WVDEP Initiates Study Under New Horizontal Well Control Act

Under legislation passed in December 2011, which established a comprehensive program for the regulation of oil and gas operations utilizing horizontal drilling methods and related activities, the West Virginia Legislature directed the Department of Environmental Protection to conduct certain studies to inform future decisions regarding the need, or lack thereof, for further legislation or regulations in this area. To comply with this legislative directive the DEP has elected to outsource the performance of these studies. Based upon the proposal adopted by DEP, the studies may not fully reflect the intent of the Legislature.

The West Virginia Natural Gas Horizontal Well Control Act (HB 401) specified three areas where DEP was to perform technical investigations and report back to the Legislature on its findings. The three areas designated for further study are set out in Table 1 along with the deadlines established by the Legislature for DEP to submit a report providing the results of each study.

Statutory Authority	Description of Study	Deadline for Report to Legislature
§22-6A-12(e)	The secretary shall, by December 31, 2012, report to the Legislature on the noise, light, dust and volatile organic compounds generated by the drilling of horizontal wells as they relate to the well location restrictions regarding occupied dwelling structures pursuant to this section. Upon finding, if any, by the secretary that the well location restrictions regarding occupied dwelling structures are inadequate or otherwise require alteration to address the items examined in the study required by this subsection, the secretary shall have the authority to propose for promulgation legislative rules establishing guidelines and procedures regarding reasonable levels of noise, light, dust and volatile organic compounds relating to drilling horizontal wells, including reasonable means of mitigating such factors, if necessary.	December 31, 2012
§22-6A-22	The secretary shall, by July 1, 2013, report to the Legislature on the need, if any, for further regulation of air pollution occurring from well sites, including the possible health impacts, the need for air quality inspections during drilling, the need for inspections of compressors, pits and impoundments, and any other potential air quality impacts that could be generated from this type of drilling activity that could harm human health or the environment. If he or she finds that specialized permit conditions are necessary, the secretary shall promulgate legislative rules establishing these new rules.	July 1, 2013
§22-6A-23	The secretary shall, by January 1, 2013, report to the Legislature on the safety of pits and impoundments utilized pursuant to section nine of this article including and evaluation of whether testing and special regulatory provision is needed for radioactivity or other toxins held in the pits and impoundments. Upon a finding that greater monitoring, safety and design requirements or other specialized permit conditions are necessary, the secretary shall propose for promulgation legislative rules establishing these new requirements.	January 1, 2013

DEP has recently indicated that it has accepted a proposal submitted on behalf of the West Virginia Water Resource Institute and West Virginia University, dated April 26, 2012, for the purpose of fulfilling the legislative mandate. A copy of this proposal (the “Proposal”) is available on IOGA’s website at www.iogawv.com. This article addresses the details of the studies as described in the Proposal with reference to the expressed legislative mandate.

A. General Approach of the Proposal

Rather than following the three distinct areas of study specified by the Legislature the Proposal takes a more general approach:


The Proposal establishes its “Objectives” based upon the following conclusions:


With these Objectives stated – which do not purport to track the objectives of the Legislature in directing that certain studies be performed - the Proposal sets forth its characterization of the three components of the work to be performed:

• Air Quality – Literature Review and Field Monitoring of Active Shale Gas Wells
• Water Quality – Literature Review and Field Monitoring of Active Shale Gas Wells
• Pit and Impoundment Safety Study

Each component of the Proposal with the objectives identified in the Proposal is summarized below.

1.    Air Quality – Literature Review and Field Monitoring of Active Shale Gas Wells

Objective 1: Literature and Technology review for Air Quality, Noise and Light Monitoring of Horizontal Well Development.

Work to be performed in connection with this Objective includes a review of “existing and proposed regulations in states with active (or proposed) horizontal well development activities;” a review of case studies with documented air quality, noise and light impacts by horizontal well development operations; and a review of “all available literature, paying close attention to studies conducted in West Virginia and surrounding states.”

On the basis of the described literature review the Proposal states that there will be identified –

• “differences in regulations and/or practices such as parameters measured, distances from well pads, etc.”
• “gaps or topics not covered in existing and proposed regulations that should be considered based on scientific research or results of health effects studies,” and
• “technologies used to address air quality, noise and light issues and provide a performance review of each technology.”

On the basis of this literature review the Proposal states that a summary will be prepared “of best practices and technologies.”

Objective 2: Develop and Conduct an On-Site Air Quality, Noise and Light Monitoring

The Proposal provides for the development of a monitoring plan that will identify parameters that will be sampled at fixed locations from the well pad intended to reflect in part “current setback distances from nearby structures.” Samples will be taken at a minimum of “2 to 3 drilling sites within West Virginia” used by different drilling companies and at locations with “differing geologic characteristics.” The Proposal provides that “state agencies” will be consulted to obtain approval of and access to these sites. The parameters to be monitored under the plan at these locations will include hydrocarbons, volatile organic compounds (“VOCs”), radioactivity, particulates, light and dust. The Proposal calls for the use of a mobile air monitoring laboratory available through the Department of Energy’s National Energy Technology Laboratory (“NETL”) for analysis of these samples.

Among the benchmarks to which the air monitoring results will be compared the Proposal cites the National Ambient Air Quality Standards (“NAAQS”) developed by the U. S. Environmental Protection Agency. However, the manner by which compliance with certain of the NAAQS is measured (e.g., annual average concentration) may make any comparison of short term monitoring results with these standards inappropriate.
   
The Proposal acknowledges that there are no national standards identified for light but proposes further research to identify any studies that have been conducted on the amount of light generated by a drilling site. With respect to noise the Proposal cites a 24-hour exposure level of 70 decibels as having been identified to prevent any measurable hearing loss over a lifetime, with levels of 55 decibels outdoors and 45 decibels indoors identified as preventing activity interference or annoyance.


2.    Water Quality – Literature Review and Field Monitoring of Active Shale Gas Wells

Objective 3: Develop and Conduct an On-Site Water and Waste Stream Monitoring Plan
   
This component of the Proposal represents the most significant departure from the specific studies mandated by the Legislature. A review of the studies described in Table 1 reveals there is no requirement for a general review of water quality impacts. Certainly, given the considerable focus on potential threats to groundwater from hydraulic fracturing in studies performed both regionally and nationally it would be reasonable for the Legislature to conclude that there was already sufficient information available on this issue. Despite the absence of a mandate in this area, the Proposal nevertheless advocates a review of literature (1) to determine the types of fluids used in hydraulic fracturing; (2) to define “the concerns with potential surface and ground water contamination that may be caused by horizontal well development activities,” and (3) to determine “how surface and ground water sources are protected during the well drilling process.” In addition to the information to be collected from the literature review, the Proposal establishes a sampling program at “a minimum of 2 or 3 drilling sites” where a plan will be developed to monitor drilling fluids, muds and cuttings along with hydraulic fracturing fluids, flowback and produced water. Samples collected will be analyzed and results compared to “environmental water quality standards.” Because water quality standards in West Virginia are applicable only to “waters of the State” it is not clear how the Proposal would relate data from the various fluids and cuttings to be sampled to compliance with State water quality standards. The Proposal also discusses the sampling of flowback water for radioactivity.

With regard to measuring impacts to groundwater from pits used for waste storage the Proposal calls for groundwater monitoring wells to be installed “around at least one single-lined pit located on the study sites prior to use of the pits” and for samples of groundwater to be taken “prior to pit usage and once the pits are filled.” The Proposal further provides:


The frequency for monitoring of the groundwater wells at the pits is one sample prior to any waste being placed in the pit and one sample after waste has been placed in the pit.
   
3.    Pit and Impoundment Safety

Objective 4: Evaluate Structural Integrity and Safety of Pits and Impoundments
   
The Proposal calls for engineering reviews of submitted and approved construction plans for pits and impoundments from twelve different companies active across West Virginia to determine their compliance with state and federal regulations. Field inspections will be conducted at these locations which will include audits of actual construction practices to determine conformance with approved permit documents. At six of these locations geotechnical soil property testing will be conducted to obtain independent verification of properties and site conditions.

4.    Project Deliverables

The Proposal commits to providing monthly updates on the progress of the studies including data collected. The final report will include discussion of the following areas:

• Specific issues observed in the field related to noise, light, air quality, water quality or waste stream, and pit and impoundment safety;
• Reference of field results to other commercial and industrial activities to provide a comparison on the impacts well development activities have on the surrounding environment;
• Gaps in current West Virginia regulations that do not address issues observed in the field;
• Potential technologies and practices that may adequately address concerns identified in the field;
• Further research studies to address gaps in existing technology or regulatory provisions based on concerns identified; and
• An assessment of pits and impoundments with conclusions and recommendations for safe and effective design construction and usage of pits and impoundments.

Path Forward

Under the schedule provided with the Proposal work was to begin in May 2012 with a final report provided to DEP by October 31, 2012. This completion date is well in advance of the deadlines specified by the Legislature. Presumably this will allow the DEP to identify areas where additional investigation is warranted and to develop and implement a plant to collect such information.

IOGA’s Environmental and Safety Committee is concerned with the scope of the studies to be undertaken and intends to monitor and report on the work being performed under the Proposal. Consideration is being given to discussing issues raised by the Proposal with the DEP toward the goal of assuring that the information sought by the Legislature is obtained and useful. Of particular concern is the failure of the Proposal to include any type of cost-benefit analysis regarding any recommended technologies or remedies identified to address the perceived harm to be avoided. Finally, we note that, to the best of our knowledge, once again the industry that is the subject of the Proposal and studies had little, if any, input into the process developed to evaluate its operations.