In continuing our commitment to best serve our clients, we have been closely monitoring legislative changes in West Virginia that may affect the shale gas industry in the state. This update covers a new rule affecting horizontal drilling and the results of a recent pit and impoundment study.

Rule Governing Horizontal Well Development

Senate Bill 245 provides for legislative approval of the West Virginia Department of Environmental Protection’s (“DEP”) proposed Rule Governing Horizontal Well Development designated as 35 C.S.R. 8 (“Rule”). The Bill was considered by the Senate Energy, Industry and Mining (“EIM”) Committee on March 13, 2013, during which the Committee amended the Rule to limit public disclosure of the hydraulic fracturing fluid formula(s). The precise detail of the formula would still be available to the DEP in response to an investigation initiated by the DEP or by request from health care providers for patient diagnosis and care.

The EIM Committee reported the Bill, as amended. The Bill was referred to the Senate Judiciary Committee where it was bundled with other DEP proposed legislative rules under Senate Bill 243 which was considered as a committee substitute bill and reported on March 22 to the full Senate. On March 27, the Senate passed SB 243 and reported it to the House of Delegates. The Bill was then referred to the House Judiciary Committee on March 28, 2013 for consideration and action.

Pit and Impoundment Study

The first of the two legislatively mandated studies required to be completed by January 1, 2013, has been published by the DEP’s Office of Oil and Gas (“OOG”). The full report, which was performed by staff at West Virginia University’s Water Research Institute and faculty and students of the Department of Civil and Environmental Engineering, is available here. 

In reporting the study to the Legislature, OOG states that “[b]ased on the results of this study, OOG finds that no additional rules are immediately necessary for the design and construction of these large pits and impoundments. . . . The study confirmed that ‘future construction, if done in accordance with the WVDEP guidelines, should pose minimal risk.’” DEP’s conclusions from the study include

1. no leakage was detected from the examined structures;
2. sites designed and constructed to current OOG standards scored higher than those built prior to the Natural Gas Horizontal Well Control Act; and
3. radiological exposure from material both on the well pads and at the centralized structures is within acceptable limits.

OOG noted that it has “specific authority to condition the issuance of certificate of approvals and individual permits.” OOG summarizes that the current “framework ensures adequate controls are in place for these large pits and impoundments (W. Va. Code 22-6A-9), and no greater monitoring, safety or design requirements or other specialized permit conditions are necessary at this time to effectively regulate the construction operation, and maintenance of centralized and large capacity pits and impoundments.”

OOG also reported to the Legislature that the study required by W. Va. Code 22-6A-12(e) on the noise, light, dust and volatile organic compounds generated by the drilling of horizontal natural gas wells as they relate to the well location restrictions regarding occupied dwelling structures is still underway. The field component of this study has been completed, and WVU is currently compiling and analyzing the data. Thus, we can expect a report on a second study in the coming weeks.

A final study required by the Act on “the need, if any, for further regulation of air pollution occurring from well sites” at 22-6A-22 is due by July 1, 2013. We will continue to provide updates on these studies as more information becomes available.