No. 40716 (Amendment): Section R649-3-32. Reporting of Undesirable Events

(Amendment)

DAR File No.: 40716
Filed: 08/26/2016 01:10:20 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to establish standards for oil and gas companies to report the release of fluids or natural gas to the environment. The main reason for the change is to improve the readability of the rule with significant restructuring of the prior provisions plus update the standards for fluid and natural gas releases.

Summary of the rule or change:

This rule section establishes standards for oil and gas companies to report the release of fluids or natural gas to the environment. The significant changes include restructuring this section for improved readability, clarifying that the division shall be notified of major and minor reportable events as described, increasing the quantity standard for natural gas from a transportation facility since it pertains to multiple wells and is reported on another form, and lowering the quantity standard for fluid release reporting to five barrels which matches an adjacent state.

Statutory or constitutional authorization for this rule:

• Subsection 40-6-5(3)

Anticipated cost or savings to:

the state budget:

No material costs or savings are expected from this change to Section R649-3-32. The quantity standard changes will not have a material impact to the expenses of the division.

local governments:

Local government is not impacted by this rule change because oil and gas companies are the parties regulated by this rule.

small businesses:

Oil and gas production in 2015 resulted in 94% of the quantity from companies larger than a small business. For oil and gas wells drilled and completed in 2014 and 2015, 98% were operated by companies larger than a small business. Gas pipelines and processing facilities normally are not small businesses. Since the rule requires reporting unauthorized releases of fluids and natural gas via one phone call if a major event occurs and one subsequent written report if a major or minor release occurs, the impact of the rule change from a 10- to 5-barrel standard to small business is minimal, when considering they represent 2% to 6% of the total.

persons other than small businesses, businesses, or local governmental entities:

Parties other than small businesses, businesses, or local government are not impacted by this rule since the rule impacts oil and gas companies operating in Utah.

Compliance costs for affected persons:

Costs will decrease for gas transportation and processing facilities since major events will begin at 1,500 vs. 500 Mcf, thus eliminating a call to the division within 24 hours. One larger processing company will see a 17% reduction in major reportable events due to the 500 to 1,500 Mcf change. Alternatively, well operators will begin fluid release reportings between 5 and 10 barrels as a minor reportable event, only requiring a subsequent report of 7 questions. Based upon the number of fluid releases reported between 10 and 15 barrels, the increase in number of minor events is estimated at 9.5%. The trade associations support this change.

Comments by the department head on the fiscal impact the rule may have on businesses:

Companies who gather, transport, and process natural gas will have a reduced fiscal impact while the individual oil and gas well operators will encounter a small increase in reporting for minor fluid releases at wellsites. The restructuring of the rule will also bring improved clarity to the reporting standards, which is more efficient for all companies. The division has worked collaboratively with stakeholders and analyzed nearby state rules on this topic, and consequently, the industry associations and SITLA support this repeal and reenactment.

Michael Styler, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Natural Resources
Oil, Gas and Mining; Oil and GasRoom 1210
1594 W NORTH TEMPLE
SALT LAKE CITY, UT 84116-3154

Direct questions regarding this rule to:

• Steve Schneider at the above address, by phone at 801-538-5328, by FAX at 801-359-3940, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/17/2016

Interested persons may attend a public hearing regarding this rule:

• 09/28/2016 10:00 AM, Department of Natural Resources, 1594 W North Temple, Salt Lake City, UT

This rule may become effective on:

11/01/2016

Authorized by:

John Baza, Director

RULE TEXT

R649. Natural Resources; Oil, Gas and Mining; Oil and Gas.

R649-3. Drilling and Operating Practices.

[R649-3-32. Reporting of Undesirable Events.

1. The division shall be notified of all fires, leaks, breaks, spills, blowouts, and other undesirable events occurring at any oil or gas drilling, producing, or transportation facility, or at any injection or disposal facility.

2. Immediate notification shall be required for all major undesirable events as outlined in R649-3-32-5.

2.1. Immediate notification shall mean a verbal report submitted to the division as soon as practical but within a maximum of 24 hours after discovery of an undesirable event.

2.2. A complete written report of the incident shall also be submitted to the division within five days following the conclusion of an undesirable event.

2.3. The requirements for written reports are specified in R649-3-32-4.

3. Subsequent notification shall be required for all minor undesirable events as outlined in R649-3-32-6.

3.1. Subsequent notification shall mean a complete written report of the incident submitted to the division within five days following the conclusion of an undesirable event.

3.2. The requirements for written reports are specified in R649-3-32-4.

4. Complete written reports of undesirable events may be submitted on Form 9, Sundry Notice and Report on Wells. The report shall include:

4.1. The date and time of occurrence and, if immediate notification was required, the date and time the occurrence was reported to the Division.

4.2. The location where the incident occurred described by section, township, range, and county.

4.3. The specific nature and cause of the incident.

4.4. A description of the resultant damage.

4.5. The action taken, the length of time required for control or containment of the incident, and the length of time required for subsequent cleanup.

4.6. An estimate of the volumes discharged and the volumes not recovered.

4.7. The cause of death if any fatal injuries occurred.

5. Major undesirable events include the following:

5.1. Leaks, breaks or spills of oil, salt water or oil field wastes that result in the discharge of more than 100 barrels of liquid, that are not fully contained on location by a wall, berm, or dike.

5.2. Equipment failures or other accidents that result in the flaring, venting, or wasting of more than 500 Mcf of gas.

5.3. Any fire that consumes the volumes of liquid or gas specified in R649-3-32-5.1 and R649-3-32-5.2.

5.4. Any spill, venting, or fire, regardless of the volume involved, that occurs in a sensitive area stipulated on the approval notice of the initial APD for a well, e.g., parks, recreation sites, wildlife refuges, lakes, reservoirs, streams, urban or suburban areas.

5.5. Each accident that involves a fatal injury.

5.6. Each blowout, loss of control of a well.

6. Minor undesirable events include the following:

6.1. Leaks, breaks or spills or oil, salt water, or oil field wastes that result in the discharge of more than ten barrels of liquid and are not considered major events in R649-3-32-5.

6.2 Equipment failures or other accidents that result in the flaring, venting or wasting of more than 50 Mcf of gas and are not considered major events in R649-3-32-5.

6.3. Any fire that consumes the volumes of liquid or specified in R649-3-32-6.1 and R649-3-32-6.2.

6.4. Each accident involving a major or life-threatening injury.]

R649-3-32. Incident Reporting.

1. The division shall be notified of major and minor reportable events occurring at any oil or gas drilling, producing, transportation, gathering, or processing facility, or at any injection or disposal facility.

2. Major reportable events include the following:

2.1. Unauthorized release of more than 25 barrels of oil, salt water, oil field chemicals, or oil field wastes.

2.2. Unauthorized flaring, venting, or wasting of:

2.2.1. More than 500 Mcf of gas at any drilling or producing well site, or at any injection or disposal facility; or

2.2.2. More than 1500 Mcf of gas at any transportation, gathering, or processing facility.

2.3. Any fire that consumes the volumes of liquid or gas specified in R649-3-32-2.1 and R649-3-32-2.2.

2.4. Any spill, venting, or fire, regardless of the volume involved, that occurs in a sensitive area, e.g., parks, recreation sites, wildlife refuges, lakes, reservoirs, streams, urban or suburban areas.

2.5. Each accident that involves a fatal injury.

2.6. Each blowout, loss of control of a well.

2.7. Each release of gas containing 100 or more parts per million of hydrogen sulfide (H2S) that is not controlled.

3. Notification for all major reportable events will include:

3.1. A verbal report submitted to the division as soon as practical but within a maximum of 24 hours after discovery of a reportable event; and

3.2. A complete written report of the incident submitted on the Incident Report Form on the division website within five days following the conclusion of a reportable event.

4. Minor reportable events include the following:

4.1. Unauthorized release of more than five barrels and up to 25 barrels of oil, salt water, oil field chemicals, or oil field wastes.

4.2. Unauthorized flaring, venting or wasting of more than 50 Mcf and up to 500 Mcf of gas at any drilling or producing well site, or at any injection or disposal facility; or

4.3. Unauthorized venting or wasting of more than 50 Mcf and up to 1500 Mcf of gas at any transportation, gathering, or processing facility.

4.4. Any fire that consumes the volumes of liquid or gas specified in R649-3-32-4.1 and R649-3-32-4.2.

4.5. Each accident involving a major or life-threatening injury.

5. Notification for all minor reportable events will include a complete written report of the incident submitted on the Incident Report Form on the division website within five days following the conclusion of a reportable event.

6. Complete written reports of major and minor reportable events shall include:

6.1. The date and time of occurrence and, if immediate notification was required, the date and time the occurrence was reported to the division.

6.2. The location where the incident occurred, described by section, township, range, and county.

6.3. The specific nature and cause of the incident.

6.4. A description of the resultant damage.

6.5. The action taken, the length of time required for control or containment of the incident, and the length of time required for subsequent cleanup.

6.6. An estimate of the volumes discharged and the volumes not recovered.

6.7. The cause of death if any fatal injuries occurred.

6.8. Other information as required by the division's Incident Report Form.

 

KEY: oil and gas law

Date of Enactment or Last Substantive Amendment: [February 26, 2015]2016

Notice of Continuation: February 3, 2012

Authorizing, and Implemented or Interpreted Law: 40-6-1 et seq.; 40-6-5; 40-6-20; 40-6-21

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