DEP: Permit Process Varies

Paperwork, site issues can delay well applications

Morgantown Dominion Post
3 July 2011
By David Beard

How long does it take for the Department of Environmental Protection (DEP) to approve a Marcellus permit?

It depends on a lot of things. Is it horizontal or vertical? Is the paperwork done right? Are there site issues or challenges from surface owners who don’t own the mineral rights? Those are just a few examples, the DEP said.

In Preston County, there are 32 active Marcellus shale gas drilling permits — 28 horizontal, four vertical. Four other permits are pending approval. One additional permit was canceled at the driller’s request, probably because it proved unproductive, the DEP said.

Permit approval — from the date an application was received — ranged from four days to 122. (Active permits means the permits were issued; they may not yet be drilled. Companies have two years from date of permit issue to begin drilling, according to the DEP).

Marion County has 60 active Marcellus permits — 42 horizontal, 18 vertical. Two others are pending and one was canceled. Approval time ranged from same day to 90 days.

Of the six Marion permits issued on the same day the applications were received, only one was for a horizontal well — XTO energy’s CRIM 2209H, issued March 3, 2009.

The other five were vertical wells — either by Waco Oil & Gas of Glenville or Meadow ridge Development LLC of Washington, Pa. All were issued in 2008.

“A lot has changed in the way we issue permits since then,” DEP spokeswoman Kathy Cosco said. With new technologies, new challenges and problems, and a few new regulations, “permits are taking longer now than they did.”

For instance, some 2010 legislation changed the way the DEP deals with fluids and drill cuttings. No Marcellus cuttings or fluids can be landapplied. They must now be entombed or taken to a landfill.

“In 2008, those things just weren’t there,” said Gene Smith, DEP regulatory compliance manager. The DEP was using rules developed decades ago for a different kind of drilling, and some permits were approved very quickly. “It can happen and did happen a lot. It was a well-oiled machine.”

In the case of one quickly approved permit, Smith said, the surface and coal owners had signed waivers on their rights to file comments or objections.

“Typically, permits issued after 45 days of being submitted,” Cosco said, “were either incomplete or were subject to a hearing by one of three boards: The Oil and Gas Conservation Commission, the Shallow Gas Well Review Board or the Coal Bed Methane Review Board, depending on the type of well.”

There is no record of any permit in any of the three counties being denied. They are frequently sent back for revisions, and the permits are frequently modified, but all the permits (except those mentioned above as pending) were issued.

“One misconception that people often have,” Cosco said, “is that permits are submitted and are either granted or denied, like a test that either they pass or fail. However, permitting all across the agency and in some cases at the federal level are more of a give-and-take between the regulating agency and the applicant.

“We might see something that a company proposed to do that prompts our staff to ask questions about the process, and if the answers satisfy the requirements under the law, then the applicant may be allowed to proceed,” she said. “If the answers do not, the staff will inform the applicant that what they are proposing to do won’t satisfy the law and the applicant will often revise the process to make sure it meets the law’s requirements.

“Additionally,” she said, “drilling is often determined by market conditions. There are times when a company may secure a well work permit then there is a shift in the market and the company’s cash flow decreases and they cannot drill the well.”

Sometimes an application will prompt a site visit. Smith cited a just-issued permit that took three weeks longer to approve than usual because an inspector made several site visits and revised the permit.

The Legislature is preparing for a possible August special session that may include Marcellus regulation. DEP Secretary Randy Huffman has said issues they never thought of will be included in their thinking this time — such things as public notice periods for permit applications, and the aggregate effects of machines and vehicles on air quality.

The permit applications are already different from a few years ago, Huffman said, and will likely change again after the new regulation passes.

Asked if some companies have more pull than others, Laura Adkins, DEP environmental resource specialist, laughed and said, “Call them and ask.”

They would like to, she said. For instance, a permit may get fast-tracked if a company loses a hole and has to plug it, and has a rig already on an approved site.

But overall, Smith said, “We’re trying to treat them the same. It’s first-come, first-served.”