Rachael Seeley, Editor
Illinois is making progress toward a regulatory framework for hydraulic fracturing after the Illinois Department of Natural Resources (IDNR) released a second set of draft rules for the well stimulation process in late August.
However, the release of the rules generated controversy, with both environmental and industry groups expressing dissatisfaction.
The National Resources Defense Council (NRDC) was pleased that the rules incorporated some of the group's suggestions but called for more restrictions on open-air reserve pits for waste water, higher administrative fines, and easier access for doctors to information on chemicals deemed trade secrets.
Henry Henderson, director of the Midwest chapter of the NRDC, said: "IDNR seems to have listened to public concern and attempted to improve the draft rules. However, Illinois remains far from prepared to protect against the risks of fracing because more research is needed concerning its public health impacts and how best to mitigate them."
IDNR spent more than 1 year revising the rules after an initial draft proposal received more than 31,000 comments.
Included in IDNR draft rules released on Aug. 29 was a call for mandatory wellsite restoration, testing of area water wells and ponds, the removal of hydraulic fracturing fluids from open-air reserve pits within 7 days of their introduction, and the disclosure of chemicals deemed trade secrets to first responders in the event of a spill.
The draft rules also contained a requirement that any public hearing for a permit application be held within 30 miles of the county of the proposed wellsite.
The Joint Committee on Administrative Rules (JCAR), a bipartisan legislative oversight committee, has until Nov. 15 to accept, change, or block IDNR's proposed rules, with the possibility of a 45-day extension. The rules would be used to implement the Hydraulic Fracturing Regulatory Act, which was approved by the Illinois General Assembly and signed into law by Gov. Pat Quinn in June 2013.
The Hydraulic Fracturing Regulatory Act resulted from collaboration between environmental activists and industry representatives and produced what "what some describe as the toughest regulatory regime associated with oil and gas exploration in the country," William Anaya and Matthew Cohn, partners with the law practice Arnstein & Lehr LLP, wrote in a research note.
Criticism from industry
The Grow-IL Coalition, a group of business, labor, construction, transportation, and agricultural organizations that supports fracing in Illinois, said that the latest proposed rules would create more burdensome certification and drilling standards than the state law intended and could dissuade operators from applying for drilling permits.
"We spent 3 years of negotiation that resulted in carefully crafted law, and now it is extremely disappointing to see proposed rulemaking that changes the law and thoroughly circumvents the intent that was agreed upon by all parties including the business community, labor, agriculture, and mainstream environmental organizations," said Mark Denzler, vice-president and chief operating officer of the Illinois Manufacturers' Association, a member of the coalition.
Under the second set of draft rules, the Grow-IL Coalition said, a permit application could be denied if a landowner refused to allow the testing of private water wells and ponds near a proposed drillsite. "The negotiated law only requires the permit seeker to provide evidence that good faith efforts were made to gain access for the purposes of conducting tests," the coalition said in a release.
In comments sent to JCAR, the coalition also said the proposed rules "arbitrarily deleted the 'economic unreasonableness' standard for approving the use of flares and completion combustion devices in well completion and production operations," setting flaring standards so high that operators would be vulnerable to legal challenges.
Illinois production history
US Energy Information Administration (EIA) data show Illinois is not a major producing state. In May 2014, production totaled 24,100 b/d of oil and 68.5 MMcfd of gas.
According to IDNR, there are 32,100 oil and gas wells in Illinois, and the majority of production comes from stripper wells with average output of 1.5 b/d/well. Production is concentrated in the southern part of the state, in the Illinois basin.
A study published by the Illinois Chamber of Commerce Foundation in 2012 estimates that new gas production from shale in southern Illinois could create more than 45,000 jobs and $9 billion in economic investment.
Debate about shale development is linked to the potential of the Upper Devonian New Albany shale. EIA's 2011 Review of Emerging Resources US Shale Gas and Shale Oil Plays estimated that the formation holds 10.95 tcf of technically recoverable gas.
However, the New Albany shale remains in an early phase of exploration, and it is uncertain whether it will yield commercial production.
