13 July 2015

Sidley Shale Gas and Hydraulic Fracturing Report

Vol. 4, No. 28

Topics discussed in this week’s Report include:

  • BLM Issues Master Leasing Plan.
  • Activists Petition for Federal Takeover of Oklahoma Disposal Program.
  • EDF Asserts $360 Million in Natural Gas From Federal Lands Wasted.
  • Ohio: Last Hydraulic Fracturing Ban Overturned.
  • California: New Drilling Rules for Groundwater.
  • Drilling Waste Unlikely to Impact Waters.
  • Barnett Methane Emissions From Small Group of Sites.

Vol. 4, No. 28

Federal

BLM Issues Master Leasing Plan. The U.S. Bureau of Land Management (BLM) issued an oil and gas master leasing plan (MLP) for the North Park area of Colorado, the first of 16 to govern oil and gas development on sensitive federal areas. The MLP includes “no surface occupancy” drilling restrictions on 198,000 acres, constituting slightly more than half of federal land in north-central Colorado. An additional 321,000 acres are subject to timing restrictions on drilling operations. The stated intention of the restrictions is to protect habitat for the greater sage grouse, mule deer and elk. BLM is planning 15 other MLPs that are expected to contain similar restrictions on millions of acres of public land in Colorado, Montana, Utah and Wyoming. Final environmental reviews were recently completed for two more draft MLPs, which would cover an additional 1.1 million acres of federal land in Colorado. The Western Energy Alliance is protesting the North Park MLP, arguing that BLM is ignoring its mandate for federal lands to accommodate multiple uses in hopes of driving away oil and gas development.

Activists Petition for Federal Takeover of Oklahoma Disposal Program. Several activists petitioned the EPA Administrator to rescind its delegation of authority to Oklahoma to manage its wastewater disposal program. According to the petition, the Oklahoma Corporation Commission (OCC) is failing to adequately restrict the underground injection of oil and gas wastewater, and fine companies that inject wastewater, leading to continued low-level seismic activity. The underground injection control program is part of the federal Safe Drinking Water Act, where the Environmental Protection Agency (EPA) can approve state authority to implement federal regulations. If granted, the petition would result in a federal takeover of the program. EPA last evaluated OCC’s administration of the program in April 2013, finding generally satisfactory performance and commending the Oklahoma Geological Survey’s investigation into the state’s seismic activity.

EDF Asserts $360 Million in Natural Gas From Federal Lands Wasted. An ICF International report commissioned by the Environmental Defense Fund (EDF) concluded that venting and flaring of natural gas on federal and tribal lands in 2013 wasted approximately $360 million in recoverable gas. The bulk of the gas reportedly came from operations in Colorado, New Mexico, North Dakota, Utah and Wyoming and could have served the equivalent of 1.6 million homes, while providing significant royalty payments to federal and tribal rights holders. ICF asserts that, even with lower natural gas prices, the value of the lost natural gas exceeds the cost of recovering it. EDF stated that the analysis is intended to influence regulations on flaring and venting on federal lands currently being considered by BLM.

States

Ohio: Last Hydraulic Fracturing Ban Overturned. Broadview Heights’ 2012 ordinance banning hydraulic fracturing was officially struck down, ending the last suit over state law preemption of municipal bans in Ohio. Although a court ruled that Broadview Heights’ ban was illegal in March 2015 after the Ohio Supreme Court invalidated a similar ban in Munroe Falls, environmental groups had filed a separate class action suit to defend the ordinance, claiming that the city itself would not adequately defend it. The groups argued that the ordinance, which passed as a ballot measure in 2012, should be immune from preemption or else state law would violate the right of people to democratic self-governance and elevate “corporate rights” over those of individuals. The Cuyahoga County Court of Common Pleas, however, found that these arguments could not overcome state law preemption of municipal oil and gas regulations. The groups said they plan to appeal.

California: New Drilling Rules for Groundwater. The California Water Resources Control Board will now require companies using unconventional drilling techniques to submit detailed groundwater protection plans for government approval, before beginning site work. Companies have provided groundwater monitoring plans since the state passed S.B. 4 in 2013, but the Board had not issued regulations detailing what those plans required until now. The new rules set out the sampling methods companies must use, along with monitoring frequencies and the chemicals tested for in samples. Plans must also identify remedial strategies that could be taken in the event of actual water contamination. Representatives from both environmental groups and industry associations announced support for the new regulations, which included compromises for both sides.

Studies

Drilling Waste Unlikely to Impact Waters. The West Virginia Department of Environmental Protection (DEP) has concluded that landfilled drilling wastes are unlikely to impact surface or ground waters. DEP’s study examined run-off from four landfills that currently accept drilling wastes, such as drill cuttings, and compared to run-off from two landfills that do not. Researchers also reviewed potential risks from heavy rainfall, treatment facility overflows, cracks in pipes and other possible system failures. The study was mandated by a 2014 West Virginia law and meant to explore the construction of a drilling waste landfill, estimated to take five years and $80 million to build.

Barnett Methane Emissions From Small Group of Sites. University of Houston researchers report that a small number of Barnett Shale gas wells, compressor stations and processing plants were responsible for a high proportion of fugitive methane emissions. According to the report, airborne and ground-based measurements show that eight sources—out of 300,000 active wells—were responsible for 10 percent of the area’s methane emissions and approximately 50 well pads, one processing plant and two to three compressor stations were responsible for 19 percent of area emissions. The authors suggested that leak detection and repair programs could reduce emissions from sources with disproportionately high fugitive emissions.

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