07 September 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 36

Topics discussed in this week’s Report include:

  • Colorado voters will not see fracking measures on the November ballot.
  • Oklahoma shuts down wastewater disposal wells following earthquake.
  • Victoria becomes first Australian state to introduce ban on hydraulic fracturing.


Colorado voters will not see fracking measures on the November ballot. Two ballot measures that would allow communities to ban and regulate hydraulic fracturing will not be considered in the November election after failing to meet state election requirements. Initiative 75 would have authorized local governments to ban or limit oil and gas development. Initiative 78 would have imposed mandatory geographic restrictions, or setbacks, on well locations near certain areas such as parks, lakes and rivers. The measures garnered the requisite number of signatures, but after the state signature verification procedure (which typically eliminates nearly 25 percent of collected signatures), the proposals did not have the support required for the ballot. The environmental groups that drafted and supported the measures have 30 days to file a challenge to the decision.

Oklahoma shuts down wastewater disposal wells following earthquake. Following a magnitude-5.6 earthquake near Pawnee, Oklahoma, on Aug. 28, state regulators contacted the operators of over three dozen wastewater injection wells to request shutdown of operations. This is the second time in the past two weeks that seismic activity prompted the Oklahoma Corporation Commission to order well operators to stop operations. The current request covers approximately 725 square miles near the earthquake’s epicenter, and operators are expected to shut down their wells within 10 days. The region where the earthquake occurred, within the Arbuckle shale formation, is also subject to a regional earthquake response plan issued by the commission in March. The plan’s goal is to reduce the number of earthquakes in the area by scaling back wastewater injection volumes by 40 percent.


Victoria becomes first Australian state to introduce ban on hydraulic fracturing. Victorian Premier Daniel Andrews announced last week that Victoria would permanently ban all onshore unconventional gas exploration, including fracking, in legislation that will be introduced later this year. Additionally, the state’s moratorium on conventional onshore drilling will be extended through June 2020. Victoria is the first Australian state to institute such a ban. The announcement was met with mixed reactions. Lock the Gate, a coalition of local environmental groups, farmers and rural communities, heralded a decision to protect what it estimates as 1.4m hectares of Victoria that could face onshore gas mining. The Australia Institute applauded the decision as good economic policy following Queensland’s foray into oil and gas development that cost agricultural jobs without generating similar numbers of gas exploration jobs. Industry groups are opposed to the ban, and at least one company, Lakes Oil, is evaluating legal action against the state after its shares fell substantially during trading following the announcement.

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