidential. The vendor, service provider or operator may

12

request, and the health professional shall provide upon

13

request, a written statement of need and a confidentiality

14

agreement from the health professional as soon as

15

circumstances permit, in conformance with regulations

16

promulgated under this chapter.

17

(c)  Disclosures not required.--Notwithstanding any other

18

provision of this chapter, a vendor, service provider or

19

operator shall not be required to do any of the following:

20

(1)  Disclose chemicals that are not disclosed to it by

21

the manufacturer, vendor or service provider.

22

(2)  Disclose chemicals that were not intentionally added

23

to the stimulation fluid.

24

(3)  Disclose chemicals that occur incidentally or are

25

otherwise unintentionally present in trace amounts, may be

26

the incidental result of a chemical reaction or chemical

27

process or may be constituents of naturally occurring

28

materials that become part of a stimulation fluid.

29

(d)  Trade secrets and confidential proprietary

30

information.--

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1

(1)  Notwithstanding any other provision of this chapter,

2

a vendor, service company or operator shall not be required

3

to disclose trade secrets or confidential proprietary

4

information to the chemical disclosure registry.

5

(2)  The following shall apply:

6

(i)  If the specific identity of a chemical, the

7

concentration of a chemical or both the specific identity

8

and concentration of a chemical are claimed to be a trade

9

secret or confidential proprietary information, the

10

vendor, service provider or operator may withhold the

11

specific identity, the concentration, or both the

12

specific identity and concentration, of the chemical from

13

the information provided to the chemical disclosure

14

registry.

15

(ii)  Nothing under this paragraph shall prohibit any

16

of the following from obtaining from a vendor, service

17

provider or operator information that may be needed to

18

respond to a spill or release: