Evan Kane, DWR Ken Pickle, DEMLR Jon RisGAARD, DWR Recommendation to Adopt Water Quality Rules in Response to S.L. 2012-143 Evan Kane, DWR Ken Pickle, DEMLR Jon RisGAARD, DWR

Session Law 2012-143 Ratified in July 2012 Created Mining & Energy Commission Updated statutory regulations of oil & gas activities Directed Environmental Management Commission, Commission for Public Health, and Mining & Energy Commission to adopt necessary rules by January 1, 2015 In July 2012 the legislature ratified SL 2012-143, “Clean Energy and Economic Security Act”

EMC Rulemaking Responsibilities Stormwater control for oil & gas exploration and development sites; Regulation of toxic air emissions from drilling operations; “…matters within its jurisdiction that allow for and regulate horizontal drilling and hydraulic fracturing for the purpose of oil and gas exploration and development.” The EMC received a much smaller share of the rulemaking responsibilities.

Proposed EMC Water Quality Rule Revisions Adopt: 15A NCAC 2H .1030 – New Stormwater rule Amend: 15A NCAC 2T – Wastes not discharged to surface waters 2T .0113 – Permitting by Regulation 2T .1001 – Closed-loop recycle 2T .1501 – Soil Remediation 15A NCAC 2U – Reclaimed Water 2U .0113 - Permitting by Regulation Other EMC rules do not need amendment at this time either because they are performance-based rules; that is, they specify water quality criteria that must be met by any industry, rather than industry-specific processes or prohibitions, or, as in the case of well construction standards and setbacks from wells and surface waters, the Mining and Energy Commission was specifically tasked with developing those rules. Tentative EMC Information Item - November 2013

Public Comment Process Draft rules published online and in NC Register June 2, 2014 Press release Comments accepted June 2 through August 1, 2014 20 persons submitted written comments Public hearing in Sanford, July 1, 2014 ~80 attendees 15 speakers Actually received last comment at 1:19 a.m. August 2.

Selected Public Comments & Recommendations - Stormwater Address commingling of stormwater with wastes Recommendation: Modify .1030(a)(3) to clarify any discharges other than stormwater must be covered by separate permit Require Public Hearings on Stormwater Permits for O&G sites Recommendation: Modify .1030(b)(3) to allow Director to request public comment on permit application Require severe weather prep and response plans as part of a new Stormwater Pollution Prevention Plan Recommendation: Modify .1030(b)(6) to require analog to NPDES Stormwater Pollution Prevention Plan The hearing officer’s report details all of the comments received and recommended responses to them. I would just like to take a few minutes to address issues that drew substantial numbers of comments or that DENR feels warrant bringing to your attention.

Selected Public Comments & Recommendations - Stormwater Require written certification of BMP construction and require inspection by DENR before operation Recommendation: Modify .1030(c)(3) to require submission of certification 3 days before spudding the well 1” rainfall insufficient as basis for design Recommendation: Modify .1030(c)(4) to use only P90 rainfall as basis for design (~1.5”) Specify TSS threshold per storm, rather than average % removal Recommendation: No change Add skimming requirement for structural BMPs 1” rainfall/P90 rainfall - 9 commenters

Selected Public Comments & Recommendations - Stormwater Require self-inspections similar to Construction Stormwater General Permit Recommendation: Modify .1030(c)(7) to add self-inspections of BMPs during the clearing and grading phase Extend rule coverage beyond well pad Recommendation: Add new .1030(c)(8) to extend rule coverage to access/haul roads to well pad Self-inspection/self-monitoring insufficient Recommendation: No change; DENR authorized by statute to inspect Specify fines and penalties Recommendation: No change; penalties authorized by statute Self-inspection/self-monitoring: is not intended to be the complete regulatory oversight function, but to augment that function. 10 commenters on self-inspection 6 commenters on fines & penalties

Public Comments - 2T & 2U Revisions Support for proposed revisions Recommendation: Be happy! Don’t allow re-use of flowback water for hydraulic fracturing Recommendation: No change

Public Comments - Other EMC should adopt regulations for air emissions from oil & gas operations Response: Federal air quality rules applicable to oil & gas already adopted by reference in the NC air quality rules Response: EMC briefed on air quality regulations in November 2013 Require/implement air monitoring Response: Monitoring station in Lee County established by DAQ in November 2013 Don’t allow landfilling of wastes from oil and gas operations Response: Solid waste regulations & permits set requirements for acceptance of industrial wastes

Final Recommendation Adopt proposed 15A NCAC 2H .1030 with recommended text changes Adopt proposed 2T & 2U rule revisions with no text changes

Hearing Officer Comments/Questions for Staff