United Refining Co. v. Department of Environmental Protection

163 A.3d 1125, 2017 WL 2536417, 2017 Pa. Commw. LEXIS 353
CourtCommonwealth Court of Pennsylvania
DecidedJune 12, 2017
DocketUnited Refining Company v. DEP - 1321 C.D. 2016
StatusPublished
Cited by5 cases

This text of 163 A.3d 1125 (United Refining Co. v. Department of Environmental Protection) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Refining Co. v. Department of Environmental Protection, 163 A.3d 1125, 2017 WL 2536417, 2017 Pa. Commw. LEXIS 353 (Pa. Ct. App. 2017).

Opinions

OPINION BY

JUDGE BROBSON

Petitioner United Refining Company petitions for review of an order of the Environmental Hearing Board (Board), .dated July 7, 2016, which dismissed Petitioner’s appeal of an oil permit issued by Respondent Department of Environmental Protection (Department) to Intervenor John D. .Branch (Branch), Petitioner contends that the Board’s decision is not supported by substantial evidence and violates Pennsylvania environmental law and Article I, Section 27 of the Pennsylvania Constitution, commonly referred to as the Environ[1128]*1128mental Rights Amendment. We now affirm.

I. BACKGROUND

The following facts are undisputed based upon the parties’ stipulation of facts and the filings of record. Since 1902, Petitioner has owned and operated an 83-acre petroleum refinery in Warren, Pennsylvania (Property), which extends approximately 1.6 miles along the north shore of the Allegheny River. The subsurface below the Property includes the Warren 1st and Warren 2nd Sands, and the Glade and Clarendon Sands. The top of the Clarendon Sands is approximately 780 feet below the surface of the Property. Petitioner has constructed several aboveground storage tanks on the Property, including Tank 234 located on the northern portion of the Property. Tank 234 has the capacity to contain 3.6 million gallons of gasoline. Tank 234 has a steel floor, concrete ring wall, and an earthen dike designed to contain 110% of its contents. It sits on fill materials, soils, gravels, silt sands, and clays, and the bedrock is approximately 76 feet below the bottom of the tank. Petitioner inspects Tank 234 every four years, and it last inspected the tank in November 2014 and discovered no problems.

Since 1990, Petitioner has installed over 100 monitoring wells on the Property. Petitioner has never drilled an oil or natural gas well on the Property, although the Department’s records indicate that four oil or natural gas wells were previously drilled on the Property. In 2001, Petitioner discovered an oil plume below Tank 234, and the plume measured approximately 265 feet long by 180 feet wide at the time the parties entered into their stipulation. Petitioner has recovered in excess of 12,-500 gallons of oil from the plume. Petitioner has used crude oil at the Property but not in the area of Tank 234. There is no direct evidence of unplugged wells near or under Tank 234 or anywhere else on the Property, and Petitioner is unaware of any property damage, surface damage, or environmental harm caused by hydraulically fracturing wells in the Glade or Clarendon Sands in Warren, Pennsylvania.

Branch has been in the oil and gas business for 31 years and in the drilling business for 15 years. He has drilled approximately 60 oil and gas wells within the City of Warren, Pennsylvania. On September 16, 2014, Branch submitted a permit application to the Department for authorization to drill an oil well—Well 61—in Warren, Pennsylvania. Pursuant to the application, Branch planned to drill Well 61 on a slant, with the top-hole location across the street from the Property and the bottom-hole location under the Property. At the time Branch submitted the permit application, he also submitted five other permit applications for wells located near the Property. Prior to the Department’s approval of the permit for Well 61, Branch met with representatives of Petitioner to tour the plant and discuss his proposed drilling plans under the Property.

On October 24, 2014, Petitioner expressed concerns to the Department regarding Branch’s proposed Well 61 and other proposed wells closest to Tank 234, including a concern that fracking pressures could reach historic wells and be released through unplugged wells to the surface. On November 5, 2014, Branch responded to the Department regarding Petitioner’s concerns. In so doing, Branch informed the Department that it was his opinion that any wells in the area that were not plugged with cement would likely already have been plugged naturally, as there is anywhere from 55 feet to 95 feet of gravel in the valley of Warren. To avoid risks in response to Petitioner’s concerns, Branch stated that he would not frack in [1129]*1129the Warren 1st or Warren 2nd formations and that he would utilize conductivity and video logs when he drilled the new wells and would avoid hydraulically fracturing in the vicinity of zones indicated by these logs as having excessive water. Branch stated that he and his team would closely watch the pressure gauges when hydraulically fracturing and, if the gauges indicated connection with another well, would cease operations immediately. Finally, Branch advised the Department that he would conduct hydraulic fracturing with smaller amounts of sand and water to control the length of the fractures. Branch also altered the proposed termination point of Well 61, so as to avoid the vicinity of the oil plume below Tank 234.

The Department issued permits for the six wells on November 12, 2014, including the permit for Well 61.1 One of the special conditions for the permits was that frack-ing operations would not be conducted in the Warren 1st or Warren 2nd formations. Thereafter, Petitioner appealed the issu-ances of the permits to the Board, identifying its concern that energy released by Branch’s fracking could be conveyed through an unplugged well and result in damage to Petitioner and the surrounding community, including potentially a large-scale fire or explosion, as well as a release of oil into the water of the Commonwealth.

The Honorable Thomas W. Renwand, Chief Judge and Chairman of the Board, conducted a hearing at which the parties presented their stipulation of facts and the testimony of Timothy Ruth (Ruth), a geologist and employee of Petitioner; Craig Lobins (Lobins), a professional geologist who is employed by the Department as the Northwest District Oil & Gas Manager; and Branch. Following the hearing, the Board issued an adjudication, dated July 7, 2016, dismissing the appeal relating to Well 61 and upholding the permit issued by the Department for Well 61.

In addition to findings based upon the facts summarized above, the Board made findings based upon the testimony received during the hearing. For instance, with regard to the geology, the Board found that there are various layers of bedrock between 75 and 750 feet below the surface of the Property, and that fracking would take place at various depths between 750 and 850 feet below the Property. Well 61 would be located a little less than 300 feet from Tank 234, the distance between Tank 234 and where the hydraulic fracturing would occur in Well 61 is approximately 300 to 360 feet, and the fractures would travel 150 feet horizontally and would be 600 to 800 feet below the surface of the Property. With regard to the oil plume, the Board found that it consists of multiple components and is likely from multiple sources.

With regard to the testimony of Lobins, presented on behalf of the Department, the Board found that Lobins was very familiar with conventional well drilling and instances where conventional wells tracked into abandoned oil and gas wells. Lobins issued the permit for Well 61, was aware that Branch planned to use a slant drilling technique, and had no problem with the use of that technique. Furthermore, Lo-bins testified that the fracking of Well 61 would break away from Tank 234 and would be too far underground to impact Tank 234, the plume, or the Property.

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163 A.3d 1125, 2017 WL 2536417, 2017 Pa. Commw. LEXIS 353, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-refining-co-v-department-of-environmental-protection-pacommwct-2017.