ODNR and Ohio EPA Propose Rules Increasing Regulation of Shale Operation Sites
As the public and environmental groups have raised concerns about fracking operations and limited ODNR permitting requirements, ODNR and Ohio EPA have proposed new shale operation rules. While companies may cringe at the prospect of increased regulation and now Ohio EPA permit appeals, the recently proposed general Ohio EPA air and water permits-by- rule may allow companies to bypass the administrative appeals process and expeditiously obtain air and water permits. However, companies lose the flexibility to negotiate site specific permit terms and conditions when they accept the general permit terms.
Below is a brief recap of the recently proposed ODNR well construction rules and Ohio EPA general air and water permit rules.
ODNR Well Construction Rules
Perhaps one of the biggest potential threats from fracking operations is from the improper casing of oil and gas wells. In response to this concern and the related SB165 legislative mandate (Ohio Revised Code 1509.17), the Ohio Department of Natural Resources (Division of Oil and Gas Resources Management) proposed new well construction rules. The draft rules encompass multiple aspects of well construction and will be applicable to all wells drilled within Ohio. One of the key features of the proposed rule is the requirement to comply with the Division’s Best Management Practices (BMPs) for oil and gas well site construction manual. Whether the BMPS are sufficient or go too far is likely a continued area of controversy. The comment period for these proposed rules and others related SB 165 recently ended on December 23, 2011.
Draft Ohio EPA Air and Water Permits
Given that one cannot administratively appeal the issuance of an ODNR oil and gas permit under SB 165 (See R.C. 1509.06(F)), the potential for Ohio EPA administrative permit appeals is particularly significant. Administrative appeals give adversely affected persons the ability to be heard at a public hearing before permit decisions become final. Further, administrative appeals have the potential to slow commercial development of a drilling site. Of course, companies accepting general permits may avoid the threat of an administrative appeal. Therefore, the Ohio EPA comment period on these proposed general permit rules remains critical for companies and environmental groups.
Ohio EPA General Air Permit
Ohio EPA’s proposed draft general permit includes emission limits, operating restrictions, and monitoring, testing and reporting requirements.
The emissions sources covered by the general permit include the following: internal combustion engines; dehydration systems (removing waster vapors from gas); truck-loading racks; storage tanks; flares; and unpaved roadways. The permit will not cover activities that occur during the drilling and fracturing phase as Ohio EPA considers the resulting air emissions to be temporary and exempt from air pollution permit regulations.
While increased regulation of shale operation emissions is expected from U.S. EPA through new MACT rules, the state’s air permit rules will in some instances go above those requirements.
Ohio EPA has accepted comments on the draft rule and should be soon announcing the formal 30-day comment period for interested parties to comment before finalizing the draft permit into a rule.
By accepting a general permit, companies can obtain an air permit within a few weeks and avoid administrative appeals by adversely affected persons.
Ohio EPA General Water 401 (Wetland/Stream Impact) Permit
A 401 permit may be required if a shale gas drilling site operation involves any of the following:
• Excavating or placing fill material in a wetland, stream or lake;
• Dredging a wetland area;
• Dredging or placing fill material into waters of the state;
•Stream piping, rerouting or straightening;
• Channelization; and
• Crossing streams or wetlands to construct roadways, or water or wastewater piping.
Ohio EPA has issued a draft general permit for wetland and stream impacts at shale gas well sites and is seeking public comments prior to finalizing the permit. The public comment period ends January 13, 2012.
The general permit may only be used for projects that Ohio EPA has classified as having relatively small wetland and/or stream impacts (projects which will impact up to 0.5 acres of Category 1 and 2 wetlands, and up to 300 linear feet of stream impacts). The general permit is not available where a project would impact high quality(Category 3) wetlands and high-quality streams.
With a general permit, Ohio EPA will complete the 401 review within 30 days. Generally, with companies seeking individual (non-general) 401 permits, the approval process can take up to the statutorily allowed timeframe of 180 days. Individual permits may also be subject to administrative appeals by persons and citizen groups.
Should a company need a 404 permit from the Army Corps of Engineers, they will not be able to expediate the process by use of this general permit.
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