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PADEP Issues White Paper on Use of Mine Influenced Waters in Natural Gas Extraction

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For the past several months, PADEP has been working internally and with stakeholders to develop policy supporting the use of mine influenced waters (“MIW”) in the natural gas extraction process — that is, using acid mine drainage and mine pool water, from Pennsylvania’s long history of coal mining, for fracking. The concept is that the impacted mine waters, which typically require treatment before discharge to surface waters, could serve as a substitute for the natural gas extraction industry’s withdrawal of millions of gallons of water from the same freshwater sources that also support aquatic life, our drinking water, and recreational uses. If workable and done safely, it’s a clear win-win — the gas extractors can use MIW that is already plentiful but has no higher use absent expensive long-term treatment, while preserving the Commonwealth’s natural resources.

Last week, PA DEP released a white paper entitled “Utilization of Mine Influenced Water for Natural Gas Extraction Activities” (the “White Paper”; link is to PDF). The document attempts to address storage and liability issues, which, if left unresolved, would significantly increase the legal risk and lower the economic incentive for transporting and using MIW. The White Paper also provides procedural guidance for those seeking to submit proposals to use acid mine drainage waters in the development of gas wells.

 

The storage options covered by the White Paper either would require new permitting, or might involve modification of existing well permits and Water Management Plans. One option, known as nonjurisdictional impoundment, would also require showings that the MIW (a) will not result in water pollution and (b) meets a specified set of parameters based upon EPA’s NPDES standards for mine drainage (measured at the source, prior to storage). The other storage options cited in the White Paper would not require that the MIW meet such parameters.

 

The White Paper’s proposed long-term liability solutions are somewhat more limited. The challenge for expanding the use of MIW into fracking applications is that Pennsylvania’s Clean Streams Law has been interpreted by state courts to impose long-term treatment obligations on those who pump water from abandoned mine pools and thereby create a discharge. As the White Paper notes, long-term treatment of MIW is expensive and labor- and capital-intensive.  So PADEP offers two options for users of MIW for fracking to limit their liability under current law and policy: First, some operators could structure their project to fit within the scope of the Environmental Good Samaritan Act, which provides fairly broad protection from civil liability under state law to certain eligible parties for projects involving treatment of MIW, with specified exceptions. Second, PADEP could enter a Consent Order and Agreement with the MIW user under which the Department would agree not to hold the user liable for long-term treatment obligations, so long as the user meets project-specific conditions. 

 

The CO&A would theoretically limit the user’s liability to the state, but would not address civil liability to third parties. For the user who cannot meet the requirements of the Environmental Good Samaritan Act, though, a CO&A may be the next best available option to protect against at least the long-term treatment liability that could otherwise attach. In some circumstances, a belt-and-suspenders approach that employs both the Environmental Good Samaritan Act and a CO&A might make sense. In any case, early communications with PADEP’s program staff will be critical. Natural gas extractors who are considering MIW projects should consult environmental counsel to discuss how to take full advantage of the available protections against liability under Pennsylvania law and how best to navigate the process within PADEP.

Looking to the future, PADEP notes that it might be appropriate to develop a general permit covering the use of MIW for fracking, or even to rework its oil and gas regulations in a way that would directly address the issue. Importantly, the MIW policy appears to have earned support across a wide spectrum of stakeholders, from the oil and gas industry to environmental organizations. Indeed, the White Paper expressly envisions the creation of partnerships between industry and watershed groups to help foster MIW uses. Time will tell whether the mechanisms and options set forth in the White Paper will help promote this new use for impaired mine discharges, or whether further regulatory or legislative actions will be necessary for the concept to reach its full potential.