Bonding • ACT 223 - Sec. 215 Bonding (a)(1)…upon filing an application for a well permit and before continuing to operate any oil or gas well, the owner or operator thereof shall file with the department a bond… conditioned that the operator shall faithfully perform all of the drilling, water supply replacement, restoration and plugging requirements (4 pages) Chapter 78.301 Scope In addition to the requirements of section 215 of the act (58 P. S. § 601.215), this subchapter specifies certain requirements for surety bonds, collateral bonds, replacement of existing bonds, maintaining adequate bond and bond forfeiture.(9 pages) More Bonding • Guidelines for Submitting Oil and Gas Well Bonds- (64 pages) 77 pages of… • single well bond $2,500…multiple bonded…blanket bond $25,000…acceptable bond -- surety or collateral… attorney-in-fact…Collateral…cash…certified check…bank check…treasurer’s check…money order…payable to the Commonwealth…letter of credit…certificate of deposit…negotiable securities…does not pay interest on cash held as collateral...collateral bond requirements…phased deposits of collateral…individuals…not to corporations, companies, or partnerships. • Plan on 2 weeks to 3 months for Bond approvals • A well will be released from bond coverage one year after it has been properly plugged and the site satisfactorily restored. Permit Application For Drilling Or Altering A Well • Act 223 - Sec.201 (a) No person shall drill a well or alter any existing well…without having first obtained a well permit. • § 78.11. Permit requirements. (a) No person may drill or alter a well unless that person has first obtained a permit from the Department. (b) No person may operate a well unless one of the following conditions has been met: (1) The person has obtained a permit under the act. (2) The person has registered the well under the act (3) The well was in operation on April 18, 1985, under a permit that was obtained under the Gas Operations Well-Drilling Petroleum and Coal Mining Act Permits • A permit will expire in 1year… …at which time the applicant can submit an affidavit, requesting renewal of the permit, attesting that all applicable parties have been notified and that all aspects of the original application are the same. Lots of Applications Total applications for New, Drill Deeper and Re-drill Permits for 2010. Northwest 2345 East Region 2299 Southwest 1926 Statewide: 6570 Staff to handle paperwork- NWRO 7 Clerical for administration -logging, tracking, issuing 7+ Technical staff for technical review -plats, deviation surveys, environmental issues, notifications 1 Program Manager to sign every permit The hardest part is finding it in the office (EFACTS) Technical Admin review Review Log/track Program Log/Track Manager Sign Date Stamp Screen Tech Chief Permit Copy/ Re-review Scan/ Screen Issuance Log/Track Send How do we keep track • By adding Numbers to the application– To each application we add the following numbers: OGO number Bond number API number Authorization number Site number Client number APS number Account number Primary Facility number Sub-facility number Sometimes more numbers Most important part of the application * Show me the money * After the date stamp… …send the money to Harrisburg… …now the review can begin Form 5500-PM-OG0001 • § 78.15. Application requirements (a) An application for a well permit shall be submitted on forms furnished by the Department and contain the information required by the Department to evaluate the application. (b) The permit application will not be considered complete until the applicant submits a complete and accurate plat, an approvable bond or other security, the fee, proof of notification, necessary requests for variance or waivers or other documents required to be furnished by law or the Department. The person named in the permit shall be the same person named in the bond or other security. Completing the Drilling Application Form Administration stuff Name Address Phone Fax Well Name & Number County Muni Was location ever permitted before? ###-##### Is this re-working an existing well not registered or permitted? Please provide all known information about the unregistered/ un-permitted well. Pennsylvania Natural Diversity Inventory… any “hits” must be addressed and mitigation standards might be included as a Special Condition on the Permit. Permit Types Drill a new well Deepen a well Re-drill a well Alter a well Other Drill a New Well • A location where a well has never been drilled location may have been permitted before Deepen a Well • To drill an existing well to lengthen the well bore Re-drill a Well • Drill through a well plug to put well in production Plugged Well Drill through Alter a Well • Changes the well bore or drills out well bore Drill out well bore Drilled out larger well bore Original well bore …Alter a well…casing • In coal areas…any work that effects the coal protective casing…requires a permit • Work or replacement of casing that changes casing depth or diameter…requires a permit • Work or replacement of casing of the same diameter to the same depth does not, by itself, require a permit. Other type ? • If not a new, deepen, re-drill or alteration…it is an “other” well…and must be specified Change use from production to storage Rehabilitate an Orphan well for production Replacement of casing. DEP is no No re-drill of borehole. longer able to register wells No re-drill of borehole. Type of well Gas Oil Comb.(gas & oil) Injection, recovery Injection, disposal Coalbed methane Gas storage Other (specify) Application Fee The fee is an application processing charge for expenses incurred by the Bureau of Oil & Gas… … and a surcharge for Abandoned & Orphan Well Plugging Funds. Surcharges & fees at a glance Permit fee’s can range from None, for rehabbing an Orphan Well… …to $3850 for a 15,000’ Marcellus Well…& more if deeper! Fee calculator website • http://www.dep.state.pa.us/dep/deputate/minres /oilgas/2011Permitcalculator.htm $ Payment $ • Pay to the order of… …”Commonwealth of PA” We accept Money Orders, personal checks & business checks. Coordination with regulations & other permits The Oil & Gas Act Oil & Gas Conservation Law Coal & Gas Resource Coordination Act Waste Management Act Clean Streams Law PACode Chapters 93, 102 & 105 Among others Oil & Gas Conservation Law • If well is 3800’ or deeper & penetrates the Onondaga…then Conservation Well. Depth Depth 3000- 5000 - Onondaga Onondaga 3800- 6000- 4000- What about these? DEP policy: Proposed vertical wells with a non-vertical lateral, where the vertical portion penetrates the Onondaga by 200’ or less, and the intent of that portion is only for logging purposes, can be considered non-conservation wells. For production purposes 6000- Onondaga <200’ 6200 >200’ In areas with no spacing application or order, the borehole, at Conservation depth, must be at least 330’ from outside lease boundary. 330’ 330’ 330’ 330’ 6000- Onondaga 6100 Coal and Gas Resource Coordination Act • Applies to all proposed locations that penetrate coal seams, deemed workable by underground methods. Except Conservation wells and certain “other wells” as defined in the Act. • Requires coordination of coal mine and gas well operators in areas where applicable proposed well locations are near active or permitted coal mines. Workable Coal Seams by underground methods • Coal 28” thick with sufficient quality • At least 100’ overburden • …………………………….for at least 1 sq mi aerial extent Surface 100’ 28” sufficient quality 100’ overburden Aerial extent at least 1 mile 28” If determined a workable coal seam and well is not exempted from the Act and not a Conservation Well Distance restrictions: At least 1000’ from any other well that -penetrates a workable coal seam -has not been plugged -is non-producing wells abandoned after 11/30/55 1000’ 1000’ workable coal seam Proposed Plugged well location Before 11/30/55 After 11/30/55 Non-Conservation well Conservation well Non producers abandoned House Bill 265 • House Bill 265 looks to amend the Coal and Gas Resource Coordination Act. • Allowing Non-Conservation well clusters, on the same pad, to be located less than 1000’ feet from each other…among other things. Permitted Coal Mines whose boundaries are within 1000’ of proposed location • Required to notify coal owners/operators Permitted coal mine boundary 1000’ Proposed location Notified coal owners/ operators have the right to object • Act 223 if “the well will, in the opinion of the coal owner or operator, unduly interfere with or endanger such mine, then the coal owner or operator affected shall have the right to file objections” DEP will mediate a conference between the 2 parties to work out an agreement Coordination with gas storage operations • Proposing to drill within 2000’ of a gas storage reservoir. Storage operator must be notified with the casing and cementing plan. The storage operator can object DEP will mediate a conference between the 2 parties to work out an agreement Within perimeter of a landfill • Whether a landfill is permitted, active or abandoned… …if the proposed location falls within it’s perimeter… …label the landfill location on plat and identify the owner Distance restrictions • The proposed site must be > 100’ from any stream, spring, body of water, or a wetland > 1 acre, unless approved through a waiver. Well pad/site 100’ 100’ 100’ Waiver request – Form 5500-FM-OG0057 • Requesting to waive the 100’ distance restriction from any wetland > 1 acre, spring, stream or body of water Describe the waiver request in detail… …water bodies, classifications, distances, etc.. …addressing all of the following: (1) Fluid containment measures (drilling, stimulation, formation & production) (2) Handling large volume of top-hole water (3) Site chemical storage & handling…spill clean-up (4) Disposal methods for wastes and waste fluids (cuttings & muds) (5) When polluting substances will be removed from site after well completion (6) Waste removal during inclement weather (7) Submittal of an E & S Control Plan per Chapter 102 Waiver request – Form 5500-FM-OG0057 • Waiver request form goes out to the field representative for approval or disapproval… …who might meet out in the field with operator… …then make an educated decision Approved waivers can have special conditions that are incorporated into the permit …more distance restrictions • A new well may not be drilled within 200’ of existing buildings (where someone normally works or lives), or a water well… >200’ …without prior written consent from the owner… …or an approved request for variance Form 5500-FM-OG0058 Request for Variance From Distance Restriction From Existing Building or Water Supply (5500-FM-OG0058) Explain the variance request: -distances from the proposed well location to buildings and / or water supply; -uses of buildings and water supplies, and frequency of use; -proof of notification -type of insurance coverage for the project -explain how adherance to the 200-ft requirement would deprive the oil and gas owner of the opportunity to produce or share in the production of oil and gas underlying the surface tract -evidence that no location more than 200 feet from all buildings or water supplies is available where the well could be drilled. • Plan Description. Describe measures, facilities, or practices to be employed during well site construction, drilling, and well operation to insure safety and protect persons and property, and to protect waters of the Commonwealth. Use additional blank sheets for narrative or sketches as needed Define: How you’re Safety Insurance deprived measures Project coverage Coordination with Public Resources • “Section 205(c) of the Oil and Gas Act requires the Department to consider the impact of the proposed well on public resources, including: publicly owned parks, forest, gamelands and wildlife areas; national or state scenic rivers; national natural landmarks; habitats of rare and endangered flora and fauna and other critical communities; historical and archaeological sites listed on the federal or state list of historic places” Wildlife Areas Forests Parks Gamelands Endangered species The operator must fill out form 5500-PM-OG0076 if on or near public resources. We treat different public resources differently… Coordination of a well Location with Public Resources - form 5500-PM-OG0076 • Is proposed location in or within 200’ of a publicly owned park/forest/etc., Natural National Landmarks or historical/archaeological sites? • Within a corridor of a scenic river? • Has a PA Natural Diversity Inventory search been run & issues resolved? • What add’l measures to be taken to protect public resource. Public Resource’s common issues… • Allegheny National Forest (ANF) and DCNR. DEP’s consideration is elevated when the ANF or DCNR objects to a drilling application. DEP will hold the application until a site visit by DEP field personnel. DEP will consider the objections raised by the agency and make a determination. ANF/DCNR objection objection consideration, through field personnel, make a determination DEP holds DEP continues Application until… Application review …more other Public Resource common issues… • Policy for Pennsylvania Natural Diversity Index (PNDI) coordination during permit review & Evaluation: Form 400-0200-001 • The application needs to include the PNDI Project Environmental Review Receipt, obtained from www.naturalheritage.state.pa.us, with the application. There are 4 types of results: Potential Impact Avoidance Measures Conservation Measures No Impact PNDI – “Potential Impacts” • If there is a potential impact a clearance letter is required from the jurisdictional agency, which may include measures the applicant must take to minimize impacts, DEP will include them in the permit as a Special Condition. Measures to take Included in permit PNDI- “Avoidance Measures” • If avoidance measures are generated the applicant needs to initial that they will abide by the measures during the project. DEP will include these measures as Special Conditions. Avoidance measures …avoidance measures Initials adherence Included in permit to… PNDI- “Conservation Measures” • If Conservation Measures are generated, DEP will might include them in the permit as a Special Condition Conservation The world is happy Measures May be included in permit Special Protection Watersheds • Applicant identifies if proposed application is in a HQ or EV watershed. DEP will stamp permits and plats accordingly, if applicant does not identify watershed appropriately. Listings for specific stream identification can be found in PA Code Chapter 93 Coordination with ESCGP-1 • If the proposed location is part of a larger development, disturbing >5 acres, list the ESCGP-1 approval date and number, if applicable. Page 2 - Notifications • The applicant shall notify…: -The surface landowner -Surface landowners whose water supplies are within 1000’ of the proposed location -Water purveyor’s whose water supplies are within 1000’ of the proposed location -Gas storage operations, with storage fields, within 2000’ -Coal owner and lessee, of all underlying seams, in workable coal areas -Underground coal mine operators with mine operations within 1000’ …of their intentions to drill a well…and list them on page 2. Water supply surface landowner Proposed Gas well Gas storage l Workable coal (owner/lessee) 2000’ 1000’ Notification details • The applicant shall notify appropriate parties by certified mail, with proof of notification or, show proof of notification with appropriate signature on page 2. The notification shall include the complete application and form 5500-FM-OG0052 Landowner Notification Of A Well Drilling Or Alterations, if applicable Rights under the law Signature on page 2 Certified mail Signature also waives the 15 day objection period Notification- Water Supply Protection • Form OG0052 Landowner Notification Of Well Drilling Or Alterations informs the water supply of their rights under Section 208 of the Act. Operators who pollute or diminish a water supply shall restore or replace the supply, adequate in quality/quantity for purposes served. Operators are presumed responsible for polluting or diminishing affected water supplies within 1000’ of the drilling, if the supply became affected during drilling or within 6 months of completion of the drilling or alteration. < 6 months < 1000’ Bad Water Operator is presumed guilty, unless… • He rebuts the presumption by proving either: – 1) Pollution was pre-existing (pre-drilling survey) – 2) The water supply refused access for pre-drilling survey – 3) The water supply is > 1000’ from the drilling – 4) The water supply became affect >6 months after well completion – 5) The water supply became affected by some other cause Objections • The right to object to an application is afforded to surface landowners and coal owner or operator’s in the Act and to gas storage operator’s in Chapter 79. DEP responds to objections from surface landowners whose water supplies are within 1000’- even if it is not afforded to them in law or regulation. • DEP responds to written objections with a letter stating receipt of the objection and that DEP will contact them, during the review, if the application comes in. DEP calls objecting party Application arrives DEP sends acknowledgement letter DEP’s objection response Most objections are from water supplies that are not the surface landowner of where the well is being drilled. DEP re-informs the objecting party that there are casing standards in regulation for groundwater protection, as well as remedies afforded water supplies that are affected by drilling. DEP will inform the objecting party of the applicant’s rights to a permit within 45 days as long as: 1) The well site is not in violation, or be in violation when permit is issued 2) The application is complete and accurate 3) There are no unresolved objections by coal mine owner/operator 4) Bonding requirements have been met 5) The applicant is not under a legal document from DEP which restricts it’s issuance The Application Plat • The plat is . . reviewed for consistency with the rest of the application, accuracy & completeness. Plat requirements • Prepared by registered professional Engineer or Surveyor with seal (4 copies) • Show: Municipality & County Surface Landowner Surface landowner water supplies of water supplies within 1000’ of proposed location. Owner of workable coal seams Tract Acreage Proposed location surveyed from at least 2 permanent points on tract boundary Proposed well angle and direction Well number Workable coal seams cased off Latitude and longitude of surface location-10 meter accuracy (NAD 83) All buildings and water supplies within 200’ of proposed location Water supplies within 1000’ of proposed location Wetlands within 100’ of proposed location Every spring, stream or body of water within 100’ of disturbed area USGS topographic map name & section number with topographic mark and offsets Applicable metadata- 10 meter accuracy Target formation Well name, number, type, permit number & project number if applicable Well Deviations and distances with total vertical depth and total measured depth Well graphic display from plan view Typical plat – top half Typical plat Typical Plat- bottom half Deviation Survey “The Department shall issue a permit within 45 days” Chapter 78 update. 78.52(d) requires the submittal of all predrill data to be used by an Operator to preserve their defense under section 208(d)(1) within 10 business days of receipt of such data. DEP is requesting your assistance and cooperation. We ask that you please submit your pre-drill data in the following method and format to: Please submit all data electronically on a CD with a cover letter to the appropriate regional office: Predrill Data, Oil and Gas Management Program Northwest Regional Office 230 Chestnut St. Meadville, PA 16335 or NCRO Predrill Data Oil and Gas Management Program Northcentral Regional Office 208 West Third Street, Suite 101 Williamsport, PA 17701 or Predrill Data, Oil and Gas Management Program Southwest Regional Office 400 Waterfront Drive Pittsburgh, PA 15222-4024 2.) All data should be submitted in .pdf form. 3.) The CD cover should clearly list the following: Company Name Well Farm Name (Pad) and Permit Number(s) (if available) County of Well Pad(s), Municipality of Well Pad(s) 4.) Folders should be created within the CD using the following file structure: Well Farm Name/Pad ID County of Sampling Location, Municipality of Sampling Location Sample ID Example (each line is a separate folder) Smith Well Pad Clairon County Knox Township John Smith Residence please include latitude/longitude of water sample location somewhere on the data sheet Permit denials Operators will be notified of inaccurate/ insufficient/incomplete applications and have 60 days to rectify the situation, or DEP may deny the application. After 60 days Insufficient application Application denied Special Condition on Permit • For shale formations with a significant horizontal well bore through the formation… • “The permittee shall not withdraw or use water from water sources within the Commonwealth of Pennsylvania, for well fracing activities, unless the permittee does so in accordance with a Water Management plan approved by the Department.” Water Management Plan An Oil & Gas operator’s plans to withdraw from a source. The plan includes calculations and analysis of the environmental impacts associated with the withdrawal. DEP will review the plan’s analysis of the environmental impact and, if in agreement, send an approval letter stating concurrence with the conclusions determined by the operator.
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