19 October 2015

Sidley Shale and Hydraulic Fracturing Report

Vol. 4, No. 42

Topics discussed in this week’s Report include:

  • Oklahoma: Environmental Protection Agency (EPA) recommends restrictions on injection wells to reduce seismicity.
  • Marcellus shale states: States announce collaborative program to promote shale gas development and manufacturing.
  • Texas: Commission announces plans to expand capability to evaluate wells for potential links to seismic activity.
  • Pennsylvania: Federal court finds township ban on disposal of hydraulic fracturing wastewater invalid.
  • Poland: Shale gas exploration declining.
  • Study shows underground injection at hydraulic fracturing sites poses little risk of water contamination.
  • Oil development in Bakken Shale poses challenges for grassland birds.

States

Oklahoma: Environmental Protection Agency (EPA) recommends restrictions on injection wells to reduce seismicity. In a recent review of Oklahoma’s underground injection control (UIC) well program, EPA recommended that Oklahoma take additional steps to reduce seismicity by reducing injection volumes further at disposal wells for oil and gas wastewater. Oklahoma adopted controversial volume restrictions in August and is facing a challenge from one injection well operator that alleges its well is not contributing to observed seismicity. EPA also raised concerns regarding Oklahoma’s data management system for tracking oil and gas disposal wells. EPA delegated authority to operate the federal UIC well program to Oklahoma, but retains oversight authority.

Marcellus shale states: States announce collaborative program to promote shale gas development and manufacturing. At the recent Tri-State Shale Summit, leaders from Pennsylvania, West Virginia and Ohio announced a new collaborative initiative to promote the region as a center for shale-related manufacturing. Over the past several years, the states have been competing for new manufacturing facilities. The new initiative will include conferences focused on best practices for economic development, workforce training, marketing and collaboration among state universities. The states also intend to collaborate on infrastructure projects such as pipelines, railways and roads that will facilitate shale gas-related manufacturing.

Texas: Commission announces plans to expand capability to evaluate wells for potential links to seismic activity. Texas Railroad Commission recently announced plans to hire a second seismologist to help the agency evaluate potential links between oil and gas wastewater disposal wells and induced seismicity. The scientist would be responsible for, among other things, evaluating applications for underground injection wells in areas with a history of seismic events. The Commission hired its first seismologist in March 2014 to evaluate the issues related to induced seismicity.

Pennsylvania: Federal court finds township ban on disposal of hydraulic fracturing wastewater invalid. On October 14, a federal district court in Pennsylvania ruled that Green Township’s complete ban on the disposal of hydraulic fracturing wastewater violated state law and regulations. The lawsuit was brought by Pennsylvania General Electric Co., LLC, which operates a disposal well in the township. The court ruled that Green Township was prohibited from regulating underground injection wells and was in violation of a state law requiring municipalities to authorize all legitimate uses somewhere within its borders. As a result, the Township cannot completely prohibit disposal wells that are authorized generally by the state.

International

Poland: Shale gas exploration declining. Previously believed to have significant shale gas potential, Poland is now in the midst of a significant decline in shale gas exploration, with exploratory concessions falling from 58 to 32 over the past year. Many major international oil and gas companies have stopped all exploratory activities in Poland, while the state-backed Polish Oil and Gas Co. has reduced its exploratory concessions by more than 50 percent. Estimates of Poland’s shale gas reserves have also been downgraded substantially. Industry observers suggest the decline is tied both to geologically unfavorable structures which make shale gas development difficult and to lower gas prices.

Studies

Study shows underground injection at hydraulic fracturing sites poses little risk of water contamination. A recent study published in the Proceedings of the National Academy of Sciences concluded that underground migration of hydraulic fracturing fluids is not likely to cause water contamination at drilling sites. Led by Yale University, the three-year study evaluated 64 well water samples, finding only trace amounts of volatile organic compounds (VOCs) that were well below EPA maximum contaminant thresholds and below the detection limits of most commercial laboratories. Using chemical tracing, the researchers concluded that the VOCs were coming from accidental surface spills rather than underground migration. The researchers found the results promising, noting that surface spills can be identified and contained.

Oil development in Bakken Shale poses challenges for grassland birds. A recent study published in Biological Conservation found that oil development in the Bakken Shale is displacing certain grassland birds. Headed by the U.S. Geological Survey and U.S. Fish and Wildlife Service, the researchers surveyed sites in several North Dakota counties. While some birds, such as clay-colored sparrows and brown-headed cowbirds were more tolerant of shale oil development, the density of other species, including the Sprague’s pipit, Baird’s sparrow, chestnut-collared longspur and grasshopper sparrow, was reduced near well pads, roads and other oil development infrastructure. The researchers recommended efforts to concentrate oil development activities where possible to reduce the scope of impacted areas.

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