After a six-year-long wait, Penneco Environmental Solutions LLC, a Pittsburgh-based oil and gas wastewater disposal service, has been approved by the Pennsylvania Department of Environmental Protection to convert an aged gas well into an injection well in Plum Borough, Pa. The injection well caused controversy among borough officials and residents from the initial phases of proposal, eventually leading to legal action, but has now checked all necessary boxes to begin operations. However, the uncertainty of the post-COVID gas industry has Penneco rethinking whether to follow through on its plan.
For Penneco, not pursuing the intended project would come as a hard blow after an extensive battle with the borough. Initially, Plum rejected Penneco’s proposal because it did not allow for such activity in any zoning district, and due to Penneco’s lack of permits from the DEP and federal EPA for such a project.
Underground injection wells are one method of storing wastewater from natural gas well fracking, which contains brines, contaminants, and carcinogens. The product is pumped back into the earth, where it is deposited into reservoirs. These types of wells are often controversial, as there is research indicating that they may negatively affect groundwater quality and cause unintended seismic activity in the area near the well. These are also the key concerns for Plum and many residents who protested the injection well. After investigation, DEP determined that though Penneco must monitor water quality and seismic activity, the well would not be deep enough to trigger the seismic shocks seen in other injection wells across the country.
Penneco appealed the rejection to Plum’s Zoning Hearing Board (ZHB), arguing that state and federal law preempts zoning regulation of an injection well, and that it had applied for the necessary permits. The board ultimately rejected the appeal. Penneco then appealed to Commonwealth Court, which ruled in its favor by holding that municipal governments cannot require permits from outside agencies such as the DEP or EPA before zoning approval, but can approve projects with the condition that all necessary permits are obtained before any operations begin. Last month, Penneco was granted an underground injection well permit from the DEP, the final hurdle before operations could begin.
The coronavirus is causing companies like Penneco to reevaluate their business plans. In a statement to NPR’s State Impact, Penneco’s COO Ben Wallace noted that they as a company are assessing “the impact of the current economic situation on the oil and gas industry”. As a result, Penneco has halted any operations on the injection well in Plum until it is determined that it would even be needed by the oil and gas industry once the nation reopens and the fallout of the pandemic begins to settle.
Many other ancillary businesses of the oil and gas industry, and the industry as a whole will likely put major projects on hold until the economy is less volatile and more stable.