[43 Pa.B. 7377]
[Saturday, December 14, 2013]
[Continued from previous Web Page]
Subchapter D. WELL DRILLING, OPERATION AND PLUGGING
GENERAL § 78.72. Use of safety devices—blow-out prevention equipment.
* * * * * (i) Well drilling and completion operations requiring pressure barriers, as identified by the operator under [§ 78.55(b) (relating to control and disposal plan)] § 78.55(d) (relating to control and disposal planning; emergency response for unconventional well sites), shall employ at least two mechanical pressure barriers between the open producing formation and the atmosphere that are capable of being tested. The mechanical pressure barriers shall be tested according to manufacturer specifications prior to operation. If during the course of operations the operator only has one functioning barrier, operations must cease until additional barriers are added and tested or the redundant barrier is repaired and tested. Stripper rubber or a stripper head may not be considered a barrier.
* * * * * § 78.73. General provision for well construction and operation.
(a) The operator shall construct and operate the well in accordance with this chapter and ensure that the integrity of the well is maintained and health, safety, environment and property are protected.
(b) The operator shall prevent gas, oil, brine, completion and servicing fluids, and any other fluids or materials from below the casing seat from entering fresh groundwater, and shall otherwise prevent pollution or diminution of fresh groundwater.
(c) Orphaned or abandoned wells identified under § 78.52a (relating to abandoned and orphaned well identification) that likely penetrate a formation intended to be stimulated shall be visually monitored during stimulation activities. The operator shall immediately notify the Department of any change to the orphaned or abandoned well being monitored and take action to prevent pollution of waters of the Commonwealth or discharges to the surface.
(d) An operator that alters an orphaned or abandoned well by hydraulic fracturing shall plug the orphaned or abandoned well.
[(c)] (e) After a well has been completed, recompleted, reconditioned or altered the operator shall prevent surface shut-in pressure and surface producing back pressure inside the surface casing or coal protective casing from exceeding the following pressure: 80% multiplied by 0.433 psi per foot multiplied by the casing length (in feet) of the applicable casing.
[(d)] (f) After a well has been completed, recompleted, reconditioned or altered, if the surface shut-in pressure or surface producing back pressure exceeds the pressure as calculated in subsection [(c)] (e), the operator shall take action to prevent the migration of gas and other fluids from lower formations into fresh groundwater. To meet this standard the operator may cement or install on a packer sufficient intermediate or production casing or take other actions approved by the Department. This section does not apply during testing for mechanical integrity in accordance with State or Federal requirements.
[(e)] (g) Excess gas encountered during drilling, completion or stimulation shall be flared, captured or diverted away from the drilling rig in a manner that does not create a hazard to the public health or safety.
[(f)] (h) Except for gas storage wells, the well must be equipped with a check valve to prevent backflow from the pipelines into the well.
§ 78.75. Alternative methods.
(a) A well operator may request approval from the Department to use an alternative method or material for the casing, plugging or equipping of a well under section [211 of the act (58 P. S. § 601.211)] 3221 of the act (relating to alternative methods).
* * * * * § 78.76. Drilling within a gas storage reservoir area.
* * * * * (b) The storage operator may file an objection with the Department to the drilling, casing and cementing plan or the proposed well location within 15 calendar days of receipt of the notification and request a conference in accordance with section [501 of the act (58 P. S. § 601.501)] 3251 of the act (relating to conferences).
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CASING AND CEMENTING § 78.87. Gas storage reservoir protective casing and cementing procedures.
* * * * * (b) A request by an operator for approval from the Department to use an alternative method or material for the casing, plugging or equipping of a well drilled through a gas storage reservoir under section [211 of the act (58 P. S. § 601.211)] 3221 of the act (relating to alternative methods) shall be made in accordance with § 78.75 (relating to alternative methods).
PLUGGING § 78.91. General provisions.
(a) Upon abandoning a well, the owner or operator shall plug the well under §§ 78.92—78.98 or an approved alternate method under section [211 of the act (58 P. S. § 601.211)] 3221 of the act (relating to alternative methods) to stop the vertical flow of fluids or gas within the well bore unless one of the following applies:
* * * * * (3) The Department has approved the identification of the well as an orphan well under section [203 of the act (58 P. S. § 601.203)] 3213 of the act (relating to well registration and identification), and the Department has not determined a prior owner or operator received economic benefit after April 18, 1979, from this well other than economic benefit derived only as a landowner or from a royalty interest.
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INACTIVE STATUS § 78.101. General provisions.
Upon application, the Department will grant inactive status for 5 years for a permitted or registered well if the application meets the requirements of section [204 of the act (58 P. S. § 601.204)] section 3214 of the act (relating to inactive status) and §§ 78.102—78.105. The Department may require information to demonstrate that the conditions imposed by § 78.102 (relating to criteria for approval of inactive status) are satisfied.
§ 78.103. Annual monitoring of inactive wells.
The owner or operator of a well granted inactive status shall monitor the integrity of the well on an annual basis and shall report the results to the Department. The owner or operator shall give the Department 3 [working] business days prior notice of the annual monitoring and mechanical integrity testing. For wells that were drilled in accordance with the casing and cementing standards of §§ 78.81—78.86 (relating to casing and cementing), the operator shall monitor the integrity of the well by using the method described in § 78.102(2)(ii)(A), (B), (D) or (E) (relating to criteria for approval of inactive status), as appropriate. For a well that was not drilled in accordance with the casing and cementing standards, the wells shall be monitored in accordance with § 78.102(1). To qualify for continued inactive status, the owner or operator shall demonstrate, by the data in the monitoring reports, that the condition of the well continues to satisfy the requirements of § 78.102. The owner or operator shall submit the report by March 31 of the following year.
§ 78.105. Revocation of inactive status.
The Department may revoke inactive status and may order the immediate plugging of a well if one of the following applies:
* * * * * (3) The condition of the well no longer satisfies the requirements of section [204 of the act (58 P. S. § 601.204)] section 3214 of the act (relating to inactive status) and §§ 78.102—78.104 (relating to criteria for approval of inactive status; annual monitoring of inactive wells; and term of inactive status).
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Subchapter E. WELL REPORTING § 78.121. Production reporting.
(a) The well operator shall submit an annual production and status report for each permitted or registered well on an individual basis, on or before February 15 of each year. [The operator of a well permitted to produce gas from the Marcellus shale formation] Each operator of an unconventional well shall submit a production and status report for each well on an individual basis, on or before February 15 and August 15 of each year. Production shall be reported for the preceding calendar year or in the case of [a Marcellus shale] an unconventional well, for the preceding [6 months] reporting period. When the production data is not available to the operator on a well basis, the operator shall report production on the most well-specific basis available. The annual production report must include information on the amount and type of waste produced and the method of waste disposal or reuse. Waste information submitted to the Department in accordance with this subsection is deemed to satisfy the residual waste biennial reporting requirements of § 287.52 (relating to biennial report).
* * * * * § 78.122. Well record and completion report.
(a) For each well that is drilled or altered, the operator shall keep a detailed drillers log at the well site available for inspection until drilling is completed. Within 30 calendar days of cessation of drilling or altering a well, the well operator shall submit a well record to the Department on a form provided by the Department that includes the following information:
* * * * * (10) Certification by the operator that the well has been constructed in accordance with this chapter and any permit conditions imposed by the Department.
(11) Whether methane was encountered other than in a target formation.
(12) The country of origin and manufacture of tubular steel products used in the construction of the well.
(13) The borrow pit used for well site development, if any.
[(11)] (14) Other information required by the Department.
(b) Within 30 calendar days after completion of the well, when the well is capable of production, the well operator shall [submit] arrange for the submission of a completion report to the Department on a form provided by the Department that includes the following information:
* * * * * (6) Stimulation record which includes the following:
(i) A descriptive list of the chemical additives in the stimulation fluid, including any acid, biocide, breaker, brine, corrosion inhibitor, crosslinker, demulsifier, friction reducer, gel, iron control, oxygen scavenger, pH adjusting agent, proppant, scale inhibitor and surfactant.
(ii) The percent by [volume] mass of each chemical additive in the stimulation fluid.
(iii) [A list of the chemicals in the Material Safety Data Sheets, by name and chemical abstract service number, corresponding to the appropriate chemical additive.] The trade name, vendor and a brief descriptor of the intended use or function of each chemical additive in the stimulation fluid.
(iv) [The percent by volume of each chemical listed in the Material Safety Data Sheets.] A list of the chemicals intentionally added to the stimulation fluid, by name and chemical abstract service number.
(v) The maximum concentration, in percent by mass, of each chemical intentionally added to the stimulation fluid.
[(v)] (vi) The total volume of the base fluid.
[(vi)] (vii) A list of water sources used under an approved water management plan and the volume of water used from each source.
[(vii)] (viii) The total volume of recycled water used.
[(viii)] (ix) The pump rate and pressure used in the well.
(7) Actual open flow production and shut in surface pressure.
(8) Open flow production and shut in surface pressure, measured 24 hours after completion.
(9) The freshwater and centralized impoundment, if any, used in the development of the well.
(c) When the well operator submits a stimulation record, it may designate specific portions of the stimulation record as containing a trade secret or confidential proprietary information. The Department will prevent disclosure of the designated confidential information to the extent permitted under the Right-to-Know Law (65 P. S. §§ 67.101—[67.3103] 67.3104) or other applicable State law.
[(d) In addition to submitting a stimulation record to the Department under subsection (b), and subject to the protections afforded for trade secrets and confidential proprietary information under the Right-to-Know Law, the operator shall arrange to provide a list of the chemical constituents of the chemical additives used to hydraulically fracture a well, by chemical name and abstract service number, unless the additive does not have an abstract service number, to the Department upon written request by the Department.]
§ 78.123. Logs and additional data.
(a) If requested by the Department within 90 calendar days after the completion [of drilling] or recompletion of [a well] drilling, the well operator shall submit to the Department a copy of the electrical, radioactive or other standard industry logs run on the well.
(b) In addition, if requested by the Department within 1 year of the completion [of drilling] or recompletion [a well] of drilling, the well operator shall file with the Department a copy of the drill stem test charts, formation water analysis, porosity, permeability or fluid saturation measurements, core analysis and lithologic log or sample description or other similar data as compiled. No information will be required unless the operator has had the information described in this subsection compiled in the ordinary course of business. No interpretation of the data is to be filed.
[(b)] (c) Upon notification by the Department prior to drilling, the well operator shall collect additional data specified by the Department, such as representative drill cuttings and samples from cores taken, and other geological information that the operator can reasonably compile. Interpretation of the data is not required to be filed.
[(c) The information requested by the Department under subsections (a) and (b) shall be provided to the Department by the operator, within 3 years after completion of the well unless the Department has granted an extension or unless the Department has requested information as described in subsection (d). If the Department has granted an extension, the information shall be submitted in accordance with the extension, but in no case may the extension exceed 5 years from the date of completion of the well.
(d) In accordance with the request of the Department, the operator shall submit the information described in this section for use in investigation or enforcement proceedings, or in aggregate form for statistical purposes.]
(d) Data required under subsections (b) and (c) shall be retained by the well operator and filed with the Department no more than 3 years after completion of the well. Upon request, the Department will extend the deadline up to 5 years from the date of completion of the well.
(e) The Department is entitled to utilize information collected under this section in the enforcement proceedings, in making designations or determinations under section 1927-A of The Administrative Code of 1929 (71 P. S. § 510-27) and in aggregate form for statistical purposes.
Subchapter G. BONDING REQUIREMENTS § 78.301. Scope.
In addition to the requirements of section [215 of the act (58 P. S. § 601.215)] 3225 of the act (relating to bonding) and section 1606-E of The Fiscal Code (72 P. S. § 1606-E), this subchapter specifies certain requirements for surety bonds, collateral bonds, replacement of existing bonds, maintaining adequate bond and bond forfeiture.
§ 78.302. Requirement to file a bond.
For a well that has not been plugged, the owner or operator shall file a bond or otherwise comply with the bonding requirements of section [215 of the act (58 P. S. § 601.215)] 3225 of the act (relating to bonding), section 1606-E of The Fiscal Code (72 P. S. § 1606-E) and this chapter. A bond or bond substitute is not required for a well drilled before April 18, 1985.
§ 78.303. Form, terms and conditions of the bond.
(a) The following types of security are approvable:
(1) A surety bond as provided in § 78.304 (relating to terms and conditions for surety bonds).
(2) A collateral bond as provided in §§ 78.305—78.308. [For individuals who meet the requirements of section 215(d.1) of the act, a phased deposit of collateral bond as provided in § 78.309(b) (relating to phased deposit of collateral).]
* * * * * (d) The person named in the bond or other security shall be the same as the person named in the permit.
[(e) The bond amounts required under section 215 of the act are as follows:
(1) Two thousand five hundred dollars for a single well.
(2) Twenty-five thousand dollars for a blanket bond.]
§ 78.306. Collateral bonds—letters of credit.
(a) Letters of credit submitted as collateral for collateral bonds shall be subject to the following conditions:
* * * * * (2) The letter of credit shall be irrevocable and shall be so designated. However, the Department may accept a letter of credit for which a limited time period is stated if the following conditions are met and are stated in the letter:
* * * * * (ii) The Department has the right to draw upon the credit before the end of its time period, if the operator fails to replace the letter of credit with other acceptable means of compliance with section [215 of the act (58 P. S. § 601.215)] 3225 of the act (relating to bonding) within 30 calendar days of the financial institution's notice to terminate the credit.
* * * * * (b) If the Department collects any amount under the letter of credit due to failure of the operator to replace the letter of credit after demand by the Department, the Department will hold the proceeds as cash collateral as provided by this subchapter. The operator may obtain the cash collateral after he has submitted and the Department has approved a bond or other means of compliance with section [215] 3225 of the act.
§ 78.308. Collateral bonds—negotiable bonds.
Negotiable bonds submitted and pledged as collateral for collateral bonds under section [215(a)(3) of the act (58 P. S. § 601.215(a)(3))] 3225(a)(3) of the act (relating to bonding) are subject to the following conditions:
* * * * * § 78.309. [Phased deposit of collateral] (Reserved).
[(a) Operators.
(1) Eligibility. An operator who had a phased deposit of collateral in effect as of November 26, 1997, may maintain that bond for wells requiring bonding, for new well permits and for wells acquired by transfer.
(i) An operator may not have more than 200 wells.
(ii) Under the following schedule, an operator shall make a deposit with the Department of approved collateral prior to the issuance of a permit for a well or the transfer of a permit for a well, and shall make subsequent annual deposits and additional well payments. For the purpose of calculating the required deposit, all of the operator's wells are included in the number of wells.
Number of Wells Annual
DepositPer Additional Well 1-10 with no intention to operate more than 10 $50/well N.A. 11-25 or 1-10 and applies for additional well permits $1,150 $150 26-50 $1,300 $400 51-100 $1,500 $400 101-200 $1,600 $1,000
(iii) An operator shall make the phased deposits of collateral as required by the bond.
(2) Termination of eligibility. An operator is no longer eligible to make phased deposits of collateral when one or more of the following occur:
(i) The operator shall fully bond the wells immediately, if an operator has more than 200 wells.
(ii) If the operator misses a phased deposit of collateral payment, the operator shall do one of the following:
(A) Immediately submit the appropriate bond amount in full.
(B) Cease all operations and plug the wells covered by the bond in accordance with the plugging requirements of section 210 of the act (58 P. S. § 601.210).
(b) Individuals.
(1) Eligibility.
(i) An individual who seeks to satisfy the collateral bond requirements of the act by submitting phased deposit of collateral under section 215(d.1) of the act (58 P. S. § 601.215(d.1)), may not drill more than ten new wells per calendar year. A well in which the individual has a financial interest is to be considered one of the wells permitted under this section. A partnership, association or corporation is not eligible for phased deposit of collateral under this subsection.
(ii) The individual shall deposit with the Department $500 per well in approved collateral prior to issuance of a new permit.
(iii) The individual shall deposit 10% of the remaining amount of bond in approved collateral in each of the next 10 years. Annual payments shall become due on the anniversary date of the issuance of the permit, unless otherwise established by the Department. Payments shall be accompanied by appropriate bond documents required by the Department.
(iv) The individual shall make the phased collateral payments as required by the bond.
(2) Termination of eligibility. If the individual misses a phased deposit of collateral payment, the individual will no longer be eligible to make phased deposits of collateral and shall do one of the following:
(i) Immediately submit the appropriate bond amount in full.
(ii) Cease operations and plug the wells covered by the bond in accordance with the plugging requirements of section 210 of the act.
(c) Interest earned. Interest earned by collateral on deposit by operators and individuals under this section shall be accumulated and become part of the bond amount until the operator completes deposit of the requisite bond amount in accordance with the schedule of deposit. Interest earned by the collateral shall be retruned to the operator or the individual upon release of the bond. Interest may not be paid for postforfeiture interest accruing during appeals and after resolution of the appeals, when the forfeiture is adjudicated, decided or settled in favor of the Commonwealth.]
§ 78.310. Replacement of existing bond.
(a) An owner or operator may replace an existing surety or collateral bond with another surety or collateral bond that satisfies the requirements of this chapter, if the liability which has accrued against the bond, the owner or operator who filed the first bond and the well operation is transferred to the replacement bond. An owner or operator may not substitute a phased deposit of collateral bond under section [215(d) and (d.1) of the act (58 P. S. § 601.215(d) and (d.1))] 3225(d) and (d.1) of the act (relating to bonding) for a valid surety bond or collateral that has been filed and approved by the Department.
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Subchapter H. UNDERGROUND STORAGE § 78.402. Inspections by the gas storage operator.
* * * * * (c) Storage operators shall inspect the gas storage reservoir and storage protective area at least annually to discover if material changes have occurred that require an amendment or supplement of the map and data as required in section [301(a) and (b) of the act (58 P. S. § 601.301(a) and (b))] 3231(a) and (b) of the act (relating to reporting requirements for gas storage operations). As part of that inspection, gas storage operators shall inspect known abandoned wells and plugged wells within the gas storage reservoir area and the gas storage protective area, subject to the right of entry, at the end of the injection season when the storage pressure is at its highest. The inspection record shall include observed evidence of gas leaking and other conditions that may be hazardous to the public or property.
* * * * * § 78.403. Gas storage well integrity testing.
* * * * * (g) The Department may require the operator to perform additional tests it deems necessary after a conference is held under section [501 of the act (58 P. S. § 601.501)] 3251 of the act (relating to conferences).
§ 78.404. Maximum storage pressure.
A gas storage reservoir operator, who has not requested approval of a maximum storage pressure for a gas storage reservoir, shall request, by February 15, 1995, Department approval of a maximum gas storage reservoir pressure in accordance with the following:
(1) The maximum shut-in wellhead pressure (psig) may not exceed the highest shut-in wellhead pressure (psig) found to exist during the production history of the reservoir, unless a higher pressure is established through testing of caprock and pool containment. The methods used for determining the higher pressure shall be determined in conference with the Department in accordance with section [501] 3251 of the act (relating to conferences).
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[Pa.B. Doc. No. 13-2362. Filed for public inspection December 13, 2013, 9:00 a.m.]
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