26 October 2015

Sidley Shale and Hydraulic Fracturing Report

Vol. 4, No. 43

Topics discussed in this week’s Report include:

  • National Park Service plan would increase regulations and costs for oil and gas activities.
  • Pennsylvania: Office of Environmental Justice will monitor shale gas.
  • California: State shuts down 33 underground injection wells.
  • Oklahoma: State Commission shuts down three more wells for seismic activity
  • North Dakota: Well blowout under control.
  • Report links historic underground injections to Oklahoma earthquakes.

Federal

National Park Service plan would increase regulations and costs for oil and gas activities. The National Park Service (NPS) has proposed a new plan for oil and gas production in federal park land that would impose additional fees and permitting requirements that NPS believes are necessary to avoid or minimize adverse effects on natural and cultural resources, aesthetics and park infrastructure. Revisions to the NPS 9B regulations, which govern development on federal forest land, would raise bonding requirements for site reclamation, require operating permits for all oil and gas operations and establish fees for access to a drilling or production site. NPS issued a draft environmental impact statement (EIS) for public review and comment. According to the EIS, the new rules would cost approximately $1,650 per well each year.

States

Pennsylvania: Office of Environmental Justice will monitor shale gas. With a new director and new funding, Pennsylvania’s Office of Environment Justice (the Office) has made its top priority to monitor shale gas operations in and around “environmental justice communities,” those neighborhoods where at least 20 percent of the residents live below the poverty level or at least 30 percent of residents are non-white. The Office cannot block permits but has a “trigger list” of industrial activities where it reviews permit applications. If the Office objects to a permit, it will coordinate opposition among local community members. Under previous Gov. Tom Corbett (R), the Office had removed oil and gas operations from its trigger list, an action Gov. Tom Wolf (D) has reversed. Environmental groups are pushing for the Office to be given a veto power over all industrial permits.

California: State shuts down 33 underground injection wells. To comply with an Environmental Protection Agency (EPA) agreement to stop wastewater injections into certain aquifers, the California Department of Conservation ordered 33 Class II underground injection wells to shut down. The Division of Oil, Gas and Geothermal Resources stated that it would inspect each well to confirm that it has stopped operating. EPA found that California had erroneously issued permits to underground injection wells under the Safe Drinking Water Act that could allow disposal of wastewater into areas containing potable groundwater. In response, EPA imposed a series of deadlines to prioritize the shutdown of those wells, requiring California to close all wells that were mistakenly permitted by the end of 2016. Industry groups noted that there was no allegation that the well owners and operators have done anything wrong and that there was no evidence that any well actually injected wastewater into any public water supply.

Oklahoma: State Commission shuts down three more wells for seismic activity. The Oklahoma Corporation Commission (OCC) ordered three underground injection wells near Cushing to shut down, believing the wells were contributing to recent seismic activity in the area. OCC informed operators of 13 other Cushing-area wells that the volume of oil and gas wastewater injected may need to be reduced, with the amount of the reduction to be based on the distance from Cushing. Home to a crucial oil pipeline and storage hub, Cushing experienced a magnitude 4.1 quake in September. The event was followed by 43 other seismic events over the next month, including a magnitude 4.5 quake. The Department of Homeland Security is also investigating as it considers the Cushing complex to be critical national infrastructure. To date, only Marjo Operation Company, Inc. has challenged the OCC’s authority to order the shutdowns.

North Dakota: Well blowout under control. The North Dakota Department of Mineral Resources (DMR) issued a statement that an Oasis Petroleum oil well blowout near White Earth has been brought under control. According to DMR, virtually all of the 756,000 gallons of oil and brine released were contained in the well pad area. However, an oil mist still coated the White Earth River, the primary drinking water source for southwest North Dakota. According to DMR officials, a series of booms was put in place, and the sheen dissipated over the course of a few days. The cause of the blowout is under investigation.

Studies

Report links historic underground injections to Oklahoma earthquakes. A report published in the Bulletin of the Seismology Society of America reviewed historic records of earthquakes to gain insight into current seismic activity. According to the report, large historic earthquakes correlated with underground injections of wastewaters and enhanced oil recovery operations. The authors believe that the record shows a likely historic link between seismic activity at magnitude 3.5 or greater and underground injections that continues through the present. Based on a comparison with archived oil and gas records, the authors tied larger historic earthquakes to underground injections including a 1952 magnitude 5.7 quake that caused a 50-foot crack in the state capitol building. According to the authors, earthquakes have been common in Oklahoma since statehood, and all but one of the historic earthquakes studied were located close to a permitted injection well.

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