Permits

Permits - Laws and Regulations
The number of wells drilled as of February, 2010 in the state of Pennsylvania as reported by the Pennsylvania Department of Environmental Protection, Bureau of Oil and Gas Management

According to Sec. 601.602. Local ordinances[1], all local ordinances and enactments purporting to regulate oil and gas well operations regulated by the act are superseded by the act in the areas of: imposing conditions, requirements or limitations on the same features of oil and gas well operations regulated by the act or that accomplish the same purposes as set forth in the act.

In Section 25 of the Pennsylvania Code - Oil and Gas Regulations § 78.11, drilling cannot occur unless a permit is obtained or registered the well.[2] The conditions of the permit once obtained must be followed in addition to posting a copy of the permit at the well while drilling or altering the well.[3] Permits can only be transferred if approved by the DEP and may require the transferee to fulfill the drilling, plugging, well site restoration, water supply replacement and other requirements of the act, regardless if the original holder had not fulfilled those requirements.[4] Applications must be complete with all information filled out as required by the department; furthermore, "The permit application will not be considered complete until the applicant submits a complete and accurate plat, an approvable bond or other means of complying with section 215 of the act (58 P. S. § 601.215), the fee in compliance with § 78.19 (relating to permit application fee schedule), proof of notification, necessary requests for variance or waivers or other documents required to be furnished by law or the Department."[5] A permit owner may request a one year renewal of a permit and, if submitted 15 calendar days before expiration, can be renewed for one year upon a fee and pending that all parts of the well are still in compliance.[6] Renewal also requires that "the surface owners, coal owners and operators, gas storage operators, where the permit renewal is for a proposed well location within an underground gas storage reservoir or the reservoir protective area, and water supply owners within 1,000 feet have been notified of this request for renewal."[7] Applicants shall pay a permit application fee according to § 78.19. Permit application fee schedule.[8]

Section 25 of the Pennsylvania Code - Oil and Gas Regulations, Chapter 79 concerns the aspects of acquiring a permit for drilling. There are specific materials that are required when applying for a permit. In § 79.31 Application requirements, when an application is filed for a drilling permit on the area covered by the spacing order, it must include a survey of the entire spacing unit showing the location and acreage content of tracts or portions of tracts, included within the spacing unit. A survey is not necessary if the operators and royalty owners included in the unit agree on the amount of acreage contained in each tract included in the unit and file. § 79.31 Application requirements further stipulate that:

  1. A counterpart or certified copy of a unit operating agreement or unit agreement signed by all of the operators and royalty owners in the unit, and specifying the participation to which each shall be entitled shall meet the requirements of the stipulation herein referred to. If accurate surveys of the spacing unit or tracts included therein are available, they may be used and a new survey is not required.
  2. If there is only one operator in the area covered or to be covered by the spacing unit, the operator shall file an affidavit to that effect. If there is more than one operator owning an interest within the drilling unit, the operators shall file a stipulation setting out the manner in which the cost of the proposed well is to be paid. A counterpart or certified copy of a joint operating agreement containing the provisions shall meet this requirement.
  3. In the event that all of the operators in the spacing unit have not signed the stipulation set out in paragraph (1), the statement shall be filed stating the names and addresses of the operators who have not executed the agreement and the estimated share of the cost of the well attributable to the interest. The operator or operators desiring to drill the well shall include in this statement whether or not they are willing to advance the nonparticipating operator's share of the cost of the well, and if the well results in production, to recover twice the amount of the costs out of the nonparticipating operator's share of the production. The participating operators shall include the statement with an application for an integration order as provided in § 79.33 (relating to integration orders). The Department will then notify the nonparticipating operators that they shall come in and file their proportionate share of the estimated cost, or a satisfactory bond securing the payment of the amount at the time it is expended by the participating operators, with the Department within 30 days from the date of the notice. The following provisions shall be alternatives to the requirements of this paragraph:
    1. If the participating operators have indicated their desire to advance the nonparticipating operator's share of the cost, then the notice shall so state and shall state that the nonparticipating operator shall then be entitled to receive his proportionate share of the production, if any, after a sum equal to double his proportionate share of the cost of the drilling and equipping the well have been repaid to the participating operators, plus an additional charge for supervision, cost of operation, and interest, at the rate of 6% per annum, out of 7/8 of the proportionate part of the production from the well drilled on the unit which is allocated to the tract or interest owned by the nonparticipating operator.
    2. If the participating operators have indicated that they are not willing to advance the share of the cost attributable to the nonparticipating operator, the notice shall state that this is the fact and that a hearing for the compulsory unitization of interests will be held in accordance with § 79.33.

Section 25 of the Pennsylvania Code - Oil and Gas Regulations, Chapter 79 § 79.11

Drilling permits

  1. No person may drill a well subject to the act unless a permit under the Oil and Gas Act (58 P. S. § § 601.101-601.605) is obtained and the requirements of the act and this section are met.
  2. The requested location of the well may not conflict with a spacing or pooling order previously entered or pending before the Department, and the requested location shall be at least 330 feet from the nearest outside boundary line of the lease on which it is located. If the application is accompanied by a signed or certified copy of a voluntary unitization agreement unitizing all or a portion of the land on which the well is to be located with all other lands or portions thereof lying within 330 feet of the requested location, the permits will not be denied on the basis that the requested location is within 330 feet of the nearest outside boundary of the lease. If the application for a requested location within 330 feet of the nearest outside boundary is not accompanied by a voluntary unitization agreement as set out in the preceding sentence, and if the applicant-being otherwise qualified to receive a permit-desires to request the Department to waive the 330-foot limitation, the applicant may file a statement with the application requesting a hearing before the Department and stating the reasons why the exemption should be granted. Notice as provided in the act will be given to all operators owning land within 330 feet of the requested location. The Department will then determine at the public hearing whether the application for a permit will be granted.
  3. When a drilling permit is requested within an area covered by a spacing order, or on which an application for a spacing order is pending, the applicant shall comply with § § 79.28 and 79.31 (relating to issuance of drilling permit; and application requirements) where applicable.

More Information found on the Pennsylvania DEP's website regarding permitting in/until 2010:

Well Permit Information from the Pennsylvania DEP
BUREAU OF OIL AND GAS MANAGEMENT
WEEKLY WORKLOAD REPORT - WEEK of 03/22/2010 to 03/26/2010
WELL PERMIT APPLICATIONS1
Year to Date Received Issued Other4
Non Marcellus 1138 895 43
Marcellus 742 51 9
Total YTD 1880 1413 52
 
For Week 03/22 - 03/26      
Non Marcellus 7 138 1
Marcellus 3 65 1
Total for Week 10 203 2
Marcellus Shale Permit Applications - 2005 to Present
  Received In Process Issued Denied Withdrawn Returned Entered in Error
2005 - Present 3,535 381 3,092 14 41 2 5
INSPECTIONS2
Year to Date Inspections Wells Inspected Violations Enforcements
Non Marcellus 1931 1509 339 75
Marcellus 744 446 302 82
Total YTD 2675 1955 641 157
 
For Week 03/22 to 03/26        
Non Marcellus 90 62 26 1
Marcellus 23 22 10 0
Total for Week 113 84 36 1
WELLS DRILLED3
2010 Year to Date, Week 03/22 to 03/26, 2005 - Present
Year to Date Inspections Wells Inspected Violations Enforcements
Non Marcellus 340 2 18,098  
Marcellus 237 0 1,256  
Total 577 2 19,354  

1Source: eFacts; permit may have been applied for during prior year and issued in current reporting period.

2Inspections count each individual inspection. Inspected wells count how many individual wells were inspected. Some wells may be inspected more than once during the time period.

3Source:"Rig Activity Spud Report http://www.dep.state.pa.us/dep/deputate/minres/oilgas/rig08.htm.

4Other: Applications withdrawn, denied, returned, or entered in error.

Note: The Marcellus Shale numbers may fluctuate as we continue to refine the Marcellus Shale Wells data in the eFacts Database.


[1] Except with respect to ordinances adopted pursuant to the act of July 31, 1968 (P.L. 805, No. 247), known as the Pennsylvania Municipalities Planning Code, and the act of October 4, 1978 (P.L. 851, No. 166), known as the Flood Plain Management Act

[2] Section 25 of the Pennsylvania Code - Oil and Gas Regulations, Chapter 78. Oil & Gas Wells, Permits, Transfers, and Objections, § 78.11.

Permit requirements

  1. No person may drill or alter a well unless that person has first obtained a permit from the Department.
  2. No person may operate a well unless one of the following conditions has been met:
    1. The person has obtained a permit under the act.
    2. The person has registered the well under the act.

[3] Section 25 of the Pennsylvania Code - Oil and Gas Regulations, § 78.12.

Compliance with permit

A person may not drill, alter or operate an oil or gas well except in accordance with a permit or registration issued under the act and in compliance with the terms and conditions of the permit, this chapter and the statutes under which it was promulgated. A copy of the permit shall be kept at the well site during drilling or alteration of a well.

[4] Section 25 of the Pennsylvania Code - Oil and Gas Regulations, § 78.13.

Permit transfers

  1. No transfer, assignment or sale of rights granted under a permit or registration may be made without prior written approval of the Department. Permit transfers may be denied for the reasons set forth in section 201(e)(4) and (5) of the act (58 P. S. § 601.201(e)(4) and (5)).
  2. The Department may require the transferee to fulfill the drilling, plugging, well site restoration, water supply replacement and other requirements of the act, regardless of whether the transferor commenced the activity and regardless of whether the transferor failed to properly perform the transferor's obligations under the act.

[5] Section 25 of the Pennsylvania Code - Oil and Gas Regulations, § 78.15.

Application requirements.

  1. An application for a well permit shall be submitted on forms furnished by the Department and contain the information required by the Department to evaluate the application.
  2. The permit application will not be considered complete until the applicant submits a complete and accurate plat, an approvable bond or other means of complying with section 215 of the act (58 P. S. § 601.215), the fee in compliance with § 78.19 (relating to permit application fee schedule), proof of notification, necessary requests for variance or waivers or other documents required to be furnished by law or the Department. The person named in the permit shall be the same person named in the bond or other security.

[6] Section 25 of the Pennsylvania Code - Oil and Gas Regulations, § 78.17.

Permit renewal

An operator may request a 1-year renewal of a well permit. The request shall be accompanied by a permit fee, the surcharge required in section 601 of the act (58 P. S. § 601.601), and an affidavit affirming that the information on the original application is still accurate and complete, that the well location restrictions are still met and that the surface owners, coal owners and operators, gas storage operators, where the permit renewal is for a proposed well location within an underground gas storage reservoir or the reservoir protective area, and water supply owners within 1,000 feet have been notified of this request for renewal. The request shall be received by the Department at least 15 calendar days prior to the expiration of the original permit.

[7] Ibid.

[8]Section 25 of the Pennsylvania Code - Oil and Gas Regulations, 78.19

Permit application fee schedule

  1. An applicant shall pay a permit application fee according to the following schedule:
    Application Fee Schedule
    Vertical Wells Nonvertical Wells Marcellus Shale Wells
    Total Well Bore
    Length in Feet
    Total
    Fee
    Total Well Bore
    Length in Feet
    Total
    Fee
    Total Well Bore
    Length in Feet
    Total
    Fee
    0 to 2,000 $250 0 to 1,500 $900 0 to 1,500 $900
    2,001 to 2,500 $300 1,501 to 2,000 $1,000 1,501 to 2,000 $1,000
    2,501 to 3,000 $350 2,001 to 2,500 $1,100 2,001 to 2,500 $1,100
    3,001 to 3,500 $400 2,501 to 3,000 $1,200 2,501 to 3,000 $1,200
    3,501 to 4,000 $450 3,001 to 3,500 $1,300 3,001 to 3,500 $1,300
    4,001 to 4,500 $500 3,501 to 4,000 $1,400 3,501 to 4,000 $1,400
    4,501 to 5,000 $550 4,001 to 4,500 $1,500 4,001 to 4,500 $1,500
    5,001 to 5,500 $650 4,501 to 5,000 $1,600 4,501 to 5,000 $1,600
    5,501 to 6,000 $750 5,001 to 5,500 $1,700 5,001 to 5,500 $1,700
    6,001 to 6,500 $850 5,501 to 6,000 $1,800 5,501 to 6,000 $1,800
    6,501 to 7,000 $950 6,001 to 6,500 $1,900 6,001 to 6,500 $1,900
    7,001 to 7,500 $1,050 6,501 to 7,000 $2,000 6,501 to 7,000 $2,000
    7,501 to 8,000 $1,150 7,001 to 7,500 $2,100 7,001 to 7,500 $2,100
    8,001 to 8,500 $1,250 7,501 to 8,000 $2,200 7,501 to 8,000 $2,200
    8,501 to 9,000 $1,350 8,001 to 8,500 $2,300 8,001 to 8,500 $2,300
    9,001 to 9,500 $1,450 8,501 to 9,000 $2,400 8,501 to 9,000 $2,400
    9,501 to 10,000 $1,550 9,001 to 9,500 $2,500 9,001 to 9,500 $2,500
    10,001 to 10,500 $1,650 9,501 to 10,000 $2,600 9,501 to 10,000 $2,600
    10,501 to 11,000 $1,750 10,001 to 10,500 $2,700 10,001 to 10,500 $2,700
    11,001 to 11,500 $1,850 10,501 to 11,000 $2,800 10,501 to 11,000 $2,800
    11,501 to 12,000 $1,950 11,001 to 11,500 $2,900 11,001 to 11,500 $2,900
        11,501 to 12,000 $3,000 11,501 to 12,000 $3,000
  2. An applicant for a vertical well exceeding 12,000 feet in total well bore length shall pay a permit application fee of $1,950 + $100 for every 500 feet the well bore extends over 12,000 feet. Fees shall be rounded to the nearest 500-foot interval.
  3. An applicant for a nonvertical well or Marcellus Shale well exceeding 12,000 feet in total well bore length shall pay a permit application fee of $3,000 + $100 for every 500 feet the well bore extends over 12,000 feet. Fees shall be rounded to the nearest 500-foot interval.
  4. If, when drilled, the total well bore length of the well exceeds the length specified in the permit application, the operator shall pay the difference between the amount paid as part of the permit application and the amount required by subsections (a)-(c).
  5. An applicant for a vertical well with a well bore length of 1,500 feet or less for home use shall pay a permit application fee of $200.
  6. At least every 3 years, the Department will provide the EQB with an evaluation of the fees in this chapter and recommend regulatory changes to the EQB to address any disparity between the program income generated by the fees and the Department's cost of administering the program with the objective of ensuring fees meet all program costs and programs are self-sustaining.