Houston, 4 June (Argus) — Illinois lawmakers passed a bill last week that sets the regulatory framework for oil and gas hydraulic fracturing in the state.
The Hydraulic Fracturing Regulation Act passed the Illinois Senate on 31 May, the last day of the state's legislative cycle. The Illinois Department of Natural Resources (DNR) will oversee regulations enacted by the bill, which is awaiting Illinois governor Pat Quinn's signature. Quinn is likely to sign the bill as he called for its passage in his 2013 budget address. A separate bill to ban hydraulic fracturing in the state failed to advance in the House of Representatives.
The legislation authorizes the DNR to regulate permitting, rules and safety concerns for all horizontal hydraulic fracturing operations. Illinois currently has 1,500 oil and gas operators with 32,100 oil and gas producing wells in the Illinois basin. The department issues about 800 drilling permits per year.
In an effort to ease transparency concerns, permit applications will be open to a 30-day public comment period. All applications must include the amount of water and chemical additives to be used.
Any company that requests to designate a hydraulic fracturing chemical as a trade secret will still have to submit a complete chemical disclosure to state regulators. An edited version will be available for public comment.
Prior to the legislation, companies were not required to disclose chemicals used in hydraulic fracturing operations.
In order to designate a chemical as a trade secret, companies will have to submit to the DNR a list of persons who know the chemical makeup of the additive, how the company has safeguarded the trade secret, proof that it is not public knowledge and a detailed report of what competitive value the chemical holds. The legislation allows for an appeal of whatever decision the DNR makes concerning trade secrets.
In the case of a spill, sickness or injury related to drilling, operators are required to release the chemicals used in drilling to health officials and any government department charged with spill cleanup.
A permit will be necessary for each well an operator drills, according to the legislation. The act also restricts companies from injecting diesel or petroleum distillates and from injecting any chemicals into fresh water.
Oil and gas operators that use hydraulic fracturing will be subject to defined setbacks — the distance a well must be from certain areas. Companies will not be able to drill closer than 500ft (152m) from a residence or place of worship. In addition, operators will have to drill at least 500ft from any school, nursing home, hospital, or existing water well.
Lawmakers designated larger setbacks for drilling that occurs near natural preserves and public water supplies. Wells will not be allowed closer than 750ft to a natural preserve or 1,500ft from a surface water or groundwater intake of a public water supply.
Setbacks can be waived if the owner of the property gives written agreement to the drilling.
Regulations will require oil and gas operators to take out at least a $5mn insurance policy to cover any injuries, damages or loss related to pollution created by drilling operations.
The Illinois Oil and Gas Act will supersede the bill and covers all other methods of drilling.
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