Kentucky Division of Oil & Gas

UIC Class II

– Public Hearing 09/23/15 Unofficial transcript

– video in application package

Good Evening I’d like to welcome everyone to the Division of Oil and Gas’ public hearing on our Class II underground injection control primacy application. I’m Kim Collings, Director of the Kentucky Division of Oil and Gas. With me is Marvin Combs, Assistant Director of the Division. This is being video recorded, will be made part of the application for our taking over primary responsibility for the injection control program. We had sign in sheets in the front when you came in and copies of the application ask you to sign in and take a copy if needed. Tonight we’re going to take any or al or written or both comments that any one may have on the application. I will let the record reflect that I did today

receive written comments from Andrew McNei l l executive director of the Kentucky Oil and Gas Association, who is here tonight. So Andrew if you have anything you would like to add, go right ahead.

Thank you Kim, thank you Marvin for putting out this public notice for this public meeting related to the Divisions application for primacy over Class II underground injection wells. To my right a have Rudy Vogt of Cumberland Valley Resources, who is president of the board for the Kentucky Oil & Gas

Association. As you mentioned I’m Andrew Mc Neill, the Executive Director of KOGA. KOGA is the industry association for Kentucky’s oil and gas produ cers. We’ve been an association since 1931 have over 240 member companies. We represent an industry that’s a $1.1 billion industry in the state’s economy. In 2013 the oil and gas industry supported over 3,200 jobs in direct and downstream industry

sectors. The average annual wage for oil and gas jobs in 2013 is between $50,000 and $ 60,000. Last year Kentucky’s oil and gas industry contributed over $40 million in tax revenues to state and local

governments.

In 2013, 34 Kentucky counties reported natural gas production and last year 63 counties reported oil production.

I’ve been in this position for 2 years, and in that tenure, it has been communicated to me by my board of directors, my membership that the Association is supportive of and has identified as a priority the state’s application for primacy over this program. KO GA is supportive of IOGCC’s and the Ground Water

Protection Counsel’s program “State’s First” and we believe this fits very well with that philosophy in

terms of the state being the best le vel of government to regulate the oil and gas industry, in Kentucky and across the country.

Just in way of comments, again as you noted, we submitted written comments today. This will be a higher level overview of that but, on the majority of the applicat ion, we feel the Division has done an excellent job of explaining both the rationale and requirements of the various issues that you all are considering as you move forward with assuming primacy over this program and we also believe that in

terms of the su pporting documentation in the appendices you submitted that it’s a very thorough and accurate collection of documents that supports the Divisions application.

We did have some comments that we would like to provide and some questions we think that when posed could possibly grant the Division an opportunity to consider and when considering strengthening their application. Going forward and largely I think they fall into the category of insuring the Division has a sufficient level of resources to manage th e program going forward. I’m going to skip over a couple of these recommendations. Because I think the written comments clearly state that we feel like the existing staff levels have a certain and sufficient level responsibilities placed upon them so that we would hate to see some additional strings put on them. But y our comments, excuse me your prop osaldoes address that and you certainly due expect additional some staff to come on within a sufficient

period of time to address that. I think that I would sa y that our primary concern is the nature of the reoccurring resources to support this program As I understand it from the application the first 2 years are more or less covered if you will, from a resource standpoint through a combination of State General Fund appropriation or agency funds and a grant that has been applied for or perhaps actually already received from US EPA to administer this program. And so

, I think the Division did an excellent job of laying out the capacity to manage the program going f orward over the next 2 years. The application is silent on what the expectations are in terms of how you might move forward after that period time. I believe the industry and I certainly think KOGA is prepare to be a partner and be supportive of whatever

s trategies the division intends to move forward with to ensure that there are sufficient level of resources in place to support this program. It would be beneficial from a standpoint of identifying any potential permitting fees you may anticipate in the fut ure or general fund requirements from the Kentucky General Assembly that you might require. Going forward to the extent that the Association and the Industry could have a better understanding of that through this application and this process. It’s one of

t hose situations that it’s the earlier the better because as you know budget cycles tend to begin soon and the year prior to the budget session and a better understanding of that I think positions KOGA and the industry to support your efforts. But as I stat ed earlier all of our comments all of our input is intended to strengthen an already strong application. And, we certainly appreciate the efforts that have been made by this office to move forward, to have this meeting, to have a very transparent process A ssuming authority over this program. We believe that programs like this are important for the future of the industry within the state. And applaud the efforts that you made.

Kim Collings: Thank you, and I thank KOGA for their

, the time that they took to review the application thoroughly and have made some valid comments and we’ll be going over those and issuing a response

soon.

Kim: Do you have a nything you’d like to add?

Rudy Vogt: I’d like to make a comment as an owner of a small independent produce r and operator of 51 Class II injection wells currently. I feel strongly that we would like , my oil company would like to support divisions acceptance of control over the Class II wells I think it is important from an ongoing

business situation for small o perators. I’ll just leave it at that.

Kim: thank you. I appreciate that. Having no other people in the audience we will draw this public hearing to a close. I will ask that if anyone would like to submit written comments we have those by

October 10 th , th en we will file an answer and send this down to the EPA Region 4 in Atlanta . That should be it. Thanks You very much.