The pits | Arkansas Blog

Wednesday, January 26, 2011

The pits

Posted By on Wed, Jan 26, 2011 at 11:20 AM

An update for this week's Insider column. The Arkansas Department of Environmental Quality responds to some questions I had about regulating drilling fluid pits on natural gas drilling pads. The pits were originally regulated by an ADEQ permit. The Arkansas Oil and Gas Commission recently passed a rule, similar to the ADEQ permit, to help regulate them. The pits are a potential source of pollution, especially after heavy rainfalls when the pits can overflow. ADEQ is also instituting a new regulation for the pits. When asked why regulating the pits would now be a joint effort, the agencies responded that it would be a better way to keep an eye on the industry and protect the waters of the state. However, according to a letter written to ADEQ by the League of Women Voters and the Sierra Club, the rules were promulgated as an end-around oil and gas producers in Arkansas who didn't think they should be regulated by state agencies.

Read the full item on the jump.

We told you last week about a joint effort by the Arkansas Oil and Gas Commission and the Arkansas Department of Environmental Quality to regulate reserve pits on natural gas drilling sites across the state. The pits are built to hold various types of fluids — some containing very dangerous chemicals — that are used or produced during drilling.
Officials from AOGC and ADEQ told the Times the joint effort was aimed at better regulating what could be a source of water pollution. ADEQ has historically been short of inspection teams to regulate these and other pits, so the joint effort will aid in that.

The reason for their cooperation was made a little more clear in a filing Tuesday by the League of Women Voters and the Sierra Club. They were commenting on the new rules passed to regulate the pits. They say AOGC's new rule B-17 and AEDQ's new Rule 34 were "promulgated in significant part to respond to an oil company challenge to the ADEQ's regulatory authority; the oil producers argued that only AOGC could control their activities." The case cited is ADEQ v. Oil Producers of Arkansas, from 2009.

Cecillea Pond-Mayo, a spokesperson for ADEQ, says the joint effort will eliminate regulatory confusion.

"The rules are being promulgated to affirm and affix the Regulation of pits by both agencies with authority over the operation. We worked with the AOGC to develop the Regulations to insure that the Regulations are fully protective and provide one set of rules for the industry to follow. In our discussions on the pit permits, it was determined by the South Arkansas Oil Producers that upon completion of the rulemakings that the substantive issues at stake in the lawsuit would be resolved," she says.

AOGC recently passed B-17 to set up regulations and institute penalties. ADEQ is adapting rule 34 from the agency's general permit, which has been used since 2007 to regulate the pits.

The League of Women Voters and the Sierra Club also maintain that the rules do "not sufficiently safeguard against dangerous leaks from waste pits." Rule B-17 does not require that gas companies line all pits with a leak-proof synthetic liner. The rule also suffers from vague language, activists say.

"[Rule B-17] requires that operators site reserve pits 'with reasonable consideration to maximizing distances from surface waters' but does not specify exact distances," the letter says.

According to the letter, another problem created by the new rule is the loss of ADEQ funds. Currently, drillers must pay a $300 permit fee to ADEQ in order to build a pit. Since the regulations will no longer be based on a permit, ADEQ — with an already tight budget for inspectors — will lose those fees.

"Because hundreds of pits are built annually, and violations are likely to be common under the vague terms of Rule B-17, enforcement costs are likely to grow, even as permitting revenues fall," the letter says.

Pond-Mayo says they will lose those funds, but they will also be saving on some costs as well.

"ADEQ does not have a funding source to replace the lost funds. The majority of the funds collected were spent on staff that processed the Notices of Intent under the General Permit. With the implementation of the Permit-by-rule we will no longer be required to process notices of intent. ADEQ will not have to reduce inspection or permitting staff levels based on this change," she says.

The Arkansas Pollution Control and Ecology Commission held a hearing on the proposed Rule 34 on Tuesday. Public comments regarding the rule will be accepted until Feb. 8.

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