08 November 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 45

Topics discussed in this week’s Report include:

  • National Park Service released updated regulations governing nonfederal oil and gas rights on lands it manages.
  • Oklahoma Corporation Commission required wastewater injection wells to cease operations or reduce disposal volumes in response to seismic activity.
  • Environmental NGO issued report claiming that increased drilling in the Alpine High field would contaminate natural springs.

Federal

National Park Service releases updated regulations governing nonfederal oil and gas rights on lands it manages.  For the first time in 37 years, the National Park Service (NPS) updated its regulations addressing private and state-owned oil and gas rights on NPS lands.  The new rules extend federal regulation to all oil and gas operations on NPS lands outside of Alaska, whereas 60 percent of such operations previously were exempted.  The regulations include a requirement that oil and gas companies must obtain an operations permit before conducting operations on these lands under most circumstances and eliminate the previous limits on financial assurance requirements that operators must satisfy.  Oil and gas operations are relatively limited on NPS lands; there are drilling operations in only 12 of 413 NPS park sites where the U.S. government acquired the property from a grantor but not the corresponding underground oil and gas rights.

States

Oklahoma Corporation Commission requires wastewater injection wells to cease operations or reduce disposal volumes in response to seismic activity.  In response to a Nov. 1 earthquake in Pawnee County, the Oklahoma Corporation Commission (Commission) ordered the owners and operators of 14 wastewater injection wells in the state’s Arbuckle formation to modify operations.  The Commission’s Nov. 3 advisory requires four of these 14 wells to cease operations.  The Commission is mandating that the volume of wastewater disposed in the other 10 wells must be decreased by 25 percent of their 30-day average.  The advisory also requires an additional eight Arbuckle disposal wells to not exceed their 30-day average disposal volume.  Owners and operators must comply with the advisory by Nov. 10.  The advisory also notes that the U.S. Environmental Protection Agency is imposing similar restrictions on some disposal wells in Osage County.   The Commission and the Oklahoma Geological Survey are currently evaluating the 5.0 magnitude quake that struck in the Cushing area on Nov. 6 but have not yet announced any responsive measures.

Studies

Environmental NGO issues report claiming that increased drilling in the Alpine High field would contaminate natural springs.  A report commissioned by Earthworks, an environmental nongovernmental organization (NGO), alleges that increased oil and gas development in the Alpine High field, located in the Big Bend region of Texas, would threaten the region’s natural springs.  According to the report, the alleged risks include contaminated groundwater, seismicity affecting spring flow and springs running dry due to use of spring water for hydraulic fracturing.  Recent estimates claim that the Alpine High field may contain up to 75 trillion cubic feet of natural gas and 3 billion barrels of oil.

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