27 July 2015

Sidley Shale Gas and Hydraulic Fracturing Report

Vol. 4, No. 30

Topics discussed in this week’s Report include:

  • EPA Issues Methane Challenge to Reduce Emissions from Oil and Gas Industry.
  • EPA Inspector General Report Says Agency Must Do More to Address Hydraulic Fracturing.
  • Oklahoma Expands Review of Underground Injection Wells Due to Concerns Over Seismicity.
  • California Governor Creates Panel to Evaluate Hydraulic Fracturing.

Federal

EPA Issues Methane Challenge to Reduce Emissions from Oil and Gas Industry. On July 23, 2015, the Environmental Protection Agency (EPA) released the Natural Gas STAR Methane Challenge Program, which is intended to reduce emissions from the oil and gas industry. The voluntary program is part of the Obama administration’s broader plan to reduce methane emissions. Additional methane reduction programs include a proposed rule for new sources in the oil and gas industry that is currently under White House review. The voluntary program for existing sources includes several changes from EPA’s 2014 proposal that provide increased flexibility to address emissions at the company level, rather than facility level, as well as increased transparency. EPA will accept comments on the Methane Challenge until September 1, 2015, and intends to finalize the program in time for a January 1, 2016 launch.

EPA Inspector General Report Says Agency Must Do More to Address Hydraulic Fracturing. A recent report issued by the Office of Inspector General concluded that EPA is not doing enough to protect water resources from risks associated with hydraulic fracturing. The report listed potential risks to water from several stages of the hydraulic fracturing process, including well construction, chemical mixing, well stimulation and wastewater treatment. The report identified two areas for increased federal involvement—oversight of the use of diesel fuels during hydraulic fracturing and chemical disclosure. EPA is currently working with states to develop strategies to help states address the use of diesel fuels in hydraulic fracturing without a Safe Drinking Water Act permit. The agency is also in the midst of reviewing comments related to chemical disclosure, after completing an advanced notice of public rulemaking in 2014.

States

Oklahoma Expands Review of Underground Injection Wells Due to Concerns Over Seismicity. The Oklahoma Corporation Commission (OCC) recently expanded a directive aimed at better understanding potential links between underground injection and increased seismicity in the state. The expanded directive applies to 211 disposal wells and requires them to prove, within 30 days, that they are not injecting fluids below the Arbuckle formation. One prior study had linked increased seismicity to injection below the Arbuckle. The directive is part of a larger effort by Oklahoma to better understand the causes of the increased seismicity that has been experienced in the state over the past several years.

California Governor Creates Panel to Evaluate Hydraulic Fracturing. On July 22, 2015, California Gov. Jerry Brown announced the formation of a panel to review a recent state-ordered assessment of hydraulic fracturing. The panel will include members of nine different state agencies. The panel will be charged with reviewing a scientific assessment of well stimulation treatments prepared by the California Council on Science and Technology (CCST), which was critical of aspects of the state’s regulation of hydraulic fracturing. CCST reported, for example, that there was inadequate tracking of wastewater from hydraulic fracturing, which prevents the state from evaluating how water resources may be impacted.

If you have any questions regarding this Report, please contact us.

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