PA budget agreement includes Onondaga relief for drillers, no severance tax

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Great to hear about the tax. What's Onondaga relief?

Basically, the Marcellus shale formation is right above a limestone formation called the Onondaga. Since these formations are not flat and can have some small peaks and valleys it's possible for an operator to be drilling straight and true but accidently hit the Onondaga because a limestone stringer protrudes into the Marcellus formation. 

There is a law called the oil and gas conservation law in PA which basically means that if an operator penetrates the Onondaga (includes accidently scrapping it with the drill bit as described above) then the operator is technically in violation if the well was not originally permitted as a conservation well. This meant operators would have to re-permit the well as a conservation well. This called for a new permit application including paperwork, fee and also the operator would have to make sure the well maintained a setback distance from the unit boundary. The new ruling prevents operators from having to deal with all that if they "accidently tag" the Onondaga. Stratigraphic Column

Bottom line: It helps the operators and DEP and solves a problem that really shouldn't be a problem and lets the DEP focus on actual problems. 



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