Final D.C. Groundwater Well Requirements Will Impact Many Property Owners

HIGHLIGHTS:

• Final regulations governing the construction, maintenance and abandonment of wells have been published by the District of Columbia Department of Energy and Environment (DOEE).
• The final rules, which became effective on Oct. 28, 2016, will affect many property owners in the District of Columbia and should be taken into consideration in all environmental due diligence, purchase and sale, and remediation negotiations. A grace period, until March 31, 2021, will delay the full impact of many of the new requirements.
• Now that DOEE has finalized the well rules, the development community must determine whether it wants to challenge the final rules or to incorporate the requirements into its routine due diligence and real estate contracting practices.

The District of Columbia Department of Energy and Environment (DOEE) on Oct. 28, 2016, published final rules governing the construction, maintenance and abandonment of wells.¹ The new regulations became effective immediately upon publication. Nevertheless, the final rules contain a grace period, until March 31, 2021, that will delay the full impact of many of the new requirements. The final rules will affect many property owners in the District of Columbia and should be taken into consideration in all environmental due diligence, purchase and sale, and remediation negotiations.

The rules have been under development since at least May 2015, when draft rules were first circulated by DOEE for public comment. The development community commented extensively upon the draft regulations on July 13, 2015, questioning the need for many of the requirements, particularly those that would apply to soil borings and temporary monitoring wells during routine due diligence activities. The development community provided extensive examples of far less onerous procedures being used in many other jurisdictions. DOEE nevertheless appears to have ignored those comments and the documented procedures being used in other jurisdictions. Now that DOEE has finalized the well rules, the development community must determine whether it wants to challenge the final rules or to incorporate the requirements into its routine due diligence and real estate contracting practices.

Practice Pointers

Property owners, potential purchasers and responsible parties should review their existing contractual agreements to determine the following:

• Do wells currently exist on a property?
• Who is the "owner" of the well?²
• Who is responsible for maintaining and ultimately abandoning the well?
• Is the well part of a DOEE regulatory action?
• How long does the well need to remain in service?

The final rules provide a grace period until March 31, 2021, for the "well owner" to register or abandon existing wells. This grace period provides property owners an opportunity to confirm that there are no wells on their properties, or to negotiate with the "well owner" the proper registration, labeling, maintenance and abandonment of existing wells before fees and other obligations begin to accrue in March 2021. Separate permits will be required to both install and abandon a well, unless the work plan to abandon the well has been included in the initial well construction application. Annual fees will apply to all wells, including fees that will apply upon transfer of property ownership to a new person.

During the grace period, property owners, responsible parties, contract purchasers, and their consultants and counsel should evaluate the following:

• Is the well required as part of a DOEE regulatory action (such as a Leaking Underground Storage Tank case, a Voluntary Remediation Action Program matter or a Voluntary Cleanup Program matter)? Different rules may apply. See 21 District of Columbia Municipal Regulations (DCMR) §1804.2.
• In drafting your purchase and sales agreement, have you allocated sufficient time during the due diligence period to obtain necessary well permits? How much of the information requested in the application is readily available (floodplains, recognized environmental conditions, etc.)? The regulatory agencies (DOEE and DCRA) have typically taken two to four weeks to issue these permits in the past year, and may take even longer going forward.
• In your purchase contracts, have you identified who "owns" any existing or future wells that may be on site?
• Will dewatering wells be needed for more than 180 days? The new well rules regarding registration, maintenance and abandonment may apply.
• Have dewatering wells been abandoned in place on-site in the past? They may need to be properly abandoned now, assuming they can be found.
• Do you as the property owner have sufficient details about the construction of existing wells in order to complete a well completion report by March 2021? If not, you may need to abandon those wells before the deadline.

Key Provisions of the Final Rule

The key provisions of DOEE's final regulations are summarized below.

Applicability of the New Regulations

DOEE's final regulations apply to any person engaged in the construction, maintenance or abandonment of a well in the District of Columbia. The owner of the well bears the ultimate responsibility for complying with these requirements. 21 DCMR §1801.

Applying for a Well Construction Building Permit

Effective immediately, a well construction building permit must be obtained from the Department of Consumer and Regulatory Affairs (DCRA) before beginning construction. 21 DCMR §1803.2.

Starting April 1, 2017, an application for a well construction building permit must also include a well construction work plan. The well construction work plan must include the following as set forth at 21 DCMR §1803.3:

• name and address of the well owner and property owner
• name and address of the well driller and a copy of the well driller's license
• location and intended use of the proposed well
• well construction details, including a well design diagram or schematic
• description of the site's topography, geology, proximity to 100-year floodplain, and the names of aquifers that will be penetrated and screened
• description of recognized environmental conditions (RECs) identified on or adjacent to the property at which the well will be located
• methods to prevent cross-contamination where a REC has been identified
• detailed site map
• description of the well construction including materials, equipment, and decontamination procedures
• plans for handling and disposing of derived waste and drilling fluid

A well cannot be relocated during construction more than 10 feet without approval by DOEE. See 21 DCMR §1811.1.

Well construction work plans for dewatering wells must also contain details on the volume of water to be pumped, estimated flow rates, anticipated radius of influence, the quality of water to be pumped along with analytical data, proposed water treatment plans, the purpose of dewatering, and the location of effluent discharges and their receiving water body or system. 21 DCMR §1803.5.

DOEE's final regulations also contain additional requirements for work plans for closed-loop ground source heat pump wells (§1803.4), ground freeze wells (§1803.6), injection wells (§1803.7) and water supply wells (§1803.8).

Well Fees

The table below shows the current fee structure for well-related activities in the District. The fees shall be paid at the time of an application for well construction or well registration. DOEE may make yearly adjustments to these fees for inflation using the Urban Consumer Price Index starting on Jan. 1, 2017. 21 DCMR §1805.2.

Well Fee Schedule

Wells Exempted from the Regulations

The following wells do not require well construction building permits:

Infiltration Wells and Stormwater Management Wells (21 DCMR §1802.1-2)

Infiltration test wells and wells constructed as part of a best management practice (BMP) for stormwater are exempt from DOEE's final regulations if they are constructed in accordance with Chapter 5 of Title 21 of the DCMR and the DOEE's Stormwater Management Guidebook.

Temporary Shallow Wells (21 DCMR §1802.3)

Wells that satisfy all of the following criteria are exempt from the permitting and related requirements in the final regulations:

• are less than 10 feet deep
• do not intersect the seasonal water table
• are not located within 25 feet of the mean high watermark of District surface waters
• are not located within 25 feet of a wetland
• are constructed and maintained in accordance with DOEE's final regulations
• are abandoned within five business days of completion of construction

Registration or Abandonment of Existing Wells

For wells constructed before March 31, 2017, the owner must ensure that the well does not pose a hazard to public health and safety or to the environment and that the well, well cap, upper terminus and well labeling satisfy the requirements in 21 DCMR §1820-21.

By March 31, 2021, all wells constructed prior to March 31, 2017, must be properly registered with DOEE or abandoned. 21 DCMR §1806.2. If the well owner fails to register the well, it must abandon the well within 60 days. 21 DCMR §1806.9.

Well Construction, Siting and Relocation

Once DOEE has approved a well construction work plan, a licensed well driller must still provide DOEE two business days' notice before commencing well construction. 21 DCMR §1809.2.

Standards for well construction and siting are set forth at 21 DCMR §1809-10. Well drillers must obtain appropriate clearances from underground utilities and the Washington Metropolitan Area Transit Authority (WMATA) before drilling. All wells must contain the following components meeting the DOEE standards: well casing (§1815), well screen (§1816), filter pack (§1817), grout between the borehole wall and the well casing (§1818), and well caps (§1820).

A well may be relocated during construction to avoid utility lines or subsurface obstructions as long as it is not moved more than 10 feet and remains on the same parcel. 21 DCMR §1811.

Well Labeling

Generally, each well must be labeled with its well registration number. 21 DCMR §1821. Labels are not required for soil borings, monitoring wells, observation wells, piezometers, injection wells, or recovery wells as long as they are abandoned within 30 days of completion. 21 DCMR §1821.3. Dewatering wells and ground freeze wells associated with temporary construction applications do not need to be labeled if the well is secured and is not accessible to the public, the well construction permit and well completion details are maintained on site, and the well is abandoned within 180 days of completion. 21 DCMR §1821.4.

Well Completion Reports

Within 60 days of well construction, well owners must submit a well completion report to DOEE for all wells that require well construction building permits and are not subject to a DOEE regulatory action. The requirements of the well completion report are set forth at 21 DCMR §1826.

Derived Waste and Drilling Fluid

DOEE requires derived waste from a well located on a property on which a REC has been identified to be containerized, sampled for known or suspected contaminants, and disposed of properly. 21 DCMR §1813.2. Soil from a well may be placed on the site if it is characterized and does not pose a hazard to public health or the environment and contains less than 100 parts-per-million of total petroleum hydrocarbons (TPH). 21 DCMR §1813.4. The final regulations prohibit the discharge of dewatering effluent, groundwater treatment system effluent, process water or derived waste into District waters or the District's municipal separate stormwater sewer system (MS4) without first obtaining applicable District and federal permits. 21 DCMR §1813.5. This can be a very long and costly process, frequently taking many months and many tens of thousands of dollars.

Drilling fluids containing additives may be used only if they have been approved in the well construction building permit application. 21 DCMR §1814.

Well Abandonment

Generally, a well abandonment work plan must be submitted 30 days prior to well abandonment. 21 DCMR §1830.1 Once DOEE approves such a work plan, abandonment is required to take place within 60 days. 21 DCMR §1830.3 Dewatering wells must be abandoned within seven days after pumping ends. 21 DCMR §1830.6. A well abandonment permit is not required if a well abandonment work plan was submitted along with the initial application for a well construction building permit and the well is abandoned within 30 days of completion. 21 DCMR §1802.7.

Drilling Licenses

Wells in the District, except for wells drilled using hand-operated or hand-driven tools such as hand-augers, soil probes and hand shovels, may be drilled only by licensed drillers. 21 DCMR §1808.1-3.

Summary and Next Steps

Given these onerous new requirements, it is important for you to know whether you have wells on your property and ask the following questions:

• Are the wells part of a DOEE regulatory action? Is responsibility for the wells clear?
• If not, who is responsible for the wells? By default, the property owner will be assumed to be responsible.
• Are the wells still needed, and for how long?
• Who will register the wells? Maintain the wells? Abandon the wells?
• Is ownership of the property/wells being transferred? If so, the new owner must register the wells by March 31 of the subsequent year.

Be sure to identify these roles and responsibilities during the due diligence period and over the longer term.

Notes

¹ The District of Columbia defines a well as "any test hole, shaft, or soil excavation created by any means including, but not limited to, drilling, coring, boring, washing, driving, digging or jetting, for purposes including, but not limited to, locating, testing, diverting, artificially recharging, or withdrawing fluids, or for the purpose of underground injection." D.C. Code §8-103.01 (26A). DOEE has interpreted this statute to mean that it can require permits for installation of soil borings that never intersect the water table, as well as permits to install groundwater wells.

² The regulations define a well owner as "a person who has the legal right to construct a well for personal use or for the use of another person." 21 DCMR §1899.1.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.