Marcellus Regulation Ordered

DEP to issue emergency rules

Morgantown Dominion Post
13 July 2011
By David Beard

CHARLESTON — Marcellus drilling regulation got a kick-start Tuesday afternoon.

Acting Gov. Earl Ray Tomblin issued an executive order directing the Department of Environmental Protection (DEP) to put in place — the official word is promulgate — emergency rules to govern Marcellus shale drilling activities. These will be in effect until the Legislature develops comprehensive legislation.

Acting Senate President Jeff Kessler, D-Marshall, explained that emergency agency rules take effect immediately upon adoption, without Legislative OK, but are temporary. They expire 15 months after adoption.

Tomblin made his announcement at a press conference packed with legislators, public officials, gas industry representatives and interested residents.

“I believe the requirements I set forth will responsibly regulate Marcellus shale drilling,” he said, “provide regulatory certainty in our burgeoning natural gas industry, protect our citizens and our environment today and in the future, create good-paying jobs in our natural gas and manufacturing industries, and ensure that our partners in the private sector responsibly develop an abundant energy source for our state and our nation.”

Tomblin acknowledged the flood of comments regarding Marcellus regulation that poured into his office from concerned residents and groups.

“I’ve heard you and I think you will be pleased with my directions,” he said. Environmental protection, thousands of jobs and the revitalization of the state’s chemical and manufacturing sectors all hinge on responsible development of Marcellus shale.

“Regulatory uncertainty like that created by the EPA in our coal industry simply is not an option that I’m willing to consider,” he said.

Opening the floor to questions, Tomblin and DEP Secretary Randy Huffman responded to several from The Dominion Post.

There is no specific deadline to draft and enact the rules, Huffman said, but he’d prefer “sooner rather than later — probably within the next 30 days.”

Will existing operations be grandfathered? Huffman said they would definitely affect new permits, but for existing ones, “we haven’t thought that through yet.” It would be difficult to make them retroactive, he said.

Tomblin agreed, equating retroactive regulation to the Environmental Protection Agency’s revoking of the Spruce Mine permit after it had been granted.

Will the rules affect the timing of the much-discussed special session for a Marcellus bill suggested for early August?

“Obviously it’s a very complicated issue,” Tomblin said of tackling a new industry. The rules are a first step, taking on important environmental safety issues. He’s still willing to call a session as soon as the Legislature has a bill ready.

Asked if the state has enough inspectors to enforce the rules, Tomblin reminded the audience he asked the Legislature during the final days of the session to find $2 million in the general fund to pay for more inspectors. That didn’t happen, so the DEP will have to get by with what it has. Huffman added that the DEP will adjust and modify its program as it goes forward.

Legislator and industry responses

Monongalia County Delegate Barbara Evans Fleischauer, part of the 10-member Marcellus select committee working on a new bill, attended and said, “I was glad to hear it.” She hadn’t seen the order and would reserve judgment on the details, but “we needed something as soon as possible.”

Delegate Mike Manypenny, D-Taylor, worked closely with Fleischauer on environmental elements of the House bill last session. He called the order a “step in the right direction. ... It shows that a few legislators and a movement of the people can make policy changes.”

Manypenny and Fleischauer were instrumental in drafting a letter, signed by 21 delegates, calling for a moratorium on new permits and Marcellus regulation that failed. “I think he listened to that letter and the people,” Manypenny said.

Steve Downey, vice president of business development for EnerVest, a Texasbased oil and gas developer, and treasurer of the Independent Oil and Gas Association of West Virginia, attended and was pleased with Tomblin’s actions.

Each horizontal well costs $7 million to $9 million, and means jobs and tax revenues. “Regulatory certainty is very important,” he said.

Kessler stood at the front with other legisaltors. Afterward, he told The Dominion Post, “I think it was much needed. ... I appreciate the governor’s leadership” in taking this first step. Among the provisions is one he’s publicly supported — closing the so-called “Haliburton loophole” exempting disclosure of fracking chemicals from the clean Water Act. Tomblin’s order requires disclosure.

The announcement also gives the Legislature a little breathing room to develop a bill, he said. A bill could be a matter of a few months, instead of the days or weeks under the speculated Aug. 1 special session.

House Speaker Rick Thompson had a prior commitment and was unable to attend the announcement, but issued a statement:

“I believe Acting Governor Tomblin is being prudent in giving the DEP the ability to quickly put in place muchneeded temporary regulations for Marcellus Shale drilling. In the meantime, the Legislature’s Select Committee on Marcellus Shale will continue to move forward in developing some long-term guidelines for the relationship between oil and gas extractors and the owners of surface rights and mineral interests that protects the environment and ensures proper labor practices.”

REGULATORY PROVISIONS

Acting Gov. Earl Ray Tomblin’s executive order includes these regulatory provisions: Fracking additives must be disclosed. Plans for surface disturbances exceeding 3 acres must be certified by an engineer. Operators planning to use more than 210,000 gallons of water a month must develop and file a water management plan for extraction and for disposal or recycling of the water.