Document ID: EPA-HQ-OW-2002-0068-0206
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2006-01-06T05:00Z

Storm
Water
Permitting
Storm
Water
Permitting
Oil
And
Gas
Operator
Concerns
Oil
And
Gas
Operator
Concerns

Impacts
of
Storm
Water
Permitting
on
Impacts
of
Storm
Water
Permitting
on
Operators
who
do
business
primarily
Operators
who
do
business
primarily
 
On
Privately
Owned
Lands
On
Privately
Owned
Lands
Lost
Leases
Lost
Leases
Lost
Access
to
Rigs
Lost
Access
to
Rigs
Compliance
Issues
Compliance
Issues
Lost
Production
and
Reserves
Lost
Production
and
Reserves
Oil
And
Gas
Operator
Concerns:

Oil
And
Gas
Operator
Concerns:


Leasing
Leasing
 
The
following
illustrates
leasing
complexities
along
The
following
illustrates
leasing
complexities
along
with
a
current
and
live
example
of
a
typical
with
a
current
and
live
example
of
a
typical
exploration
project:

exploration
project:
Complex
Leasing
Issues
 
Split
Estate
Complex
Leasing
Issues
 
Split
Estate
Mrs.
Barksdale
has
Mrs.
Barksdale
has

20
Grandchildren
20
Grandchildren

30
Great
30
Great­
grandchildren
grandchildren

55
G
55
G­
G­
grandchildren
grandchildren

19
G
19
G­
G­
G­
grandchildren
grandchildren
Numerous
individually
Numerous
individually
negotiated
leases
on
negotiated
leases
on
tracts
of
land
with
tracts
of
land
with
numerous
undivided
numerous
undivided
interest
owners
interest
owners
Small
Operator
Leasing
for
an
Exploration
Prospect
Small
Operator
Leasing
for
an
Exploration
Prospect
3
Year
Prospect
(
320
Acres)

3
Year
Prospect
(
320
Acres)


Leased
Leased

Partial
Leased
Partial
Leased

Held
by
Production
Held
by
Production
Tract
1
Lease
Program
Tract
1
Lease
Program
12
12
Leases
expire
by
6­
16­
06
Unless
prior
commencement
of
drilling
Tract
1
Continued
Tract
1
Continued
Researching
title
&
locating
heirs.
Leasing
for
Tract
1
has
taken
years.

(
Bottom
8
owners
are
heirs
of
the
estate
of
James
S.
who
were
located
from
cousin
Irene
living
in
Chicago.
Heirs
live
in
N
&
S
Carolina.
Now
attempting
to
lease.)
Tract
2
Lease
Program
Tract
2
Lease
Program

No
Will
(
Intestate)

No
Will
(
Intestate)


Heirs
Determined
by
Heirs
Determined
by
Probate
Court
(
3
Probate
Court
(
3­
5
Mos
Mos)

James
T.
died
intestate
(
James
T.
had
no
will).

Attempting
to
find
all
known
heirs.
Will
then
offer
leases.

May
need
to
go
through
court
for
receivership
(
3­
5
Mos)

(
If
permitting
delays
cause
receivership
leases
to
expire,

additional
court
proceedings
required)
Tracts
3­
a
&
3­
b
Lease
Program
Tracts
3­
a
&
3­
b
Lease
Program
°
Leases
on
Tracts
3a&
b
held
by
production
from
outside
operator.

°
To
obtain
this
kind
of
lease,
a
farmout
is
required.

°
Typical
farmouts
have
6
month
(
or
less)
drilling
requirements.

°
Company
approval
process
may
take
2­
5
months
or
longer.

°
Storm
Water
Permitting
delays
may
cause
loss
of
farmout.
All
Tracts
All
Tracts

Drill
site,
if
known,
is
kept
confidential
until
leasing
is
fina
Drill
site,
if
known,
is
kept
confidential
until
leasing
is
finalized
due
to
lized
due
to
 
Outside
competition
for
leases
Outside
competition
for
leases
 
Compromising
mineral
owner
negotiations
Compromising
mineral
owner
negotiations

Estimated
completion
of
leasing
close
to
6
Estimated
completion
of
leasing
close
to
6­
16
16­
06
expiration
date.

06
expiration
date.

NO
TIME
FOR
PERMITTING
DELAYS.

NO
TIME
FOR
PERMITTING
DELAYS.

 
Drilling
and
permitting
must
commence
after
Drilling
and
permitting
must
commence
after
leasing/

leasing/
farmouts
farmouts
acquired
and
prior
to
their
expiration
acquired
and
prior
to
their
expiration
.
Oil
And
Gas
Operator
Concerns:

Oil
And
Gas
Operator
Concerns:


Risk
Of
Losing
Leases
Risk
Of
Losing
Leases
 
Exploration
projects
have
numerous
individually
Exploration
projects
have
numerous
individually
negotiated
leases
with
short
timelines
that
may
easily
negotiated
leases
with
short
timelines
that
may
easily
be
derailed
by
delays
be
derailed
by
delays
 
If
leases
are
lost,
then
reserves
and
production
are
If
leases
are
lost,
then
reserves
and
production
are
lost
due
to
abandoned
exploration
project
lost
due
to
abandoned
exploration
project
 
Costs
Lost
Forever
Costs
Lost
Forever
­
geological,
seismic,
exploration,

geological,
seismic,
exploration,

engineering,
project
financing,
lease
acquisition,

engineering,
project
financing,
lease
acquisition,

title
work,
legal
work,
permitting,
and
title
work,
legal
work,
permitting,
and
environmental
work
environmental
work
Oil
And
Gas
Operator
Concerns:
(
con't)

Oil
And
Gas
Operator
Concerns:
(
con't)


Risk
Of
Losing
Rig
Risk
Of
Losing
Rig
 
Rig
will
commit
to
other
jobs
if
Operator
cannot
keep
Rig
will
commit
to
other
jobs
if
Operator
cannot
keep
on
schedule
on
schedule
 
once
the
rig
is
lost,
the
risk
of
losing
leases
and
once
the
rig
is
lost,
the
risk
of
losing
leases
and
abandoning
the
exploration
project
is
compounded
abandoning
the
exploration
project
is
compounded
 
4
to
6
months
to
acquire
or
re
4
to
6
months
to
acquire
or
re­
acquire
a
rig
acquire
a
rig
 
Rig
mobilization
costs
$
70,000
to
$
100,000
(
depending
Rig
mobilization
costs
$
70,000
to
$
100,000
(
depending
upon
rig
size)

upon
rig
size)

 
Drilling
is
required
after
final
lease
acquisition
and
Drilling
is
required
after
final
lease
acquisition
and
prior
to
lease
terminations
prior
to
lease
terminations
 
Lease
clauses
require
continuous
drilling
to
hold
Lease
clauses
require
continuous
drilling
to
hold
additional
acreage
(
60
additional
acreage
(
60
 
90
day)

90
day)
Oil
And
Gas
Operator
Concerns:
(
con't)

Oil
And
Gas
Operator
Concerns:
(
con't)

PROPOSED
STORM
WATER
PERMITTING
COMPLIANCE
PROPOSED
STORM
WATER
PERMITTING
COMPLIANCE
ISSUES
ISSUES
 
COMPLIANCE
ISSUES
FOR
ALL
OPERATORS
COMPLIANCE
ISSUES
FOR
ALL
OPERATORS
 
Timing
Timing
­
On
the
ground
compliance
cannot
begin
until
lease
On
the
ground
compliance
cannot
begin
until
lease
acquisition
is
finalized
due
to
confidentiality
concerns
acquisition
is
finalized
due
to
confidentiality
concerns
 
Substantial
delays
associated
with
proposed
permitting
process
Substantial
delays
associated
with
proposed
permitting
process
 
Leases
on
privately
owned
land
do
not
allow
for
permitting
delay
Leases
on
privately
owned
land
do
not
allow
for
permitting
delay
 
Need
for
user
friendly
guidelines
such
as
RAPPS
Need
for
user
friendly
guidelines
such
as
RAPPS
 
COMPLIANCE
ISSUES
FOR
ALL
OPERATORS,
BUT
COMPLIANCE
ISSUES
FOR
ALL
OPERATORS,
BUT
ESPECIALLY
SMALLER
OPERATORS
ESPECIALLY
SMALLER
OPERATORS
 
Storm
Water
Permitting
Costs
Storm
Water
Permitting
Costs
 
3rd
rd
party
consultants
party
consultants
 
COMPLIANCE
ISSUES
MAINLY
FOR
SMALLER
OPERATORS
COMPLIANCE
ISSUES
MAINLY
FOR
SMALLER
OPERATORS
 
Due
to
financial
constraints,
unable
to
compete
on
Federal
land
Due
to
financial
constraints,
unable
to
compete
on
Federal
land
 
Unlike
Federal
leases,
leases
on
privately
held
land
do
not
allo
Unlike
Federal
leases,
leases
on
privately
held
land
do
not
allow
for
permitting
delay
for
permitting
delay
Conclusion
Conclusion

Proposed
Storm
Water
permitting
requirements
will
cause
Proposed
Storm
Water
permitting
requirements
will
cause
delays,
lost
opportunities,
and
lost
production
delays,
lost
opportunities,
and
lost
production
°
Delays
cause
lost
leases
and
rigs
Delays
cause
lost
leases
and
rigs
°
Lost
leases
and
rigs
cause
abandoned
exploration
projects
Lost
leases
and
rigs
cause
abandoned
exploration
projects
°
Abandoned
exploration
projects
cause
lost
reserves
and
productio
Abandoned
exploration
projects
cause
lost
reserves
and
production
for
the
US
for
the
US

Lost
US
reserves
and
production
will
result
in:

Lost
US
reserves
and
production
will
result
in:

 
Lost
Jobs
Lost
Jobs
 
More
Imports
More
Imports
 
Larger
US
Trade
Imbalance
Larger
US
Trade
Imbalance
 
More
Energy
Dependency
on
Foreign
Countries
More
Energy
Dependency
on
Foreign
Countries
 
Higher
Consumer
Prices
Higher
Consumer
Prices
 
Less
Federal,
State,
and
Local
Tax
Revenue
Less
Federal,
State,
and
Local
Tax
Revenue
 
Less
Clean
Burning
Natural
Gas
(
87%
of
US
drilling
for
Less
Clean
Burning
Natural
Gas
(
87%
of
US
drilling
for
nat
nat.
gas)

.
gas)

Implementation
of
the
RAPPS
document
is
a
better
alternative
as
Implementation
of
the
RAPPS
document
is
a
better
alternative
as
compared
to
the
proposed
storm
water
permitting
requirements
compared
to
the
proposed
storm
water
permitting
requirements
 
RAPPS
is
user
friendly
&
addresses
storm
water
runoff
concerns
RAPPS
is
user
friendly
&
addresses
storm
water
runoff
concerns
 
RAPPS
avoids
delays
and
cost
impact
issues
RAPPS
avoids
delays
and
cost
impact
issues