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2017 Oil and Gas Annual Report

Pennsylvania Department of Environmental Protection


The mission of the Pennsylvania Department of Environmental Protection (DEP) is to protect Pennsylvania’s air, land and water from pollution and provide for the health and safety of its citizens through a cleaner environment. We work as partners with individuals, organizations, governments and businesses to prevent pollution and restore our natural resources. This annual report presents trends in Pennsylvania's oil and gas industry. For more detailed information, visit the DEP Oil and Gas Program websiteOil and Gas website image.

To view the report, simply scroll down or use the top menu to jump to a topic. If content doesn’t display properly, please try opening the report using another web browser.

PA Department of Environmental Protection

Disclaimer: The information contained in this report is based on the data contained in DEP information systems at the time of the publication of this report, including, but not limited to, DEP's enterprise-wide permitting and compliance database called eFACTS (Environment Facility Application Compliance Tracking System). As some data contained in these systems are self-reported by operators and other permitees, data in this report reflects the data as reported to the department.

Message From the Secretary


DEP Office of Oil and Gas Management

The DEP Office of Oil and Gas Management administers an internationally recognized oil and gas program that includes the Bureau of Oil and Gas Planning and Program Management and the Bureau of District Oil and Gas Operations.

The Bureau of Oil and Gas Planning and Program Management is located in Harrisburg and is responsible for administrative, policy, technical assistance and regulatory development functions. The Bureau of District Oil and Gas Operations consists of three district oil and gas offices and is responsible for permitting, inspection, compliance and enforcement functions.

What's New in 2017

See the “2017 Calendar” to view a complete detailing of accomplishments by month.

  •   Support for “Good Samaritan” Cleanups of Legacy Wells

What We Do...

Review Permits

Before an operator may begin drilling a well, it must first submit the proper permit applications to DEP for review and approval. Different types of permits are related to oil and gas activities including, but not limited to:

2,028 - Unconventional well drilling permits issued in 2017.
   203 - Conventional well drilling permits issued in 2017.

Unconventional and Conventional Well Drilling Permits Issued Unconventional vs. Conventional Well Drilling Permits Issued

Unconventional and Conventional Well Drilling Permits Issued
2010 - 2017

In 2017, DEP began developing a new ePermitting application to replace the old “eWell” system and streamline the permit process. The new ePermitting application is expected to be released in late 2018.

Inspect Well Sites

DEP inspects oil and gas well sites to ensure they are constructed and operated in accordance with approved permits. DEP’s goal is to inspect new wells at the beginning, middle and end of construction and development. Inspections increased about 2 percent from 2016 to 2017, due in part to efficiencies gained from the development of electronic permitting capabilities. DEP has also increased emphasis on inspecting orphan and abandoned wells.

36,288 - Number of compliance inspections conducted in 2017.

The number of compliance inspections has significantly increased from 2010 through 2017. In 2010, oil and gas inspectors conducted a total of 16,504 inspections and this number rose to 36,288 inspections in 2017; more than twice as many inspections.

Inspection Reports

Compliance Inspections Compliance Inspections

Compliance Inspections
2010 - 2017

Ensure Compliance

DEP is committed to working with oil and gas operators to ensure well sites operate in compliance with all applicable laws and regulations. DEP routinely provides compliance assistance through outreach and training opportunities. The total number of conventional well violations increased from 1,834 in 2016 to 3,273 in 2017. Unconventional well violations increased from 456 in 2016 to 821 in 2017.

DEP’s compliance and enforcement tracking database (eFACTS) was updated in 2017 to record an ongoing violation that is not otherwise corrected prior to a subsequent inspection as a separate violation. Therefore, DEP now has the ability to record multiple violations for the same incident if it is not corrected in a timely manner.

To view all conventional and unconventional well violations from 2017, click hereViolations.

Compliance Report

Violations Violations

Unconventional and Conventional Well Violations
2010 - 2017

Issue Fines and Penalties

Since 2010, DEP has collected about $35.5 million as a result of noncompliance at oil and gas sites in Pennsylvania. These fines and penalties are used to reimburse operating costs that are incurred by DEP in the oversight of oil and gas and related environmental programs.

$3,540,777 - Total fines and penalties collected in 2017.

The fines and penalties collected in calendar years 2014 and 2016 are a result of significant violations observed at a relatively small number of enforcement actions. For example, in 2016, nine violations resulted in the levy of about $8.4 million of the $9.7 million collected that year.

Penalties Fines and Penalties

Plug Legacy Wells

Legacy Well Identification
As a result of the oil and gas drilling booms during the mid-nineteenth and early twentieth centuries, hundreds of thousands of oil and gas wells were drilled in Pennsylvania. Over the past 150 years, many of these wells were abandoned by their owners without notifying DEP or other state agencies. DEP estimates that between 100,000 and 560,000 abandoned oil and gas wells exist in Pennsylvania that remain unaccounted for. These legacy orphan and abandoned wells can lead to pollution if they are not properly plugged.

DEP has located 11,359*orphan and abandoned wells and is working diligently to identify the location of the many remaining wells. Unfortunately, given its current resources, it will likely take DEP many years to locate all of Pennsylvania’s legacy wells.
*Unplugged orphan/abandoned wells = 8,287 (source: DEP eFACTS database). Plugged orphan/abandoned wells = 3,072 (source: well plugging certificates from contracts issued)

One way the public and industry can help DEP to expand its inventory of known legacy wells is to report the location of such wells when they are discovered. If you come across a well on your property or when you are on other public lands that you believe is an orphan or abandoned well, please let DEP know. Contact a DEP District Oil and Gas representative at the telephone number listed in the below Fact Sheet.

Oil and Gas Fact Sheet

Click on the play button above to view the slideshow of abandoned oil and gas wells.

Good Samaritan Legacy Well Cleanups
DEP developed an initiative in 2017 to encourage private-sector partners to become Good Samaritans, by participating in a program that helps to plug dangerous abandoned oil and gas wells statewide. The program protects third-parties from liability for their role in helping to reduce the health, safety, and environmental hazards associated with the plugging of orphan and abandoned wells.

The Environmental Good Samaritan Act of 1999 protects groups and individuals who volunteer to implement qualifying environmental remediation projects from civil and environmental liability. The Act does not provide immunity for injury or damage that may result from reckless, unlawful, or grossly negligent acts or omissions.

While the Act has been used in the past to encourage mine reclamation projects, DEP applied its provisions to two oil and gas well plugging projects for the first time in 2017.   A volunteered to plug a well in Warren County that was discharging crude oil to the ground and nearby streams.
An volunteered to plug a leaking natural gas well in Elk County. These projects are estimated to have saved DEP $60,000 to $85,000, in addition to administrative cost savings related to contract development and management.

Additional project proposals are currently under review and DEP welcomes other third parties to step forward to take advantage of the benefits of participating in the Good Samaritan Legacy Well Cleanup initiative. Not only will they enjoy reduced liability, but they may often develop the land at or near the well site more quickly than waiting for state funding to become available for the plugging project.

DEP has developed online training Good Samaritan Applicant Training image to educate volunteers about the process of submitting a project proposal and applying for the liability protection under the Good Samaritan Legacy Well Cleanup initiative. For more information about this initiative and to obtain a “Project Proposal Application”, click here Good Samaritan Act website .

Questions about well plugging through the Environmental Good Samaritan Act can be addressed to the DEP’s Bureau of Oil and Gas Planning and Program Management or the district office where the project is located Oil and Gas Districts Image .

Legacy Well Initiatives and Partnerships
When no viable responsible party can be identified for an orphan or abandoned oil or gas well, the DEP Well Plugging Program has authority to address proper plugging of the well.

Funding to address legacy wells comes from surcharges established by the 1984 Oil and Gas Act of $150 and $250, respectively, for each oil well permit and gas well permit. Because DEP has received a reduced number of permits in recent years, fewer funds are available to plug orphan and abandoned wells in Pennsylvania.

Currently, more abandoned wells are being added to the state’s inventory than are being addressed through permanent plugging through state-issued contracts. Since 2015, DEP has been able to fund the plugging of oil and gas wells only in emergency situations and/or when residents must be temporarily evacuated from their homes due to imminent threats that legacy wells pose when well integrity is compromised.

Legacy oil and gas wells are one of the most significant environmental challenges facing the commonwealth. By assessing historic operating costs and acknowledging the sheer number of wells, DEP estimates that addressing legacy wells will require $150 million to $3.7 billion. The low end of this estimate assumes that DEP will not identify any additional abandoned wells; the upper end of the estimate assumes about 200,000 legacy wells will eventually be identified and plugged.

Starting in 2015, DEP increased its efforts to address the challenges posed by legacy wells in Pennsylvania. The groundwork for the effort was largely established in 2016 and in 2017 many successes were realized. DEP’s efforts consisted of several key components that include:

  • informing future action through data collection/utilization and research;
  • pooling resources and working collaboratively to extend capabilities and achieve success;
  • improving business practices through modernization; and
  • developing partnerships and implementing creative solutions.

This work ultimately extended far beyond the DEP Office of Oil and Gas Management, and the effort exemplifies a collaborative assimilation and implementation of ideas and procedures that have saved or secured millions of dollars for the commonwealth, while introducing marked improvements in efficiency. The following table presents in-kind contributions and cost savings that have helped to leverage additional dollars to plug legacy wells in Pennsylvania.

Project/External Funding Savings/Contributions
Estimated cost savings: Abandoned well no. 003-01011 $1,000,000
Estimated cost saving: Abandoned well no. 003-22455 $10,000
Environmental Stewardship Funds secured $460,000
Estimated cost savings: Abandoned well no. 125-21401 $179,000
Estimated cost savings: DCNR Cooks Run well $190,000
CFA 2017 grants awarded $657,503
CFA 2016 grants awarded $130,000
Estimated cost savings: Good Samaritan $85,000
Cost savings: Turnpike Commission plugging project $3,500,000
TOTAL $6,211,503

DCNR = Department of Conservation and Natural Resources
CFA = Commonwealth Financing Authority

What We Accomplished in 2017
Click on a calendar month below to view detailed accomplishments.


This section of the report provides the answers to many common questions related to oil and gas exploration and development in Pennsylvania. Check out the following maps, graphs, tables and video to learn more about Pennsylvania’s oil and gas reserves, conventional and unconventional wells, locations of oil and gas wells, and class II disposal wells.

What You Can Do...

Learn More

Where are Pennsylvania’s oil and natural gas reserves located?
The nation’s first oil well was drilled in 1859 by Edwin Drake in Titusville, PA. Today, most oil in Pennsylvania is produced in the northwest corner of the state. This area is commonly called the oil patch since it is home to the largest number of active oil wells.

Oil Reserves Oil Reserves

Well Density Map

Pennsylvania's Shale Plays
In 2004, operators began producing natural gas from the Marcellus shale formation which extends from the southwest to northeast corners of the state. There are other shale formations in the state, such as the Utica shale formation, that contain substantial reserves of natural gas. Pennsylvania’s shale formations are expected to produce natural gas for many decades into the future.

Shale Play Shale Play

Pennsylvania's Shale Plays

What is a Conventional vs. an Unconventional Well?
Conventional Wells
A conventional well is typically a well that is drilled vertically into a shallow oil or gas reservoir.

Conventional wells are constructed on much smaller well pad sites than unconventional wells. Most conventional wells do not require large volumes of water for hydraulic fracturing and do not employ horizontal drilling techniques. In Pennsylvania, what constitutes a conventional well is defined by law in Act 52 of 2016 and 25 Pa. Code Chapter 78.

Conventional Well Conventional Well

Unconventional Wells
An unconventional well generally refers to a well that is drilled deep into shale formations to produce natural gas. A distinction of these wells is that they involve horizontal drilling techniques and use large volumes of water under high pressures to hydraulically fracture (commonly called “fracking”) the shale rock to access large volumes of natural gas. In Pennsylvania, what constitutes an unconventional well is defined by law in Section 3202 of the 2012 Oil and Gas Act and 25 Pa. Code Chapter 78a.

Where Are Oil and Gas Wells in Pennsylvania?
Shown to the right are thumbnail images of the conventional, unconventional and Utica and Point Pleasant wells drilled by county. For a high-level view of where conventional oil and gas wells were drilled during calendar year 2017, click on any map to view a larger interactive version. Wells drilled in 2017 appear as "squares" and wells drilled prior to 2017 appear as "circles". The Utica/Point Pleasant map depicts only those wells drilled in 2017.

DEP developed an interactive GIS mapping tool that can be used to identify oil and gas wells that are located in Pennsylvania. In addition to specific well locations, this tool provides other information including production data, inspection results and compliance actions taken by DEP, and more. To learn about this tool, check out the tutorialTutorial Image and begin using this interactive map todayOil and Gas interactive map. To see the trend in the number of wells drilled from 2010 through 2017, click the button below the interactive maps.

Convetional Wells
Unconventional Wells

What is a Class II Underground Injection Control (UIC) Disposal Well?
A Class II UIC disposal well is used to dispose of produced fluids (i.e., brine fluids) that flow back to the surface after a well is hydraulically fractured. In 2017, about 94 percent of all produced fluids was recycled and/or reused in the production/hydraulic fracturing of other natural gas wells and about 6 percent was disposed in Class II disposal wells.

The U.S. Environmental Protection Agency is responsible for reviewing and approving Class II UIC well permit applications in Pennsylvania. However, DEP also conducts a review of these permit applications to ensure state regulatory requirements are met prior to issuing a permit for well usage.

DEP’s permit review involves a review of the Control and Disposal Plan, Erosion and Sedimentation Control Plan, Casing and Cementing Plan, Geologic Analysis and Mechanical Integrity Analysis to ensure the well can accept the produced fluid at proposed rates and pressures.

Where Are UIC Class II Disposal Wells in Pennsylvania?
Currently, there are 12 active UIC Class II disposal wells located in Pennsylvania. The CNX Gas Co., LLC UIC Class II disposal well listed below is in the process of being permanently plugged.

*Previously operated by Cottonwood OPR Corporation
**Under technical review by DEP in 2017; permit issued on March 22, 2018
Operator Permit Status Municipality County
1 Bear Lake Properties, LLC Active Columbus Township Warren
2 Bear Lake Properties, LLC Active Columbus Township Warren
3 Bear Lake Properties, LLC Active Columbus Township Warren
4 CNX Gas Co., LLC Active Jenner Township Somerset
5 Columbia Gas of PA, Inc. Active South Beaver Township Beaver
6 LPR, Inc.* Active Stonycreek Township Somerset
7 EXCO Resources PA, LLC Active Bell Township Clearfield
8 Pennsylvania General Energy Active Grant Township Indiana
9 Sammy-Mar, LLC Active Huston Township Clearfield
10 Seneca Resources Corp Active Highland Township Elk
11 Stonehaven Energy Mgmt Co., LLC Active Cranberry Township Venango
12 Windfall Oil & Gas, Inc.** Active Brady Township Clearfield

Neighboring states contain many more active UIC Class II disposal wells compared to Pennsylvania. For example, Ohio has more than 200 and West Virginia has more than 40 active UIC disposal wells, respectively. Most produced fluids from Pennsylvania that are disposed in UIC Class II disposal wells are transported to neighboring states. To view waste production reports by operator, county or waste facility click here Report Site .

How Much Natural Gas is Produced in Pennsylvania?
Although natural gas has been produced for many years using conventional drilling methods, it was not until 2004 that the first unconventional natural gas well was drilled in Pennsylvania’s Marcellus Shale play. It did not take long before natural gas operators began exploring and producing large amounts of natural gas from the Marcellus Shale play and other shale plays.

The volume of natural gas recovered from Pennsylvania’s shale plays has steadily increased since the first natural gas well was drilled in Pennsylvania; and much more natural gas remains available for future exploration and development.

In 2017, about 5.36 trillion cubic feet of natural gas was produced from unconventional gas wells in Pennsylvania. This represents the largest volume of natural gas on record that has been produced in Pennsylvania in a single year.

Currently, Pennsylvania is the second largest producer of natural gas in the nation (Texas produces the most).

To query production information related to natural gas, condensate, oil and waste for each permitted well, click hereReporting Image .

Gas Production Gas Production

Unconventional Gas Production

Are there Natural Gas Storage Reservoirs in Pennsylvania?
Natural gas is a commodity that is used in the residential, commercial, industrial and transportation sectors for activities such as space heating, water heating, combined heat and power, cooking, drying, and is a feedstock in the production of fertilizers and plastics.

Since most natural gas is used as a fuel source to heat homes and businesses, the demand for natural gas peaks in winter months. In the summer, natural gas producers routinely store gas in geologic reservoirs for future use during the colder seasons of the year.

Three types of natural gas reservoirs are most commonly used in the United States. First, historic natural gas reservoirs that were depleted of its natural gas supplies are the most common geologic features that are suitable to be put back into productive use as reservoirs to store natural gas from other active natural gas producing formations. Second, natural gas may be injected into a subsurface geologic formation to displace water from the pore space and this is called an “aquifer” reservoir. Finally, salt caverns that are created by flushing out salts from solid salt domes or formations are sometimes used as a natural gas storage feature.

According to a study conducted by the American Petroleum Institute in June 2017, Pennsylvania has the fourth largest total capacity to store natural gas in geologic formations in the nation.

In November 2017, the DEP Oil and Gas Program developed a statewide protocol for assessing and verifying the mechanical integrity of underground natural gas storage reservoirs in Pennsylvania. The protocol is used by Oil and Gas staff to ensure that natural gas storage reservoirs are operated in a safe and reliable manner to ensure the protection of Pennsylvania’s environment and the safety of its citizens.

What Happens When a Well Stops Producing Oil or Gas?
Eventually, active oil and gas wells stop producing oil and gas or become uneconomical to operate. When Pennsylvania’s Oil and Gas Act of 1984 was enacted, regulations were created to require the plugging of such wells. Although operators are required to post bonds with DEP to ensure that wells are properly plugged at the end of their useful life, this was not always the case. Legacy oil and gas wells are discussed in more detail in the section of this report called “Plug Legacy Wells”.

DEP has spent over $34 million since 1989 to administer Pennsylvania’s orphan and abandoned oil and gas well program, but much work remains. DEP collects a small surcharge on each well drilling permit to plug unsafe orphan and abandoned wells and DEP’s Growing Greener grant program has funded more than $13 million toward well plugging projects over the history of the program. In 2016 DEP spent $1,029,166 to plug 23 wells and in 2017 DEP spent $1,093,598 to plug 7 wells.

Given the estimated hundreds of thousands of orphan and abandoned oil and gas wells that may exist in Pennsylvania, there is not enough funding currently available to plug the remaining wells. Unless additional monies are identified for this purpose, the universe of orphan and abandoned wells will remain unplugged and will be a potential environmental and safety threat for many decades to come.

Can I Review Forms and Reports that DEP Receives from Unconventional Oil and Gas Operators?
Yes. Pennsylvania’s oil and gas regulations require unconventional operators to submit to DEP electronically various forms, requests and reports such as completion reports and well records.

DEP developed a search tool called "eSubmissions" to allow the public to view the forms and reports that are submitted to DEP electronically. To view this search tool, go hereeSubmission tool.

Can I Review Notifications that DEP Receives from Oil and Gas Operators?
Yes. All oil and gas well operators are required to submit advanced notification to DEP electronically the date it starts to drill a well (aka, “spud date”). Additionally, operators of unconventional wells are required to electronically notify DEP in advance of conducting various operations such as casing and cementing a well, hydraulically fracturing a well and abandoning or plugging a well.

To review the spud notifications report, go hereSpud report page.

DEP’s Greenport application allows DEP to receive new notifications required by the promulgation of 25 Pa. Code Chapter 78a. To view the "eNotifications" report, go hereeSubmission tool.

Where Can I Access Online Reports?
DEP has developed many useful interactive reports to enable the public to quickly search DEP’s databases. The reports include the ability to view oil and gas permits that have been issued, locations of wells that are drilled, locations of orphan and abandoned wells and natural gas production reports to name a few. Visit DEP’s websiteOil and Gas reports to access these reports. A companion “Interactive Reports Data Dictionary”Data Dictionary is also available at this website that describes in more detail the types of interactive reports that are available.



Webinars and Oil and Gas Technical Advisory Board
The public may attend regular meetings of the Oil and Gas Technical Advisory Board (TAB) and Pennsylvania Grade Crude Development Advisory Council (CDAC). These meetings routinely involve discussions about proposed oil and gas regulations, policies and other related topics. Generally, CDAC focuses on issues that pertain solely to the conventional oil and gas industry and TAB examines issues that pertain mainly to the unconventional industry, but sometimes considers issues related to the conventional industry.

To view meeting dates and locations for CDAC, go to the Department of Community and Economic Development's (DCED) webpageCDAC Meeting Registration.

To attend a TAB meeting via WebEx, go hereTAB Meeting Registration.

DEP’s Office of Oil and Gas Management periodically offers stakeholders and the public opportunities to participate in Webinars regarding other general oil and gas topics.

To view prior webinars, hereWebinars.

DEP encourages the public to provide constructive comments about regulations, policies, technical guidance, general permits, and other proposals that are under development. To access the full text of such documents, submit comments, and see comments from other individuals, please visit the DEP website hereeComment.

DEP developed an electronic notification system for the public to use to stay up-to-date with many types of environmental topics. This tool is called eNOTICE and you may register to receive free notifications of important actions the department takes. It’s easy. Go here eNotice to register to receive notices that are important to you!

DEP Newsletter
DEP publishes a biweekly newsletter that features information about hot topics, recent department actions, regulatory updates, webinars and upcoming events. To subscribe to this free newsletter, click here DEP Newsletters.

Water Supply Impacts
DEP is committed to the protection of environmental resources including private water supplies. The Oil and Gas Act of 2012 (Act) contains language that holds oil and gas operators responsible for restoring or replacing water supplies when it is determined that oil and gas activities are the cause of contamination. The Act goes a step further and presumes that an oil and gas operator is responsible for contamination of water supplies located within prescribed distances and timeframes; unless the operator can clearly demonstrate that it is not responsible for the contamination.

Although there is no evidence that hydraulic fracturing has resulted in a direct impact to a water supply in Pennsylvania, there are cases where related oil and gas activities have adversely affected private water supplies. DEP investigates all stray gas-related complaints and if it is determined that a water supply is adversely affected by oil and gas activities, DEP works with the responsible operator to ensure the water supply is restored or replaced.

Contact Us...
To report any cases of suspected water contamination that may be associated with the development of oil and gas resources or any other environmental complaint, call DEP’s statewide environmental hotline at 1-866-255-5158.

To report an environmental emergency to DEP, click on the button below, and call the appropriate regional emergency contact number.

Report an Incident

What's Next for 2018

The Erosion and Sediment Control General Permit for Oil and Gas Operations (ESCGP-2) will expire on December 29, 2018. DEP is developing a new Erosion and Sediment Control General Permit for Oil and Gas Operations (ESCGP-3) that will include elements of the ESCGP-2 permit while being streamlined and reorganized to improve the efficiency and effectiveness of the current permit review process. Ultimately, the ESCGP-3 permit will be available to operators via DEP’s electronic permitting system.    

In addition, DEP is considering implementation of a priority review for ESCGP-3 permit applications when the project will result in superior environmental outcomes.

The Oil and Gas Program intends to create three workgroups to focus on specific aspects of the ESCGP-3:

  1. Updating the permit documents, including the general permit, instructions, transition plan, etc.;
  2. Developing the electronic permitting tool;
  3. Developing the criteria to be considered as part of the priority permit review process related to environmentally superior outcomes.

DEP will publish the ESCGP-3 permit and associated documents in the Pennsylvania Bulletin with a 30-day comment period. Based on those comments, a final set of ESCGP-3 documents will be developed, including a Comment and Response document. The target date for the availability of the ESCGP-3 is late 2018. DEP plans to phase in the ESCGP-3 to transition from use of the current ESCGP-2 permit.
Governor Tom Wolf announced a four-point methane emission reduction strategy in 2016 for unconventional natural gas operations in Pennsylvania. This strategy includes the development of a general permit (GP-5A) for new unconventional well pad operations and modifications to the existing general permit (GP-5) for compressors and natural gas processing facilities. DEP Air Quality Program staff presented on the draft-final General Permits 5 and 5A and Exemption 38 at the December 14, 2017, Air Quality Technical Advisory Committee (AQTAC); the January 16, 2018, Citizens Advisory Council; and the February 14, 2018, Oil and Gas Technical Advisory Board meeting. The general permits, Exemption 38, and the corresponding Comment and Response and Technical Support Documents will be finalized in summer 2018.    

At the December 14 AQTAC meeting, DEP also presented concepts for a proposed rulemaking to implement EPA’s 2016 Control Technique Guidelines for the oil and gas industry. The guidelines provide information to state, local, and tribal air agencies to assist them in determining reasonably available control technology (RACT) requirements for volatile organic compound emissions from oil and natural gas industry emission sources. EPA established a deadline of two years from the date of issuance of the final guidelines to submit the State Implementation Plan revision, which will be due to EPA on or before October 27, 2018. EPA now believes it is prudent to withdraw the Control Technique Guidelines based on the belief that it is more efficient for states not to be required to revise their State Implementation Plans to comply with the 2012 Standards and then again after EPA reconsiders the 2016 Standards. On February 16, 2018, the White House Office of Management and Budget finished its review of EPA’s proposed withdrawal notice for the Control Technique Guidelines. On March 9, EPA published its proposed withdrawal for public comment. On April 23, DEP submitted comments on the guidelines withdrawal stating the agency does not support a comprehensive withdrawal of the guidelines without providing a specific replacement proposal to control emissions.
Pursuant to 25 Pa. Code Sections 78.19(e) (conventional oil and gas wells) and 78a.19(b) (unconventional gas wells), at least every 3 years, DEP will provide the Environmental Quality Board (EQB) with an evaluation of the well permit application fees received. In accordance with these regulatory requirements, DEP conducted a comprehensive review of its administration of the 2012 Oil and Gas Act along with projected revenues to administer the Act. The 3-Year Regulatory Fee and Program Cost Analysis Report summarizes that review and analysis.

Although DEP’s inspection and program administration responsibilities related to administering the 2012 Oil and Gas Act have increased, the number of well permit applications submitted to DEP does not generate sufficient revenue to cover the costs of administering the 2012 Oil and Gas Act.

The well permit fee paid with the permit application at the beginning of a well’s operating life is a one-time source of revenue that is used to fund continuing obligations. A well typically remains active for decades before being plugged, during which time the cost for DEP to administer the 2012 Oil and Gas Act is borne by the receipt of new drilling permit application fees. While in prior years, DEP received enough oil and gas drilling permit fees to meet its basic financial needs, current permit volumes are insufficient to maintain the Oil and Gas Program into the future.

When the unconventional well permit fee was amended in June 2014, DEP projected that a $5,000 flat fee for each unconventional permit application would be adequate to support the full complement of 226 Oil and Gas Program staff, provided DEP received 2,600 unconventional well permits annually (along with $6 million in impact fees). While that projection was accurate during the pendency of the previous rulemaking, the number of oil and gas permits received in FY2015-16 and FY2016-17 was significantly lower than anticipated.

Although the number of unconventional natural gas permits has fallen off dramatically, the volume of natural gas produced by unconventional operators has continued to steadily rise.

Given the low number of permit applications received over the past two fiscal years and indications that permit volumes are not expected to rebound in the near term, the current well permit fee is no longer sufficient to fund the Oil and Gas Program; even with substantial cost-saving measures that have been implemented. While revenues are declining, DEP’s responsibility to inspect and monitor existing wells continues to increase as the inventory of active oil and gas wells grows in addition to other workload requirements and policy initiatives.

Despite reductions in staff and operating expenditures, the Office of Oil and Gas Management will soon reach a funding deficit at current well permit fee levels. The fund that supports DEP oil and gas operations is expected to reach a negative balance by the first quarter of FY 2019-20, given current expense and revenue projections.

On May 16, 2018, the Office of Oil and Gas Management presented the proposed Unconventional Well Permit Application Fee rulemaking to the Environmental Quality Board (EQB). The proposed rulemaking increases the current well permit application fees from $5,000 for a nonvertical unconventional well and $4,200 for a vertical unconventional well, to $12,500 for all unconventional well permit applications to administer the 2012 Oil and Gas Act. The permit fees for conventional permits remain unchanged. The Office of Oil and Gas Management consulted with the Oil and Gas Technical Advisory Board (TAB) in the development of this proposed rulemaking. DEP presented the 3-Year Fee Report and discussed its proposal to raise the unconventional well permit application fee to $12,500 at TAB’s February 14, 2018 meeting. T he 3-Year Fee Report was also presented to the EQB on April 17, 2018. The EQB took action to adopt the proposed rulemaking with two opposing votes. The proposed rulemaking will be published in the Pennsylvania Bulletin with a 30-day public comment period.
Technical staff in the Office of Oil and Gas Management are responsible for reviewing and approving permit applications that pertain to surface and sub-surface activities at oil and gas well sites. This includes the Erosion and Sedimentation Control General Permit, Well Drilling Permit, and other necessary permits. Historically, permitting functions related to surface and sub-surface operating permits have been managed at the three district oil and gas offices in Williamsport, Meadville and Pittsburgh.

To enhance the consistency of permit reviews and permitting efficiencies, the Office of Oil and Gas Management will be restructured to align the management of the district permitting into two functional areas: surface permits and sub-surface permits. Technical permit reviewers will remain in each of the district offices, but this streamlined management structure will promote improved communication that will result in greater consistency and efficiencies in the permit review process.

We hope you found this annual report to be informative and useful. This past year was another busy one for DEP, but there is more to be done. DEP and the Office of Oil and Gas Management look forward to continue serving the citizens of Pennsylvania in 2018 through the work that we do to carry out the mission of the Department!

Pennsylvania Department of Environmental Protection
Office of Oil and Gas Management
Key Facts

Complement:             190 employees

Organization:             Central Office – Bureau of O&G Planning and Program Mgmt. - Harrisburg
                                      Eastern District Oil and Gas Office – Williamsport
                                      Northwest District Oil and Gas Office – Meadville
                                      Southwest District Oil and Gas Office – Pittsburgh

Funding:                      Fees, Fines/Penalties and Impact Fee Revenue

                                      Well Drilling Permit Fees:             $9,703,101 (FY2016-17)

                                      Permit Fees:                                    $579,100 (FY2016-17)

                                      Penalties:                                         $9,590,432 (FY2016-17)

                                      Impact Fees:                                   $6 million annually

PA Natural Gas Production (unconventional):                                 5.36 trillion cubic feet
Avg. # Wells Reporting Gas Production (unconventional):           7,794

PA Natural Gas Production (conventional):                                       96.5 billion cubic feet
# Wells Reporting Gas Production in 2017 (total):                          57,461

PA Oil Production (total):                                                                      1.1 million barrels
# Wells Reporting Oil Production in 2017 (total):                           18,102

Permits Issued:
         Unconventional Drilling Permit                                                  2,028
         Conventional Drilling Permit                                                       203

         Stream Crossing & Encroachment (Individual Permits)         57
         Stream Crossing & Encroachment (General Permits)             670

         Erosion and Sediment Control General Permit (Expedited)  248
         Erosion and Sediment Control General Permit (Standard)    216

         Unconventional Inspections                                                        16,296
         Conventional Inspections                                                             15,243
         Well Site/Administrative Inspections                                         4,749
         Total Inspections                                                                           36,288

         Unconventional                                                                              821
         Conventional                                                                                  3,273
         Well Site/Administrative                                                              948
         Total Violations                                                                             5,042

Wells Drilled:
         Unconventional                                                                              810
         Conventional                                                                                   103
         Total Wells Drilled                                                                        913

         Unconventional (total on record)                                               10,924
         Conventional (total on record)                                                    192,969

# Active Permitted Class II Disposal Wells in PA:                              12

# Orphaned/Abandoned Wells in PA (estimated):                           100K - 560K

# Orphaned/Abandoned Wells on DEP List (Identified/Ranked) 8,287

# Orphaned/Abandoned Wells Plugged                                           3,072

NOTE: Unless otherwise specified, all information is reported for calendar year 2017.

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