After expiring in the previous legislative session, a bill looking to protect small oil producers from state regulations targeting larger Marcellus Shale drillers has been reintroduced, clearing initial hurdles Wednesday on its way to being back before the state Senate.
Senate Bill 279, introduced by Sen. Scott Hutchinson, R-Oil City, sailed through the Senate Environmental Resources and Energy Committee on Wednesday, months after failing to clear the House as Senate Bill 1310 by a Nov. 30 deadline.
“The conventional oil industry is an important part of the regional economy in northwestern Pennsylvania — an economy that is already struggling,” said Hutchinson. “It cannot afford to be stymied by excessive and unnecessary regulatory burdens.”
The bill, now headed back to the full Senate for consideration, is heralded by “mom and pop” drillers as necessary to protecting jobs and bottom lines.
They believe it starts with the bill’s creation of a Penn Grade Crude Development Advisory Council — a group of area oil interests appointed by the governor to advise state policymakers on industry needs.
These include the creation of new, separate rules for smaller oil producers and their Marcellus Shale counterparts, something the smaller producers lobbied for extensively, calling it crucial to their survival.
Mark Cline of Cline Oil in Bradford was one of them.
He continues to argue that generational shallow well or conventional producers, like himself, have been unfairly lumped-in with state efforts to regulate drilling in the Shale gas boom-era, as new, even tougher laws are eyed.
Cline describes Marcellus Shale, or deep-well production, as larger-scale than his, and the companies or corporations behind it as better-able to afford complying with tougher mandates.
For his part, Rep. Matthew Baker, R-Wellsboro, explained it thusly: “Some regulations may be too burdensome and expensive on the conventional well companies given the significant difference and depth they have as compared to non-conventional Marcellus and Utica wells.”
Cline promised to press the issue if the bill succeeds and he is named to the Penn Grade Crude Development Advisory Council. He remains a possible candidate along with representatives from American Refining Group (ARG); the Bradford-based Pennsylvania Independent Petroleum Producers (PIPP); and Warren’s Penn Grade Crude Oil Coalition.
“We’ll have a first-ever say in what regulations will be adopted and it only makes sense, we know our business better than anyone,” Cline said. He added the input is needed now more than ever, as state regulators work to separate conventional and unconventional drilling rules while tackling ongoing rewrites of Chapter 78 of the Oil and Gas Act.
Cline is joined by lawmakers like Rep. Martin Causer, R-Turtlepoint, in calling Wednesday’s committee passage of Senate Bill 279, welcome and “long overdue.”
“This is something we’ve got to get done and get done soon,” Causer said.
While legislation was passed last year requiring the state Department of Environmental Protection (DEP) to craft separate rules for conventional and unconventional producers, Causer said Senate Bill 279 “takes it one step further in creating a council or board to continually advise the DEP on these issues.”
Hutchinson agrees, saying, “The council created under my bill would work with the DEP to ensure that the differences between the operations are taken into account as these regulations and laws are developed and implemented.”
It is not yet known what impact, if any, a new Democratic governor might have on the process.