Illinois Releases Proposed Hydraulic Fracturing Regulations

By on November 22, 2013

Nearly six months after passage of the much touted Illinois Hydraulic Fracturing Regulation Act (225 ILCS 732/1-1 et seq.) (the Act), the Illinois Department of Natural Resources (IDNR) issued proposed regulations implementing the Act (the HFRA Regulations) and scheduled two public hearings to receive public input (one in Chicago on November 26, 2013 and the second in Ina (downstate Illinois) on December 3, 2013).  In addition, the IDNR will accept written comments to the HFRA Regulations until January 3, 2014 (the IDNR has created an online public comment forum).

The HFR Regulations are subject to the Illinois Administrative Procedure Act’s (IAPA’s) two-step process.  The first step is to obtain public comment no less than 45 days after issuance of notice of the proposed rule in the Illinois Register, and the second step is to finalize the regulations upon a maximum of 45 days’ written notice to the Illinois Joint Committee on Administrative Rules (JCAR).  Critics of the Act have complained that the two  public hearings (with none in central Illinois) and the January 3, 2014 deadline for comments are inadequate.  Under the IAPA, the IDNR has until November 15, 2014 to issue final HFRA Regulations.

Substantively, critics, including environmental groups who originally supported the Act, have questioned several aspects of the HFRA Regulations including: (1) the process that a health professional must take, even in an emergency, to obtain information about hydraulic fracturing chemicals furnished to the IDNR under a claim of trade secret (Section 245.730); (2) what they perceive as a relaxation of the time in which hydraulic fracturing treatment flowback may be temporarily stored in open pits (Section 245.850); and (3) what they perceive as inadequate potential monetary penalties for administrative violations (starting at $50) and operating violations (starting at $100) (Section 245.1120).

The environmental groups are not the only critics of the HFRA Regulations.  The Illinois Oil and Gas Association, which has cast the state as hostile to the oil and gas exploration and production industry, has blamed the Act’s “onerous” nature on driving more than one E&P firm to abandon Illinois in favor of Indiana, which shares the New Albany Shale formation with Illinois and Kentucky.

The IDNR also issued proposed seismicity regulations for Class II Underground Injection Control (UIC) disposal wells that are intended to receive flowback from a high volume horizontal hydraulic fracturing well.  In order to receive a permit under the Act, the operator must identify an existing Class II UIC disposal well that will receive the flowback from the production well.  The proposed regulations implement the Act’s “traffic-light” seismicity reporting and enforcement authority, and add new injection recordkeeping requirements for permittees.

Before applying for a permit under the Act, an applicant must first be registered with the IDNR for at least 30 days.  So far, no firm has registered.  IDNR officials recently predicted that it will be at least a year until hydraulic fracturing begins in Illinois.




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