Hydraulic Fracturing Regulatory Act Public Act 98 - 0022

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

2. [§ 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.

3. [§ 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

4. [§ 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

5. [§ 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

6. [§ 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

7. [§ 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

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

9. 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.

10. [§ 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

11. [§ 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

12. [§ 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”

13. [§ 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

14. [§ 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

15. Mary H. Morrissey-Kochanny Deputy Chief of Staff for Policy and Legislative Affairs Office of the Attorney General 100 West Randolph, 12th Floor Chicago, IL 60601 312-814-8553 Springfield 217-557-0056 Mmorrissey-kochanny@atg.state.il.us