12 April 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 15

Topics discussed in this week’s Report include:

  • BLM proposes to approve requested utility rights-of-way to provide access to proposed oil shale project.
  • Oklahoma: Judge dismisses lawsuit challenging oil and gas permits on tribal lands.
  • EIA projects continued growth in ethane production.
  • Researchers report evidence of endocrine-disrupting chemicals found near oil and gas disposal wells.
  • EDF reports that study finds oil and gas well pads contribute significant methane emissions.

Federal

BLM proposes to approve requested utility rights-of-way to provide access to proposed oil shale project. On April 8, the U.S. Bureau of Land Management (BLM) published a notice that it had prepared a draft environmental impact statement (EIS) proposing to approve the Enefit American Oil (Enefit) Utility Corridor Project (Utility Project). Enefit has applied for rights-of-way under the Federal Land Policy and Management Act to build and operate three pipelines, a power line and an upgraded road on federal and state-administered lands. The Utility Project would provide access for Enefit’s South Project, a proposed oil shale operation projected to produce up to 50,000 barrels of oil per day. BLM has no authority to review the South Project, which is a commercial project to develop private oil shale resources on private land, although the draft EIS considers the indirect effects of the development. Environmental groups oppose oil shale development, arguing it increases greenhouse gas emissions and imposes other environmental impacts. BLM will accept comments on the draft EIS for 60 days.

States

Oklahoma: Judge dismisses lawsuit challenging oil and gas permits on tribal lands. A district court in the Northern District of Oklahoma recently dismissed a lawsuit challenging the legality of 15,000 oil and gas wells and 5,000 disposal wells located on tribal land in Osage County, Oklahoma. The class-action lawsuit alleged that Bureau of Indian Affairs (BIA) failed to comply with the National Environmental Policy Act (NEPA) because it relied on a 1979 environmental assessment that plaintiffs alleged did not account for the impact of modern oil and gas development. The court’s decision did not address the merits of plaintiffs’ NEPA claim and instead held that plaintiffs’ programmatic challenge to the BIA’s oil and gas leasing program failed to identify a discrete agency action that is required for lawsuits brought under the Administrative Procedure Act.

Studies

EIA projects continued growth in ethane production. The U.S Energy Information Administration (EIA) recently projected that ethane production would grow to 1.4 million barrels per day between 2015 and 2017, an increase of 300,000 barrels. Ethane is a liquid component of natural gas that is prevalent in the Marcellus and Utica shale formations and can be used as a feedstock in plastics manufacturing. While the supply of ethane currently exceeds demand, the EIA also projects that demand will increase by 130,000 barrels per day due to six ethane crackers under construction. In addition, the EIA noted that additional demand could come from export markets and from power production.

Researchers report evidence of endocrine-disrupting chemicals found near oil and gas disposal wells. Researchers from Duke University, the U.S. Geological Survey and the University of Missouri indentified endocrine-disrupting chemicals (EDCs) in the vicinity of an oil and gas wastewater disposal facility in West Virginia. The study results, which will be published in Science of the Total Environment, found elevated levels of EDCs in samples collected on-site and at downstream locations in comparison to upstream and background samples. The researchers stressed, however, that there has been no systemic study evaluating the effects of oil and gas wastewater disposal wells on surface water quality.

EDF reports that study finds oil and gas well pads contribute significant methane emissions. The Environmental Defense Fund (EDF) reports that it has completed a study that concludes that oil and gas well pads contributed a disproportionate amount of the methane emissions from the oil and gas sector. According to EDF, the study, which will be published in Environmental Science & Technology, defines these larger emitters as facilities that emit between one and three grams of hydrocarbons per second. The researchers used a helicopter equipped with infrared technology to fly over 8,000 well pads in seven different petroleum-producing basins. According to the abstract, the study found these larger emitters on four percent of well pads nationally, although rates in individual basins varied from 1 to 14 percent. The study also found that tank hatches and tank vents were the most common equipment that contributed to these emissions.

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