21 September 2015

Sidley Shale and Hydraulic Fracturing Report

Vol. 4, No. 38

Topics discussed in this week’s Report include: 

  • Ohio: State Supreme Court Issues Two Decisions on Ballot Proposals Which Seek to Ban Use of Hydraulic Fracturing.
  • North Dakota: Regulators Weigh Rule Changes in Reaction to Industry Downturn.
  • Study Finds that Hydraulic Fracturing Water Use Totals Less Than One Percent of Industrial Water Use Nationwide.
  • Report Estimates Releases From Hydraulic Fracturing in West Texas.
  • Monthly Total U.S. Crude Oil Production Has Fallen Slightly.

States

Ohio: State Supreme Court Issues Two Decisions on Ballot Proposals Which Seek to Ban Use of Hydraulic Fracturing. Last week, the Ohio Supreme court issued two decisions on hydraulic fracturing ballot measures. In the first case, the court held proposed county charters in Athens, Medina and Fulton counties, which included bans on hydraulic fracturing, failed to meet the minimum procedural requirements for charter proposals and thus could be excluded from the ballot by the Ohio Secretary of State. However, the court also held that the Ohio Secretary of State could not disqualify ballot initiatives based on his assessment of the legality or constitutionality of the measure. Accordingly, in the second decision, the court held the Mahoning County Board of Elections did not have the right to exclude from the November ballot the city of Youngstown’s proposed “community bill of rights,” which would have banned hydraulic fracturing within city limits. The Board had excluded the proposal from the ballot, finding the proposed initiative was unconstitutional. Youngstown then sought a writ of mandamus against the Board, its members and the Ohio Secretary of State to compel them to allow the proposal to appear on the November ballot. Echoing language from the first case, the Supreme court rejected the Board’s line of reasoning, stating that boards of election are not “arbiters of the legality or constitutionality of a ballot measure’s substantive terms.” If it proceeds, this would be the fifth vote in Youngstown on the community bill of rights. Voters rejected each of the previous submissions.

North Dakota: Regulators Weigh Rule Changes in Reaction to Industry Downturn. In response to the drop in oil prices, North Dakota’s Industrial Commission is holding a vote this week on a proposal to relax rules governing flaring of natural gas at oil production sites. Currently, North Dakota requires the oil and gas industry to capture 85 percent of natural gas by January 2016 and 95 percent by 2020. The Director of North Dakota’s Department of Mineral Resources is also considering allowing wells to sit idle for longer periods of time. Producers can currently drill wells and leave them uncompleted, or not yet hydraulically fractured, for up to one year. The Director is considering allowing such wells to be designated “temporarily abandoned,” which would allow them to sit for a second year.

Studies

Study Finds that Hydraulic Fracturing Water Use Totals Less Than One Percent of Industrial Water Use Nationwide. A recent study by Duke University researchers published in the journal Environmental Science & Technology Letters determined that hydraulic fracturing uses about 48 billion gallons of water per year, which is equivalent to less than one percent of the total annual industrial water use in the United States. The study observed that hydraulic fracturing’s water use and produced water intensity is less than that of other energy extraction techniques and that water use varies between and among shale plays. Additionally, according to the report, from 2005-2014, hydraulic fracturing used approximately 248 billion gallons of water, about 84 percent of which was returned to the surface as wastewater.

Report Estimates Releases From Hydraulic Fracturing in West Texas. A report by Environment Texas Research and Policy Center and the Frontier Group has evaluated the effects on the environment of the growth of hydraulic fracturing in West Texas over the past decade. The researchers looked at the approximately 4,100 hydraulic fracturing wells drilled on 2.1 million acres of land in West Texas owned by the University of Texas system and found that approximately 1.6 million gallons of oil, saltwater and other pollutants have been released on the land since 2008. The report also claims the wells have released significant methane emissions.

Business

Monthly Total U.S. Crude Oil Production Has Fallen Slightly. Although monthly U.S. crude oil production had been continuing to increase despite the changing market conditions, in recent months domestic production has fallen slightly. The top month for U.S. production this year was April, with a production figure of 9.61 million barrels of crude per day, just shy of the highest month of domestic production in November 1970. Production has leveled off since then, with June 2015 production reaching 9.30 million barrels per day. Production declines in the Bakken Shale in North Dakota and Eagle Ford Shale in Texas are offsetting continued increases in production in the Permian Basin in Texas and the Gulf of Mexico.

If you have any questions regarding this Report, please contact us.

SHARE
EmailShare