Pennsylvania Oil and Gas Production Public Reporting Application

Pennsylvania Oil and Gas Production Public Reporting Application Commonwealth of Pennsylvania Department of Environmental Protection Digital Government: Government to Citizen (G2C) Nominator Jim Knudson, Chief Information Officer PA Department of Environmental Protection Rachel Carson State Office Building 3rd Floor 400 Market Street Harrisburg, PA 17101 1

B. Executive Summary Natural gas exploration in the Marcellus Shale formation in Pennsylvania has attracted national and international attention as the largest potential natural gas field in U.S. history. Pennsylvania has issued more than 3,000 new Marcellus well permits in each of the past three years. The rapid growth of the Marcellus Shale industry and the projected gas production over the next few decades makes it critical that gas companies utilize best practices in their exploration and well development activities and safely transport the natural gas from the wellheads to market. With sole regulatory authority over the burgeoning Marcellus Shale exploration industry, the Pennsylvania Department of Environmental Protection (PADEP) is responsible for enforcing regulations to ensure this developing green energy industry adheres to safe and environmentally conscious practices. In 2010, Pennsylvania enacted a law requiring oil and gas companies (operators) to report production data to PADEP every six months and for PADEP to post that information on its website. The bill also repealed a confidentiality requirement that prevented production data from being released to the public for a period of five years. Prior to this, operators reported production data to PADEP on an annual basis, and most operators did so using paper forms. In order to fulfill the requirements of the legislation, PADEP required the operators to start reporting gas production and drilling waste information electronically. For the initial 12-month electronic reporting period, 4,064 active Marcellus permits were reported, indicating a total of 851 producing wells. The ability to leverage technology to provide greater transparency into agency operations is a core mission of PADEP s Bureau of Information Technology (BIT). Complete, accurate and up-to-date data on Marcellus activities is critical to proactive decision making by PADEP and informing the public. Operators can also now access production data from their competitors to identify areas with high production yields, helping to promote industry growth and stimulate Pennsylvania s economy. In order to meet the requirements of the new law, staff from PADEP s BIT and Bureau of Oil and Gas Management (BOGM) internally developed the Pennsylvania Oil and Gas web-based production applications. The production data collection portal was launched in July 2010 and the public reporting application was launched in October 2010, allowing all interested parties to access the electronically reported Marcellus production information online. The production public reporting application provides interactive reporting capabilities on wells by county, operator and waste treatment facility. Formatted reports, raw data downloads and interactive maps provide statewide information for production and waste data for individual wells for each reporting period and are available at: www.paoilandgasreporting.state.pa.us/publicreports. 2

C. Description of the Business Problem and Solution Exploration of the Marcellus Shale formation is fueling an economic boom in Pennsylvania, the likes of which has not been seen in many years. In April 2010, Senate Bill 297 was signed into law, requiring PADEP to collect production information from oil and gas operators drilling into the Marcellus Shale formation in Pennsylvania. Located approximately 5,000 to 8,000 feet underground, this rock formation is believed to hold trillions of cubic feet of natural gas. The law requires Marcellus operators to submit production data every six months and PADEP to publish production data in the most well-specific basis on its website. The oil and gas industry has proven to be a critical component in revitalizing Pennsylvania s economy through new job opportunities and increased revenues for the state, which faces a projected $4 billion deficit in the 2011-2012 fiscal year. However, the first priority of PADEP must be to ensure that natural gas exploration, production and transmission is done in a safe and environmentally conscious manner in accordance with existing regulations. The constituent groups for the new PA Oil and Gas Production applications are very broad, particularly for the Marcellus exploration activities. Landowners who lease their land to exploration companies are interested in production amounts in order to calculate potential royalties. Operators, investors and local businesses are seeking opportunities to capitalize on the industrial resurgence in Pennsylvania. Environmental groups are concerned about the immediate and long-term potential impacts on air, land and water quality and local governments seek to mitigate the impacts to public infrastructure caused by major increases in heavy truck traffic. Regulatory agencies like PADEP are working to ensure that oil and gas exploration and hydraulic fracturing operations used for Marcellus wells are being conducted in an environmentally sensitive manner. The purpose of the 2010 legislation was to enable access by all constituents to the oil and gas production information, to level the playing field across exploration companies, and to provide current and quality information and transparency related to Marcellus exploration in the commonwealth. PADEP had tracked the bill, which originated in the previous year s legislative session, and had previously estimated that it would cost $1 million dollars and require 12-18 months to implement the two new applications. The BOGM and BIT coordinated with the commonwealth s CIO, the Department of Conservation and Natural Resources (DCNR) and other state agencies to ensure that the commonwealth could rise to the challenge to meet a legislated six-month timeline and develop two new Internet applications. The first decision was an easy one the only way to collect and publish Marcellus well production and waste information in the timeframe required by the legislation would be to receive all of it electronically. Upon signing in April 2009, the bill directed PADEP to collect twelve months of Marcellus production information for the first reporting period by August 15, 2010 and to continue collecting production data on a six month cycle going forward. The legislation also required PADEP to publish the first year of collected production data by November 1, 2010. This meant that PADEP had a total of four months to collect the information and six and a half months to publish it. Previously, 30 percent of the annual data received was manually entered into DCNR s Wells Information System (WIS) from 3

paper forms received by PADEP from the majority of small operators, which often required up to a year to complete. PADEP had many challenges to meet in order to develop the new Internet applications. First, PADEP had previously collected oil and gas production information once a year. In addition, the data systems that held all of the historical oil and gas production information were retained in a sister agency, DCNR. BIT typically averaged 18 months to develop a new Internet application. Consequenty, the prospect of creating two dependent Internet applications in a third of the time was a daunting task. When the online data collection period opened on July 30, 2010, the new production data collection portal worked flawlessly and allowed operators to enter their production information and to update their well inventory information online. PADEP successfully collected electronic information for more than 4,000 Marcellus well permits for the first 12-month reporting period. After the data collection, PADEP s focus quickly turned to the challenge of building an interactive Internet reporting application to provide Marcellus well production and waste data in an easily understandable and useful format for the public. Previously, only static, county-level, summary annual production statistics had been published on PADEP s website; well-specific oil and gas production and waste data had never been made public in Pennsylvania before due to the confidentiality requirement. Since waste data was also collected, PADEP decided to publish that information also, even though it was not required by the legislation. The design and construction activities of the public reporting application took into consideration all of the constituent groups and stakeholders. PADEP wanted to make the production and waste data easily accessible and simple to understand, allow each identified constituent group to utilize the website and data to satisfy their individual interests and provide multiple access methods and data products to facilitate these goals. The project team started by identifying the types of queries that would be required for each group to find the wells they were most interested in. The three primary reports display production information, waste information and the waste products and amounts transported to waste treatment/disposal facilities. Together, these reports show how much gas was produced by each well, as well as the waste created by that well and the facility to which each waste product was transported. In addition, a report that displays all historic waste and production information for a specific well and a report displaying operator contact information were also created. Once the constituents and different reporting needs were identified, PADEP worked on the data model necessary to support the reporting requirements and designed the database to house and report on current and historical oil and gas production and waste data. PADEP decided to capitalize on the change in confidentiality to publish not only the production and waste data from the initial 12-month Marcellus reporting period, but also the previous 10 years of the statewide annual oil and gas production data. BIT s database team undertook a major effort and migrated the newly collected production and waste data for the Marcellus wells and converted the ten years of historical annual production data from DCNR s WIS application. 4

BOGM expected that hundreds of thousands of individuals would access the public reporting application on a regular basis, so PADEP implemented two virtual servers to run the public reporting web application simultaneously in order to maximize availability and to double the application s reporting capabilities. The application was built using VB.NET and ASP.NET, with an Oracle database backend, and utilizing Microsoft SQL Server Reporting Services (SSRS) to produce formatted reports in Adobe PDF file format. An Oracle 11g database was chosen to support the public reporting application based on the ability to tune the database and pin the data in memory on the database server in order to make the application performance as fast as possible. Load testing was performed using Microsoft Visual Studio 2010 to ensure that the new application would support a very large number of concurrent users. Approximately 20 PADEP staff and contractors were involved in the project over the six month period. Conversations among BOGM, BIT, and PADEP executive management determined that providing the raw production and waste data directly to interested parties would be an effective way to address many of the constituent needs. This also reduced the expected application load and resulted in fewer requests to the department for production and waste information. Statewide data files for waste and production data were generated in Comma Separated Value (CSV) format and as formatted reports in Adobe PDF format by SSRS. In addition to providing this capability for the statewide data, all other search criteria and resulting recordsets in the interactive reporting application can be saved locally by the user as CSV files or as formatted Adobe PDF reports. The online interactive application also provides multiple methods to query specific information. Users can query waste and production data by operator, county or by waste facility, and can choose to include or filter out non-producing wells. Detailed online help files and a data dictionary assist users in understanding how to interpret each data field displayed in the application, as well as providing contextual help for each user interface. D. Significance to the Improvement of the Operation of Government PADEP brought the electronic data collection system that DCNR had supported for the department for the past ten years in-house and modified it to meet the initial challenge of receiving production data electronically. DCNR provided a copy of the WIS historical production database, allowing PADEP for the first time to have direct access to critical oil and gas data necessary for decision making, analysis and trending, which is now critically important to PADEP in light of the Marcellus development activities. Prior to the launch of the public reporting application, PADEP did not have a current inventory of producing Marcellus wells. If PADEP had continued collecting production statistics on an annual basis and accepting paper reports, the most current and complete data available for analysis would have been over a year old. Additionally, making data on Marcellus activities publicly available greatly reduced requests for information, allowing staff to be assigned to other important projects. Public reporting will enhance operator accuracy and accountability as the public can now review and 5

track production and waste data and understand where waste products are being transported. It is vital that PADEP have current, complete and accurate information in order to evaluate all potential impacts of the rapidly expanding oil and gas industry in Pennsylvania. This information is essential in the responsible development of the industry for the economic benefit of all Pennsylvanians. In addition, the data is extremely important in ensuring the protection of environmental resources and public safety. PADEP now has information that it can analyze and report on within 10 weeks of the reporting deadline. This allows PADEP to quickly identify new trends and any potential issues as the data for each new reporting period (every 6 months) is received. This was the first time BIT delivered an Internet application in less than 12 months. More importantly, PADEP was able to satisfy the application development requirements with existing hardware, software and onsite developer resources. Since BIT utilized existing in-house resources, the original $1 million anticipated cost of the application implementation was unnecessary and instead was used by BOGM to put additional oil and gas inspectors in the field, enhancing public safety. BOGM and other PADEP program areas are able to capitalize on this public application to satisfy some of their own Marcellus data mining and analysis needs, as well. All of the identified public reporting constituent groups are able to access the data they need for analysis and decision making to promote the industry and to understand the environmental impacts of its activities. This application also enabled BOGM to eliminate the cost of data entry of paper forms for the 4,000 wells in the first reporting period. E. Benefits of the Project The primary function of the PA Oil and Gas Public Reporting website is to provide a window of transparency into industry activities. In order to improve the timeliness and accuracy of the information from the operators and maximize the benefits, it was essential to require the operators to submit information electronically. The decision to require electronic reporting is not only helpful to the environment, but it saves a significant amount of the time and resources that can now be dedicated to inspections, compliance and enforcement to ensure public and environmental safety. PADEP implemented far more than the basic requirements of the legislation, and used the mandate as a unique opportunity to allow public access to waste data and the historical oil and gas well-specific production data that was previously confidential and had never been published at a well-specific record level. The electronic production data has not only been extremely beneficial to the department, but also to all of the interested stakeholders, including the general public. The information has provided a great resource to PADEP staff for assessing the impact of exploration, drilling, hydraulic fracturing and waste product lifecycles across the commonwealth. 6

Public safety has been improved by the collection and publication of this information. For example, the data can be used to identify roadways that are experiencing increased traffic due to industry activities, which PennDOT uses to schedule inspections of rural roads and bridges, and the Pennsylvania State Police uses to conduct enforcement activities targeting overweight or unsafe trucks hauling water for hydraulic fracturing or carrying waste products to disposal facilities. The Pennsylvania Oil and Gas Production Public Reporting application has provided an extremely beneficial information resource that is easily accessible and user friendly. It provides information on the operators drilling in Pennsylvania, where the Marcellus activities are occurring, where waste products are being disposed and production statistics, which are of interest to industry, supporting businesses, and landowners. Most importantly, whether you are a proponent of natural gas exploration in the commonwealth or a citizen concerned about the impact of these activities, there is now a public, easily accessible source of information providing data on permitted drilling sites, oil and gas operators, production statistics, waste products and waste disposal. PADEP more than met the mandate for transparency. Marcellus production and waste data is current and is made available almost immediately after it is collected. In addition, PADEP now has an operational framework for the electronic reporting of other oil and gas related information from operators in order to facilitate executive decision making and ensure the safety and security of the public. The responsible development of the Marcellus Shale resource will make Pennsylvania a world leader in energy supply and the launch of this application makes the commonwealth a leader in industry transparency and reporting. 7