27 September 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 39

Topics discussed in this week’s Report include:

  • Environmental groups criticize FERC pipeline permitting process.
  • Groups push EPA for zero discharge hydraulic fracturing in the Gulf.
  • Maryland Department of the Environment will miss deadline for regulations.
  • Pennsylvania extends drilling moratorium in state forests.
  • New Oklahoma seismologist wades into disposal well issues.
  • Researchers use satellite data to attribute Texas seismicity to disposal wells.

Federal

Environmental groups criticize FERC pipeline permitting process. In a letter to Congress, environmental groups from 35 states accused the Federal Energy Regulatory Commission (FERC) of abuse and bias in approving new natural gas infrastructure. Many of the groups have been fighting natural gas pipelines approved under the Natural Gas Act. They claim that the FERC has a conflict of interest by collecting fees from the infrastructure projects that it approves. The letter claims that this creates a bias at the FERC in favor of permitting pipeline construction manifested through alleged “abuses,” such as the use of eminent domain by private companies, obstructing and delaying local opposition to projects through tolling orders, illegally segmenting projects, ignoring environmental harms to local communities, and authorizing projects before other agencies have issued necessary permits. According to the letter, Congress should hold hearings on amending the Natural Gas Act and changing how the FERC reviews infrastructure projects before acting on the Energy Policy Modernization Act of 2016, now under consideration by a conference committee. The bill would streamline the pipeline permitting process and address other energy issues including the electricity grid, liquefied natural gas exports  and energy efficiency in buildings and elsewhere, among other provisions.

Groups push EPA for zero discharge hydraulic fracturing in the Gulf. Comments by environmental groups on the Environmental Protection Agency’s (EPA) draft wastewater permit for off-shore hydraulic fracturing operations in the Gulf of Mexico claim that it fails to protect water quality and endangered species. They urge the EPA to adopt a general permit with a zero-discharge standard, similar to standards applicable to drillers in state waters. Under the proposed rule, the general permit would allow drillers to discharge wastewater in the Eastern Gulf, subject to toxicity limitations and maintaining an inventory of well stimulation chemicals. Environmental groups, however, argue that the EPA failed to perform an Environmental Impact Statement or complete consultation under the Endangered Species Act. The EPA issued an Environmental Assessment and a Finding of No Significant Impact and is proceeding with its consultation obligations. In their comments, the groups also demand that the general permit impose a zero-discharge standard similar to state permits in Alaska, California and Gulf Coast states. The current general permit expired March 31, 2015 but continues to be in effect until the EPA issues the proposed revision.

States

Maryland Department of the Environment will miss deadline for regulations. Despite an Oct. 1 deadline imposed by state law, the Maryland Department of the Environment (MDE) will not be issuing proposed hydraulic fracturing regulations on time. MDE officials are said to be continuing their review of comments on four “issue papers” the department released, but still hope to issue proposed regulations later this fall. The issue papers set out the current administration’s disagreements with proposed regulations issued in January 2015 as former Governor Martin O’Malley left office. Maryland is still under a 2011 moratorium on hydraulic fracturing that cannot be lifted until the MDE issues final regulations. A 2015 law struck a compromise between those who wanted to lift the moratorium and those who wished to continue it for eight years. Under the law, the MDE was scheduled to issue a new set of proposed regulations by Oct. 1, 2016 and final regulations one year later.

Pennsylvania extends drilling moratorium in state forests. The new five-year forest management plan issued by the Pennsylvania Department of Conservation and Natural Resources prohibits oil and gas leases and drilling in any state forest where the Commonwealth controls subsurface mineral rights. The plan effectively extends the moratorium on drilling in public lands ordered in January by Governor Tom Wolf. There are currently 123 existing oil and gas leases on 301,000 acres of public lands which are unaffected by the management plan. The Commonwealth’s Forest Bureau estimates that these are less than 20 percent developed but will eventually involve up to 3,000 wells when fully developed. Another 1.55 million acres, with more than half in shale gas development areas, will not be leased for the foreseeable future. The Forest Bureau stated that it will wait for currently leased areas to be more fully developed and cited the role of forests in mitigating climate change.

New Oklahoma seismologist wades into disposal well issues. Jake Walter, a research associate at the University of Texas’ Institute for Geophysics, was appointed to be the lead seismologist for the Oklahoma Geological Survey, replacing Austin Holland who left the post last summer. The position has received significant scrutiny as Oklahoma regulators wrestle with the state’s seismicity which many attribute to oil and gas wastewater disposal wells. Holland left the position, in part, due to what he described as political pressure regarding the cause of Oklahoma’s earthquakes. Walter studied man-made earthquakes while at the University of Texas and will begin work in November.

Studies

Researchers use satellite data to attribute Texas seismicity to disposal wells. Researchers from Arizona State University and Stanford University used satellite-based radar imaging to track ground movements from a series of five Texas earthquakes in 2012 and 2013. The study, published in Science, claims that the earthquakes, including a magnitude 4.8 event near Timpson, Texas, were caused by oil and gas wastewater injection wells. According to the study, satellite images show the ground near Timpson disposal wells rising 3 millimeters per year between 2007 and 2010. Using the amount of fluid injected at the wells, they estimated that underground pore pressures increased enough near fault lines to cause the earthquakes. The area has not experienced any quakes since the wells decreased injection volumes.

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