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Fracking rules finally unveiled

Friday, Aug 29, 2014

* IDNR released its new fracking rules today. Lawrence Falbe took a quick look for us…

Rich,

My take on the revisions is that IDNR seems to worked very hard to digest an enormous body of public comment, and revise the regulations as it saw necessary and appropriate. I think that few people will be able to argue that IDNR rushed the process or otherwise did not fairly consider the staggering volume of comments it received, even if the end result is not considered perfect by either pro- or anti-fracking proponents.

Here is my “quick hit” list of what I saw that was important in my first very quick run-through.

    • Requirement to disclose specific fracking chemicals is strengthened and burden to prove protection as a trade secret is more stringent
    • Radioactivity is now addressed and a Radioactive Materials Management Plan is now required, among other things
    • The carve-out for adverse effects to water bodies that are “wholly contained” is much more stringent, with any hydrogeological connections to off-site groundwater sources now enough to exclude this caveat
    • The permit applicant must identify efforts to mitigate the impact of HVHHF on local roads
    • Burden is on the applicant to show if local first responders have adequate training and equipment to respond to emergencies
    • Changes to the permit application to address deficiencies identified by IDNR may trigger a new public comment/hearing period on those changes
    • Tightens up rules for when an objector can demand a public hearing by requiring specific facts and regulations at issue to be identified, but softens requirement to identify witnesses at time of request for public hearing
    • Public hearings must be held WITHIN THE COUNTY of the well site when possible but in no event more than 30 MILES OUTSIDE of county of well site
    • Applicants MUST appear at the public hearing (if there is one) except in a case of documented emergency, in which case the hearing can be rescheduled but applicant must pay costs
    • Clarifies that Hearing Officer does not render a “decision” but now makes only recommended findings, and the IDNR (presumably the Director but it’s not specified) makes the decision.
    • The permit decision still has to be made within 60 days of application completion unless waived by the applicant
    • The standard for granting a permit now specifically includes consideration of potential harm to property, wildlife, aquatic life and the environment
    • The IDNR has to make specific findings in its permit decision on key input from governmental agencies and objectors that was presented by public comment/hearing
    • The permit decision must consider the incremental impact and CUMULATIVE EFFECT of past, present and future fracking operations in the same vicinity or county
    • Significant deviations to the original permit application (including changes in well dimensions, boring locations, changes to proposed containment, etc.) requires another $13,500 fee
    • IDNR can impose ADDITIONAL SETBACKS as necessary to protect public health, public safety, property, wildlife, aquatic life, or the environment
    • Baseline groundwater monitoring requires GPS coordinates
    • Burden for claiming technical or economic infeasibility of complying with requirements to manage natural gas and hydrocarbon fluids produced during flowback periods is more stringent
    • Excess fluid in a reserve pit must be removed within 7 days after it is deposited
    • SITE Restoration is MANDATORY and cannot be contractually waived between site owner and permittee

Note that the new requirement that a well permit application decision must consider incremental impacts and “cumulative effects” (Section 245.300(c)(4)(vii)) is HUGE and could have a major impact on incentivizing companies to rush to get permitted, for fear that an overabundance of wells in a certain area may make additional permits harder to get as time goes on.

- Posted by Rich Miller        

17 Comments
  1. - VanillaMan - Friday, Aug 29, 14 @ 1:54 pm:

    Well.
    It was either this or video gaming at every McDonalds, Burger King and KFC booth and drive up window.


  2. - Anonymous - Friday, Aug 29, 14 @ 2:03 pm:

    Gee, thoughtful consideration of both sides and a balance between the two. I thought they were just slow rolling?

    Good job all involved, despite the hand-wringing from both sides IDNR were the adults I the room.


  3. - Hack in the Back - Friday, Aug 29, 14 @ 2:03 pm:

    The Commenter Index is unprecedented. It’s the who’s who of fracking in IL.


  4. - wordslinger - Friday, Aug 29, 14 @ 2:07 pm:

    OK, start making money.


  5. - Down South - Friday, Aug 29, 14 @ 2:19 pm:

    The Commenter Index is indeed quite interesting. It is basically a roster of every ecoreligionist in Illinois. Shows clearly the urgent involvement of those who wished to block the drillers.

    The Commenter Index also shows the lack of involvement of individuals who are in counties which stand to gain from fracking. Most names are from Chicago, Carbondale, etc.


  6. - dupage dan - Friday, Aug 29, 14 @ 2:32 pm:

    === OK, start making money. ===

    With that long list it could take awhile - I hope not. The applicants are keen - there is real money to be made.


  7. - John A Logan - Friday, Aug 29, 14 @ 2:41 pm:

    Finally, the savior of Southern Illinois has arrived! God Bless You Pat Quinn and the fracking industry! Hallelujah!


  8. - Just Saying - Friday, Aug 29, 14 @ 2:44 pm:

    Most of these proposed changes are non-starters with industry. Don’t see these passing.


  9. - Demoralized - Friday, Aug 29, 14 @ 2:54 pm:

    ==Most of these proposed changes are non-starters with industry. Don’t see these passing.==

    Let the whining begin. You figure out a way to 100% satisfy everybody you let us know.


  10. - Ghost - Friday, Aug 29, 14 @ 3:07 pm:

    about fracking time…..

    VMan you say that like its a bad thing? we could put these on parking meters, play for a free parking


  11. - dupage dan - Friday, Aug 29, 14 @ 3:08 pm:

    Apparently one company has allowed their lease to expire possibly due to the delays in the approval process. There’s plenty of gas to be drilled in Indiana. It’ll be interesting to see if the path of least resistance leads east.


  12. - Going nuclear - Friday, Aug 29, 14 @ 3:16 pm:

    I think DNR took a measured approach. It’s important to get this right from the start.

    Look what’s going on in Pennsylvania. The state environmental protection agency recently made public 243 cases of contamination of private drinking wells from oil and gas drilling operations.

    Let’s make sure fracking is done safely here.

    See: http://online.wsj.com/article/AP16a162b66b5946d0837c7395cab7a5f4.html


  13. - Judgment Day - Friday, Aug 29, 14 @ 3:33 pm:

    “Most of these proposed changes are non-starters with industry. Don’t see these passing.”
    ————————–

    It’s not just a matter of ‘passing’. It’s more Administrative Rules/JCAR, which as I look at more of a technical document writing process.

    And industry may howl initially, but IDNR, the anti-fracking folks, and eventually the legislature will be saying “what were we thinking of?” And that’s where the most noise will be coming from.

    This same type of issue, is why in many ways we were never able to get a real, custom designed statewide building code passed into law.

    Most, not all, but enough came to the realization that a ‘one fits all’ regulatory environment doesn’t work very well in practice across the entire state, even excluding Chicago (even all of Cook County). The law just can’t keep up with technology.

    And fracking technology is always changing. So that’s going to be a lot of $13.5k fees and paperwork, but remember, the fracking companies can far outpace the regulatory agencies in paperwork. After all, for the oil/fracking companies, it’s their BUSINESS. For the regulators, it’s just one area.

    And please note, the local health departments (Environmental Health) are going to be ‘players’ in this. Is anybody aware, for example, that Richland County (Olney, IL), which is right smack in the middle of the S. Illinois oil patch, has no chartered health department? I mean, NONE.

    That’s going to be an interesting ‘work around”.

    Also, with the rules on potential drilling (such as ‘incremental impacts’ and ‘cumulative effects’), you will have immediately created immediate litigation over those terms, but also a fairly immediate secondary market for existing wells and related support facilities.

    Just a thought, but you may want to re-think this particular one, as you are potentially kicking over a hornets nest known as MERS (Mortgage Electronic Registration Systems, Inc. (MERS)).

    The link is: http://en.wikipedia.org/wiki/Mortgage_Electronic_Registration_Systems

    Remember, MERS handles all UCC (Uniform Commercial Code) documents for virtually all places in the US, and that includes Southern Illinois. A secondary marketplace for the fracking business might very well fall under the UCC provisions. Oh, this could be some serious ‘fun’.

    Just a few initial thoughts to consider.


  14. - Illiana - Friday, Aug 29, 14 @ 4:02 pm:

    Either way the natural gas will be extracted eventually. Those who want to prevent fracking will fail for economic reasons & those who want it easier are not going to increase the amount of natural gas in the ground. The past of least resistance cannot increase the amount extracted over the long term.


  15. - 4 percent - Friday, Aug 29, 14 @ 4:02 pm:

    Unfortunately, many of these changes go beyond the scope of the legislation and fragile agreement that resulted in support from enviros, ag, and business community. While they may seem to “make sense” they don’t reflect the “give and take” that resulted in the historic agreement. Several items go far beyond what was negotiated by both sides.


  16. - wordslinger - Friday, Aug 29, 14 @ 4:05 pm:

    –Apparently one company has allowed their lease to expire possibly due to the delays in the approval process. There’s plenty of gas to be drilled in Indiana. It’ll be interesting to see if the path of least resistance leads east–

    So someone else will get it. They’ll drill where it’s juicy.

    For more 100 years, the elected Texas Railroad Commission has ruled where you can drill and how much you can take out of the ground, every month.

    I don’t think any drillers abandoned Texas over that hyper-regulation.


  17. - Judgment Day - Friday, Aug 29, 14 @ 4:14 pm:

    IF the fracking community is really smart, they will have performance time frames included for IL DNR. Because IL DNR will likely never be able to meet any reasonable time frames.

    And as a result, eventually there will be enough of a firestorm over IL DNR performance that moderating legislation will get passed that will be more in line with reasonable expectations.

    The State of Illinois will pass these hideously complicated rule sets, then do an ‘epic fail’ in terms of IL DNR regulatory performance, and as a result, will get their brains kicked out with new legislation meant to correct the resulting IL DNR regulatory failures.

    It’s going to be like the FOID card performance, only far bigger, and more complex. And somebody will come along and use IL DNR performance metrics as an example of why changes have to occur.

    Wait for it…..


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