July 30, 2019The Journal Record |
OKLAHOMA CITY – A handful of Oklahoma Corporation Commission rule changes affecting the oil and gas industry go into effect Thursday.
Revisions to oil and gas conservation rules include the installment of a physical boundary around underground gas storage reservoirs, tightening requirements for operations on land with hydrogen sulfide and requiring oil and gas operators to notify other operations within 1 mile of their activity.
Bud Ground, director of regulatory affairs for The Petroleum Alliance of Oklahoma, said drilling into underground storage reservoirs is not a persistent problem, but the changes update an old rule that didn’t account for the growing use of horizontal drilling.
“(The rule) made some significant changes to help the people in gas storage and to help the people who want to drill around it,” Ground said. “That was very much needed.”
Revisions to rules of practice include a requirement for a separate permit application for each horizontal drilling project, instead of one permit for each well pad. Before, a company could apply for a permit once and drill multiple wells on a pad, Ground said.
“You like to get it all done at once. Now you won’t be able to,” Ground said. “You don’t drill them all at one time, you drill them sequentially. It’s really a time issue. They’ll submit an application, then submit another and submit another.”
Also beginning Aug. 1, protesters must file a notice of protest with the county clerk’s office. The filing requirement for protesters will help operators by reducing the number of invalid protests that slow down projects.
“That’s what we’re trying to get around,” Ground said. “The only people that protest actually have a valid protest. They’re not doing it just to delay.”
The wind power industry will also be affected by the new rules, which establish an annual fee of $2,000 for each wind facility and a one-time $5,000 processing fee for initial intent-to-build notifications.
Advanced Power Alliance Vice President Mark Yates said the fees will cover the cost of the OCC implementing a new law preventing wind farms from encroaching upon military training routes.
“This was a collaborative effort. … The industry was very receptive (to the fees). We brokered this fee structure during session,” Yates said.
OCC spokesman Matt Skinner said the commission holds technical conferences and meetings are held throughout the rule-making process.
“All rule-making involves input from all stakeholders. That ranges, of course from industry to the general public,” Skinner said. “The bottom line is that the staff, in developing rules, tries to work as closely as possible with stakeholders.”
Ground said the Petroleum Alliance worked closely with regulators as the new rules were developed.
“The commission was very good to work with us to make sure we could comply and we could live with the rules,” Ground said.