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Hydraulic Fracturing Regulatory Act Public Act 98 - 0022 Fracking Industry Seminar Rend Lake College

Hydraulic Fracturing Regulatory Act Public Act 98 - 0022 Fracking Industry Seminar Rend Lake College. July 30, 2013. LISA MADIGAN ATTORNEY GENERAL STATE OF ILLINOIS. Concerns Addressed. Environmental Water Contamination Water usage Air quality Earthquakes Traffic Health and Safety

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Hydraulic Fracturing Regulatory Act Public Act 98 - 0022 Fracking Industry Seminar Rend Lake College

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  1. Hydraulic Fracturing Regulatory ActPublic Act 98 - 0022Fracking Industry SeminarRend Lake College July 30, 2013 LISA MADIGAN ATTORNEY GENERAL STATE OF ILLINOIS

  2. Concerns Addressed • Environmental • Water Contamination • Water usage • Air quality • Earthquakes • Traffic • Health and Safety • Quality of life • Enforcement of new law

  3. Protective Goals of the New Law • Water must be protected from contamination • Air emissions should be minimized. • Waste must be properly disposed. • Operators with poor records should be prohibited from operating in Illinois. • DNR and EPA must be given the funding to properly supervise and enforce the law. • Public must have access to information about permit applications and chemicals used. • Public must have input into permit decisions. • Public must have a recourse if the law isn’t enforced.

  4. [§ 1-5]Definitions • “High volume horizontal hydraulic fracturing operations” (HVHHF) means all stages of a stimulation treatment of a horizontal well as defined by this Act by the pressurized application of more than 80,000 gallons per stage or more than 300,000 gallons total of hydraulic fracturing fluid and proppant to initiate or propagate fractures in a geologic formation to enhance extraction or production of oil or gas.

  5. [§ 1-10]Intergovernmental Cooperation • Lead agency: • Illinois Department of Natural Resources (“IDNR”) • Permitting, public participation, inspections • Coordinating agency: • Illinois Environmental Protection Agency • Retains enforcement authority for water pollution violations under the Illinois Environmental Protection Act (“Act”) • Advisory agencies: • Illinois State Geological Survey • Illinois State Water Survey

  6. [§ 1-20]Applicability • This Act applies to all wells where HVHHF operations are planned, have occurred, or are occurring in this State. • The provisions of this Act shall be in addition to the provisions of the of the Illinois Oil and Gas Act. • If there is a conflict, this Act supersedes the Illinois Oil and Gas Act

  7. [§ 1-25]Prohibitions It is unlawful to: • Inject diesel for fracturing operations • Inject or discharge any of the following into fresh water: • Hydraulic fracturing fluid • Produced water • BTEX (Benzene, Toluene, Ethylbenzene, Xylene) • Diesel • Petroleum distillates

  8. [§ 1-25]300 Foot Setbacks • Perennial streams • Rivers • Natural or artificial lakes • Ponds • Reservoirs

  9. [§ 1-25]500 Foot Setbacks • Residences • Places of worship • Schools • Hospitals • Licensed nursing homes • Existing water wells or domestic springs used for human or domestic animal consumption

  10. [§ 1-25]750 & 1,500 Foot Setbacks • 750 foot setbacks • Nature Preserves • Sites on the Register of Land and Water Reserves • 1,500 foot setbacks: • Public Water supply intakes • Surface water intakes on lake or reservoir are measured from the intake point • Surface water intakes on flowing stream are measured from a semicircular radius extending upstream of the surface water intake • Groundwater intakes are measured from surface location of the wellhead or the ordinary high mark of the stream

  11. [§ 1-25]Waivable Setbacks Some setbacks can be waived if the owner gives informed, written consent • Waivable setbacks • Residences • Places of worship • Well or spring • Surface waters if wholly located on owner’s land • Nonwaivable setbacks • Schools • Hospitals • Licensed nursing homes • Nature preserves • Sites on the Register of Land & Water Resources • Public water supply intakes

  12. [§ 1-30]HVHHF Permit Required • Permit is required for all HVHHF operations, including: • Drilling a well • Deepening a well • Converting a horizontal or vertical well • Separate permits are required for each HVHHF stimulation operation occurring at a well site

  13. [§ 1-35]Applicant Permit Registration • Each applicant for an HVHHF Permit must register with the IDNR • At least 30 days before applying for a permit • Information required for registration: • Name and address of registrant and any parent, subsidiary, and affiliate • Disclosure of a violation of any law due to hydraulic fracturing within the previous 5 years • Includes violations of parents, subsidiaries, affiliates • $5 million insurance • Covers any injuries, damages, or loss related to pollution or diminution

  14. [§ 1-35]HVHHF Permit Application • Name and address of applicant and their related companies • Proposed well name, address, description of well site • Proof that site complies with setback requirements • Detailed description of proposed well • Estimated depth and location of fresh water sources • Detailed description of proposed HVHHF operations • Plat showing other previous well bores within 750 feet of proposed well • Chemical disclosure report, unless information is not available • Compliance with local and state water use laws • Fresh water withdrawal and management plan

  15. [§ 1-35]HVHHF Permit Application • Plan for handling fluid and flowback disposal • Well site safety plan • Containment plan • Casing and cementing plan • Traffic management plan • Names and addresses of owners within 1,500 ft of well site • Drafts of the required public notices • Statement that well site will be restored after HVHHF operations • Proof of $5 million insurance • Any other information required by IDNR

  16. [§ 1-35]Water Management Plans • Freshwater withdrawal management plan • Source of water • Withdrawal rates • Months withdrawn • Methods to minimize water withdrawals • Methods to minimize impact on aquatic life • Fracking fluid and flowback management plan • Above ground tanks required for storage • In special cases, lined pits can be used for temporary overflow / backup

  17. [§ 1-35]Permit Requirements • If proposed well is within municipal limits, applicant must show consent from municipality • $13,500 fee per permit application • $11,000 to Mines and Minerals regulatory fund • $2,500 to Illinois Clean Water Fund • Must include certification that permit is accurate, under penalty of perjury • IDNR has 60 days to review permit applications

  18. [§ 1-40] Public Notice • IDNR will post all permit applications on their website • Part of a larger IDNR website database of all fracking operations in Illinois • Applicant responsible for public notice • To all property owners by mail within 1,500 ft of well site • Publication notice in each county affected

  19. [§ 1-45] Public Comment • Public comment period begins 7 calendar days after IDNR receives permit application • Public comment lasts for 30 calendar days • IDNR can extend by 15 days after public hearing to allow responses to the hearing • Any person may file written comments • IDNR can request permit applicant to respond

  20. [§ 1-50] Public Hearings • IDNR shall hold a public hearing if petitioned by: • A government agency or county which is affected by the operation, or • A person “having an interest that is or may be adversely affected by the operation” • Only those who would have been authorized to petition for public hearing can participate • IDNR can deny petition for public hearing if it would be “frivolous” • Hearing shall comply with the contested case requirements of the Illinois APA

  21. [§ 1-53] Standards for Permit Issuance IDNR shall issue a HVHHF permit only if the record demonstrates that: • The well complies with all setback requirements • The permit application meets all application requirements • Proposed management plans are sufficient • Hydraulic fracturing operations will be conducted so as to “protect the public health and safety and prevent pollution or diminution of any water source”

  22. [§ 1-53] Standards for Permit Issuance • The Water Quality work plan has been submitted to IDNR • Neither the applicant nor any parent, subsidiary, or affiliate has failed to abate a violation of this Act or the Oil and Gas Act • The Class II injection wells used for fluid flowback disposal comply with all applicable requirements • IDNR has no cause to deny, suspend, or revoke the permit subject to Section 1-60

  23. [§ 1-60] Permit Denial, Suspension, Revocation • IDNR may deny, suspend, or revoke a permit for any of the following reasons: • 1) Incomplete, misleading, or untrue information • 2) Violating any condition of a permit • 3) Violating a provision of this Act or the Oil and Gas Act • 4) Fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility • 5) HVHHF permit was revoked in another state for a violation or fraudulent or dishonest practices • 6) Emergency situation exists where HVHHF operation would pose a significant hazard to public health, aquatic life, wildlife, or the environment • Permittee can seek IDNR hearing to contest decision within 30 days

  24. [§ 1-70] Pre-Fracking Site Preparations This Section contains specific and detailed technical requirements for the following: • Site preparation and maintenance • Well construction and drilling standards • Well casing standards • Cement quality standards • Blowout prevention requirements

  25. [§ 1-75] Operational Requirements • Pre-operation equipment testing • Monitoring and recordkeeping • IDNR notification • Tank storage for drilling fluid and flowback • Air emission and dust controls • Seismicity Control for injection wells

  26. [§ 1-75] Tank Storage Requirements • Above ground storage tanks required • For all drilling fluid, additives, flowback • Secondary containment required • Fluids and flowback must be removed from well site after HVHHF operations are complete • Tanks removed within 60 days

  27. [§ 1-75] Tank Storage Requirements • Reserve pits limited to unanticipated flowback occurrence due to lack of tank capacity • Standards for pit and liner construction • Limited to 7 days temporary storage • Standards for testing & disposal of flowback • Discharge into Class II injection wells • Prohibition on discharges into fresh water

  28. [§ 1-75] Air Emission Control • Gas emissions must be minimized • Utilize gas if possible (e.g. as on-site power source) • Gas can only be flared if operator shows it is infeasible to use gas or minimize emissions • Dust control requirements • Truck speed control, minimizing activity during high wind days, road surfacing, etc.

  29. [§ 1-75] Control of Releases • Operator must immediately clean up and remediate any release of: • Hydraulic fracturing fluid • Hydraulic fracturing additive • Hydraulic fracturing flowback • Report to IDNR required for: • Release of fluid or flowback in excess of 1 barrel • Release of additive in excess of the EPCRA, CERCLA, or Clean Air Act reportable quantities • Release of more than 5 barrels of produced water must be cleaned up, remediated, and reported to IDNR

  30. [§ 1-77] Chemical Disclosure • Fracking operators • Must register and maintain master chemical list with IDNR • Chemicals must be disclosed to IDNR before HVHHF operations • Applicant can disclose chemicals in permit application • Trade Secret Protection • IDNR determines whether the information is protected • IDNR will post a redacted copy of the chemical list online • Public can contest IDNR determination through FOIA • IDNR is authorized to release information to health care professionals for patient treatment

  31. [§ 1-80] Water Quality Monitoring • Operator will retain third party to monitor water quality • All water sources within 1,500 feet of well • Landowner can refuse monitoring of a water source that is wholly located on their property • Baseline water testing before operations begin • Water testing after HVHHF operations are complete • 6 months, 18 months, 30 month intervals

  32. [§ 1-83] Order Authority • Any person who has reason to believe they incurred pollution or diminution of a water source due to HVHHF operations may notify IDNR and request an investigation • Timing • IDNR will begin investigation 30 days after notification • IDNR will make “reasonable effort” to make a determination within 180 days • IEPA may assist in sampling • Can request cost recovery • If IDNR finds pollution or diminution, they can require operator to provide replacement water source

  33. [§ 1-85] Presumption of Pollution or Diminution • Establishes rebuttable presumption that fracking operations are liable for: • Any “pollution or diminution” of water source • Within 1,500 ft of well • Compared to baseline pre-operation water quality • Within 30 months of the end of fracking operations • Standard to rebut presumption: • “Clear and convincing evidence” that fracking operations not responsible for pollution or diminution

  34. [§ 1-87] Water Quality Investigation and Enforcement • No person shall allow HVHHF operations to violate Section 12 of the Illinois Environmental Protection Act • IEPA has duty to investigate complaints of violations • Section 12 of IEP Act prohibits discharges of contaminants to waters without an IEPA permit, or so as to cause water pollution • Permittee must reimburse IEPA for costs of cleanup of water pollution caused by HVHHF operations • Applies to either “pollution or diminution” under this Act, or a Section 12 water pollution violation

  35. [§ 1-95] Plugging and Restoration Establishes standards for restoration once HVHHF operations are concluded • Permittee bears cost of plugging well and restoring the site • Must also plug other wells within 750 feet of permittee’s well bore • Permittee shall restore the site until “closely approximating” pre-drilling conditions • Within 12 months of completion of operations • Must remove all equipment and materials

  36. [§ 1-96] Seismicity • IDNR and State Geological Survey will develop regulations concerning seismicity • “Traffic Light” System for injection wells • Allows operation during low levels of seismic activity • Slow or stop injection operations as necessary to protect public health and safety

  37. [§ 1-97] Department Mapping and Reporting • By February 1, 2014, IDNR shall submit a report to the General Assembly and Governor identifying the following, and recommend any further legislative or administrative action: • The location of resources of shale gas and oil, conventional gas and oil, and process materials • The potential impacts of HVHHF operations on IDNR sites, nature preserves, sites on the Register of Land and Water Reserves, the availability of water for human consumption and general domestic use, and the potential for influencing natural seismic activity

  38. [§ 1-97] Two Year Report • Two years after the effective date of the first HVHHF permit issued by IDNR, and every 3 years thereafter, IDNR shall prepare a report that examines: • The number of HVHHF permits issued by IDNR on an annual basis • A map showing permitted HVHHF locations • Scientific research, best practices and technological improvements related to HVHHF operations and methods to protect public health and the environment

  39. [§ 1-97] Two Year Report • Confirmed environmental impacts due to HVHHF operations • Confirmed public health impacts • A comparison of permit fee revenues and IDNR’s costs of implementing and administering the Act • A comparison of investigation and cleanup costs paid to IEPA and IEPA’s costs of implementing and administering the Act • A description of modifications to existing programs, practices or rules related to HVHHF operations made by IDNR

  40. [§ 1-97] Two Year Report • Any problems or issues IDNR identifies as it implements and administers the Act • Any recommendations for legislative action by the General Assembly to address the findings in the report • Any other information IDNR deems relevant regarding its specific experiences implementing and administering the Act and, generally, HVHHF operations

  41. [§ 1-98] Hydraulic FracturingCompletion Reporting • Within 60 calendar days after the conclusion of hydraulic fracturing operations, the operator shall file a hydraulic fracturing operations completion report with IDNR • Applies to wells using 80,000 to 300,001 gallons of hydraulic fracturing fluid and proppant

  42. [§ 1-98] Hydraulic FracturingCompletion Reporting • The report must contain: • Name and location of well • Total and per-stage gallons of hydraulic fracturing fluid used • Depth of the wellbore • Length of horizontal wellbore • Maximum surface treating pressure used • Formation targeted • Number of hydraulic fracturing stages • Total and individual perforated intervals

  43. Hydraulic FracturingCompletion Reporting • Completion reports for high volume horizontal hydraulic fracturing operations • Wells over 301,000 gallons • Section 1-75(f)

  44. [§ 1-99] Task Force on HydraulicFracturing Regulation • Task Force shall consist of: • 4 legislators (2 from Senate and 2 from House) • Governor • Director of Illinois EPA • Director of IDNR • Attorney General • Director of Illinois State Geological Survey • Representatives from environmental organizations • Representatives from the hydraulic fracturing industry

  45. [§ 1-99] Task Force on HydraulicFracturing Regulation • Director of IDNR shall serve as Chairperson • IDNR responsible for administering Task Force operations • The Task Force shall prepare a report evaluating the scope of hydraulic fracturing activity in the State and recommend to the General Assembly whether further legislation is needed to regulate hydraulic fracturing in Illinois

  46. [§ 1-99] Task Force on HydraulicFracturing Regulation • The Task Force shall provide its report and recommendations to the General Assembly by September 15, 2016 • Upon issuance of its report and recommendations, the Task Force will be dissolved and § 1-99 will be repealed

  47. [§ 1-100] Criminal Offenses and Penalties • A knowing violation of the Act, rules or permit, or knowingly submitting false information, is a Class A misdemeanor • Violator is subject to a fine of not to exceed $10,000 per day • It is unlawful for a person knowingly to: • Inject or discharge hydraulic fracturing fluid, produced water, BTEX, diesel, or petroleum distillates into fresh water • Perform any HVHHF operations by injecting diesel • Drill, deepen or convert a horizontal well where HVHHF operations are planned or occurring or convert a vertical well into a horizontal well where HVHHF operations are planned in the State, unless the person has been issued a permit • Discharge hydraulic fracturing fluids, hydraulic fracturing flowback, or produced water into any surface water or water drainage way

  48. [§ 1-100] Criminal Offenses and Penalties • A person who knowingly violates these requirements or prohibitions commits a Class 4 felony and is subject to a fine not to exceed $25,000 per day • A person who commits a second or subsequent knowing violation commits a Class 3 felony and is subject to a fine not to exceed $50,000 per day • Any person who knowingly makes a false, fictitious or fraudulent material statement to IDNR or IEPA commits a Class 4 felony • Each false statement or writing is a separate violation • Violators are subject to a fine of not to exceed $25,000 per day • A second or subsequent knowing violation is a Class 3 felony with a fine not to exceed $50,000 per day

  49. [§ 1-100] Criminal Offenses and Penalties • Any criminal action shall be brought by the State’s Attorney or the Attorney General and shall be conducted in accordance with the Code of Criminal Procedure of 1963 • The period for commencing prosecution begins to run when the offense is discovered or reported

  50. [§ 1-101] Civil Penalties and Injunctions • Any person who violates the Act or a rule, order or permit shall be liable for a civil penalty not to exceed $50,000 per violation and an additional $10,000 per day of violation • Any person who does the following is subject to a civil penalty not to exceed $100,000 per violation and an additional $20,000 per day of violation: • Inject or discharge hydraulic fracturing fluid, produced water, BTEX, diesel, or petroleum distillates into fresh water • Perform any HVHHF operations by injecting diesel • Drill, deepen or convert a horizontal well where HVHHF operations are planned or occurring or convert a vertical well into a horizontal well where HVHHF operations are planned in the State, unless the person has been issued a permit

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