IOGA of NY Response/Revisions to DEC on New Fracking Rules

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A 119-page response submitted by Brad Gill, Independent Oil & Gas Association of New York to the NY Dept. of Environmental Conservation about the DEC's latest revision to draft fracking rules for the state. The IOGA response is highly critical of the new revisions and makes detailed recommendations on how to fix the proposed rules to ensure drilling actually happens in NY. According to IOGA, they are forced to now be "adversarial" in their stance after working closely with the DEC over the past 4.5 years on this issue.

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IOGA of NY Response/Revisions to DEC on New Fracking Rules

  1. 1. January 11, 2013New York State Department of Environmental Conservation625 BroadwayAlbany, NY 12233-6510Subject: Draft HVHF Regulations CommentsDear Sir/Madam:Enclosed please find comments from the Independent Oil and Gas Association of New York (IOGA NewYork) relative to the Revised Proposed Regulations proposing amendments to 6 NYCRR Parts 52 and 190,Parts 550 through 556 and 560, and parts 750.1 and 750.3. Thank you for the opportunity to provide thesecomments.In reviewing these comments, you will find that IOGA New York has been forced to take a moreadversarial position with these proposals. Notwithstanding our excellent working relationship over theyears and all the efforts that have been made by industry to educate Department personnel regardingmodern natural gas drilling techniques and best management practices to minimize potential adverseenvironmental impacts, it appears that most of our comments on the previous proposals have not beengiven any credibility and that the Department has erroneously come to the conclusion that the shaleresources in New York State will only be developed by large operators. This is truly unfortunate. Becauseof the failure of the Department to consider our comments that were submitted on January 11, 2012, we areresubmitting those comments. In addition, we are enclosing detailed comments on the Revised ProposedRegulations, together with suggested revisions to certain sections of the Revised Proposed Regulations thatwill ameliorate the adverse consequences of these proposals, without compromising environmental quality.Finally, we are also submitting additional letters from companies that qualify as small businesses under theState Administrative Procedure Act (“SAPA”) to reinforce the need for the Department to provideflexibility with these regulatory proposals and to meet the requirements of SAPA to reduce burdens onsmall businesses.As you are well aware, IOGA New York supports a high environmental bar, but the bar must be attainableby industry in order to have the valuable shale resources in this state properly developed. These regulationsare replete with requirements that have no foundation in science or in the long history of modern drilling inNew York State without adverse environmental consequences. In addition, in a number of instances, theDepartment has exceeded its regulatory authority, again with no scientific or historical basis for theoffensive proposals. For example, one of the most glaring issues is the proposal by the Department torequire a 300-foot setback from wetlands regulated by the United States Army Corps of Engineers. As youare well aware, the jurisdiction of the Department over wetlands is limited by Environmental ConservationLaw Article 24, wherein the Legislature made the determination that only a 100-foot buffer zone is requiredfrom state jurisdictional wetlands. By attempting to regulate federal wetlands and also to implement abuffer requirement that is three times the statutory buffer for state wetlands, the Department has proposed arequirement that is not only illegal, but, in conjunction with the many other proposed setbacks andprohibitions, will make it extremely difficult, if not impossible, to site a well pad in New York State. 38 Lake Street • Hamburg, New York 14075 • Phone (716) 202-4688 • Fax (716) 202-4689
  2. 2. Independent Oil & Gas Association Comment LetterJanuary 10, 2013We welcome the opportunity to discuss any of these issues with you and your staff. We urge you to modifythese regulatory proposals in a manner that is lawful, attainable, protective of the environment andconsistent with the statutory mandate that the Department promote the development of oil and gasresources in New York State and protect the correlative rights of landowners to do the same.Thank you for your consideration of our comments and our proposed regulatory revisions.Sincerely,Independent Oil and Gas Association of New York,Brad Gill Executive DirectorEnclosurescc: Andrew M. Cuomo, Governor Joseph Martens, Commissioner Marc Gerstman, Executive Deputy Commissioner Eugene Leff, Deputy Commissioner, Remediation and Materials Management Steven Russo, Esq., General Counsel Bradley J. Field, Director, Division of Mineral Resources Thomas S. West, Esq., The West Firm, PLLC James J. Carr, Hinman Straub PC4811-8179-7138, v. 1 Page 2
  3. 3. Comments on the New York State Department of Environmental Conservation’s Revised Proposed Regulations for High-Volume Hydraulic Fracturing Submitted by the Independent Oil and Gas Association of New York January 11, 2013 The Independent Oil and Gas Association of New York (“IOGA”) respectfully submitsthe following comments regarding the Revised Proposed Express Terms 6 NYCRR Parts 52 and190 Use of State Lands Administered by the Division of Fish, Wildlife and Marine Resourcesand Use of State Lands; Revised Proposed Express Terms 6 NYCRR Parts 550 through 556 and560 Subchapter B: Mineral Resources; and Revised Proposed Express Terms 6 NYCRR Parts750.1 and 750-3 Obtaining a SPDES Permit and High Volume Hydro Fracturing (HVHF)(hereinafter the “Revised Proposed Regulations”), as well as the related documents issuedpursuant to the State Administrative Procedure Act (“SAPA”). As part of these comments,IOGA has identified areas where the Revised Proposed Regulations and the related SAPAdocuments fail to comply with legal requirements, thus rendering the Revised ProposedRegulations legally defective and subject to challenge. In addition to the comments that follow,Exhibit A is IOGA’s proposal on how some of the Revised Proposed Regulations should bemodified, which will bring the Revised Proposed Regulations into compliance with law andimprove the overall quality of the Revised Proposed Regulations without compromisingenvironmental standards. Initially, IOGA would like to commend Department Staff’s continuing efforts regardingthese regulatory proposals, including the need to respond to an unprecedented number of publiccomments. Although we recognize that the task at hand has been difficult for the Department, inthe final analysis, the overarching concern of industry remains the failure of the Department toinclude provisions in the regulations that will allow Department Staff to implement theregulations in a manner that protects the environment to the maximum extent practicable, butdoes so in a manner that provides the necessary flexibility to allow the orderly development ofthe shale resources in New York State consistent with the mandates of New York law. IOGA previously submitted comments regarding the previously Proposed Express Terms6 NYCRR Parts 52 and 190 Use of State Lands Administered by the Division of Fish, Wildlifeand Marine Resources and Use of State Lands; Proposed Express Terms 6 NYCRR Parts 550through 556 and 560 Subchapter B: Mineral Resources; and Proposed Express Terms 6 NYCRRParts 750.1 and 750.3 Obtaining a SPDES Permit and High-Volume Hydro Fracturing (HVHF)that were put out for public comment on September 7, 2011 (hereinafter the “2011 ProposedRegulations”). In IOGA’s 2012 Comments, which were submitted on or about January 11, 2012,and are fully incorporated by reference herein (the “2012 Comments”), IOGA identified many ofthe same issues that are identified below, including the need for the Department to provideregulatory flexibility in the final standards such that the Department can meet its balancingobligations under the State Environmental Quality Review Act and fulfill the mandates ofEnvironmental Conservation Law (“ECL”) § 23-0301 to promote the greater development of theoil and gas resources in New York State and to protect the correlative rights of landowners to 1
  4. 4. have those resources developed.1 IOGA notes that a complete copy of the 2012 Comments isbeing submitted with these comments. I. Positive changes IOGA has reviewed the Revised Proposed Regulations in great detail, including the changesthat were made as a result of public comment received during the initial rulemaking. IOGAwishes to commend the Department for some changes that were made that were partiallyresponsive to the needs of industry. One example is the flexibility provided by the removal ofthe $2 million cap and the addition of an undefined limitation, as determined by the Department,on bonding requirements for well operators. Although the Department did not accept IOGA’ssuggestion for a financial security test to determine the necessity for bonding, or the adoption ofa specific cap on bonding consistent with levels adopted by other states currently engaging inHVHF, this change provides the Department the ability to determine an appropriate cap forbonding requirements on an owner by owner basis. As is more fully detailed below, IOGAcontinues to believe that the Department should incorporate a financial assurance test to allowthose companies that are fully capitalized to meet the financial assurance intended by theRevised Proposed Regulations, without unnecessarily tying up capital for extended periods oftime. This is particularly true with the shale resources, which are anticipated to produce naturalgas for decades. Likewise, the Department should adopt an overall cap on the amount offinancial assurance that is required, per company, to keep New York State competitive with othershale producing states. As recent experience in New York State and in other states hasdemonstrated, these types of limits provide adequate assurance that the wells will be properlyclosed without the need to tie up unnecessary capital. Further, the Department has provided greater clarity to the application process by addingapplication procedures at proposed Section 560.3(e). IOGA commends the Department forproviding a 10-day window to determine if the application is “functionally complete,” as thiswill move applications along on a predictable schedule. Additionally, processing applicationsfor additional wells on a well pad associated with wells that have already received a Part 560permit without additional public notice or comment period will provide for expediency andefficiency in processing applications. See § 560.3(e)(7). IOGA also notes that the Revised Proposed Regulations require a “flare approval” instead ofa “flare permit,” which was previously proposed. This will increase efficiency in fieldoperations, while maintaining Department oversight over any needed flares. See § 556.2(c). It is acknowledged that the Revised Proposed Regulations modified the documentationrequired to demonstrate the “green frac fluid analysis” requirement, both in Part 560 and Part750-3, by limiting it to “existing data and studies.” See §§ 560.3(d)(1)(viii); 750-3.7(k)(2). Thischange will make assessing the chemicals intended for stimulation and preparing applicationsmore predictable for industry. However, notwithstanding this positive change, industry, after1 These regulatory requirements are complemented by the corresponding language in the Energy Law, whichrequires the State to “foster, encourage and promote the prudent development and wise use of all indigenous stateenergy resources including, but not limited to, on-shore oil and natural gas, off-shore oil and natural gas, [and]natural gas from Devonian shale formations . . . .” New York Energy Law § 3-101(5). 2
  5. 5. considerable internal inquiry, has no consensus or definition as to what constitutes a “green”product. The Department should consider utilizing some of the current available standards foradditives used in other geographic regions, even internationally, such as the “North Sea”standard that we believe to be the most rigorous standard. Currently, industry believes itsproducts pass even those stringent requirements. In any event, it is hard to comply with astandard that has no definition or measurement. Moreover, the Department continues to require that the “green” frac fluid analysis beperformed for each well permit application. This is unnecessarily burdensome on industry anddoes not take into account the significant progress that has been made during the four and onehalf years while the revised regulatory standards have been developed in New York in theimprovement of frac fluid chemicals. These improvements have reduced the number andconcentrations of chemicals utilized while enhancing the efficacy of the stimulation process. II. Provisions Demonstrating the Critical Need for Variances and Regulatory Flexibility Although the Department did incorporate some changes to the regulations that are helpful toindustry, in IOGA’s view, there remain significant issues for industry that prevent the RevisedProposed Regulations from being workable or legal. The net result is that the Revised ProposedRegulations will discourage development, rather than promoting development as is mandated bylaw. The 2011 Proposed Regulations contained numerous protective setbacks that were moreextensive than those included in any other state. See §§ 52.3; 560.4(a)(1)-(5); 560.6(b)(1)(ii);750-3.3(a)(1)-(6). The setbacks included in the Revised Proposed Regulations have beenexpanded upon – both for hydraulic fracturing permits and SPDES permitting. Compoundingthis problem, the Revised Proposed Regulations continue to promote extensive prohibitions,including prohibitions on siting within or near the Syracuse and New York City watersheds andcertain aquifers. See § 750-3.3(a)(1) & (2). The Revised Proposed Regulations further maintainthe additional prohibition in Part 52, which provides that no surface disturbance associated withdrilling a HVHF natural gas well is permitted on any State lands, applicable to both pre-existingand new leases. See § 52.3. It is noted that this prohibition is the broadest of any setback, as itprevents any soil disturbance on state lands, which would include access roads, well paddevelopment, and any other aspect of site development that disturbs land. See id. IOGApreviously commented on the inclusion of this prohibition in the 2012 Comments, and all of itsprior concerns are repeated here. Simply stated, these prohibitions are without legal authority and inconsistent with themandate of the ECL that requires the Department to promote the greater recovery of the resourceand protect the correlative rights of the landowners. ECL § 23-0301. In fact, these prohibitionsamount to a taking of mineral rights without just compensation in violation of constitutionalrights.2 See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015 (1992); MartinMarietta Materials, Inc. v. City of Carmel, 2007 U.S. Dist. LEXIS 88922 at *41 (S.D. Ind. Nov.2 No member of IOGA New York is proposing to drill in either the New York City or Syracuse watersheds andIOGA recognizes the political sensitivity of those areas. However, notwithstanding the political sensitivity, theDepartment does not have the authority to ban drilling in any area of the state and any such ban amounts to an illegaltaking of mineral rights without the payment of just compensation. 3
  6. 6. 28, 2007); Bass Enters. Prod. Co. v. U.S., 381 F.3d 1360, 1364 (Fed. Cir. 2004) (citing PennCent. Transp. Co. v. New York City, 438 U.S. 104, 124-45 (1978)). Compounding these broad prohibitions are the many setbacks that are proposed, with onlylimited variances available to industry. Specifically, the Revised Proposed Regulations includethe following setbacks in Section 560.4: (a) No well pad or portion of a well pad may be located: (1) within 500 feet from a residential water well, domestic supply spring or water well or spring used as a water supply for livestock or crops; (2) within 500 feet from an inhabited dwelling or place of assembly; (3) within a primary aquifer and a 500-foot buffer from the boundary of a primary aquifer; (4) within a 100-year floodplain; and (5) within 2,000 feet of any public water supply (municipal or otherwise, or the boundaries of any public water supply reservoir, natural lake or man-made impoundment (except engineered impoundments constructed for fresh water storage associated with fracturing operations). See also SGEIS § 7.1.11, pp. 7-73. Importantly, unlike other states that measure setbacks from the wellbore, the setbacks arefrom the closest edge of the well pad. Section 560.4(b). And, the Revised Proposed Regulationsinclude a variance for only two of the five broad setback provisions (for (a)(1) and (a)(2)).Additionally, before the Department can even consider a variance, the applicant must obtainlandowner and (as applicable) tenant consent for the variance. Some of the newly proposed setbacks have substantive problems. The Revised ProposedRegulations include a new setback on water supplies for crops and livestock, which was notdiscussed in the SGEIS, and which further restricts where sites may be located. See SGEISExecutive Summary p. 22. Further, the term “crops” and “water supply” are not defined, makingthe requirement vague. IOGA recommends deleting or at a minimum, defining these terms.With regard to testing in Section 560.5(d)(1), water used for irrigation purposes is not commonlyisolated as applicable sources to be tested in other states and the sources can be difficult tolocate, because they may be as simple as a waterhole dug by a farmer. Section 560.6(b)(1)(ii) contains an additional setback that will restrict available areas tolocate well pads, which provides that “fueling tanks must not be placed within 500 feet of aperennial or intermittent stream, storm drain, regulated wetland, lake or pond.” In removing the“to the extent practical” that existed in the 2011 Proposed Regulations, the Revised ProposedRegulations actually decrease flexibility in siting well pads. This provision is likely to severelyfurther restrict recoverable unconventional shale resources as it is possible that well pads cannotbe properly designed to meet the various requirements contained in the Revised ProposedRegulations as well as this buffer, particularly with no variance provision. Additionally, it ispossible that a hazard could be created because tanks may have to be placed in other areas than 4
  7. 7. where they normally are placed, resulting in more fuel transfers and the potential for spills andaccidents. In addition to the setbacks contained in Part 560, the proposed Part 750-3 containsadditional setbacks at Section 750-3.3, providing: Well pads for HVHF operations are prohibited, and no SPDES permit will be issued authorizing any such activity or discharge: (1) within 4,000 feet of, and including, an unfiltered surface drinking water supply watersheds; (2) within 500 feet of, and including, a primary aquifer; (3) within 100-year floodplains; (4) within 2,000 feet of any public (municipal or otherwise) drinking water supply well, reservoir, natural lake, man-made impoundment, or spring; and (See also SGEIS Section 7.1.11, pp.7-73.) (5) within 2,000 feet around a public (municipal or otherwise) drinking water supply intake in flowing water with an additional prohibition of 1,000 feet on each side of the main flowing waterbody and any upstream tributary to that waterbody for a distance of one mile from the public drinking water supply intake; and (See also SGEIS Section 7.1.11, pp.7-73.) (6) within 500 feet of a private water well or domestic use spring, or water supply for crops or livestock, unless the Department has granted a variance from the setback pursuant to subparagraph 560.4(c) of this Title, adopted on XX, 20XX. Again, the setbacks are measured from the closest edge of the well pad, not the wellboreas is common in other states. See § 750-3.3(b). More troublesome is the fact that a number ofthese setbacks are redundant with setbacks contained in proposed Part 560 and, therefore, shouldbe deleted or a reference to Part 560 incorporated in Section 750-3.3. See, e.g. §§ 560.4(a)(3);750-3.3(a)(2) (providing setback of 500 feet from, and including, a primary aquifer); §§560.4(a)(4) 750-3.3(a)(3) (prohibiting siting within floodplains). Others within Section 750-3.3are slightly varied from those contained in Part 560, but are similar enough that, at a minimum,confusion over the application will result. See § 750-3.3(a)(4) (similar to Section 560.4(a)(5)); §750-3.3(a)(6)(similar to Section 560.4(a)(1)). It is also likely that, especially in the absence of avariance provision, an overly broad reading of the setbacks will be imposed to further restrictavailable drilling areas. Indeed, only one category (Section 750-3.3(a)(6)) of the six setbackscontained in Section 750-3.3 contemplate a variance. The Department must streamline these inconsistent provisions and, if no revisions aremade, must provide a rationale for why these slight variants are needed in Section 750-3.3(a)versus the identical or nearly identical setbacks contained in Section 560.4, as well as what thesevariants will accomplish. IOGA attaches as Exhibit A proposed revised regulations, including a 5
  8. 8. proposed revised Section 750-3.3, streamlining the setbacks and allowing a variance consistentwith those provided in Section 560.4. Additionally, an updated Section 560.4, acknowledgingthe revisions to Section 750-3.3 is also included within the attached Exhibit A. Proposed Section 750-3.5(c)(1) presents an additional limitation that will eliminateeligibility for an exemption from SPDES permitting requirements contained in proposed Section750-3.5(b) for many sites. The provision provides: (c) At a minimum, in order for the department to make a determination that the injection will not result in the degradation of ground or surface water resources pursuant to paragraph 750-3.5(b)(2) of this Part: (1) the top of the target fracture zone, at any point along any part of the proposed length of the wellbore, for HVHF must be deeper than 2,000 feet below the ground surface and must be deeper than 1,000 feet below the base of a known freshwater supply; and (2) the owner or operator must have measures in place to ensure compliance with the requirements of paragraphs 750-3.7(k)(1), (2), (3), (4), (6), and (7) of this Part and subdivisions 750-3.7(l), (m), and (n) of this Part. In addition to these general disqualifiers, the proposed SPDES general permit for HVHFoperations is unavailable for sites located in certain buffer areas: (1) within 500 feet of a principal aquifer (2) within 300 feet of a state or federal wetland; (3) within 300 feet of perennial or intermittent streams, as described in Parts 800-941 of this Title, storm drains, lakes or ponds.” See § 750-3.11(d); see also SGEIS § 7.1.11, pp.7-73. Finally, all of these buffers and setbacks are supplemented with the revised draft SGEISpublished in 2011,3 which includes as proposed mitigation a number of other prohibitions onareas where drilling may occur: (1) Prohibition on HVHF construction and drilling activities occurring in contiguous grassland habitat of 30 acres or more during nesting season of grassland birds for “Grassland Focus Areas” See SGEIS Executive Summary p. 24; see also SGEIS § 7.4.1.2, pp. 7-79-82. (2) Site specific ecological assessment and implementation of mitigation measures for HVHF activities in contiguous forest patches of 150 acres or more in “Forest Focus Areas.” See SGEIS Executive Summary p. 24; see also SGEIS § 7.4.1, pp. 7-83-87.3 Of course, IOGA has no way of knowing whether additional restrictions have been added to the SGEIS since itslast publication in 2011. If additional restrictions and/or setbacks are included with the final SGEIS, these problemswill be compounded even further. 6
  9. 9. (3) Site specific EIS required for HVHF on “principal aquifers” or within a 500 foot buffer outside of “principal aquifers.” SGEIS Executive Summary p. 21; see also SGEIS § 7.1.11, pp.7-73. Given the breadth and extent of setbacks that were originally proposed, industry isconcerned that yet further setbacks and prohibitions have been added to the Revised ProposedRegulations. Industry is particularly concerned because there is a complete absence of anyfactual basis for most of the setbacks as well for the extensiveness of the setbacks in the RevisedProposed Regulations or the SGEIS. Indeed, industry’s proven track record would support lesserregulation, not further, more stringent prohibitions as has occurred in the Revised ProposedRegulations. In IOGA’s view, the prohibitions on siting within a primary aquifer and a 100 yearfloodplain are unnecessary. Industry has an excellent track record of drilling within primaryaquifers for many years without incident which would support allowing drilling in these areas.Further, the prohibition on 100 year floodplains is unneeded. Operators in other states routinelydrill in floodplain areas, with effective, proven contingency methods that avoid incident duringfloods. In fact, the experience of the natural gas industry in the Northeast during tropical stormIrene demonstrated that the natural gas industry is more than capable of dealing with severeflood conditions. There were no incidents reported at natural gas sites. In a similar vein, IOGAopposes the requirement for a specific EIS for principal aquifers. Like primary aquifers, industryhas decades of experience drilling in these areas without incident. It is also evident from the paltry regulatory support documents putatively prepared incompliance with SAPA that the Department has not considered other factors in proposing theseextensive prohibitions and setbacks. Two factors that are highly relevant to the location of wellpads include terrain and the availability of surface rights. Terrain is an obvious issue that needslittle explanation.4 The Southern Tier where most of the shale development will occur is an areaof the state that has hilly terrain, with steep slopes and limited areas that are suitable for wellpads. There is nothing in any of the analysis put forth by the Department that indicates that theDepartment has considered this limitation in relation to the prohibitions and setbacks that havebeen proposed. Likewise, it is very common in New York State for landowners to restrict orprohibit surface access as part of an oil and gas lease. Yet, there is nothing in the regulatorysupport documents that indicates that the Department considered this limitation in relation to theprohibitions and setbacks. As a consequence, the Revised Proposed Regulations will make itextremely difficult, if not impossible, to find proposed well pad locations when all of theprohibitions and setbacks are factored in with limitations created by to terrain and surface rights. Of greatest concern to the industry is the failure of the Department in the RevisedProposed Regulations to include a general variance provision or waivers to provide regulatoryflexibility. Simply put, industry cannot operate under a regulatory scheme that does not providesubstantially greater flexibility, including a broad variance provision. In sharp contrast to theway the Department is proposing to regulate the oil and gas industry, the Department has enactedmore than 40 separate regulatory provisions across numerous programs it administers, each of4 The Department is obviously aware of the significant slopes in the Southern Tier and has also proposed adisqualification from obtaining a general permit in certain areas with steep slopes. See proposed §750 –3.11(f)(2)(iii). 7
  10. 10. which that allow applicants to vary or modify the governing regulations. Attached as Exhibit Bis a listing of these regulations. Many of these provisions, if not the majority, are a general variance authorizationallowing “any provision” of the regulatory program to be varied provided environmentalstandards can be met. Such general variances are provided for many industries whose solepurpose is to handle waste, and on a permanent basis, including hazardous and radioactive waste,both during transport and at waste management facilities. See 6 NYCRR § 360-1.7 (allowingvariance for solid waste management facilities); 6 NYCRR § 361.1(allowing variance forhazardous waste disposal facilities); 6 NYCRR § 364.1 (allowing variance for solid wastetransporters); 6 NYCRR § 370.3 (allowing variances for hazardous waste managementsystems); 6 NYCRR § 373-1.1(allowing variances for hazardous waste treatment, storage anddisposal facilities); Id. at 373-3.10(allowing variances for owners and operators of hazardouswaste facilities); 6 NYCRR § at 376.1 (allowing variances for hazardous waste land disposal); 6NYCRR § 376.4 (allowing variances from treatment standards required for treatment ofhazardous waste); 6 NYCRR § 380-3.5 (allowing variances for discharge and disposal ofradioactive material to the environment); 6 NYCRR § 381.8 (allowing variances for transport oflow level radioactive waste); 6 NYCRR § 382.4 (allowing variances for low level radioactivewaste disposal facilities). Petroleum storage facilities are also provided a general varianceprovision. See 6 NYCRR 614.1. Indeed, even as part of remediating suspected or knowncontaminated sites as part of the Brownfield Cleanup Program the Department allows variationfrom a strict cleanup standard to suit a particular site. See 6 NYCRR §375-3.8(e)(4); see also 6NYCRR § 375-1.8 (allowing flexibility in remedial programs). It is evident that even where, by statute, a substance is designated hazardous, radioactive,or otherwise a contamination risk, the Department has consistently included a flexible varianceprovision allowing site-specific standards that are protective of the environment. And yet, forHVHF, a temporary process with numerous safeguards included in the practice and required bythe evolving regulatory standards, virtually no variance provisions are provided. There isdemonstrably absent a general variance provision such as is provided for the solid, hazardousand radioactive waste industries, despite the critical need for one in light of the numeroussetbacks and prohibitions the HVHF industry must follow. The Department has provided norationale for its disparate treatment of HVHF, an industry whose practices present substantiallyfewer risks to the environment than industries involved in management, transport and disposal ofsolid waste, hazardous waste, radioactive waste, and petroleum - all industries with a longhistory of discharges to the environment and corresponding environmental contamination –whose regulations contain generous variance provisions. As the Department is well aware, the oil and gas industry has an excellent track record inNew York State, both in terms of developing deep wells and hydraulically fracturing many wells,without any significant adverse environmental impacts. Although HVHF presents someadditional challenges, those challenges are more than adequately managed through the extremelyrobust regulatory program that is being created under the SGEIS and the Revised ProposedRegulations. There is simply no justification for treating the oil and gas industry differently thanvirtually every other industry that is regulated by the Department. This is particularly so with thenumerous prohibitions and setbacks that have been proposed, which will, absent the variance 8
  11. 11. provision, render much of the state off-limits to oil and gas development. A proposed varianceprovision for Part 560 and for Part 750-3 is included in Exhibit A. Additionally, these proposed setbacks and prohibitions are arbitrary and capriciousbecause the draft SGEIS5 does not provide data or other record support for the scope of therestrictions that the Department has proposed. Indeed, even in its response to comments theDepartment provides no basis for the setbacks and the need to expand them. Previous commentsfrom industry have pointed out that the proposed setbacks vastly exceed those required by otherstates and the Department fails to provide a reasoned basis for asserting that those setbacks areinadequate. Such a failure renders the Revised Proposed Regulations arbitrary and capricious,and subject to annulment. See New York State Ass’n of Counties v. Axelrod, 78 N.Y.2d 158,166-69 (1991) (finding regulations lacked rational basis because of lack of evidence in the recordsupporting across the board increase in cost); see also Law Enforcement Officers Union, Dist.Council 82, AFSCME, AFL-CIO v. State, 229 A.D.2d 286, 291 (3d Dep’t 1997) (finding singlehousing regulation arbitrary and capricious because it contains a minimum square footagerequirement while double occupancy housing does not contain such a requirement). The Courtof Appeals in New York State Association of Counties cited the often-repeated general rule that“an administrative regulation will be upheld only if it has a rational basis, and is notunreasonable, arbitrary or capricious.” New York State Ass’n of Counties, 78 N.Y.2d at 166.The Revised Proposed Regulations do not provide record support for a number of the proposedsetbacks and, in particular, for the increases to setbacks previously included in the 2011Proposed Regulations. In the absence of this explanation, the Revised Proposed Regulationscould not stand judicial challenge. Compounding this arbitrary and capricious treatment of the oil and gas industry, theRevised Proposed Regulations impermissibly assert state jurisdiction over federal wetlands withthe consequence that it will be extremely difficult, if not impossible, to site well pads and accessroads. As noted above, Section 750-3.11(d) of the Revised Proposed Regulations disqualifies anoperator from obtaining the general stormwater permit if any activities are located within 300feet of a federal wetland. (The Revised Proposed Regulations now include a definition for“wetland” applicable to Part 750-3. See § 750-3.2(b)(54) (defining wetland as “any arearegulated pursuant to Article 24 of the Environmental Conservation Law and any other wetlandsregulated under Section 404 of 33 U.S.C. 1251 et seq.”). Initially, IOGA questions the legalauthority of the Department to include within the definition of “wetland” wetlands that qualify asfederal wetlands. As the Department is well aware, the limits of the Department’s jurisdictionregarding wetlands are detailed in ECL Article 24. This effort to incorporate federal wetlandsinto the regulatory definition is, therefore, ultra vires.6 The buffer contained in Section 750-3.11(d), which is three times greater than thatestablished by statute for New York regulated freshwater wetlands generally, unduly restrictsand complicates development of the Marcellus shale resource. See ECL 24-0701(2). Sincefederal regulations have no minimum acreage requirement and can be often found as ruts in old5 See Footnote 3, above.6 Industry acknowledges its requirements to comply with federal laws regarding potential impacts to wetlands thatare jurisdictional under those laws. As in the past, industry will continue to work with the United States Army Corpsof Engineers concerning any permits or approvals that are necessary. 9
  12. 12. logging roads and the like, this potential proposed setback could have devastating consequenceson the development of the shale resources in New York. Indeed, substantial additional areas ofthe Marcellus shale will now be foreclosed from development through use of the HVHF SPDESGeneral Permit, and operators would have to expend significant additional time and money on anindividual SPDES permitting process, which could ultimately result in adjudicatory hearings anda waste of the resource in contravention of ECL 23-0301. With these new buffers and theadditional setbacks contained elsewhere in the Revised Proposed Regulations, the already greatlyreduced available areas, which were previously estimated to make approximately 50% of theresource off-limits to development, are further restricted such that it will be difficult for anycompany to justify an investment in New York. As mentioned above, a variance provision isdesperately needed to avoid lengthy cost and delay in permitting and this illegal extension of theDepartment’s jurisdiction over wetlands should be eliminated from the Revised ProposedRegulations entirely. In addition, there is a fundamental unfairness to this restriction. No other SPDESGeneral Permit imposes a 300 foot restriction based on proximity to wetlands or any other waterresource. Indeed, the one general permit that includes any buffer at all includes only a 100 footbuffer, applicable to the actual deposit of waste on the ground near the wetland, in stark contrastto HVHF operations, which may only discharge stormwater. The other five SPDES generalpermits contain no wetland or similar buffers, including, notably, the SPDES construction permitfor well drilling activities issued April 1, 2010. See SPDES General Permit for StormwaterDischarges from Construction Activity (GP-0-10-001) Requirements for Well Drilling Activities,NYS Dep’t of Environmental Conservation (Apr. 1, 2010), available athttp://www.dec.ny.gov/docs/water_pdf/welldrilling.pdf. Therefore, any other applicant orindustry could place their operations 100 feet from a New York-regulated wetland with nowetland or other permit, while, at the same time, that applicant could utilize the SPDES GeneralPermit. The same unfairness exists for those projects proposed to be developed in a portion ofthe wetland, which could use the state freshwater wetland permitting program. Indeed, no otherindustry subject to Department regulation must comply with a flat prohibition relating towetlands. (And, to the extent any buffers exist, those other programs could obtain a variance inrelation to the buffer). This regulatory prohibition prevents solely the HVHF industry fromusing a SPDES general permit while being located near a wetland, and restricts the ability of theHVHF industry to utilize the existing statutory freshwater wetland permit program to developsites. Additionally, with respect to federal wetlands, any other industry could develop as closeas directly adjacent to the wetland with no wetland permit, and still utilize a NY SPDES GeneralPermit. No other Department program attempts to usurp or piggyback on Federal permittingauthority and then compound this illegal extension of its regulatory authority with an excessivebuffer. Indeed, 6 NYCRR § 360-2.12(c)(8) shows proper deference to the governing federalagency in prohibiting siting landfills in federal wetlands unless an Army Corps of Engineers(“ACOE”) permit is obtained, and requiring consideration of alternatives, but only to the extent“required under federal or State law.” The Revised Proposed Regulations should similarlyrecognize the authority of the ACOE to determine proper regulation of the wetlands under itsjurisdiction. Since the Revised Proposed Regulations seek to impose a buffer zone on federal 10
  13. 13. wetlands, where none exists at federal law, not only does this extend the Department’sjurisdiction impermissibly, but it conflicts with the Clean Water Act. More specifically, in the absence of this restriction by the Department, a number ofNationwide Permits (“NWP”) exist that would allow HVHF operations to discharge into or evendisturb federal wetlands while also using the SPDES General Permit. For example, the ACOEincludes in its Nationwide Permit Program a specific NWP for construction or modification ofoutfall and associated intake structures. See Army Corps. of US Engineers, 2012 NationwidePermits, Conditions, District Engineer’s Decision, Further Information, and Definitions (withcorrections), Permit #7 (2012), available at http://www.usace.army.mil/Missions/CivilWorks/RegulatoryProgramandPermits/NationwidePermits.aspx. The ACOE has also authorized up to aone-half acre loss of waters of the United States for the purpose of placing utility lines, includingpipelines carrying natural gas. See id. at Permit #12. There are a number of other permits that,absent this substantial prohibition, an HVHF operator could utilize to develop its well pad. Seeid. at Permit #18 (authorizing minor discharges of dredged or fill material into up to one-tenth ofan acre of federal wetlands); see also id. at Permit #19 (allowing up to 25 cubic yards ofdredging in waters of the United States); see also id. at Permit #33 (authorizing temporarystructures, work, and discharges, necessary for construction activities, access fills or dewateringof construction sites); see also id. at Permit #43 (permitting discharges of dredged or fill materialto construct storm water management facilities). Even assuming it is legally permissible for the Department to infringe upon a federalagency’s regulatory authority in this way, it is confusing to the extreme that the Departmentwould prohibit HVHF operations within 300 feet from wetlands from using a SPDES GeneralPermit when the very Federal agency regulating them has determined those sites may bedisturbed or impacted using the expedited NWP process. Beyond these numerous NWP avenuesordinarily available to an applicant, an individual permit could also normally be applied for. Theproposed 300 foot buffer, therefore, also forecloses the HVHF industry from utilizing an existingfederal statutory scheme to develop its property in an efficient manner which minimizes theregulatory burden. What this means is that an HVHF operator could obtain an approval from theACOE to disturb wetlands to build its well pad, to then have the Department require anindividual SPDES permit application, which would subject an operator to unnecessary,protracted proceedings, and which could ultimately preclude development, all on the basis of thisexcessive 300 foot buffer. Critically, the Department’s actions in engulfing all of the wetlands regulated by separateFederal agencies deprive the various Federal agencies charged by law with regulating thesewetlands the opportunity to exercise that authority. This provision must be deleted, or at leastmodified to, at a minimum, remove the federal wetlands subject to other agencies’ review fromthe scope of “wetlands” subject to the buffer. Additionally, in the absence of a demonstration asto why a buffer three times the size of the statutory buffer surrounding New York regulatedwetlands is necessary for use of the proposed HVHF SPDES General Permit, the 300 foot buffershould be rejected and the 100 foot buffer applicable to New York regulated wetlands in generalreinstated. Since the 100 foot buffer zone is established by statute (ECL §24-0701(2)), this is yeta further example of where the Department has engaged in ultra vires activities. 11
  14. 14. III. State Administrative Procedures Act (SAPA) Issues As IOGA commented previously in its 2012 Comments, the 2011 Proposed Regulations,and the related Regulatory Impact Statement (“RIS”) and Regulatory Flexibility Analysis(“RFA”) fail to comply with a number of the mandates of SAPA. Several defects continue toexist in the current Revised Regulatory Impact Statement (“RRIS”) and the Revised RegulatoryFlexibility Analysis (“RRFA”) issued in conjunction with the Revised Proposed Regulations.Indeed, some of the defects have worsened. IOGA previously submitted substantial comments regarding the essential requirementthat the RIS detail the significant financial costs to industry to comply with the 2011 ProposedRegulations. See SAPA 202-a (3)(c)(i) & (iii). To aid with this effort, IOGA provided anassessment of the permitting and planning costs associated with the 2011 Proposed Regulations.The RRIS acknowledges receipt of these costs, but largely reports the numbers as speculativeand excessive, without documentation to support that claim. The RRIS notes some attempts thatwere made to obtain more information; however, it fails to provide “a statement setting forth itsbest estimate” in the absence of an analysis of costs as required by SAPA 202-a(3)(c)(iv).Rather than complying with these statutory requirements and either accepting the cost analysesprovided by industry or documenting meaningful alternative numbers, the Department bootstrapsthis issue by asserting that the cost will include the “potential costs that the regulated communityshould have expected from the mitigation measures and/or permit conditions that have beenidentified in the rdSGEIS.” NYS Dep’t of Environmental Conservation, Revised RegulatoryImpact Statement: High-Volume Hydraulic Fracturing - 6 NYCRR Parts 52, 190, 550-556, 560,and 750, Proposed Regulations (2013); available athttp://www.dec.ny.gov/regulations/87440.html. This position fails to recognize that the Revised Proposed Regulations and the mitigationstandards being developed under the SGEIS are being developed in tandem, on a parallel track.If the Department’s position were true, there never would be a requirement to assess the cost ofnew regulations if those regulations are evaluated under the State Environmental Quality ReviewAct. This, of course, is not true. Accordingly, the RRIS and related documents utterly fail toprovide a quantifiable best estimate of cost to demonstrate “the cost for the implementation of,and continuing compliance with, the rule to regulated persons.” See RRIS; SAPA § 202-a(3)(c)(i). Without this estimate, the enactment of the Revised Proposed Regulations violatesSAPA. More importantly, there is no assessment of the cost to comply with the RevisedProposed Regulations or a meaningful basis to assess less costly alternatives for industry.Accordingly, the Department has failed to comply with a number of statutory mandates ofSAPA, including those mandates which require that agencies minimize the cost to smallbusinesses. IOGA also notes that its prior estimate of cost is likely inaccurate now, as the RevisedProposed Regulations include a number of new regulatory requirements that will imposeadditional cost on the regulated community. As just one example out of a number of newrequirements imposing cost, additional water sampling is now required, both for baselineanalysis (including an increase in the number of sources that must be tested, as well as theparameters to be tested for), and flowback and production brine. This sampling will generatenew costs not previously assessed by IOGA and, critically, not addressed by the Department in 12
  15. 15. the RRIS. This violates SAPA. Likewise, the Department has not provided any meaningfulanalysis of the cost to develop all of the plans that are required to support permit applications.These regulatory omissions must be corrected. When these direct costs are included with theindirect costs incurred in the many areas of the state that will be off limits to development,resulting in loss of investment in the leases, geologic assessments and the like, the conclusion isinescapable that the Department has violated SAPA. (To say nothing of the staggering cost ofcompliance with the Revised Proposed Regulations). Additionally, the Revised Proposed Regulations now contain a requirement that applicantsfor HVHF well permits “pay all permit fees required under the Environmental ConservationLaw” and that the “applicant . . . pay any costs assessed by the department pursuant to section 8-0109(7) of the Environmental Conservation Law and . . . sections 617.13 and 618.1” of 6NYCRR. See § 560.3(f). Although 6 NYCRR Section 617.13 putatively allows the Departmentto recoup its costs in preparing or reviewing an EIS, including “a chargeback to recover aproportion of the lead agencys actual costs expended for the preparation of a generic EIS,” thisis the first time that the Department has announced its intention to assess these costs againstindustry. Notably, even though the process to develop the SGEIS has been pending forapproximately four and one-half years, the Department never raised this issue publicly. As such,the Department should be estopped from asserting these costs retroactively at this point in theprocess. In addition, the RRIS fails to specify any estimate of the actual costs the Departmenthas expended in preparing the SGEIS, and has failed to provide any indication of how the coststo each applicant will be determined and assessed. As the costs to prepare the SGEIS areuniquely within the Department’s knowledge, omitting this information in its assessment of coststo industry in the RRIS cannot pass muster under SAPA. Indeed, the RRIS does not evenmention that there is a cost associated with this new application fee requirement, or any of theother new costs the Revised Proposed Regulations include. Lastly, the proposal to assert SEQRA fees through 6 NYCRR §§ 617.13 and 618.1 does noteven acknowledge the limits on those costs provided in the Department’s own SEQRAregulations. As provided in the regulations, those costs are limited to a percentage ofdevelopment and other costs set forth in Section 617.13(b), (c) and (d). Of course, theDepartment is required to follow its own regulations. See Era Steel Constr. Corp. v. Egan, 145A.D.2d 795, 799 (3d Dep’t 1988). Particularly relevant here is subparagraph (d), which limitscosts associated with applications regulated under the minerals program. Since the oil and gasprogram is part of the minerals program, the Department is limited by subparagraph (d) in theamount that can be charged to each applicant. Under that regulatory provision, each applicantcould be charged a maximum fee for each unit developed based upon a percentage of the totalcost to develop the well pad and the access road, and the cost to run any utilities, if any, to thewell pad. IOGA is willing to accept this limitation as a compromise concerning this issue. Thosecosts could be charged against the initial permit or permits that are part of the application leadingto the development of the well pad and access road within the unit established by the initialpermit application. Thereafter, no additional fees would be assessed against infill wells drilledfrom the common well pad. In addition to the violations noted above, SAPA Section 202-a(3)(g) requires a discussion ofalternatives and the reasons why those alternatives were not incorporated into the rule. IOGA 13
  16. 16. previously commented that the RIS is required to have sufficient discussion of alternatives, andthat the RIS failed to do this, which was particularly egregious given the significant costs beingimposed on the regulated community and the failure of the Department to incorporate regulatoryflexibility into the Revised Proposed Regulations. Additionally, IOGA noted that its “commentsidentify a number of less costly alternatives to avoid and/or minimize” impacts to the regulatedcommunity, including small businesses. 2012 Comments, Tab 3, p.3. The RRIS fails toacknowledge that any alternatives were suggested in public comment, particularly by theindustry to be regulated, and instead continues to rely on the limited no-action alternative and the‘denial of permits’ alternative. This violates SAPA. A significant evaluation of additional, lesscostly alternatives is required to properly finalize and adopt the Revised Proposed Regulations.Once again, IOGA is submitting proposed changes to the Revised Proposed Regulations that willaccomplish the Department’s goal of protecting the environment while providing the industrywith necessary flexibility. Should the Department fail to adopt these changes, it will be, yetagain, in further violation of SAPA. Perhaps the most egregious violation of SAPA is the failure of the Department toacknowledge the significant regulatory impacts on small businesses and to identify measures tominimize those impacts. As the Department is well aware, SAPA contains a requirement for theDepartment to prepare a regulatory flexibility analysis. See SAPA § 202–b(2). IOGApreviously commented that the RFA failed to consider impacts to small businesses engaging inHVHF as required by SAPA. IOGA additionally provided letters from ten (10) separatecompanies intending to engage in HVHF operations in New York that meet SAPA’s definition of“small business.” Notably, at least eight (8) of those letters were from operators who identifiedtheir prior investments that were intended to develop shale resources in New York State, whichare in jeopardy, or were going to be sold because of the significant regulatory cost and burdenincluded in the 2011 Proposed Regulations.7 Each letter discussed the impacts that will beexperienced by that small business and many asked that the Department provide further reviewof the impact to small businesses and propose alternative, less costly requirements to allow smallbusinesses to be competitive in the HVHF field. Several of the letters also emphatically statedthat their businesses and the oil and gas industry in general, will be forced to stop doing businessin New York if the regulatory requirements remain as burdensome as then proposed. The RRFA does not acknowledge any of these comments or the many other comments thathave been received from small businesses. Instead, the RRFA outright states that “it is notexpected that small businesses . . . will be engaged in HVHF itself.” See NYS Dep’t ofEnvironmental Conservation, Revised Regulatory Flexibility Analysis for Small Businesses &Local Governments, p. 4 (2012), available at http://www.dec.ny.gov/docs/administration_pdf/rhvhfrfa2.pdf. This statement patently false, as is demonstrated by the small business lettersattached to the 2012 Comments and the new small business letters that are attached to thesecomments. See Exhibit C, attached. Notably, any impacts to small businesses that were reportedin the 2012 Comments have increased, as the Revised Proposed Regulations include a number ofnew requirements that will increase costs experienced by small businesses. The RevisedProposed Regulations, therefore, place an enormous new burden on small businesses,particularly those that intend to engage in HVHF operations (such as the companies who7 New small business letters are attached as Exhibit C, which includes letters from many of the same companies thatprovided letters in support of the 2012 Comments. 14
  17. 17. previously commented), which requires that the RRFA make an effort to determine the impactsto those businesses. Accordingly, the RRFA is defective in its failure to consider any of these impacts to smallbusinesses that may engage in HVHF operations. This is a direct result of the failure of theDepartment to acknowledge that small businesses will be impacted by the Revised ProposedRegulations and to provide regulatory flexibility in the revised proposal to minimize the impactto small businesses. Of course, the Department can still make revisions to the Revised ProposedRegulations to incorporate regulatory flexibility and, therefore, minimize the impact to smallbusinesses. The best example is the need to provide general variance provisions, similar to thevariance provisions in the many other regulatory programs administered by the Department,consistent with IOGA’s comments above. Also, the Department must eliminate a number of theregulatory proposals identified above that clearly are in excess of the jurisdiction of theDepartment. IV. Technical Comments a. 551.6 – Financial Security As mentioned above, IOGA acknowledges the amendment to proposed Section 551.6 tospecify that the Department will approve a bonding cap for each owner. However, IOGApreviously cited bonding levels of $15,000 to $60,000 for Ohio and West Virginia, withPennsylvania considering a blanket bonding cap of $600,000. West Virginia ultimately adopteda bonding limit of $250,000 in Pennsylvania adopted a bonding limit of $600,000. TheDepartment did not acknowledge the expertise of its sister states currently engaging in HVHF.Further, this proposed regulation provides financial uncertainty for industry, as they will not beable to reliably predict the capital requirements for a particular permit requirement with noindication whatsoever of the bonding the Department may impose. This uncertainty also violatesSAPA, as discussed above. It warrants noting that the Department includes a variance procedurein at least two other regulatory programs (hazardous and radioactive waste) to allow an applicantto demonstrate financial responsibility and thereby be relieved from excessive financialassurances. See 6 NYCRR § 373-2.8 (allowing a variance from financial assurance requirementsunder the hazardous waste treatment, storage and disposal facilities program); see also 6NYCRR § 3.8 (allowing a variance from financial assurance requirements for hazardous wastefacilities); see also 6 NYCRR § 383-1.5 (providing procedure for variance from financialassurance requirements for low-level radioactive waste disposal facilities); see also 6 NYCRR §383-6.11 (providing for variance from financial assurance requirements for radioactive wasteland disposal facilities). A similar program could be incorporated in the Revised ProposedRegulations. Therefore, IOGA encourages the Department to adopt a reasonable cap on bondingconsistent with other states, and with the requirements of SAPA, including, as previouslyrequested in IOGA’s comments, a financial test for financial security. 15
  18. 18. b. Part 553 – Well Spacing Requirements IOGA commends the Department for continuing to include a variance provision in thewell spacing provisions, consistent with the recognition in the statute that nonconforming unitsshould be available to operators. ECL § 23-0503(3). However, the Proposed RevisedRegulations do not go far enough in that they do not incorporate the statutory standards set forthin ECL § 23-0503(3) for establishing a unit that does not conform to statewide spacing.Recommended additions are set forth in the IOGA revisions to the Revised ProposedRegulations. See Exhibit A. Many operators believe that when prudent planning and efficientresource development considerations are put into effect together with the many restrictions andsetbacks that are proposed by the Department and the natural limitations of terrain andlandowners’ restrictions to surface access that it will be necessary to propose nonconformingunits and to propose wellbore paths that do not conform to the requirement to centralize theinitial wellbore. Accordingly, these variance provisions will be important to determiningwhether the development of deep shale resources can be conducted in New York on a practical,operable or profitable basis. c. 554.1(c)(1) Recycling to the “Maximum Extent Feasible” The Department modified proposed Section 554.1(c)(1) from the 2011 ProposedRegulations to incorporate changes that could create significant additional costs and regulatoryburdens upon industry. The 2011 Proposed Regulations based the requirement to prepare a fluiddisposal plan on whether there is a “probability . . . that brine, salt water or other polluting fluidswill be produced or obtained . . . in sufficient quantities to be deleterious to the surroundingenvironment.” Now, the Department has removed that limitation. Instead, a fluiddisposition/disposal plan is required for all permit applications, as well as “any operationreported to the department on the Sundry Well Notice and Report form that requires pre-approvalfrom the department.” See § 554.1(c)(1). This makes no distinction for de minimus generationof materials required for disposal, particularly for the Sundry Well Notice and Report formrequirement, which may involve changes that do not generate waste, and yet a fluid disposal planwould be required. Further, the spectrum of materials that must be managed in the plan has greatly increased.Previously, the Department proposed to require disposal plan for “fluids.” Now, the Departmenthas increased this to include “used drilling mud, flowback water, and production brine.” Id.Additionally, this proposed regulation now contains a requirement that “[t]he owner or operator [] state in its plan that it will maximize the reuse and/or recycling of used drilling mud, flowbackwater and production brine to the maximum extent feasible.” Id. While industry embraces reuseand/or recycling of materials resulting from the HVHF process, requiring reuse and/or recycling“to the maximum extent feasible” places an unclear and unmanageable burden on industry thatcould create frequent challenges to the sufficiency of a fluid disposition/disposal plan. Such astandard does not take cost or practicality into consideration, as various recycling or reusemethods may technically be “feasible,” but may be cost-prohibitive, or may generate impactsgreater than disposal methods that do not involve recycling or reuse; e.g., some of the recyclingtechnologies employ significant amounts of energy. In sum, this language is too absolute, and 16
  19. 19. would require an operator to follow what is viewed as the maximum reuse/recycling solution,regardless of cost. This is an unreasonable burden to impose on industry and is yet anotherexample of where the Department has crafted the Revised Proposed Regulations in a manner thatis too restrictive and without the required regulatory flexibility. To address the unreasonableness of the requirement that recycling and/or reuse of useddrilling mud, flowback water and production brine be to the “maximum extent feasible,” whilestill accomplishing the goal to recycle and/or reuse materials as often as possible, IOGA hasprepared suggested revisions to Section 554.1(c)(1) in the attached Exhibit A. d. 556.2(b), (c); 560.6(c)(28)(29); EPA NSPS, 40 CFR 60 Subpart OOOO Flaring Issues The Department made some revisions to various proposed regulatory provisionsgoverning potential air emissions related to the HVHF process. See, e.g. 6 NYCRR §§ 556.2(b),(c), 560.6(c)(28), (29). The Revised Proposed Regulations require that venting gas duringflowback must be through a 30 foot flare stack (unless previous wells show no hydrogen sulfidein the gas) and must be ignited “whenever possible.” § 560.6(c)(28). The stack must have a selfigniting device. Id. The Revised Proposed Regulations also require that reduced emissionscompletions, with minimal venting and flaring, must be preformed if the infrastructure is in placeto transport or market the gas. Over this past summer and fall the United States Environmental Protection Agency(EPA) proposed and adopted New Source Performance Standards (NSPS) for oil and gas wellsincluding those that are completed using hydraulic fracturing unless more stringent state or localregulations are in place. “The rule covers any gas well that is an onshore well drilled principallyfor production of natural gas.’’ (Federal Register August 16, 2012; 77 FR 49490) Thisregulation became effective October 15, 2012. The federal regulations will be more stringentthan the Revised Proposed Regulations as of January 1, 2015, except for the New York flowbackand workover regulations at 6 NYCRR Part 556.2(b). Until this date, under the federalregulations, the owners/operators have the option of using reduced emissions completions(RECs) or completion combustion devices (with a continuous ignition source), the same as isrequired in the Revised Proposed Regulations. The federal regulations encourage the use ofREC and complete combustion devices in the interim. For fractured and refractured gas wells,the federal rule generally requires owners/operators to use reduced emissions completions, alsoknown as ‘‘RECs’’ or ‘‘green completions,’’ to reduce VOC emissions from well completions.To achieve these VOC reductions, owners and/or operators may use RECs or completioncombustion devices, such as flaring, until January 1, 2015. As of January 1, 2015, owners and/oroperators must use RECs and a completion combustion device. The rule does not require RECswhere their use is not feasible, as specified in the rule. (See 40 CFR 60.5375; 77 FR 49543-44;Federal Register August 16, 2012 [Emphasis added]) Well completions subject to the new federal standards are gas well completions followinghydraulic fracturing and refracturing operations. These completions include those conducted atnewly drilled and fractured wells, as well as completions conducted following refracturingoperations at various times over the life of the well. As was explained in the proposal preamble, 17
  20. 20. a completion operation associated with refracturing performed at a well is considered amodification under CAA section 111(a), because physical change occurs to the well resulting inemissions increases during the refracturing and completion operation. (Federal Register August16, 2012). The Revised Proposed Regulations (6 NYCRR Part 556.2(b)) prohibit the release of gasto the atmosphere during a flowback or workover for more than 48 hours. Further, §556.2(c)indicates that flaring is considered a release of gas and must then be limited to 48 hours or havean extension filed on a per well basis. Such a requirement is infeasible as most well cleanoutswill exceed a 48 hour period allowing for no clean up or flowback time. To file for extension foreach well will be labor intensive. Furthermore, these restrictions exceed those required byEPA’s NSPS’s Subpart OOOO and may be operationally impossible to meet. IOGA recommends that the Revised Proposed Regulations follow, or incorporate byreference, the federal regulations. The federal regulations allow for more flexibility regardingREC use before January 1, 2015 and are not dependent on gathering lines. Moreover, theRevised Proposed Regulations will be out of date if they are not amended before January 1, 2015to be as strict as the federal regulations. There are no time limits on the flowback operations forcompletion in the federal regulations since completion times will vary from well to well.Flowback, as defined by the federal government, ends with either well shut in or when the well isproducing continuously to the flow line or to a storage vessel for collection, whichever occursfirst. See 77 FR 49497. This change should be made to the Revised Proposed Regulations. Thetime limits imposed by the Revised Proposed Regulations cannot be met, are burdensome tooperators, and would require more paperwork from the operators and unnecessarily consumetime of state employees. Moreover, since paperwork burden was not discussed in the RRIS it isyet a further violation of SAPA. e. 560.2(b)(4) Best Management Practices The Revised Proposed Regulations include a clarification to the proposed definition of“best management practices” at Section 560.2(b)(4). This section now defines “bestmanagement practices” to “mean measure or methods used to prevent or minimize potentialimpacts on air quality, biological resources, land, and water quality caused by drilling,deepening, plugging back or converting or producing a well subject to this Part.” § 560.2(b)(4)(emphasis added). The changes noted in this definition broaden the duration of operationsencompassed in the definition, as well as the scope of impacts that must be addressed.Additionally, no changes were made to make this definition consistent with the definition of bestmanagement practices contained in 6 NYCRR § 750-1.2 as IOGA previously suggested. Instead,a separate definition of “best management practices” applies to SPDES permits for HVHFoperations. This is yet another example of differences between the well permitting regulationsand the SPDES regulations, which should be eliminated or explained. Practically speaking, however, this definition is nearly meaningless as the RevisedProposed Regulations only employ the term in two places, in reference to invasive speciesrequirements and in reference to restoration of native plant cover associated with partial site 18
  21. 21. reclamation. See § 560.3(a)(16) & (17). Nearly all of the impacts cited in the definition of bestmanagement practices are irrelevant to these topics. The definition should, therefore, be deleted. f. 560.2(b)(7); 560.3(d)(1); 560.5(h) Chemical Disclosure Requirements The Revised Proposed Regulations include new requirements to disclose chemicalscontained in hydraulic fracturing fluid, including most notably a new requirement to disclose thecontents of the hydraulic fracturing fluid after fracturing is complete, a requirement to postchemical constituents used in an HVHF well on an online chemical disclosure registry, andbetter defined trade secret protections. IOGA fully supports the Department’s efforts to increase transparency of chemicalconstituents through new sections 560.2(b)(7), 560.3(d)(1) and 560.5(h)(4). Members of theservice company industry who may seek protections for the chemical constituents withinhydraulic fracturing fluid are generally comfortable with the Department’s approach in theRevised Proposed Regulations; however, these companies have a few concerns. Preliminarily,the Department’s approach and the Revised Proposed Regulations vastly overstate the potentialimpact from additives to hydraulic fracturing fluid by referencing material safety data sheets(“MSDS”) instead of analyzing the actual make up of the fluid as a percentage. The RevisedProposed Regulations should provide at least some acknowledgement that any chemicals used inhydraulic fracturing fluid are diluted by substantial measure. This dilution is critical inevaluating the impact a chemical constituent has on the environment in relation to the HVHFprocess. Referencing an MSDS does not provide an accurate view of the impacts, because themake-up of the fracturing fluid contains such a small percentage (in the range of 1 percent) ofadditives. It is commonplace for substances used every day by consumers as well as industries tohave a standard based in parts per million, or even parts per billion. For example, chlorine isadded to drinking water used every day by millions of people, but in much less quantity than thatdescribed on the MSDS sheet, which makes the MSDS sheet not relevant to the impactsexperienced by water consumers. If a ppm or ppb standard was used for HVHF, it would giveperspective to the actual risk presented, instead of reviewing the potential dangers of a materialin its concentrated form as listed on the MSDS sheet. Such an approach allows the Departmentand the public to review the properties and any hazards associated with these substances indiluted form consistent with how industry utilizes all of the additives in the field.8 IOGA commends the Department for acknowledging protections for trade secrets inproposed Part 560 that are important to various sectors of the HVHF industry. Such a balanceserves both New York State’s right to know with the protections normally afforded confidentialtrade secret information. The FOIL protections and procedures are generally consistent betweenthe disclosure required during the well permit application process and the post-completionreporting, however; Section 560.5(h) contains an inconsistency in the protections affordedcompared with the protections contained in Section 560.3(d). When applying for a well permit,Section 560.3(d) allows the applicant to seek trade secret protections for the identity of each8 Industry acknowledges that an MSDS is relevant for emergency responders relative to the chemicals that are storedon site prior to use in the high volume hydraulic fracturing process. 19
  22. 22. additive proposed for use (see § 560.3(d)(1)(ii) & (2)), while the identity of each additive is notprotected in the post-completion disclosures. See § 560.5(h)(1)(viii) & (2). This should becorrected. It is also noted that the proposed SPDES regulations require disclosure of “arepresentative assay of the concentrations of chemical constituents present” to apply fortreatment or disposal of HVHF wastewater for POTWs, privately owned disposal facilities, andfor UIC wells. See § 750-3.12(c)(2), (d)(2) & (f)(3). Additionally, the POTW and privatelyowned disposal facilities must maintain “a list of chemical constituents used in HVHF, alongwith a representative assay of the concentrations of chemical constituents present, as well asother parameters that may be present.” See § 750-3.12(c)(5) & (d)(5); see also (c)(7). However,there are no specific trade secret protections notwithstanding that those constituents are protectedduring the well permit application and completion stages. While the general SPDES regulations9allow an applicant to request confidentiality pursuant to 6 NYCRR Part 616, this does notprovide sufficient protection, especially given the broad disclosure requirements unique to theHVHF program and the tailored trade secret protections the Department proposes in Part 560.IOGA recommends, therefore, that proposed Part 750-3 be modified to incorporate the tradesecret protections contained in Section 560.3(d). See Exhibit A for proposed revisions to Section750-3.12. In addition, Section 560.3(d)(1) should do more to encourage flexibility in disclosingcomponents of hydraulic fracturing fluid as part of a permit application, such as allowing broadpotential ingredient lists to be filed, with clarifications as to which of those ingredients disclosedwere actually utilized provided in the later disclosure included in Section 560.5(h)(4). This typeof flexibility would take into account the fact that, very often, permit applications will be draftedmany months (6 to 12 months) before the well is actually drilled and before site-specificgeologic conditions are identified through the drilling phase of well development, which maynecessitate changes in the frac fluid composition. By allowing a broader array of potentialchemicals to be used in the hydraulic fracturing stimulation process, the Department will give theindustry, including the service sector of the industry, the flexibility that they need to makeadjustments at the time of stimulation consistent with the statutory mandate to promote theultimate recovery of the resource. IOGA previously submitted comments regarding the requirement to complete a “green”frac fluid analysis for each well permit contained in Section 560.3(d)(1)(v) (which is nowsubdivision (d)(1)(viii)), as well as Sections 750-3.7(k)(2). The 2012 Comments recommendedconducting a biennial master chemical review with the HVHF service companies instead of apermit specific review. As the Department did not accept this recommendation, all of IOGA’sprevious remarks regarding the “green” hydraulic fracturing fluid analysis are repeated andincorporated by reference here. Although IOGA supports the effort to encourage improvementsto the hydraulic fracturing process that have resulted in a reduction in the number of chemicalsused and improvements in efficacy, this is yet another example of the failure of the Departmentto implement regulatory flexibility.9 See 6 NYCRR § 750-1.22. 20
  23. 23. Additionally, while IOGA acknowledges that the documentation making up the greenfrac fluid analysis requirement, both in Part 560 and Part 750-3.7, is now limited to “existingdata and studies,” industry is unclear as to the meaning and application of the requirement todocument that additives “exhibit reduced aquatic toxicity.” See §§ 560.3(d)(1)(viii), 750-3.7(k)(2). As with chemicals used in any industrial process, there are many substances that havenot been fully tested on all species. Presumably, the new language limiting the analysis toexisting data and studies would not require any additional aquatic toxicity studies, but this shouldbe clarified. Further, Section 560.6(c)(23)’s prohibition on the use of hydraulic fracturing fluids otherthan those identified in the well permit application without Department approval should beclarified to provide flexibility, i.e. by allowing the Department to approve changes verbally, withwritten approval following if necessary. Such flexibility is necessary, as noted above, because ofchanging conditions in the field that can only be discovered during the drilling and hydraulicfracturing process. Alternatively, allowing applicants to identify a broad array of chemicals thatmay be used in the stimulation process would solve this problem by allowing flexibility. Finally, IOGA notes that there is an inconsistency in the Revised Proposed Regulations.An applicant for a well permit must identify the proposed hydraulic fracturing service companypursuant to Section 560.3(d)(1)(vii). Practically speaking, this company may change during thesix to twelve months between submitting an application, receiving approval, and ultimatelyhydraulically fracturing a well, and there is no opportunity to amend this information in laterdisclosures or on the Pre-Frac Checklist and Certification. IOGA recommends that any changesto the service company be identified on the Pre-Frac Checklist and Certification. g. 560.3(a)(16) Invasive Species The Revised Proposed Regulations now include a requirement for an applicant to produce“a list of invasive species found at the well site and description of the best management practiceswhich will be used for preventing the spread of these invasive species, including measures beingused to prevent new invasive species from being transported to the site.” See § 560.3(a)(16).This provision, which is unique to any Department industrial or commercial permitting program,presents a number of concerns. In 2003, the State took initial steps to address the growing problem of invasive speciesand statutorily established the Invasive Species Task Force (Chapter 324 of the Laws of NewYork 2003). The Task Force studied the problem of invasive species and providedrecommendations to the Governor and Legislature in the Final Report of the New York StateInvasive Species Task Force (Task Force 2005). Subsequently, the Legislature implemented thefirst Task Force recommendation by establishing the NYS Invasive Species Council (Council)and the Advisory Committee to the Council (Chapter 26, Laws of New York, 2008,Environmental Conservation Law, Article 9, Title 17). According the to the New York State Invasive Species Management Strategy which wasprepared for and submitted to the Department, it is recommended that the Invasive SpeciesCouncil should “undertake an initiative to integrate invasive species concerns in all relevant state 21
  24. 24. and local planning and construction projects.” New York State Invasive Species ManagementStrategy, § 4.3, p. 4-8 (2011). The recommendations clearly state this approach should focus itslimited resources and energies on state and local projects, not private sector activities.Additionally, the Management Strategy does not recommend best management practices orprotocols for construction projects or other industrial activities. The provisions of proposedsection 560.3(a)(16) call for the creation of a management strategy by industry that is not beencontemplated, vetted or recommended by the state’s own Invasive Species Council, is not part ofits Invasive Species Management Strategy nor is it discussed as part of the processes outlined bystatute and subsequent tasks forces to address real and challenging invasive species issues. Furthermore, the construction and surface disturbance activities associated with HVHFdiffer in no way from the historic development of conventional well sites or with thedevelopment of typical commercial sites such as shopping centers. As the Invasive SpeciesCouncil conducted a rigorous review of potential industrial and commercial activities that couldserve as conduit for the spread of invasive species and failed to identify oil/gas well sitedevelopment as a primary activity of concern, there is no basis for this requirement.Accordingly, IOGA believes that the Department is placing undue burden on the HVHF industrywithout any basis in law or policy, and without merit. Accordingly, Section 560.3(a)(16) shouldbe removed from the Revised Proposed Regulations. In the event that the Department does not remove this provision, IOGA recommends thatthe Revised Proposed Regulations include flexibility to develop and implement an operatorspecific invasive plan. Prescribed requirements on analysis, mapping, identification, biologicalassessment, requirements to reintroduce native (yet now currently absent) species, andsignificant vehicle washing requirements, should not be advanced as prescriptive requirements. Additionally, failure include the potential cost associated with developing 1) bestmanagement practices for preventing the spread of invasive species and 2) measures forpreventing transport of new invasive species to the site, violates SAPA, as described above.Indeed, in the absence of any guidance on how to control invasive species at an HVHF or similarindustrial site, the time and cost to develop such a program may likely be considerable.Currently, no Department regulations require a permit applicant to address invasive species, withthe exception of the transport of firewood. In the absence of any analysis as to cost in the RRISand RRFA, however, IOGA cannot be certain how much this will cost and what unintendedconsequences will occur. It is, therefore, critical that the Department remove this requirement orprovide significant changes so that it is workable for industry. h. 560.3(a)(17); 750-3.2(35) Partial Reclamation IOGA previously commented that the definition of “partial reclamation” was different inthe proposed Part 560 regulations (§ 560.2(b)(18)) and the proposed Part 750-3 regulations (§750-3.2(b)(35)), and that the Part 750 definition should be deleted, with a reasonable timeframeimposed for partial reclamation imposed in the Part 560 regulations. The Department acceptednone of these suggestions and, although modifications were made to the Part 750 definition of“partial reclamation,” these modifications to not adequately address IOGA’s concerns. Asindustry has made clear to the Department on a number of occasions, including in its 2012 22
  25. 25. Comments, there will be a variety of factors that will dictate the rate at which wells aredeveloped on a common well pad. Well pads typically are not reclaimed at all until the well padhas had all of the wells drilled, the wells are hydraulically fractured and the wells have beenturned into production. Where full well pad development is spread out over time, the sites arestabilized and seeded & mulched, where necessary, but not reclaimed. Requiring unnecessaryreclamation promotes unnecessary land disturbance, which will actually increase the potential forimpacts from stormwater runoff. i. 560.3(e) Application Procedures The Revised Proposed Regulations now contain a procedure for submission and reviewof HVHF well applications, which, as mentioned above, is useful to industry. However, IOGA isconcerned that proposed Section 560.3(e)(5) will create an opportunity for inefficiency in thepermitting process. By allowing comments on “local and site specific issues that have not beenaddressed in the Final Generic Environmental Impact Statement,” the Department may openitself up to continual comment challenging the sufficiency of the SGEIS and its applicability to aparticular site. Additionally, this Section should make clear that the Part 560.3 regulationsgovern the application process and do not create any new requirements that might be interpretedas being subject to the Uniform Procedures Act, including any process that would give rise to theright to an adjudicatory hearing. j. 560.5(c) Non-Routine Incident Reporting The Revised Proposed Regulations include modifications to Section 560.5(c) regardingreporting of non-routine incidents. IOGA notes that a “non-routine incident” is described bystatute at ECL Section 23-0305(8)(h), and the Revised Proposed Regulations do not contain aspecific definition outside of proposed Section 560.5(c). IOGA recommends that a definition beadded to the Part 560 definitions section. This terminology could be used in a definition of “non-routine” incident. As currently proposed, the term “non-routine incident” includes incidents ofwater complaints and other items which were not really intended as a non-routine incident in thestatute. IOGA has revised proposed Section 560.5(c) to be more consistent with the statutorydefinition in Exhibit A, attached. This terminology could be used in a definition of “non-routineincident.” k. 560.5(d) Sampling Parameters IOGA reviewed and compared the Revised Proposed Regulations to industry’s standardpre-drill baseline water parameters completed in the neighboring states (PA & OH). IOGA has anumber of resulting comments. Section 560.5(d)(1) was modified to include a number ofminimum parameters that must be sampled for all required water testing. Even with the additionof these minimum parameters, this regulation still seems to be open-ended. IOGA suggestshaving a defined list without the caveat of as “specified by the department.” The modificationsto Section 560.5(d)(1) added a requirement to test Gross Alpha and Gross Beta. However, thissampling is not required in neighboring states such as Pennsylvania. 23
  26. 26. Section 560.5(d)(1) added a requirement to test the Static Water Level (when possible),which requires, for accurate results, invasive measures on the subject water well. Performingthese procedures will greatly increase the risk of exposure for the landowner’s well/water sourceand expose industry to potential claims from landowners concerning adverse impacts to theirwell by reason of the invasive procedure. Currently, industry’s program is only through “non-invasive” measures, which means industry does not open or measure anything within theconfines of the water well or source. This minimizes the risk of a landowner claiming that theirwell has been contaminated, or damages to their water pump, flow or other water well featureshave occurred. Using any invasive measure for testing has a very high risk. Industry generally onlyperforms invasive measures like this where required by lease water clause requirement, which doexist but generally are not a common part of a typical industry’s program. IOGA also notes thatapplying the “when possible” provision to the static water level testing could be difficult, as thisSection contains no discussion on how the Department will determine if testing is possible. Section 560.5(d)(1) also adds Volatile Organic Compounds (VOCs), and specificallyBTEX, to water sampling parameters. Industry in other states currently reports BTEX in theirbaseline analyses; however, IOGA questions the need to require sampling of other VOCs as partof the water sampling requirements. Other VOCs are not compounds commonly used in theHVHF industry, so no later comparison would be needed. Further, operations in Pennsylvaniado not require this sampling. Sampling BTEX helps industry understand if there are legacyissues commonly associated with any underground storage tank (UST) and other downstreamindustry activity present. IOGA would, therefore, recommend deleting the requirement tosample VOCs other than BTEX. In the event the Department does not delete this requirement, industry requires a fullunderstanding of which VOCs the Department will want tested, particularly to be able to assesscost, as there would be an added cost per sample. If VOC testing is required, IOGA recommendsadopting a list of the VOCs that must be tested to the Revised Proposed Regulations in either atable within the regulations or an addendum. Section 560.5(d)(2) now includes a requirement that “all significant deviation(s) from thebaseline compositions” be reported to the Department. This needs to be better clarified as towhat is a “significant deviation” and the “timing” for when a “determination” is made. No otherstate has a requirement like this. Only one state (CO) currently has a “post-drill” samplingrequirement, but it does not have any notification of variances with analytical results. Animportant consideration here is that there are common and normal “natural,” “seasonal” and“analytical” variances that are acceptable in environmental analysis. If this becomes arequirement, then thresholds for acceptance need to be clearly defined. Industry has additional questions regarding the sampling requirements in general. Willthe sampling data be kept confidential? “Ambient” sampling might identify an individual wellissue that might affect a landowner’s private property value or result in an enforcement action onthe well owner. Section 560.5(d)(3) talks about submission of test results to New York StateDepartment of Health. Will that lead to public disclosure? If so, that landowner should know 24
  27. 27. that going into the sampling process. The Revised Proposed Regulations do not appear to takeinto account or require any assessment of the well construction itself as part of this samplingrequirement or identification of existing pollution sources that might already be impacting thewell. Finally, what specifically constitutes a “reasonable attempt” to (1) obtain a landowner’spermission; and (2) to sample and test a well?” Industry needs to understand the outreachrequirements that will be in effect. l. 560.5(f) Internet Posting of Waste Tracking Forms The Revised Proposed Regulations have added a requirement for the owner and operatorto post completed Drilling and Production Waste Tracking Forms, for any wastes “disposedinstead of recycled or reused,” on the owner or operator’s website within 30 days of receipt ofthe waste by the disposal company. See § 560.5(f). As the Revised Proposed Regulations requirea Waste Tracking Form to be prepared “for any used drilling mud, flowback water, productionbrine and drill cuttings removed from the well site,” each time these materials move off a site toa disposal facility (i.e., each truckload), a form would have to be prepared. Id. For a given site,this could result in hundreds of postings per well. Initially, IOGA questions the legal authority for this requirement, which appears to bebased upon “right to know” principles rather than environmental mitigation. Any suchrequirement should have a statutory foundation, which is totally lacking here. In addition, thisrequirement appears to be an arbitrary requirement that is being imposed upon the natural gasindustry without any similar requirements being imposed upon other industries, includingindustries that engage in the business of generating, transporting or disposing of wastes. Indeed,the Department rarely requires posting of information on the internet and in no other case isindustry required to post information on its own website for informational purposes only.Further, no federal environmental law imposes this requirement on the permit holder as a meansof disclosure; the federal agency generally maintains and posts information of this nature in someform on its own website. All of this points to the conclusion that the Department is proceedingin excess of its legal authority. IOGA, therefore, recommends that the requirement to post Waste Tracking Forms on theoperator’s website be removed, or in the alternative, that the Department be responsible forposting the information on the Department’s website, perhaps in a similar manner to its currentenvironmental remediation sites and spill incidents or oil and gas well databases. m. 560.7(c) Mineral Oil Containing Drill Cuttings The Revised Proposed Regulations added a prohibition on the onsite burial of drillcuttings contaminated with polymer-based mud containing mineral oil lubricant. See § 560.7(c).This prohibition is unnecessary, and discourages flexibility and advances in technology. Thereare new nano-materials and advancing technology to render these materials inert and safely burythem onsite. These technological advances, should be properly evaluated and permitted by theDepartment pursuant to a Beneficial Use Determination or similar approval. IOGA, therefore,recommends removing this restriction and including a provision to allow these materials to beburied if proper approvals are received. 25
  28. 28. The wording used in Section 560.7(c) related to “disposal” (and seemingly excludingbeneficial reuse opportunities) should also be revised for consistency with Section 554.1(c)(4).See Exhibit A for proposed revisions to this section. n. 560.7(i), (k); 750-3.7(k)(6) Radioactivity Issues A number of revisions were included in the Revised Proposed Regulations relating toradioactivity. For example, Section 560.7(i) now includes a requirement to analyze flowbackwater, production brine, and the soils adjacent to these fluids for radioactivity. The oil and gas industry conducts periodic external radiation surveys to detect thepresence of NORM in equipment and wastes. The finding of external radiation levels in excessof standards, which differ somewhat from state to state, triggers requirements to handle wastesand decommissioned equipment according to regulations. Survey results are also used todetermine the need for specific NORM management procedures to ensure appropriate industrialhygiene practices. It is also a routine practice to survey soils during the decommissioning ofsites. A practical suggestion is to require periodic external radiation surveys and to establish atrigger level above which wastes and surplus equipment must be treated according to NORMmanagement procedures. As the Department is well aware, data collected by the Department itself hasdemonstrated that flowback and produced water do not present significant NORM issues in NewYork State. In April, 1999 study entitled “An Investigation of Naturally Occurring RadioactiveMaterials (NORM) in Oil and Gas Wells in New York State” concluded that the amount ofNORM in produced water is relatively insignificant and does not amount to any public healthhazard. Specifically, the study included 43 brine (salty waters brought to the surface as abyproduct of gas production), 10 scale, two sludge, two water and one soil sample. Only twobrine and one scale sample indicated radium isotope concentrations that were greater than 5.0picocuries per gram (pCi/g) total radium (pCi/ml for liquid samples such as brines). The brineradium results, 0.95 and 24 picocuries per milliliter (pCi/ml) for one sample, and 3.8 and 7.7pCi/ml for the other (Ra-226 and Ra-228 respectively), were found not to pose any threat topublic health or the environment. This conclusion is supported by an analysis of road disposal ofthe brine with the U.S. Department of Energy’s (USDOE) Residual Radioactive MaterialGuideline computer model (RESRAD). The scale result, 11 pCi/g for Ra-226 and 3.8 pCi/g forRa-228, was also found not to pose any threat to public health or the environment due to the lowamount of scale deposited in gas plant piping. Based upon this analytical data the Departmentreached the following conclusions: 1. Several types of oil and gas well field wastes were found to contain slightly concentrated NORM but not at concentrations sufficiently high to pose a threat to the public health or the environment. These wastes include gas well field brines and well casing scales, and oil well sludges and sediments. 26

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