Pennsylvania’s Oil and Gas Act (Act 223)
TITLE 58. OIL AND GAS
CHAPTER 11. OIL AND GAS ACT
CHAPTER 1. PRELIMINARY PROVISIONS
Sec. 601.101. Short title
This act shall be known and may be cited as the Oil and Gas Act.
Title of Act:
An Act relating to the development of oil and gas and coal; imposing duties and powers on the Department of Environmental Resources; imposing notification requirements to protect landowners; and providing for definitions, for various requirements to regulate the drilling and operation of oil and gas wells, for gas storage reservoirs, for various reporting requirements, including certain requirements concerning the operation of coal mines, for well permits, for well registration, for distance requirements, for well casing requirements, for safety device requirements, for storage reservoir obligations, for well bonding requirements, for a Well Plugging Restricted Revenue Account to enforce oil and gas well plugging requirements, for the creation of an Oil and Gas Technical Advisory Board, for oil and gas well inspections, for enforcement and for penalties. Dec. 19, 1984, P.L. 1140, No. 223.
Sec. 601.102. Declaration of purpose
The purposes of this act are to:
(1) Permit the optimal development of the oil and gas resources of Pennsylvania consistent with the protection of the health, safety, environment and property of the citizens of the Commonwealth.
(2) Protect the safety of personnel and facilities employed in the exploration, development, storage and production of natural gas or oil or the mining of coal.
(3) Protect the safety and property rights of persons residing in areas where such exploration, development, storage or production occurs.
(4) Protect the natural resources, environmental rights and values secured by the Pennsylvania Constitution.
Sec. 601.103. Definitions
The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Abandoned well." Any well that has not been used to produce, extract or inject any gas, petroleum or other liquid within the preceding 12 months, or any well for which the equipment necessary for production, extraction or injection has been removed, or any well, considered dry, not equipped for production within 60 days after drilling, redrilling or deepening, except that it shall not include any well granted inactive status.
"Alteration." Any operation which changes the physical characteristics of the well bore, including stimulation or removing, repairing or changing the casing. For the purpose of this act only, the term shall not include:
(1) Repairing or replacing of casing if the activity does not affect the depth or diameter of the well bore, the use or purpose of the well does not change and the activity complies with regulations promulgated hereunder. However, this exclusion shall not apply to production casings in coal areas when the production casings are also the coal protection casings and shall not apply when the method of repairing or replacing the casing would affect the coal protection casing.
(2) Stimulation of a well.
"Board." The Oil and Gas Technical Advisory Board.
"Bridge." An obstruction placed in a well at any specified depth.
"Building." An occupied structure with walls and roof within which persons live or customarily work.
"Casing." A string or strings of pipe commonly placed in wells drilled for natural gas or petroleum.
"Cement" or "cement grout." Hydraulic cement properly mixed with water only or any mixture of materials adequate for bonding or sealing of well bores as approved by regulations promulgated hereunder.
"Coal mine." Those operations in a coal seam which include the excavated and abandoned portions as well as the places actually being worked, also all underground workings and shafts, slopes, tunnels and other ways and openings and all such shafts, slopes, tunnels and other openings in the course of being sunk or driven, together with all roads and facilities connected with them below the surface.
"Coal operator." Any person as herein defined who proposes to or does operate a coal mine either as owner or lessee.
"Completion of a well." The date after treatment, if any, that the well is properly equipped for production of oil or gas, or, if the well is dry, the date the well is abandoned.
"Department." The Department of Environmental Resources of the Commonwealth.
"Drilling." The drilling or redrilling of any well or the deepening of any existing well.
"Fresh groundwater." Water in that portion of the generally recognized hydrologic cycle which occupies the pore spaces and fractures of saturated subsurface materials.
"Gas." Any fluid, either combustible or noncombustible, which is produced in a natural state from the earth and which maintains a gaseous or rarified state at standard temperature of 60 degrees Fahrenheit and pressure 14.7 PSIA, any manufactured gas, any byproduct gas or any mixture of gases.
"Inactivate." To shut off the vertical movement of gas in a gas storage well by means of a temporary plug or other suitable device or by injecting bentonitic mud or other such equally nonporous material into the well.
"Linear foot." A unit or measurement in a straight line on a horizontal plane.
"Oil" or "petroleum." Hydrocarbons in liquid form at standard temperature of 60 degrees Fahrenheit and pressure 14.7 PSIA.
"Operating coal mine."
(1) An underground coal mine which is producing coal or has been in production of coal at any time during the 12 months immediately preceding the date its status is put in question under this act and any worked out or abandoned coal mine connected underground with or contiguous to such operating coal mine as herein defined.
(2) Any underground coal mine to be established or reestablished as an operating coal mine in the future pursuant to this act.
"Operating well." Any well not plugged and abandoned.
"Orphan well." Any well abandoned prior to the effective date of this act that has not been affected or operated by the present owner or operator and from which the present owner, operator or lessee has received no economic benefit, except only as a landowner or recipient of a royalty interest from the well.
"Outside coal boundaries." When used in conjunction with the term "operating coal mine," means the boundaries of the coal acreage assigned to such coal mine under an underground mine permit issued by the department.
"Owner." Any person who owns, manages, leases, controls or possesses any well or coal property; except that for purposes of sections 203(a)(4) and (5) and 210, the term "owner" shall not include those owners or possessors of surface real property on which the abandoned well is located who did not participate or incur costs in the drilling or extraction operation of the abandoned well and had no right of control over the drilling or extraction operation of the abandoned well. This term shall not apply to orphan wells except where the department determines a prior owner or operator benefited from the well as provided in section 210(a).
"Pillar." A solid block of coal surrounded by either active mine workings or a mined out area.
"Plat." A map, drawing or print accurately drawn to scale showing the proposed or existing location of a well or wells as herein defined.
"Person." Any individual, association, partnership, corporation, political subdivision or agency of the State or Federal Government or other legal entity.
"Reservoir protective area." All of that area outside of and surrounding the storage reservoir boundary but within 2,000 linear feet thereof, unless an alternate area shall have been designated by the department, deemed reasonable necessary to afford protection to the reservoir, pursuant to a conference held in accordance with section 501.
"Retreat mining." The removal of such coal pillars, ribs and stumps as remain after the development mining has been completed in that section of a coal mine.
"Storage operator." Any person who proposes to or does operate a storage reservoir either as owner or lessee.
"Storage reservoir." That portion of any subsurface geological stratum or strata into which gas is or may be injected for the purposes of storage or of testing the suitability of such strata or stratum for storage.
"Well." A bore hole drilled or being drilled for the purpose of or to be used for producing, extracting or injecting any gas, petroleum or other liquid related to oil or gas production or storage, including brine disposal, but excluding bore holes drilled to produce potable water to be used as such. The term "well" does not include a bore hole drilled or being drilled for the purpose of or to be used for systems of monitoring, producing or extracting gas from solid waste disposal facilities, as long as the wells are subject to the act of July 7, 1980 (P.L. 380, No. 97), known as the Solid Waste Management Act, and do not penetrate a workable coal seam. The term also does not include a bore hole drilled or being drilled for the purpose of or to be used for degasifying coal seams if the following conditions are satisfied:
(1) (A) the bore hole is used to vent methane to the outside atmosphere from an operating coal mine; and
(B) the bore hole is regulated as part of the mining permit pursuant to the act of June 22, 1937 (P.L. 1987, No. 394), known as The Clean Streams Law, and the act of May 31, 1945 (P.L. 1198, No. 418), known as the Surface Mining Conservation and Reclamation Act; and
(C) the bore hole is drilled by the operator of the operating coal mine for the purpose of increased safety; or
(2) the bore hole is used to vent methane to the outside atmosphere pursuant to a State or Federal funded abandoned mine reclamation project.
"Well operator" or "operator." The person designated as the well operator or operator on the permit application or well registration. Where a permit or registration was not issued, the term shall mean any person who locates, drills, operates, alters or plugs any well or reconditions any well with the purpose of production therefrom. In cases where a well is used in connection with the underground storage of gas, the term also means a "storage operator."
"Wetland." Those areas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support and that under normal circumstances do support a prevalence of vegetation typically adapted for life in saturated soil conditions, including swamps, marshes, bogs and similar areas.
"Workable coal seams."
(1) A coal seam in fact being mined in the area in question under this act by underground methods.
(2) A coal seam, which in the judgment of the department, can reasonably be expected to be mined by underground methods.
CHAPTER 2. GENERAL REQUIREMENTS
Sec. 601.201. Well permits
(a) No person shall drill a well or alter any existing well, except for alterations which satisfy the requirements of subsection (j), without having first obtained a well permit pursuant to subsections (b), (c), (d) and (e). A copy of the permit shall be kept at the well site during drilling or alteration of the well. However, no person shall be required to obtain a permit to redrill a nonproducing well, if:
(1) the redrilling has been evaluated and approved as part of an order from the department authorizing the cleaning out and plugging or replugging of a nonproducing well, pursuant to section 13(c) of the act of December 18, 1984 (P.L. 1069, No. 214), known as the Coal and Gas Resource Coordination Act; and
(2) the redrilling is incidental to the plugging or replugging operation and the well subsequently is plugged within 15 days of redrilling.
(b) The permit application shall be accompanied by a plat prepared by a competent engineer or a competent surveyor, on forms to be furnished by the department, showing the political subdivision and county in which the tract of land upon which the well to be drilled is located, the name of the surface landowner of record and lessor, the name of all surface landowners or water purveyors whose water supplies are within 1,000 feet of the proposed well location, the name of the owner of record or operator of all known underlying workable coal seams, if any, the acreage in the tract to be drilled, the proposed location of the well determined by survey, the courses and distances of such location from two or more permanent identifiable points or landmarks on said tract boundary corners, the proposed angle and direction of such well, if the well is to be deviated substantially from a vertical course, the number or other identification to be given the well, the workable coal seams, if any, underlying the tract of land upon which the well is to be drilled or altered, which are to be cased off in accordance with section 207, and such information needed by the department to administer this act. The applicant shall forward, by certified mail, a copy of said plat to the surface landowner, all surface landowners or water purveyors whose water supplies are within 1,000 feet of the proposed well location, the owner and lessee, if any, of such coal seams, and every coal operator required to be identified on the well permit application and shall submit proof of such notification with the well permit application. With respect to surface owners, notification shall be accomplished under this section by sending notice to the persons to whom the tax notices for said surface property are sent, as indicated in the assessment books in the county in which the property is located. With respect to surface landowners or water purveyors whose water supplies are within 1,000 feet of the proposed well location, notification shall be made on forms and in a manner prescribed by the department sufficient to identify, for such persons, the rights afforded them under section 208 and the advisability of taking their own predrilling or prealteration survey. If the applicant submits to the department written approval of the proposed well location by the surface landowner and the coal operator, lessee or owner, if any, of the coal underlying the proposed well location and no objections are raised by the department within 15 days of filing or if no such approval has been submitted and no objections are made to such proposed well location within 15 days from receipt of such notice by the surface landowner and the coal operator, lessee or owner, if any, or by the department, the same shall be filed and become a permanent record of such location, subject to inspection at any time by any interested person.
(c) If the applicant for a well permit is a corporation, partnership or a person nonresident of the Commonwealth, then there shall be designated the name and address of an agent for such operator who shall be the attorney in fact for the operator and who shall be a resident of the Commonwealth upon whom notices, orders or other communications issued pursuant to this act or the regulations adopted hereunder may be served and upon whom process may be served. Every well operator required to designate an agent under this section shall, within five days after the termination of such designation, notify the department of such termination and designate a new agent.
(d) Every application for a well permit shall be accompanied by a permit fee, established by regulation of the department, which bears a reasonable relationship to the cost of administering this act: Provided, however, That the permit fee shall be $100 for two years immediately following the effective date of this act.
(e) The department shall issue a permit within 45 days of the submission of a permit application unless the department denies the permit application for one or more of the five reasons set forth below: Provided, however, That the department shall have the right to extend such period for 15 days for cause shown upon notification to the applicant of the reasons for that extension. The department may impose such permit terms and conditions as are necessary to assure compliance with this act and other laws administered by the department. The department shall have the authority to deny a permit to any person for the following reasons:
(1) the well site for which a permit is requested is in violation of any of the provisions of this act, or if issuance of such permit would result in a violation of this act or any other applicable environmental statute, rule or regulation;
(2) the permit application is incomplete;
(3) unresolved objections to the well location by coal mine owner or operator remain;
(4) the requirements of section 215 have not been met; or
(5) the applicant, with respect to any other well or wells which the applicant operates, is in continuing violation of this act or any other applicable statute administered by the department. The right of the department to deny a permit under this paragraph shall not be effective until a final administrative determination has been made of any of these violations and no appeal is pending in which a stay has been granted.
(f) Upon issuance of a permit, the well operator may proceed with the drilling of the well at the exact location shown on the plat after providing the department, the surface landowner and the local political subdivision in which the well is to be located 24 hours' notice of the date that drilling will commence. In noncoal areas where more than one well is to be drilled as part of the same development project, only the first well of the project need be located by survey. The remaining wells of the project shall be shown on the plat in a manner prescribed by regulation. Prior to drilling each of the additional project wells, the well operator shall notify the department of his intention and provide reasonable notice of the data drilling will commence. Whenever, before or during the drilling of any well which is not within the outside boundaries of an operating coal mine, the well operator shall encounter conditions of such a nature as to render drilling of the bore hole or portions thereof more hazardous than usual, or otherwise impossible, then the well operator shall have the right, upon verbal notice to the department, to immediately plug all or portions of the bore hole, if drilling has occurred, and to commence a new bore hole not more than 50 feet distant if the location of the new bore hole does not violate section 205 and if, for wells subject to the act of July 25, 1961 (P.L. 825, No. 359), known as the Oil and Gas Conservation Law, the new location complies with any existing law, regulation or spacing order and if the new bore hole is a minimum of 330 feet distant from the nearest lease boundary. Within ten days of commencement of the new bore hole, the well operator shall file with the department a written notice of intention to plug, a well record, a completion report, a plugging certificate for the original bore hole and an amended plat for the new bore hole. The well operator shall forward a copy of the amended plat to the surface landowner identified on the well permit application within ten days of commencement of the new well bore.
(g) The well permit number and operator's name, address and telephone number shall be posted at the drilling site, in a conspicuous manner, prior to commencement of drilling.
(h) The well operator shall install the permit number issued by the department in a legible, visible and permanent manner on the well upon completion.
(i) Well permits issued for drilling of wells covered by this act shall expire one year after issuance unless operations for drilling the well are commenced within such period and pursued with due diligence or unless the permit is renewed in accordance with regulations of the department. If drilling is commenced during the one year period, the well permit shall remain in force until the well is plugged in accordance with section 210 or the permit is revoked. Any drilling permit issued prior to the effective date of this act for a well which is an operating well on said date shall remain in force as a well permit until the well is plugged in accordance with section 210. Nothing in this subsection shall be construed to rescind the provisions pertaining to drilling permits contained in the Oil and Gas Conservation Law.
(j) The Environmental Quality Board may establish by regulation certain categories of alterations of permitted or registered wells for which the permitting requirements of this section shall not apply. The well operator or owner who proposes to conduct such alteration activity shall first obtain a permit or registration modification from the department. Requirements for such modifications shall be as the Environmental Quality Board shall require by regulation.
(k) No permit issued pursuant to this section or registration issued pursuant to section 203 may be transferred without prior approval of the department. Requests for approval of such transfer shall be made on forms or in a manner prescribed by the department. The department shall approve or deny the transfer request within 45 days of receipt of a complete and accurate application. The department shall only have the authority to deny such request for the reasons set forth in subsection (e)(4) or (5). Approval of the transfer request shall permanently transfer responsibility to plug the well under section 210 to the recipient of the transferred permit or registration.
(l) The department may establish a procedure for accelerated approval of well permit applications in hardship cases, as defined by regulation of the Environmental Quality Board, consistent with the requirements of this act.
Sec. 601.202. Permit objections
(a) In case any well location referred to in section 201(b is made so that the well, when drilled, will be located on a tract whose surface is owned by a person other than the well operator, then the surface landowner affected shall be notified of the intent to drill and have right to file objections, in accordance with section 501, based on the assertion that the well location violates section 205 or that information in the application is untrue in any material respect, within 15 days of the receipt by the surface owner of the plat provided for in section 201(b). Receipt of notice by the surface owner shall be presumed to have occurred 15 days from the date of the certified mailing when the well operator submits a copy of the certified mail receipt sent to the surface owner and an affidavit certifying that the address of the surface owner to which notice was sent is the same address that is listed in the assessment books in the county in which the property is located. If no such objections are filed or none are raised by the department within 15 days after receipt of the plat by the surface landowner or if written approval by the surface landowner is filed with the department and no objections are raised by the department within 15 days of filing, the department shall proceed to issue or deny the permit.
(b) In case any well location referred to in section 201(b) is made so that the well when drilled will penetrate anywhere within the outside coal boundaries of any operating coal mine or coal mine already projected and platted but not yet being operated or within 1,000 linear feet beyond such boundaries and the well when drilled or the pillar of coal about the well will, in the opinion of the coal owner or operator, unduly interfere with or endanger such mine, then the coal owner or operator affected shall have the right to file objections in accordance with section 501 to such proposed location within 15 days of the receipt by the coal operator of the plat provided for in section 201(b). An alternative location at which the proposed well could be drilled to overcome such objections shall, if possible, be indicated. If no such objections to the proposed location are filed or if none are raised by the department within 15 days after receipt of the plat by the coal operator or owner or if written approval by the coal operator or owner of the location is filed within the department and no objections are raised by the department within 15 days of filing, the department shall proceed to issue or deny the permit.
(c) If any objections are filed by any coal operator or owner or are made by the department, the department shall fix a time and place for a conference in accordance with section 501 not more than ten days from the date of the service of such objections on the well operator, at which conference the well operator and such coal operators or owners as are present or represented shall consider the objections and attempt to agree upon a location. If they fail to agree upon a location, the department shall, by an appropriate order, determine a location on such tract of land as near to the original location as possible where, in the judgment of the department, the well can be safety drilled without unduly interfering with or endangering such mine as defined in subsection (b). Such new location as agreed upon by said parties or as determined by the department shall be indicated on the plat on file with the department and shall become a permanent record, whereupon the department shall proceed to issue or deny the permit.
(d) Within 120 days after the commencement of drilling operations, the coal operator shall accurately locate the well by a closed survey on the same datum as the mine workings or coal boundaries are mapped and file the results of the survey with the department and forward, by certified mail, a copy to the well operator.