02 February 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 5

Topics discussed in this week’s Report include:

  • The U.S. Environmental Protection Agency (EPA) finalizes voluntary program for existing oil and gas sources to reduce methane emissions.
  • EPA proposes additional monitoring method to satisfy greenhouse gas reporting obligations.
  • The U.S. Department of the Interior agrees to perform environmental assessment of offshore hydraulic fracturing in the Pacific Ocean.
  • Oklahoma: Corporation Commission and Sandridge Energy enter agreement on disposal wells.

Federal

The U.S. Environmental Protection Agency (EPA) finalizes voluntary program for existing oil and gas sources to reduce methane emissions. EPA released its final “Natural Gas STAR Methane Challenge Program Best Management Practice (BMP) Commitment Framework” (the Framework) as part of the Obama administration’s plan to reduce methane emissions from the oil and gas sector. A blueprint document for the agency’s Methane Challenge Program, the Framework addresses a variety of emissions sources, such as pneumatic controllers and liquids unloading, and groups them by different sectors of the natural gas production, transmission and distribution process. EPA will publish at least one BMP for each existing emissions source it identified in the Framework, and partner companies can join the program by implementing the BMPs across their operations. EPA will officially launch the program at its Global Methane Forum, to be held on March 29-30.

EPA proposes additional monitoring method to satisfy greenhouse gas reporting obligations. EPA issued a proposed rule that would amend subpart W of its greenhouse gas reporting regulations to expand monitoring methods permitted for oil and natural gas systems under subpart W to include methods in the agency’s proposed new source performance standard addressing methane emissions from new and modified oil and gas sources. The proposal would allow oil and gas operations to use new leak detection methods such as optical gas imaging, and it includes emissions factors that can be used in conjunction with the new monitoring options. Public comment on the proposed rule is due on February 29.

The U.S. Department of the Interior agrees to perform environmental assessment of offshore hydraulic fracturing in the Pacific Ocean. As part of a settlement with an environmental group, Interior’s Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement consented to perform a programmatic environmental assessment of hydraulic fracturing on the Pacific Outer Continental Shelf and to stop issuing permits until the assessment is completed. The assessment, to be completed by May 28, will determine whether a more detailed environmental impact statement is required. The agreement settles a 2015 suit by the Center for Biological Diversity alleging that the federal government had approved applications for permits to drill on the Shelf without adequate environmental review in violation of the National Environmental Policy Act, Outer Continental Shelf Lands Act and other statutes.

States

Oklahoma: Corporation Commission and Sandridge Energy enter agreement on disposal wells. To address concerns of potential induced seismicity, the Oklahoma Corporation Commission’s Oil and Gas Division and Sandridge Energy came to an agreement under which Sandridge would stop using seven disposal wells and reduce total saltwater disposal volume by 40 percent in areas of concern by the end of April. Three of the wells will cease operating, while the other four will be used as monitoring wells in an Oklahoma Geological Survey study. The agreement averts a lawsuit that the Oil and Gas Division was intending to file against Sandridge.

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