Tuesday, May 22, 2012

WV DEP Still Struggling To Add Staff To Meet Permit Backlog; Solution Expected By End Of Summer

The West Virginia DEP continues to struggle with the challenge of adding more workers and inspectors while trying to keep up with the increase in horizontal well permits.  The agency updated producers about the situation at a meeting yesterday in Charleston.  Provided is an article that appears in the May 22 edition of The State Journal:

WVDEP: Trouble hiring, attempting to reduce gas permit backlog

The State Journal, May 22, 2012

More employees are coming, but the West Virginia Department of Environmental Protection continues to battle a backlog of horizontal well drilling permits. Randy Huffman, DEP secretary, said the agency continues to struggle with a backlog of more than 250 horizontal well permits.

"We're going through the process right now of staffing up," Huffman said. "The permit backlog, the horizontal well permits are stacking up in the queue. They're coming in faster than they're going out."

The DEP recently received increased funding for more staff through increased permit fees for horizontal well permits.  Huffman spoke at the West Virginia Chamber of Commerce's Environmental Conference Tuesday morning. At an event in February, Huffman also spoke of the backlog issue. Then, he said the average permitting time for a horizontal drilling permit was about 110 days.

"The worst thing that can happen is backlog. That is just a dirty word in the agency," Huffman said. "I've worked on backlogs before in mining, and we're going to get this one in oil and gas resolved."

The challenge for the DEP, Huffman said Tuesday, has been hiring the new staff. While he said he has the ability to now hire nine to 10 inspectors and four to five office staff, the hiring process has not gone well. One new hire quit less than a month after joining, Huffman said, and another quit before the first day on the job.

"Since December, I've been able to add one new resource to the program to help with the permitting, the influx of permit applications that are coming in," Huffman said, referencing a newly hired employee.

One solution, titled the "Oil and Gas Control Room," on the slide presented by Huffman at the conference, has been to insulate permitting staff "from the daily barrage" of things such as permitee pressure, the hiring process or Freedom of Information Act requests.

About a week ago, he said, the members of the permitting staff began focusing on reducing the horizontal well permit backlog, a frequent sore point among those industry who want to develop.
"We got word just yesterday, they've been in there for about a week, that, hey, it's working," Huffman said.

It's not that the permits take that long to process, he said. It's the sheer number of applications. In 2006, Huffman said, no permits for horizontal drilling operations were issued. By 2011, more than 500 permits were issued.

Meanwhile, conventional permits have been dropping, from 2,400 in 2007 to about 300 in 2011. The conventional wells typically produce less gas, sustain fewer jobs and are generally simpler than a larger horizontal drilling operation.

Prior to the December legislation, any gas drilling permit was just a few hundred dollars. With total permits issued decreasing, the WVDEP was under immense strain because workloads were increasing due to the complexity of the horizontal drilling permits.

In February, Huffman explained that prior to the new Horizontal Well Act, workloads were increasing without significant increases staffing. While the DEP was "going broke and not hiring people," Huffman said in February, workloads were increasing "exponentially," putting the organization in a "serious jam."

"Without this special session, we would have imploded, or without something happening during this session, if the special session had not occurred, we would not have survived another year," Huffman said in February. "We would have imploded and the industry would have been in trouble because getting permits would have been a nightmare."

The new legislation will provide the DEP with an estimated $2.4 million, enough to fill seven vacant positions and add an additional 14.

Because of the way the legislation is structured, Huffman said, the minimum amount of time to issue a permit would be about 33 days. The agency is aiming for a window closer to 45 to 60 days to issue a permit, Huffman said Tuesday.

"We're optimistic, confident, that by the end of summer we will have this backlog under control," he said