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Another Tom Wolf Attack on PA Natural Gas – Part II

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Shepstone Management Company, Inc.

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Gov. Tom Wolf’s two-front attack on the PA natural gas industry includes a severance tax and ridiculous new Chapter 78 regulations – here’s more on the regs.

A couple of weeks ago I posted some thoughts on the regulatory part of Tom Wolf’s two-front attack on the PA natural gas industry, taking quick look at just a few of the changes the Pennsylvania Department of Environmental Protection (DEP), led by SecretaryJohn Quigley, who sees himself as an environmental Darth Vader, is proposing to Chapter 78 oil and gas regulations on behalf of the Green Empire. I explained in that earlier post how the new regulations pertaining to endangered and threatened species were opening the door to frivolous challenges by every NIMBY and wacko group out there. But, there’s more.

PA Natural GasAs I noted in the last post, Chapter 78 and its companion Chapter 78a of the Pennsylvania Code of Regulations regulate the PA natural gas and oil industry. A new final draft of the regulations proposed by Quigley and Wolf is a perfect example of how to what happens when you try to build a swing by committee, as they have been cluttered with all sorts on nonsense that represents extensive additional costs and time for the PA natural gas industry (and consumers) without any significant commensurate benefit to the public. Here are two more examples. Recall, as I cover them, that the Darth Vader Quigley additions are all BOLD, UNDERLINED, AND CAPITALIZED and text that is bold, bracketed, and strikethrough ] shows language that was deleted in the draft final version. Other bold, underlined and bracketed text relates to changes made pre-Quigley.

“Well Development” Impoundments:

The new Chapter 78a.59 provision proposes regulation of freshwater impoundments complete with requirements for synthetic impervious liners, studies by soil scientists and much more. The subsection was, at least, honestly labeled as such. The new version simply deletes “freshwater” and replaces it with “Well Development” but the new definition of that term (found on page 126)  is “Designed to hold surface water, fresh groundwater, and other fluids approved by the Department.”

This is problematic for two reasons. First, why is DEP even regulating freshwater impoundments to this extent? Does this happen with any other construction project. No, of course not. It’s completely over the top and unnecessary.

What makes it necessary bureaucratically is that DEP wants to allow for the re-use of acid mine drainage, which is a good idea to be sure, and one can easily understand why an impoundment containing that fluid should be regulated more strictly. But, why try to deal with that in the same breath as freshwater impoundments? It makes no sense whatsoever and illustrates the casual nature of the way DEP is willing to impose new regulations where none are needed and no public interest is benefitted.

PA natural Gas

Freshwater Impoundment – Lycoming County

It’s also important to point out the underlying problem here and that is natural gas development involves both a construction and operations element and DEP regulates both but it’s far too easy to lose site of the distinction as an excuse to regulate aspects of construction that are simply not regulated in the case of other industries. This, to DEP’s credit, why they have probably now deleted a section on noise regulation during construction (see page 150) but the same principle should be applied throughout and regulation of natural gas development construction activities that are akin to those involved in building a Wal-Mart, for example, should not be regulated any more severely.

“Probable Harmful Impact” Mitigation:

The danger connected with a loose term such as “probable harmful impact” can’t be underestimated and the new regulations provide for mitigation of such impacts if identified by a “public resource agency” (I discussed the problem with that Orwellian term in my last post). The previous version of the regulations didn’t define “probable harmful impact” either but, at least, it put the “burden of proving that the conditions were necessary to protect against a probable harmful impact of the public resource” on DEP. There was also this language on pages 139-140:

“The Department will consider the impact of any potential permit condition on the applicant’s ability to exercise its property rights with regard to the development of oil and gas resources and the degree to which any potential condition may impact or impede the optimal development of the oil and gas resources. The issuance of a permit containing conditions imposed by the Department under this subsection is an action that is appealable to the Environmental Hearing Board.

These protection have now largely been eliminated (there’s still some language about optimal development of gas resources) and the new regulations require identification of “proposed measures to avoid, minimize, or otherwise mitigate the impacts to public resources” and “other measures necessary to protect against a problem harmful impact to the functions and uses of the public resource,” which as we remind readers includes any of the following (see page 139):

  • Publicly owned park, forest land or wildlife area (within 200 feet)
  • A state or national scenic river (within the corridor)
  • A national natural landmark (within 200 feet)
  • Locations that impact critical communities
  • A historical or archeological site listed on the Federal or state list of historic places (within 200 feet)
  • A school’s property or playground (within 200 feet)
  • A wellhead protection area
  • A location within 1,000 feet of a water well, surface water intake, reservoir or other water supply extraction point used by a water purveyor.

One might easily be drawn to the conclusion these are reasonable setbacks in some cases but, remember, they are not setbacks per se. Rather they are definitions for when an applicant has to notify a public resource agency and get into the business of trying to define what a “probable harmful impact” is or isn’t. This gives the National Park Service and DEP nearly complete ability to prevent development in scenic river corridors and in numerous other places. It is an open door for others as well to assert the Park Service must assert its rights, etc. One can imagine the chaos and the delays involved. There are hundreds of thousands of acres involved including state game lands and forest lands on which private owners still retain the mineral rights. Think what this will mean for their ability to develop they natural gas.

These two examples illustrate the slow smothering of the PA natural gas industry that’s going on here with these Chapter 78 regulations. They’re a part of a deliberate Wolf attack on an industry that’s created an economic revival for the rural areas of the Commonwealth while delivering cheap energy to urban areas and putting America on the track to energy independence. Why? Because Tom Wolf is more indebted to public sector unions and environmental special interests than he is to the welfare of Pennsylvanians.

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