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Background

Guidance on the Extraction of Gas & Oil on Federally Obligated Airport Property Advisory Circular FAA Eastern Region 35 th Airport Conference Hershey, PA April 3, 2012. Background. Technological advances combined horizontal drilling & hydraulic fracturing in early 2000s

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Background

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  1. Guidance on the Extraction of Gas & Oil on Federally Obligated Airport Property Advisory CircularFAA Eastern Region35th Airport ConferenceHershey, PAApril 3, 2012

  2. Background • Technological advances combined horizontal drilling & hydraulic fracturing in early 2000s • Deposits previously not tapped are now accessible • Current “gas and oil” boom • Natural gas extraction is the principal focus of hydraulic fracturing.

  3. What is Hydraulic Fracturing? http://www.propublica.org/special/hydraulic-fracturing-national

  4. Mineral Shale Deposits in the US

  5. Current Regulatory Environment • Mineral extraction activities are permitted by state agencies or local municipalities. • Statutory exemptions for gas and oil extraction activities from Federal Law* • Clean Water Act - oil and gas operations exempt except treatment of flowback or produced water returning to surface if they violate water quality standards. • Clean Air Act – exemption for aggregation of emissions from oil and gas exploration and production operations • Safe Drinking Water Act – hydraulic fracturing exempted unless the fluids contain diesel fuel *These may be regulated by individual states.

  6. Public Concerns • Public is concerned with potential impacts • Water quality and Emissions are primary concerns Scranton, PA

  7. Changes to the Regulatory Environment • Congress and EPA are currently considering or reviewing changes to aspects of the statutory and regulatory framework.

  8. Changes to the Regulatory Environment • DOE created a Natural Gas Subcommittee to make recommendations to improve the safety and environmental performance of natural gas hydraulic fracturing from shale formations as part of the President’s “Blueprint for a Secure Energy Future.” • Committee issued final report on November 18, 2011. • In February 2012, BLM has issued draft rules on hydraulic fracturing on federal lands requiring: • disclosure of chemicals used; • the amount and source of fracking water; • the plan of disposal and reporting actual disposal materials; and • tests to ensure well bores maintain their integrity.

  9. FAA guidance on gas and oil leases • Gas and oil operators, as well as airport sponsors, are interested in extracting oil and gas resources located under airport land. • Airport sponsors must maintain safe airport operations and adhere to grant obligations and assurances. • Preserve Rights and Powers / Good Title • Fair Market Value Revenue • Prevention of Hazards and Obstructions • The guidance does not encourage gas and oil leasing on-airport property.

  10. Gas and Oil Operation on-Airport • Current Oil and Gas Operations on-Airport • FAA Airports Regions who have or are currently reviewing gas and oil leases for on-airport • AEA – New York, Pennsylvania, and West Virginia • AGL - North Dakota, Ohio and Michigan • DFW and surrounding areas • DFW is a large scale on-airport shale gas development • DEN is conducting its own gas and oil operations • It is anticipated that more airports will be approached by developers as areas are tapped. • Most active shale formations currently • Marcellus Shale in the North East • Barnett Shale in Texas • Haynesville/Bossier Shale in Louisiana • Bakken Shale in North Dakota

  11. Background on Guidance • AEA Region prepared mineral extraction Guidance in October 2010 • New York delegation visited in January and May 2011 • FAA committed to establishing National Guidance to facilitate consistent application of FAA requirements for gas and oil leasing and on-airport development.

  12. Background on Guidance • Established a working group to draft guidance (January 2011). • APP 400 • ACO 100 • AAS 300 • AGC • Region and ADO representatives • AEA, • ASW, • AGL and • ANM

  13. Advisory Circular – Goals / Objectives • Provide consistent guidance for airport sponsors to develop gas and oil leases and development proposals in compliance with their Federal obligations; • Incorporating existing FAA requirements for: • Airspace/Aeronautical Studies and Notifications; • On-airport Construction and Development; • Airport Planning; • Environmental Documentation; and • FAA revenue use policies. • Provide FAA field offices on what is needed for gas and oil project review

  14. “It’s an Airport not a Gas/oil Field” • Any exploration or development on Airport Surface Land must be subordinated to FAA Safety and Operations Standards and Requirements. • Gas and oil leases must restrict access and use of airport operational and aeronautical development land. (No drill zones defined) • Airport Design and Construction Rules must be applied. (airspace, hazard elimination/prevention, environmental compliance, etc). • FAA must Approve Changes to the Airport Layout Plan (ALP). • Lease is Contingent on ALP approval • NEPA Review for FAA Approval • Gas and Oil leases terms and provisions must be at Fair Market Value (Signing bonus, royalty, surface land rents, terms and expiration provisions.)

  15. Outline of Guidance • Chapter 1provides a brief overview of gas and oil production in the United States. • Chapter 2provides the airport sponsor with FAA requirements and recommendations on how to develop acceptable on-airport gas and oil development plans and proposals. • Chapter 3provides an overview of the FAA review process and submittal documentation requirements • Addendums: • Listing of Recommended and Required Gas and Oil Lease Terms and Restrictions • Listing of Government Agency References and Authorities Associated with Shale Gas and Oil Development (i.e., EPA, DOE, BLM, state gas and oil development agencies, etc.)

  16. Next Steps • Finalize a Draft Advisory Circular “Guidance on the Extraction of Gas and Oil on Federally Obligated Airport Property” • Meet with Resource Agencies • Circulate for internal FAA review (ARP, Regions, other FAA Offices) • Federal Register notice for public review and comment

  17. Thank You!

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