American Oil and Gas Reporter - January 2012 - 16

IndustryDigest
West Virginia Imposes
New Well Regulations
CHARLESTON, W.V.-West
Virginia natural gas producers will be
operating under new regulations as the
new year opens, the Independent Oil and
Gas Association of West Virginia
advises, as the state reacts to increased
interest in the Marcellus Shale.
"This landmark piece of legislation
provides clear rules to the natural gas
industry, protects our communities,
surface owners and waterways while
sending a clear message-West Virginia
wants jobs and we will protect our rights
and our environment," Governor Earl
Ray Tomblin said after signing the
Horizontal Well Act in late December,
the culmination of a three-year process
to overhaul state drilling regulations.
According to the governor's office,
the bill's provisions include:
* Increased permit fees to increase
staffing levels at the Department of
Environmental Protection;
* Increased well location restrictions
to limit impacts on water resources;
* A requirement that operators have
a road use agreement in place before a
permit is issued; and
* Increased enforcement authority
for DEP, including an increase in civil
penalties for rule violations.
The new legislation also authorizes
DEP to write and promulgate further
rules regarding air quality as well as
cementing and casing requirements, the
governor's office points out.
Douglas Malcolm, chairman of
IOGAWV's Governmental Affairs
Committee, reports the legislation also
includes provisions requiring operators
to disclose the chemicals and additives
used in fracture fluids, a requirement he
says the association and industry in
general support.
"While there were many ideas as to
specifics within this complex bill, the
governor and legislators were in
agreement that there was an urgent need
for a regulatory framework to address
the relationship between oil and gas
extractors and surface owners, and to
provide environmental protections," says
West Virginia House Speaker Rick
Thompson, D-Wayne. r
See Related Story Page 200

Coming In February
Special Report: The Gulf of Mexico
16 THE AMERICAN OIL & GAS REPORTER

Pennsylvania Senate
Votes To Expand
State Lands Leasing
HARRISBURG, PA.-The
Pennsylvania Independent Oil & Gas
Association reports the Pennsylvania
Senate has passed S. 367, which allows
mineral resources to be developed on
state lands, including prisons and
universities. The bill has been
forwarded to the House Environmental
Resources and Energy Committee.
According to PIOGA, S. 367 passed
the Senate 47-2 and authorizes the
Department of General Services and the
State System of Higher Education to
lease properties for mineral
development through competitive
bidding. Under the legislation,
payments and royalties through fiscal
2013-14 would be deposited into the oil
and gas lease fund. Thereafter, the
revenue would be divided evenly
between the Hazardous Sites Cleanup
Fund, Pennsylvania Infrastructure
Investment Authority, H2O Program,
and the Oil & Gas Lease Fund, the
association says.
S. 367 allows a university leasing its
minerals to retain 40 percent of the
revenue, with the remaining 60 percent
shared among schools with no mineral
leasing, PIOGA relates. The latter group
will be allowed to use its share of
revenues only for deferred maintenance
or improvements that reduce the
school's energy costs.
The association also calls attention to
a report by the Joint Legislative Budget
& Finance Committee, which
recommends the general assembly
authorize agencies with significant
property holdings in the Marcellus
Shale region to lease properties for
drilling. The report identifies 16 state
prison facilities within the Marcellus
fairway as potential opportunities. r

Momentum Eludes
Fracture Disclosure Bill
In Illinois Veto Session
MOUNT VERNON, IL.-The Illinois
Oil & Gas Association reports that the
Illinois General Assembly's veto
session came and went without moving
legislation to require oil and gas
companies to disclose the chemical
constituents of hydraulic fracturing

treatments in shale operations.
IOGA opposed an early iteration of
the legislation, arguing that a frac
disclosure bill such as SB 2058
provided inadequate protection for
companies' proprietary information.
Negotiations between IOGA and green
groups yielded another chemical
disclosure bill, SB 664, which IOGA
did not oppose and was passed by the
Illinois Senate in late spring. However,
Illinois' regular session expired before
the House could take it up (AOGR, June
2011, pg. 16).
The bill also languished during the
state's fall veto session, IOGA reports.
Nevertheless, the association
emphasizes that it does not oppose
reasonable chemical disclosure that
does not place a significant regulatory
burden on operators. r

Chemical Disclosure,
Advance Notice Part Of
Revised Colorado Rules
DENVER-Colorado regulators have
approved rules that require companies
to disclose concentrations of chemicals
they use in hydraulic fracturing and
provide 48-hour notice before pumping
chemicals into the well bore. The new
rules, approved by the Colorado Oil &
Gas Conservation Commission in
December, take effect in April.
Under the revised regulations,
vendors, service companies or operators
claiming trade secret protection must
certify the fluid composition as a trade
secret as well as disclose to the
commission the ingredient's chemical
family. In the event of a spill or release,
the COGCC has the authority to release
that information to the commissioners,
certain county officials and the Colorado
Department of Public Health and
Environment.
According to the commission, during
the rule-making process it rejected
proposals that it review and approve all
trade secret claims, saying it lacked
authority to evaluate such claims. It
added the commission also would be at
risk of accidental disclosure of trade
secrets, and having such responsibility
would force it to allocate resources away
from its other priorities.
Under the regulations, COGCC's
director is expected to issue reports
identifying the number of trade secret
claims, as well as the vendor, service
American Oil and Gas Reporter - January 2012

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