23 February 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 8

Topics discussed in this week’s Report include:

  • The U.S. Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) panel updates review of EPA’s draft assessment of hydraulic fracturing.
  • U.S. Coast Guard retracts proposed policy concerning bulk shipments of hydraulic fracturing wastewater on barges.
  • Oklahoma: Oklahoma Corporation Commission (the Commission) releases plan to reduce volume of underground oil and gas wastewater disposal.
  • North Dakota: Oil production declines in response to lower oil prices.

Federal

The U.S. Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) panel updates review of EPA’s draft assessment of hydraulic fracturing. A panel of EPA’s SAB issued an updated draft of its review of EPA’s June 2015 draft report entitled “Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources.” The panel’s updated draft peer review report finds “the EPA’s overall approach … to be appropriate and comprehensive.” However, the updated draft also recommends that EPA make a number of changes to its analyses and undertake an additional study to collect more data once this assessment is completed. The panel plans to issue a final set of comments this spring to be reviewed by the entire SAB before a final report is formally submitted to EPA for consideration. The public can participate in the panel process by submitting written comments or joining the panel’s teleconferences next month.

U.S. Coast Guard retracts proposed policy concerning bulk shipments of hydraulic fracturing wastewater on barges. The Coast Guard announced that it will publish a notice in the Federal Register withdrawing a proposed policy letter that would have created procedures for shipping hydraulic fracturing wastewater in bulk on barges. The proposed policy letter, which was issued in October 2013, would have required specific chemical analyses of hydraulic fracturing wastewater before permitting bulk shipments of such wastewater on barges. Both environmental groups and some industry representatives had voiced opposition to the proposed policy. According to the notice, barge owners may continue to request case-by-case approval to transport shale gas extraction wastewater under current rules, while the Coast Guard will consider further whether it should institute a standardized process for transporting the wastewater after it has assessed whether current regulations are sufficient.

States

Oklahoma: Oklahoma Corporation Commission (the Commission) releases plan to reduce volume of underground oil and gas wastewater disposal. The Commission issued a plan to reduce underground injection of oil and gas wastewater by approximately 40 percent in 245 disposal wells in the western area of the state. The plan was developed in response to concerns that increased seismic activity in the state is related to underground injection and is one of a series of actions the Commission has taken in recent months.

North Dakota: Oil production declines in response to lower oil prices. North Dakota’s Department of Mineral Resources released statistics indicating that statewide oil production in December 2015 was 2.5 percent below November 2015 levels and 6 percent below record high production levels in December 2014. North Dakota sweet crude prices have dropped from $27 a barrel in December 2015 to $16.50 a barrel this month, and the number of active drilling rigs in the state is at its lowest since July 2009.

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