Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Committees Consider Bills to Split Ties in Oil, Gas Regulations

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Committees Consider Bills to Split Ties in Oil, Gas Regulations

Article excerpt

Two legislative committees are set to consider bills Wednesday that would split apart the state's oil and gas regulations, a move meant to save the traditional drilling industry from having to comply with stricter environmental standards designed with shale gas operations in mind.

Identical bills introduced in the House and Senate would require the state's environmental rulemaking board to differentiate between the conventional and unconventional drilling industries in all regulations that apply to oil and gas wells.

The bills declare the conventional industry environmentally benign, even as Department of Environmental Protection records show traditional oil and gas producers regularly fall short of the current rules and laws.

The bills come after months of intense lobbying by the conventional oil and gas industry, which argues that new rules and stronger enforcement are to blame for the decline in the number of shallow wells drilled each year. They say further proposed regulations would make the conventional industry's small businesses a casualty of efforts to police large operations run by powerful unconventional drilling companies extracting gas from the Marcellus and Utica shales.

A new trade group, the Pennsylvania Grade Crude Oil Coalition, was formed last summer to promote shallow oil and gas production in the face of "burdensome regulations being proposed and implemented by the DEP," according to its mission statement.

An older organization, the Pennsylvania Independent Petroleum Producers Association, retained a lobbyist and a communications firm last year whose monthly bills now amount to 81 percent of the association's expenses, according to the association's? March newsletter.

The two trade groups have publicly touted the conventional industry's? historical and ongoing economic significance in a brochure and video distributed to legislators while privately pressuring the Corbett administration to rein in environmental regulators.

In an email to the governor's? policy director, energy executive and DEP secretary in February, the crude oil coalition's? lobbyist Robert Taylor questioned whether the administration "want[s] this small business industry to continue and to grow in the commonwealth." He said draft legislation to split the drilling regulations was crafted because DEP's? actions and proposals "seriously exceeded" the legislative intent of the state's? 2012 drilling law, known as Act 13.

"Please understand, we are NOT moving forward with any legislative agenda prior to talking with you and determining the Administration's? final position on the matter," he wrote.

"The Secretary has been VERY willing to talk and work with PGCC, and we deeply appreciate that effort. His Deputy and others at the agency appear to have other agendas in some cases, and we seek understanding whether those approaches are endorsed by the Governor."

The crude oil coalition has said DEP underestimated by as much as $1.5 billion the costs that the conventional industry will bear to comply with a major proposed revision of the oil and gas regulations, a calculation that DEP officials say is wildly inflated.

DEP production statistics that put the number of producing conventional wells at about 90,000 based on companies' 2011 data is "certainly understated," because the production reports can only be submitted by operators electronically, the coalition said. "There is a significant constituency of legacy well owners who choose not to own a computer or be connected to the Internet."

Both bills under consideration on Wednesday, House Bill 2350 and Senate Bill 1378, begin by declaring the General Assembly's? finding that the "conventional oil and gas industry has had a benign impact on human health and the environment in this Commonwealth" since the 1984 Oil and Gas Act became law.

The bills' sponsors, Rep. …

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