The Pennsylvania Oil and Gas Act at Section 208 - Protection of Water Supplies - provides that an oil and gas well operator that affects a public or private water supply by pollution or diminution must restore or replace the affected supply.  The law presumes that a well operator is responsible for the pollution of a water supply that is within 1,000 feet of the oil or gas well, or where the pollution occurred within 6 months after the completion of drilling or altering of such a well.  The operator may overcome the presumption of liability by showing that the pollution existed prior to the drilling activity as determined by a predrilling survey, among other things.  It is interesting to note that the presumption and ability to rebut the presumption applies only to “pollution” of a water supply, not diminution.  It is unclear whether this is an intentional omission or simply a legislative oversight. 

Several recent House bills in the 2009-2010 session have attempted to modify the presumption of liability for adversely impacting a water supply well.  The first is HB 1155, a new statute to be known as the Surface Owners’ Protection Act.  Section 8 of HB 1155 (“Protection of Water Supplies”) requires the same restoration of a well affected by pollution or diminution; however, the presumption extends to any oil or gas well within 2,500 feet of the affected water supply.  Once again, the presumption only applies to pollution of the water supply, and not diminution.

By contrast, HB 1205, which seeks to amend the current PA Oil and Gas Act, extends the presumption from 1,000 to 2,000 feet, and extends the timeframe from 6 months to 24 months after the completion of drilling or alteration of an oil or gas well.  The amendment also completely rewrites subsection (e), which previously required an operator that wished to preserve its defenses to retain an independent laboratory to conduct predrilling surveys of water supplies.  The amended subsection (e) requires, without limitation, the oil and gas well operator to survey, sample and analyze the quality and quantity of the water from any wells, springs or other water resources located within 2,000 feet of the proposed oil or gas well.  The results of such tests are to be provided in writing to the landowner or water supply owner.  The amended Oil and Gas Act also would require the oil or gas well operator, upon completion of drilling activities and for a period of 24 months thereafter, to conduct follow up surveys and analysis of the quality and quantity of the water from the water supplies.  Written notice to the landowner is required of the right to request follow up tests. 
     
Both bills are currently in House Committees (HB 1155 in the Rules Committee, HB 1205 in the Appropriations Committee) and it is unclear which bill, if either, will ultimately be enacted and how their enactment might conflict.  Suffice it to say however, that more and more pressure is being placed upon oil and gas well operators to protect private and public water supplies, and much more is going to be required of these well operators to not only protect water supplies, but to prove that their operations did not affect water supplies.  Drilling companies will need to come up with a strict protocol for sampling wells, and notifying those who own or benefit from the water supply, and will need to be prepared to restore or replace such water supplies in the event that they are presumed to have affected the water supply.  This is yet another challenge to be faced by the companies that wish to tap into the Marcellus Shale formation.  However, responsible drilling and operations, along with appropriate guidance and counsel, should allow those seeking to extract Marcellus Shale gas to do so with minimal problems or interruptions.