04 December 2013

Hydraulic Fracturing and Shale Gas Report

Volume 2, No. 48

Federal

National Park Service withdraws comments critical of hydraulic fracturing. National Park Service (“NPS”) Director Jonathan Jarvis announced that the agency is withdrawing comments it submitted on the U.S. Bureau of Land Management’s proposed regulations governing hydraulic fracturing. The comments were controversial for relying on a New York Times op-ed by Cornell University Professor and hydraulic fracturing critic Anthony Ingraffea claiming that shale gas is a greater threat to the Earth’s climate than coal because of fugitive methane emissions. Professor Ingraffea’s claims have been criticized by both other academics and the U.S. Department of Energy. According to Jarvis, the unsigned comments were submitted without any management review or approval, called their submission “inappropriate,” and stated that relying on opinion pieces in the popular press in forming its scientific views was contrary to NPS’ scientific integrity policy.

States

Texas Supreme Court to hear wastewater trespass case. Next month, the Texas Supreme Court will hear arguments on whether a property owner should be able to recover damages for fluids entering the deep subsurface under the owner’s property. A rice farm, FPL Farming, claimed that when Environmental Processing Systems (“EPS”) injected hydraulic fracturing wastewater underground, wastewater migrated under FPL’s property. A jury ruled that there was no trespass, but the appeals court reversed, finding fluid migration far below the surface could be a trespass. It also found EPS had the burden to show FPL had consented to the migration. The Texas Oil & Gas Association, among other industry groups, filed amicus curiae briefs arguing that the lower court’s ruling marks an unprecedented expansion of the rights protected by trespass and significantly threatens oil and gas production in the state.

International

Poland will issue shale gas regulations by the end of the year. Maciej Graboswki, Poland’s new Minister of the Environment, announced his ministry will issue regulations governing shale gas by the end of this year. Those regulations would require parliamentary approval. Poland’s Prime Minister, Donald Tusk, is pushing for a quick passage in order to provide regulatory certainty for foreign gas companies interested in developing shale gas in Poland. Industry representatives, however, reportedly have raised concerns that drafts of the regulations provide for the creation of a state-owned gas company that would own a stake in any operation and that the provisions for converting exploration licenses and production licenses are too vague.

Business

Tribes will build gas plant to cut flaring. North Dakota’s Mandan, Hidatsa, and Akira Nations announced plans to invest up to $300 million to build a gas processing plant on the Fort Berthold Indian Reservation. According to the tribes, approximately 55% of all gas produced from nearby oil wells is burned off at flares, because there is currently no natural gas infrastructure to take and process the gas. The proposed plant would fill that gap, with an eye towards significantly reducing waste gas flaring from oil wells.

Research

Hydraulic fracturing opponents assert shale development brought fewer jobs than claimed. The Fiscal Policy Institute of New York, a coalition of groups opposed to shale development and the use of hydraulic fracturing, has prepared a report claiming that industry analyses have inflated the number of jobs created by drilling in the Marcellus and Utica shale plays. Including related jobs, such as engineering and trucking, the Institute asserts shale development has only created 52,000 jobs in Pennsylvania, West Virginia, and Ohio. The Institute’s report also criticizes the Pennsylvania Department of Labor and Industry’s September 2013 analysis that found shale development supported 200,000 jobs in that state alone.

Study: EPA should not have changed methane emission estimates. A study by Harvard University researchers, published in the Proceedings of the National Academy of Sciences, argues that EPA was wrong to lower its estimate of methane emissions from natural gas production by 20% earlier this year. Instead, the study claims that EPA was underestimating emissions by as much as 50% overall and up to 270% from oil and gas wells in Texas and Oklahoma. The researchers relied on atmospheric methane observations from aircraft and towers instead of estimates of individual well emissions, as EPA uses.

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