American Oil and Gas Reporter - April 2019 - 116

ConventionCoverage: Illinois Oil & Gas Association
require operators to obtain consent from
county governments for well locations.
But first counties would have to consult
with the Illinois State Water Survey, Environmental Protection Agency, Illinois
Emergency Management Agency, Department of Transportation, Department
of State Police, state fire marshal, Department of Public Health and the Illinois
State Geological Survey.
"If no one was going to file (for a permit) under the HFRA before, they certainly
aren't going to get by this hurdle," he
opined.
Equally onerous, offered McArthy,
is HB 282 by Robyn Gabel, D-Evanston,
which would create additional reporting
requirements for all horizontal well operators. It would require the Department

of Natural Resources to post on its website weekly, notice of all permits it
issued and include surface and bottomhole locations for all wells drilled either
horizontally or directionally. Further,
he said, IDNR and ISGS would be required to publish all drilling and completion reports within 30 days of receipt,
thereby eliminating an operator's ability
to hold well information confidential
for two years.
HB 282 also would require an operator
to disclose a list of all chemicals and additives intended to be used in drilling
and completion operations prior to drilling,
and severely restricts an operator's ability
to protect formulas as trade secrets,
McArthy went on. Reporting requirements
for each chemical used include trade

name, vendor, material safety data sheet
descriptions of function or intended use,
Chemical Abstracts Service number, concentration, and the total volume of water
used in both drilling and completion.
Another bill, HB 2839, which Hedin
said was introduced by Representative
Jennifer Gong-Gershowitz, D-Glenview,
and five cosponsors, follows a failed attempt last year to give any person standing
to protest permits issued by Illinois state
agencies by granting any person "adversely
affected or aggrieved" by a final decision
by any of five agencies, including IDNR,
the right to judicial review.
"You can imagine how broad that would
get," he mused. "Anyone, whether he lives
six blocks away or six miles away, could
go to court and tie up everything."
❒

IDNR Altering Enforcement Procedures
EVANSVILLE, IN.-New procedures
for enforcement actions by the Illinois
Department of Natural Resources are well
on their way to being finalized, and an ad
valorem tax assessment problem that surfaced a year ago appears to have been resolved. But an action by the state attorney
general's office could have serious ramifications for Illinois operators, if successful,
members of the Illinois Oil & Gas Association were advised during their annual
convention, March 5-7 in Evansville.
Speaking during the legislative and
legal session on the final day of IOGA's
convention, Dan Brennan, acting director
of IDNR's Office of Oil and Gas Resource
Management, updated members on amendments to the agency's enforcement procedures, which at that time were being
reviewed by a joint legislative committee
under second notice.
The day before, outgoing IOGA President Craig Hedin, vice president and
general counsel for Gesell's Pump Sales
and Service in Whittington, Il., reported
on the ad valorem issue. He recalled that,
apparently fearing some oil companies
might be claiming underground injection
disposal wells were enhanced recovery
injection wells, some county assessors
in 2018 demanded operators copy them
with IDNR form OG-17 in order to claim
the qualified EOR deduction.
This caused some consternation because
not everyone filed an OG-17, which is
used for reporting injection pressures and
volumes, Hedin noted. "I personally consider

them only for big waterfloods that have
been approved by the state, but not for,
say, a one-well injection program," he said.
Working with the county assessors
committee, Hedin said IOGA was able
to devise an "EOR self-certification" form
that identifies the operator, lease, oil purchaser, and the injection and producing
formations. "It is a fairly simple form to
which you attach a copy of your IDNR
injection well permit, saying 'Yes, this is

116 THE AMERICAN OIL & GAS REPORTER

The biggest change to new Illinois Department of Natural Resources enforcement procedures, General Counsel Jarred
Tynes advises Illinois Oil & Gas Association members during their annual meeting, March 5-7 in Evansville, In., is that
they no longer will receive notices of violation before the NOVs are sent to IDNR
headquarters.

an injection well used for enhanced recovery and not disposal,'" he advised.
IDNR Enforcement
Under the new enforcement procedures,
once approved, Brennan told IOGA, operators may be granted as much as 180
days-up from 120-to respond to notices
of noncompliance for nonserious violations. "That gives both the district offices
and the operator a little more leeway," he
remarked. "We are aware that just because
it isn't a serious issue, doesn't mean it
can be resolved right away."
A more significant procedural change,
he went on, is the way operators will receive notices of violations. Previously,
he observed, inspectors sent NOVs to
the operator and to IDNR headquarters
simultaneously, after which a director's
decision would be mailed to the operator
indicating whether the NOV had been
modified, confirmed or vacated.
Going forward, Brennan said, NOVs
will be sent to Springfield only.
There, explained IOGA General Counsel
Jarred Tynes, the department's investigation
staff will review the NOV and any mitigating or aggravating circumstances, determine whether to modify, confirm or
vacate the NOV or issue a civil penalty,
and then issue the director's decision. This
means, "You aren't going to get the OG21 from the inspector anymore. The first
thing you are going to see is the director's
decision," he advised operators.
The director's decision will indicate
American Oil and Gas Reporter - April 2019

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