11 January 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 2

Topics discussed in this week’s Report include:

  • U.S. Geological Survey (USGS) announces seismic study in Oklahoma.
  • House Democratic representatives call for probe of U.S. Bureau of Land Management (BLM) oil and gas lease suspensions.
  • New York: Intermediate appellate court holds that village must study environmental effects of selling water to hydraulic fracturing operations in Pennsylvania.
  • Pennsylvania: Commonwealth Court allows challenge to state drilling permitting practices to move forward.
  • Wyoming: Revised draft report indicates alleged groundwater contamination near Pavillion is unlikely to be due to hydraulic fracturing.

U.S. Geological Survey (USGS) announces seismic study in Oklahoma. USGS announced a study that it plans to conduct in Oklahoma beginning this spring to look at whether underground injection of oil and gas waste has played any role in the upswing in the state’s seismic activity. USGS plans to place about 1,850 simple seismometers within a 230 square-mile area in the north-central portion of the state. The instruments will look for minor seismic activity, which USGS says has not been studied in much detail. In 2015, Oklahoma experienced over 850 earthquakes of greater than magnitude three levels, up from 585 such earthquakes in 2014.

House Democratic representatives call for probe of U.S. Bureau of Land Management (BLM) oil and gas lease suspensions. Three Democratic representatives sent a letter to the U.S. Government Accountability Office (GAO) requesting that it study oil and gas lease suspensions on BLM lands. BLM can suspend leases on federal land when operators show that drilling has been delayed for reasons beyond their control, extending the duration of leases. The letter alleged that BLM was issuing suspensions “for reasons beyond what Congress envisioned” and called on GAO to compile the quantity of suspended leases and evaluate BLM’s ability to monitor suspended leases. A December report by the Wilderness Society, which alleged that one-third of suspended leases have remained that way for more than 25 years, spurred the letter.

States

New York: Intermediate appellate court holds that village must study environmental effects of selling water to hydraulic fracturing operations in Pennsylvania. An intermediate appellate court in Rochester upheld a lower court ruling that the village of Painted Post could not sell up to one million gallons of groundwater per day to hydraulic fracturing operations in Pennsylvania without first conducting a review under New York’s State Environmental Quality Review Act (SEQRA). Painted Post had conducted a SEQRA review for the lease agreement for a water loading facility but had argued that the agreement to sell water was exempt from SEQRA. The Sierra Club, local environmental groups and residents first challenged the village’s water deal in 2012.

Pennsylvania: Commonwealth Court allows challenge to state drilling permitting practices to move forward. A seven-judge panel held that a suit by the Pennsylvania Independent Oil & Gas Association (PIOGA) alleging that the state Department of Environmental Protection (DEP) used provisions of the invalidated Act 13 when evaluating natural gas drilling permit applications was ripe, that PIOGA had standing to bring the case and that PIOGA did not first have to exhaust administrative remedies. PIOGA sued DEP in June, alleging that DEP was requiring permit applicants to meet the defunct Act 13’s standards for evaluating a gas well’s potential to affect environmentally sensitive areas. Act 13, which established various rules for natural gas production, was struck down by the Pennsylvania Supreme Court in 2013 in Robinson Township v. Commonwealth.

Wyoming: Revised draft report indicates alleged groundwater contamination near Pavillion is unlikely to be due to hydraulic fracturing. The Wyoming Department of Environmental Quality (DEQ) released a draft report addressing findings from its study of alleged groundwater contamination in Pavillion, Wyoming. In concluding that such contamination was unlikely to be related to hydraulic fracturing, DEQ observed that there was no evidence that hydraulic fracturing fluids rose to shallow enough levels to intersect with water supply wells and that it was equally unlikely that hydraulic fracturing caused structural effects to such wells. The draft report did note, however, that hydraulic fracturing could potentially cause slow gas seepages into water but that such seepage might not be that different than natural migration of gas underground. The U.S. Environmental Protection Agency (EPA) issued a draft report in December 2011 that concluded that hydraulic fracturing had likely caused groundwater contamination at Pavillion, but in 2013 EPA agreed to support a state study instead of finalizing its own. DEQ is accepting comments on the report until March 18.

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

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