20 December 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 51

Topics discussed in this week’s Report include:

  • EPA hydraulic fracturing study retracted controversial conclusion.
  • Environmental groups, states intervened to defend BLM flaring rule.
  • Shale gas companies sought incidental take permits for bats.
  • Environmental groups opposed drilling near New Mexico site.
  • Oklahoma assessing possible link between hydraulic  fracturing and recent quakes.
  • New law opened Quebec to hydraulic fracturing.
  • Study found sharp rise in atmospheric methane primarily from agriculture in tropics.


EPA hydraulic fracturing study retracts controversial conclusion. In the final version of its report on hydraulic fracturing, the Environmental Protection Agency (EPA) retracted a finding from a prior draft concluding there was no evidence the well stimulation technique caused “widespread, systematic impacts on drinking water resources.” Instead, the final report states that hydraulic fracturing “can impact drinking water resources in the United States under some circumstances.” Environmental groups strongly objected to the June 2015 draft report’s conclusion and a majority of EPA’s Science Advisory Board opined that there were too many uncertainties and significant gaps in available data to quantitatively support it. The retraction left the final report without any clear determination on whether hydraulic fracturing involves significant environmental risks. Industry groups harshly criticized the reversal, stating that hydraulic fracturing has never contaminated drinking water, while environmental groups claim that the report is proof that hydraulic fracturing threatens drinking water. The report did not make any policy recommendations to Congress or call for new EPA regulations. It remains to be seen what effect, if any, the study would have on federal policy in the incoming administration or whether further assessments will be conducted.

Environmental groups, states intervene to defend BLM flaring rule. A magistrate judge allowed six environmental groups and two states to intervene in a suit seeking to vacate Bureau of Land Management (BLM) rules to limit flaring and venting from oil and gas operations on federal and Indian lands. Along with the environmental groups, California and New Mexico will defend the BLM rule from arguments by three other states and two trade associations that BLM lacks statutory authority to regulate air pollution. The petitioners moved for a preliminary injunction to block the rule, which is scheduled to go into effect on Jan. 17, pending resolution of the appeal.

Shale gas companies seeking incidental take permits for bats. Nine shale gas companies with operations in Ohio, Pennsylvania and West Virginia petitioned the U.S. Fish & Wildlife Service for a 50-year incidental take permit to allow new gas drilling near habitat for five bat species, including the endangered Indiana bat. All of the bat species, however, have seen significant declines in the eastern United States since 2008 due to white-nose syndrome, a poorly understood lethal condition caused by a fungus. Environmental groups are opposing the petition, claiming that drilling near bat habitat would send the species into further decline at a time when their survival is uncertain. The gas companies argue that an incidental take permit would establish clear and predictable protocols for shale gas development through a habitat conservation plan that would allow for long-term business planning while conserving bat habitat.

Environmental groups oppose drilling near New Mexico site. Environmental groups filed a formal protest to block four proposed oil and gas leases in northwestern New Mexico, arguing that they will be too close to Chaco Culture National Historical Park. The park contains archeological remains of pueblo complexes and is a UNESCO World Heritage but also lies within the San Juan Basin, one of the country’s largest natural gas fields. BLM maintains a 10-mile buffer zone around the park. The leases would be 20 miles from the park, but environmental groups object that several pueblo sites exist outside of the park’s boundaries. They argue that gas drilling could affect those sites and want a larger buffer area around the park.


Oklahoma assessing possible link between hydraulic fracturing and recent quakes. The Oklahoma Corporation Commission is evaluating whether recent seismic activity southwest of Oklahoma City may have been caused by hydraulic fracturing. Until now, Oklahoma officials had been exploring the relationship between seismic activity and underground injection of wastewater; however, two low-level earthquakes in July occurred in an area where there are no underground injection operations. Nine quakes, ranging in magnitude from 2.1 to 3.4, were correlated with hydraulic fracturing in two relatively new shale plays, the South Central Oklahoma Oil Province and the Sooner Trend Anadarko Basin, with no large-scale wastewater injection in the vicinity. The Oklahoma Corporation Commission stated that the state’s oil and gas industry is providing its full cooperation as the state continues to investigate.


New law opens Quebec to hydraulic fracturing. Canada’s National Assembly approved Bill 106, officially allowing for hydraulic fracturing to be used in Quebec. Although the bill was primarily one to promote renewable energy, it contained provisions creating the Petroleum Resource Act, which would allow the use of hydraulic fracturing in the province. During an all-night debate, opponents demanded that the provision be stripped and a moratorium on hydraulic fracturing be substituted, but the bill passed with the Petroleum Resource Act by a 62-38 vote. Quebec currently sees very little oil and gas development but rests on a portion of the Utica shale formation.


Study finds sharp rise in atmospheric methane primarily from agriculture in tropics. A study published in Environmental Research Letters found that atmospheric methane concentrations increased from 2007 to the present. This contrasted with atmospheric carbon dioxide concentrations, which were flat during the same period. According to the study, methane concentrations saw marginal growth, about 0.5 parts per billion, from 2000 to 2006. Since then, atmospheric methane concentrations increased at a significantly higher rate, including 12.5 parts per billion in 2014 and 9.9 parts per billion in 2015. The lead researchers, from Stanford University and France’s Laboratoire des Sciences du Climat et de l’Environnement, have published a global methane budget every two years as part of the Global Carbon Project. They estimated that atmospheric methane has increased from approximately 700 parts per billion in pre-industrial times to 1,834 parts per billion in 2015. The study concluded, however, that U.S. shale gas operations were unlikely to be a substantial cause of the increased methane concentrations. The researchers believe that approximately two-thirds of methane emissions originate from agriculture in tropical regions.