Appalachian Basin

Pennsylvania Act 13, One Year Later

Pennsylvania’s Act 13 was signed into law in February of last year and even after a year there still seems to be misinformation surrounding the legislation.  Act 13 focused on three things having to do with oil and gas development; regulatory modifications, establishment of an impact fee and providing incentives to increase the use of natural gas vehicles. 

Community outreach on shale gas development has exposed much misinformation surrounding Act 13 and how it affects considerations at the local level.  Act 13 is just over one-year-old, being signed into law on February 14th of last year, and was the latest in a series of reforms Pennsylvania oil and gas laws designed to reduce the footprint of oil and natural gas operations.  In essence, what this act did was revamp the entire law to address some of  concerns that arose from Marcellus Shale development.

In this post we address some of the more common distortions of the law being employed by anti-natural gas development activists.

Disclosure Distortions

One of the worst examples of misinformation surrounding Act 13 is an intentional distortion by natural gas opponents who have falsely claimed doctors can’t report incidents of exposures to other healthcare professionals, or disclose to their patients,  the composition of fracturing fluids there patients may have come into contact with.  This is a really juicy sound bite these folks have grabbed onto for purposes of suggesting something nefarious about a procedure that also applies to the formula of Coca-Cola among other examples.

Most readers will now be familiar with where users can examine the composition of hydraulic fracturing fluids on a well-by-well basis.  While operators can claim some chemicals as being proprietary this only means the precise mix, in amounts,  is restricted information, not the constituent itself. This is a subject we addressed in depth in an earlier post.  Lets take aliphatic acids, for example, which are often used in corrosion inhibitor products and are frequently listed as proprietary.

Notwithstanding any limitations pertaining to proprietary data, a doctor who has a patient who has been exposed to HF fluid that includes alphatic acid will see it listed as one of the ingredients and can gain access to the precise formulation of that acid.  If, indeed, an aliphatic acid was listed as “proprietary” the doctor can not only tell the world an aliphatic acid was involved, but also talk about the case and reveal anything other the constituents that make it up and their proportions (the  total amount of aliphatic acid used in the HF fluid is already revealed).  Nonetheless, its worth noting even this can be shared with other medical professionals so long as it relates directly to patient care.

These are the same rules that apply to ingredients in GreenSol Eco-Conscious Spot Remover and that company’s Solid Green #78 Glass & Neutral Cleaner, designated by the EPA’s Design for the Environment program as one of several “products that perform well, are cost-effective, and are safer for the environment.”

Substantial Setbacks

The more substantial parts of Act 13 are the environmental regulations that dealt with increases in setbacks.  Originally, conventional gas wells required a 200 foot setback from houses, water sources, wetlands and the like.  Act 13 expanded this requirement to 500 feet.  Many people mistakenly believe Act 13 allows operators to develop wells anywhere they want.  By looking at the map of Washington County Pennsylvania below you can see that this is not the case.  Everything is pink is an area that cannot support gas development due to Act 13.

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Here are some numbers making it more than evident Act 13 does not allow development to happen everywhere and, due to the increased setbacks, actually decreases the area where development is permitted by substantial amounts.

Washington County

Total acres – 551,006.3  (100.00%)

Total acres of land allowed for oil and gas development 196,660.0  (35.69%)

Total acres of land not allowed for oil and gas development 354,339.3  (64.31%)

We can also look at the same figures for Allegheny County, which is home to the city of Pittsburgh.  What’s interesting about Pittsburgh is that the city passed a ban on hydraulic fracturing.  See map below for Allegheny County setbacks.

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If we look at the center of the map above where the three rivers meet we can see the city of Pittsburgh and we can also see it is covered in red, meaning no development would ever  be allowed within city limits under state law.  This shows pretty clearly that the city’s ban on hydraulic fracturing had political motives.  Again, let’s take a look at the numbers.

Allegheny County

Total acres in Allegheny County 476,076.8  (100.00%)

Total acres of land allowed for oil and gas development 57,976.4  (12.18%)

Total acres of land not allowed for oil and gas development 418,100.4  (87.82%)

Impact Fees

When the Governor was looking at this, instead of a tax, he wanted to direct funding to areas undergoing shale development and reimburse them for any impacts that occur with this development.  The legislation put in place a formula based on the amount of gas being produced, and the price of that gas to provide revenues to governments hosting shale development.  The first round of Act 13 funding has been estimated and is being distributed with the following  figures reflecting how much funding some local governments are getting.

Allegheny County – $79,430.47

     *Pittsburgh City with hydraulic fracturing ban received $6,914.84*

Bradford County – $8,375,502.10

Butler County – $741,351.08

Lycoming County – $3,927,395.61

Depending on the amount of development, some counties see figures in millions while some only see a few thousand dollars.  This is money that is allowing some townships to increase annual budgets, in some cases doubling them, based on receipts received from Act 13 funding.

Increasing Vehicular Natural Gas Use

We have discussed natural gas vehicles previously (more information  here and here) but for this post we are only examining Act 13’s natural gas vehicle program, which includes the following grant:

Approximately $10 million in grants will be available through the Alternative Fuels Incentive Grant Program for organizations, non-profit agencies, for profit companies, commonwealth or municipal authorities and local transportation organizations. The grant funds available will include an opportunity to propose projects which will convert or purchase natural gas vehicles weighing less than 14,000 pounds as well as convert or purchase electric, propane, or other alternative fuel vehicles of any size.

As done with the heavy-duty NGV grants, applicants interested in purchasing or converting one or two alternative fuel vehicles will be encouraged to join forces and aggregate into a single application to satisfy the five vehicle minimum required for application.

Applications will also be accepted for innovation in alternative fuel transportation, including non-road vehicles, such as natural gas trains or tug boats.

Summarizing, Act 13 did just what it set out to do; revamp the existing oil and gas regulations in Pennsylvania to accomodate new technology.  One year later it stands tall.


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