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[Federal Register Volume 76, Number 2 (Tuesday, January 4, 2011)]
[Proposed Rules]
[Pages 295-296]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32981]

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DELAWARE RIVER BASIN COMMISSION

18 CFR Part 410

Proposed Amendments to the Water Quality Regulations, Water Code 
and Comprehensive Plan To Provide for Regulation of Natural Gas 
Development Projects

AGENCY: Delaware River Basin Commission.

ACTION: Proposed rule; notice of public hearing.

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SUMMARY: The Delaware River Basin Commission (``Commission'') proposes 
to amend its Water Quality Regulations (``WQR''), Water Code and 
Comprehensive Plan by adding a new Article 7 to the WQR providing for 
the conservation and development of water resources of the Delaware 
River Basin during the implementation of natural gas development 
projects. This Article applies to all natural gas development projects 
involving siting, construction or use of production, exploratory or 
other wells in the Basin regardless of the target geologic formation, 
and to water withdrawals, well pad and related activities and 
wastewater disposal activities comprising part of, associated with or 
serving such projects.

DATES: Comments must be received on or before close of business on 
March 16, 2011. Public hearings are scheduled for February 17 and 22, 
2011. See SUPPLEMENTARY INFORMATION below for further information about 
the public hearings.

ADDRESSES: Electronic comments will only be accepted through the 
designated public comment collection system accessible through the 
Commission's Draft Natural Gas Development Regulations Web page: http://www.state.nj.us/drbc/notice_naturalgas-draftregs.htm. Printed 
comments may be submitted through the U.S. Mail to Natural Gas 
Regulations c/o Commission Secretary, DRBC, P.O. Box 7360, West 
Trenton, NJ 08628-0360; by private mail carrier to Natural Gas 
Regulations c/o Commission Secretary, DRBC, 25 State Police Drive, West 
Trenton, NJ 08628-0360; or at any of the three public hearings. See 
Supplemental Information below for further information about the 
location of the public hearings and how to file comments 
electronically.

FOR FURTHER INFORMATION CONTACT: The full text of the Draft Natural Gas 
Development Regulations was posted on December 9, 2010 on the 
Commission's Web site: http://www.state.nj.us/drbc/notice_naturalgas-draftregs.htm. Hard copies of these materials may be obtained at cost 
by contacting Ms. Paula Schmitt at 609-883-9500, ext. 224.

SUPPLEMENTARY INFORMATION: 
    Comment Process: Interested parties wishing to comment on the 
proposed Article 7 are encouraged to visit the Commission's Draft 
Natural Gas Development Regulations webpage: http://www.state.nj.us/drbc/notice_naturalgas-draftregs.htm. This Web page provides 
instructions on how to submit comments, a copy of the draft 
regulations, supporting documents and information about the public 
hearings and informational sessions, and access to the public comment 
collection system. The Commission will only accept comments received 
through the electronic comment collection system accessible through its 
Web page, during the public hearing or at the addresses listed above. 
Comment received through any other method, including email, fax and 
telephone, will not be considered or included in the record.
    Public Hearings: Three public hearings will be held. The hearings 
are tentatively scheduled for February 17, 2010 near the Commission 
office and February 22, 2011 in Wayne County, Pennsylvania and Sullivan 
County, New York. The exact times, locations, directions, and other 
details about these meetings will be posted on the Commission's Web 
page as they become available: http://www.state.nj.us/drbc/notice_naturalgas-draftregs.htm.
    Purpose, Authority and Scope: The Commission is proposing a new 
Article 7 of DRBC's Water Quality Regulations to protect the water 
resources of the Basin during the construction and operation of natural 
gas development projects. This Article applies to all natural gas 
development projects involving siting, construction or use of 
production, exploratory or other wells in the Basin regardless of the 
target geologic formation, and to water withdrawals, well pad and 
related activities and wastewater disposal activities comprising part 
of, associated with or serving such projects. The provisions of this 
Article rely on the state oil and gas regulatory programs of 
Pennsylvania and New York where separate administration by the 
Commission would result in unnecessary duplication. The Article 
supersedes the Executive Director's Determinations issued on May 19, 
2009, June 14, 2010 and July 23, 2010.
    This Article implements the statutory authority that the Basin 
states of Delaware, New Jersey, New York and Pennsylvania and the 
federal government granted to the Commission in the Delaware River 
Basin Compact and supplements the Commission's Comprehensive Plan with 
respect to natural gas development projects within the Basin. 
Commission regulations are one mechanism by which the Basin states and 
Federal government work together to manage water resources in an 
integrated manner for the benefit of all citizens of the Basin.
    Strategic Regulatory Framework: This Article's regulatory framework 
is divided into sections addressing water sources for natural gas 
development, well pad siting, and wastewater disposal. The Commission 
primarily relies on the oil and gas programs and the experienced agency 
staff of the state in which the natural gas well is located to manage 
well construction and operation.
    Water Sources for Uses Related to Natural Gas Well Development: 
Existing Commission regulations establish a program for regulating 
water withdrawals. These Commission requirements serve multiple water 
resources objectives including, among others, preserving river flows to 
protect in-stream living resources and downstream withdrawers, and 
ensuring adequate assimilative capacity for approved discharges. The 
Commission has in other regulations established thresholds for project 
review based on the thirty-day average volume of water withdrawals. 
Water withdrawals for natural gas development including high volume 
hydraulic fracturing may have substantial water quality impacts due to 
their high intermittent daily withdrawal volume. Consequently, this 
Article requires that water used for natural gas development projects 
must come from water sources that have been approved by the Commission 
for use for natural gas development. The requirements for approval are 
designed to protect minimum stream flows, provide a

[[Page 296]]

record of water transfers and otherwise ensure that water resources are 
not adversely affected. A streamlined approval process is provided that 
encourages the use of existing Commission-approved water sources to 
minimize the need to construct and operate new water sources. This 
Article permits water sources located within the physical boundaries of 
an approved Natural Gas Development Plan (``NGDP'') to be approved for 
uses within the NGDP. This Article also permits flowback and production 
waters, treated wastewater and mine drainage waters to be reused for 
natural gas development under specified conditions.
    Natural Gas Development Plan (``NGDP'') and Well Pad Siting 
Requirements: The severity of the risks to water resources from well 
pad construction and operation depends in large part on where the well 
pads are placed. Article 7 seeks to minimize impacts to water resources 
from natural gas development by establishing NGDP and well pad siting 
and planning requirements, including:
     Mandatory preparation of NGDP by sponsors of natural gas 
well pad projects who have total lease holdings in the Delaware River 
Basin of over 3,200 acres or intend to construct more than five natural 
gas well pads designed for any type of natural gas well.
     Identification, through the NGDP, of the project sponsor's 
foreseeable natural gas development in a defined geographic area. The 
NGDP requirement is designed to foster protection of water resources 
through broad scale lease area planning rather than limited site-by-
site decision making, thereby encouraging development only in areas 
most suitable for it and minimizing impact to sensitive water resource 
features. These plans identify geographic and hydrological constraints 
to natural gas development and identify measures to minimize those 
impacts.
     Restrictions regarding siting in flood hazard areas, on 
steep slopes, and areas that serve as critical habitat for federal or 
state designated threatened and endangered (T&E) species.
     Minimum setbacks from water bodies, wetlands, surface 
water supply intakes and water supply reservoirs at distances specified 
in the regulations, and from occupied homes, public buildings, public 
roads, public water supply wells, and domestic water supply wells as 
provided by regulations of the state in which the well pad is located.
     A requirement for pre- and post-project monitoring of 
surface and groundwater near well pads involving high volume 
hydraulically fractured wells, including a characterization of the 
hydrology, water chemistry and biological resources of surface waters 
and the water chemistry of ground waters.
     Requiring the monitoring, tracking, and reporting of water 
usage and wastewater treatment and disposal. All wastewaters must be 
transported to an approved treatment and disposal facilities.
    Well Construction and Operation Procedures: The Commission 
principally relies on the states' implementation of state laws, 
regulations and programs concerning construction and operation of 
natural gas wells, well pads, and appurtenant structures to satisfy the 
requirements of the Compact and the Commission's Comprehensive Plan. In 
this Article, the Commission is separately requiring that all non-
domestic wastewater be transferred to appropriate tanks for temporary 
storage on the well pad site or to a centralized wastewater storage 
facility and that fluids and drill cuttings from horizontal wellbores 
in the target formation be beneficially reused or disposed of at an 
appropriate waste facility.
    Wastewater Generated from Natural Gas Activities: Wastewater 
produced at natural gas well sites contains salts and other chemicals 
that present water treatment challenges. This Article provides that any 
wastewater treatment facility within the Basin may accept non-domestic 
wastewater from a natural gas development project only if the facility 
first obtains approval from the Commission in the form of a docket or 
modification of an existing docket.
    To obtain authorization, a project sponsor must submit a 
treatability study to demonstrate that acceptance of the non-domestic 
wastewater will not interfere with the facility's operations, and 
provide information to show that the facility's discharge will neither 
(a) cause primary and secondary Safe Drinking Water Act standards to be 
exceeded where surface water may be used as a public water supply, nor 
(b) violate zone-specific stream quality objectives and effluent 
limitations. This Article 7 includes a comprehensive tracking system 
designed to promote the proper disposal of wastewater from natural gas 
development projects.
    Approval by Rule (``ABR'') Procedures: Existing procedures for 
obtaining a Commission decision on a project application generally take 
6-9 months. This Article 7 provides for a streamlined process for 
natural gas development projects that demonstrate that they satisfy 
certain criteria. It provides Commission approval for these projects 
under an ``approval by rule'' process involving public notice, 
application to and approval by the Executive Director in a process that 
may take less than 30 days Eligible projects include (a) Bulk water 
sales for uses related to natural gas by holders of valid Commission 
approvals that can provide water within their current allocations; (b) 
well pad projects that conform to a Commission-approved Natural Gas 
Development Plan; (c) well pad projects that conform to specified 
restrictions and setback requirements; and (d) water supply projects 
involving the reuse of recovered flowback and production fluids as 
make-up water for hydraulically fracturing natural gas wells. In 
addition, projects that do not involve fracturing or that consist of 
well pads constructed exclusively for the development and operation of 
exploratory natural gas wells and that are expected to use no more than 
80,000 gallons or equivalent of hydraulic fracturing fluids (``low 
volume hydraulically fractured wells'') are eligible for an ABR if they 
comply with applicable state programs and Commission setbacks and 
requirements. Approval by rule is not available for projects located in 
National Park Management Areas or in the watersheds of the New York 
City Reservoirs.
    Financial Assurance Requirements: Financial assurance for the 
plugging, abandonment and restoration of natural gas wells and the 
remediation of any pollution from natural gas development activities is 
required in the amount of $125,000 per natural gas well. After well 
installation and hydraulic fracturing are complete, the Executive 
Director may approve a reduction in the amount of the financial 
assurance for individual wells if there is no evidence of harm to the 
water resources of the Basin and the project sponsor obtains a separate 
``excess'' insurance policy or other financial assurance instrument.

    Dated: December 23, 2010.
John F. Calkin,
Attorney, Delaware River Basin Commission.
[FR Doc. 2010-32981 Filed 1-3-11; 8:45 am]
BILLING CODE 6360-01-P
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