PITTSBURGH (TNS) — Pennsylvania regulators have backed off some of their most far-reaching demands for Equitrans Corp. following the company’s massive gas storage well leak in Cambria County last year.

The Pennsylvania Department of Environmental Protection, which promised a “top to bottom review” of the state’s sizable natural gas storage industry, beginning with Canonsburg-based Equitrans, has withdrawn an order it issued Dec. 8. The document required, among other things, an audit of all Equitrans storage wells and fields in Pennsylvania and a plan to fix or plug wells that don’t comply with state standards.

Equitrans, which took nearly a month to appeal the order and two others dealing with environmental pollution and cleanup, argued that the DEP was overstepping its authority. The integrity of its storage fields is already regulated by the federal Pipeline and Hazardous Materials Safety Administration and the Federal Energy Regulatory Commission, the company said.

Earlier this month, the DEP yielded, saying it had issued the order believing that the Rager Mountain storage field in Cambria County was an intrastate, rather than an interstate, facility.

But nine other Equitrans storage fields are also listed as interstate facilities, as are dozens of others belonging to other operators, possibly limiting the scope of the DEP’s effort to overhaul gas storage oversight.

Pennsylvania’s gas storage industry is one of the nation’s largest, with nearly 50 fields and more than 1,770 wells.

Southwestern Pennsylvania has a concentration of these facilities. Many of them have wells that were drilled to produce oil and gas decades ago. When the fuel ran dry, they were converted into storage reservoirs, the wells repurposed for injecting and withdrawing gas and observing conditions underground.

In the weeks following the Equitrans leak at Rager Mountain, Kurt Klapkowski, acting deputy secretary at the office of oil and gas management with the DEP, said he was eager to reach out to gas storage operators and begin a deep dive into the industry that likely would result in new regulations.

In an interview with the Post-Gazette in mid-December, Mr. Klapkowski said the agency would entertain “having more of a prescriptive approach” to gas storage regulations. Such an approach would outline steps companies must take, as opposed to a risk-management approach, which gives operators the desired outcome but leaves “the how” up to them.

”One of the directives that we’ve been given from the secretary and the governor’s office is to take a hard look at this program from top to bottom — not just enforcement and inspection but other (areas),” he said, vowing the department would be “thoughtful” but “move expeditiously.”

Last month, at a meeting of the Oil and Gas Technical Advisory Board, Mr. Klapkowski said he was prepared to talk about the “things we learned from this disaster,” but that he’d been advised by the agency’s attorneys to stay mum until a settlement with Equitrans over the compliance orders was in place. He indicated a resolution would be imminent, after which he could discuss the agency’s thinking about its gas storage oversight.

”We’ve been doing some significant internal review,” he said on March 13. “Watch this space for development.”

A TWO-TIER PROBLEM

Equitrans’ George L. Reade 1 well began releasing gas around Nov. 6. It vented with pressure so high that the roar could be heard from homes throughout the rural area. Neighbors described it as sounding like a jet engine.

Equitrans’ contractors worked for nearly two weeks to bring the well under control, dumping heavy brine into the annulus to push back against the pressure. When attempts failed, brine spewed out of the well. The effort succeeded on Nov. 19, and the following day the company poured cement down the well to seal it.

A record 1.2 billion cubic feet of gas escaped into the air, and the DEP was left with a two-tiered problem.

One was on the surface and could be broadly summarized as erosion and sedimentation concerns: The ground was coated with brine, there was a previously unidentified wetland impacted by the incident, and nearby soil showed elevated conductivity readings from the brine.

Then there was the underground layer. While the cause of the blowout is still under investigation, regulators understood that the integrity of the storage wells and the field they plunge into is at the core of preventing something like this from happening again.

By mid-December, the DEP had issued three orders to Equitrans, along with notices of violations, and a subpoena for records. Equitrans, in turn, appealed all three, claiming, among other things, that the DEP was broadly overstepping its authority.

Not only did the DEP make unreasonable requests, Equitrans claimed — such as the production of a root cause report within seven days — its order is “preempted in whole or in part by the federal Natural Gas Act, the Pipeline Safety Act, and/or regulations or orders of the Pipeline and Hazardous Materials Safety Administration,” the company wrote in the appeal.

The objections, filed with the state Environmental Hearing Board, appeared a few days after the Pipeline and Hazardous Materials Safety Administration issued a proposed safety order to Equitrans, instructing the company to do some of the same things that the DEP order attempted to mandate.

Among those items: Conduct a construction and well integrity review of all wells in the Rager Mountain storage field, undergo a root cause analysis, and a create plan that must be approved by the agency before Equitrans could resume injecting gas into the facility.

In a settlement with the DEP that led the agency to withdraw one of its compliance orders, Equitrans agreed to forward the materials it submits to federal regulators to the state agency, which DEP spokeswoman Lauren Camarda said would free up the DEP “to focus its efforts on ongoing compliance concerns at the facility.” DEP inspectors have continued to issue violations in recent trips to the site.{p class=”krtText”}The DEP is still investigating the incident, she said, and “avenues for potential enforcement action” remain open.{p class=”krtText”}The federal order, which found that Equitrans may not have followed its own emergency response plan and didn’t review its up-to-date schematics of the well before attempting to stop the leak in Cambria County, doesn’t reach beyond Rager Mountain.{p class=”krtText”}It’s unclear where the DEP stands in its review of the state’s storage industry or which steps it is taking to strengthen oversight.{p class=”krtText”}Recently, the agency began asking storage field operators to send gate keys or codes to inspectors, so they can visit sites unannounced, Mr. Klapkowski said at a February meeting of the Pennsylvania Grade Crude Development Advisory Council.{p class=”krtText”}”The well control incident at Rager Mountain put environmental concerns related to storage fields into sharp focus,” Ms. Camarda said last week. “As such, DEP will continue to bring its regulatory authority in all relevant programs to protect the environment.”

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