On January 9, the Pennsylvania Department of Environmental Protection (“DEP”) released a white paper (“White Paper”) outlining DEP’s plan to incentivize the use of Mine Influenced Water (“MIW”) for natural gas operations that refines and finalizes DEP’s initial November 2011 draft. The final White Paper has been highly anticipated: a successful approach to using MIW in natural gas operations could be a win-win opportunity to make use of abandoned mine water – deemed by DEP to be one of Pennsylvania’s biggest environmental challenges – rather than the use of freshwater supplies. The White Paper addresses: (1) DEP’s process for reviewing and evaluating MIW proposals, (2) storage options for MIW prior to use for natural gas extraction, (3) potential solutions to long-term liability issues implicated by MIW use and (4) funding continued treatment of MIW.

DEP’s Review Process

The first stage of DEP’s review process is an informal consultation between an interested party and DEP to identify potential MIW sources, which will be followed by sampling and hydrologic analysis of MIW where warranted. The interested party must identify its anticipated method of MIW storage and the location of storage facilities, as well as develop proposed treatment facility options if an MIW discharge to surface water is anticipated. The roles of any cooperating third-party (such as a watershed group) must be identified to DEP. After informal consultation, MIW proposals are to be submitted directly to DEP’s Bureau of Abandoned Mine Reclamation. The full list of proposal specifications may be found here.

Storage Options and Standards

DEP has outlined four MIW storage options: (1) nonjurisdictional impoundment, (2) centralized impoundment, (3) on-site pits and tanks and (4) MIW source. MIW stored in the first of these options – nonjurisdictional impoundments – would be subject to strict standards outlined in Appendix A to the White Paper developed with reference to drinking water standards. (“Appendix A Criteria.”). MIW stored in centralized impoundments or on-site pits and tanks would not be subject to the Appendix A Criteria; however, for the former option, an operator would need to obtain a “Dam Permit for a Centralized Impoundment Dam for Oil and Gas Activities” and meet those permitting conditions. Finally, DEP has introduced the option of using existing treatment facilities (such as polishing ponds or aerobic wetlands) as sources of MIW as long as it does not negatively impact the function of the treatment facility.

Liability Protections & Treatment Trust Funds

To attempt to address certain concerns regarding potential liability for the use of MIW, DEP identified two options to shield MIW users from potential environmental liability: the Environmental Good Samaritan Act (“EGSA”), the purpose of which is to encourage citizens to improve the environment by offering protections against environmental liability, and DEP Consent Orders and Agreements. The White Paper notes that legislation has been proposed to revise EGSA to include use of MIW in hydraulic fracturing, which would bolster that particular option. In conjunction with these mechanisms to protect MIW users from environmental liability, DEP is developing mechanisms – potentially funded by the sale of MIW for use in natural gas extraction – to pay for the treatment of sources of MIW.

Next Steps

DEP is also throwing its support behind the reuse of MIW by advocating that the Susquehanna River and Delaware River Basin Commissions adopt policies that incentivize the use of MIW for natural gas extraction. Though this discussion is in its nascent stage, DEP’s White Paper is a major step forward towards a cooperative approach to developing standards and procedures for the use of MIW in the Commonwealth.