1. Water Quality Rulemaking in Response to S.L. 2012-143

2. Background - Location
From Reid and Milici “Hydrocarbon Source Rocks in the Deep River and Dan River Triassic Basins, North Carolina”

3. Technically Recoverable Undiscovered Unconventional Resources
Background - Volume
Technically Recoverable Undiscovered Unconventional Resources
Assessment Unit
Natural Gas
(mean, BCFG)
Natural Gas Liquids (mean, MMBNGL)
NC Triassic Basins1
1,709 83
Marcellus Shale
(PA, NY, WVa, OH)2
84,198
3,379
Barnett Shale (TX)3
26,228
1,049
Sources:
(1) USGS Fact Sheet
(2) USGS Fact Sheet
BCFG: billion cubic feet of gas
(3) USGS Fact Sheet
MMBNGL: million barrels of natural gas liquids

4. Major Provisions of S.L. 2012-143
Creates Mining & Energy Commission
Authorizes hydraulic fracturing and horizontal drilling
Prohibits issuance of drilling permits until legislature acts
Updates statutory regulations of oil & gas activities
Directs EMC, Commission for Public Health, and Mining & Energy Commission to adopt necessary rules by October 1,

5. Mining & Energy Commission Rulemaking Responsibilities
Drilling permit application requirements
Baseline sampling rules
Oil and gas well construction standards
Siting standards for oil & gas wells and other production infrastructure
Limits on water use and establishment of water management plans
Management of wastes (onsite)

6. Mining & Energy Commission Rulemaking Responsibilities (cont’d)
Prohibitions on use of certain chemicals
Disclosure of chemicals used
Blowout and spill prevention and response
Well closure and site reclamation

7. EMC Rulemaking Responsibilities
Stormwater control for oil & gas exploration and development sites;
Regulation of toxic air emissions from drilling operations;
“…matters within its jurisdiction that allow for and regulate horizontal drilling and hydraulic fracturing for the purpose of oil and gas exploration and development.”

8. Water Quality Rule Development Process for SL 2012-143
May 2012 DENR Study Report Staff review of all EMC water quality rules Staff level coordination with DEMLR staff & MEC members Rules presented to MEC Oil & Gas Stakeholder Group Participation in MEC Coordinated Permitting Study Group Presentation to MEC’s November 2013 meeting March 2014 EMC Water Quality Committee review & action
Tentative EMC Information Item - November 2013

9. Recommended EMC Water Quality Rule Revisions
Adopt:
15A NCAC 2H – New Stormwater rule
Amend:
15A NCAC 2T – Wastes not discharged to surface waters
2T – Permitting by Regulation
2T – Closed-loop recycle
2T – Soil Remediation
15A NCAC 2U – Reclaimed Water
2U Permitting by Regulation
Tentative EMC Information Item - November 2013

10. Stormwater
Oil & Gas operations exempt from federal NPDES stormwater requirements until after a release or water quality standard violation
State stormwater regulations recommended by STRONGER and DENR study; required by SL

11. Stormwater Stormwater discharges and major pollutant concerns:
Initial grading – sediment
Initial drilling – sediment, trace hydrocarbons, brines
Production, stimulation, and maintenance – sediment, peak flow, brines, residuals

12. Stormwater

13. Stormwater & Spills

15. New Stormwater Rule (15A NCAC 2H .1030)
Site stabilization: similar to the current NPDES Construction Stormwater permit elements
Structural BMPs: extend existing rules in 15A NCAC 2H

16. New Stormwater Rule (15A NCAC 2H .1030)
Design Rainfall criteria:
Control and treat runoff from the 1” rainfall OR
Control and treat the difference in pre- and post- development runoff for the 90th percentile storm

17. Non-Discharge Rule Amendments (15A NCAC 2T)
2T – Permitting by Regulation
On-site disposal of drilling muds, cuttings and produced water should not be permitted by rule

18. Non-Discharge Rule Amendments (15A NCAC 2T)
2T – Closed-loop recycle
Clarify that reuse of flowback water or drilling fluids is not a “closed-loop recycle system”
2T – Soil Remediation
Clarify that soil remediation permits are not appropriate for spreading of oil and gas drilling muds and cuttings

19. Reclaimed Water Rule Amendments (15A NCAC 2U)
2U – Permitting by Regulation
Reuse of flowback water in oil and gas operations should be permitted by rule under conditions approved by DEMLR

20. Executive Orders, Certifications & Fiscal Notes
No fiscal note required
OSBM certification per G.S. 150B-19.1(h) required to publish in register (pending)

21. Rulemaking Targets
EMC Action - send rules to public comment: May 8, 2014
NC Register filing deadline: May 9, 2014
Start of Comment period: June 2, 2014
Public Hearing: July 1, 2014, (Sanford - Wicker Center)
End Comment period: August 1, 2014
Adoption: by October 1, 2014

22. For More Information
Evan Kane, Groundwater Planning & Environmental Review Branch Supervisor Division of Water Resources Jon Risgaard, Non-Discharge Unit Supervisor Ken Pickle, Stormwater Program Engineer Division of Energy, Mineral, and Land Resources