Division of Energy, Mineral, & Land Resources - Energy Program

1. Division of Energy, Mineral, & Land Resources - Energy Program Walt Haven, P.G. Photo courtesy of W.T. Haven, 2013

2. Session Law 2012-143 • Establishes the Mining and Energy Commission • Modern regulatory oil and gas program with rules for: • Well Permitting • Well Construction • Well Abandonment • Wellhead & Site Standards • Drilling Units • Environmental Sampling • Water Use & Management • Waste Management & Disposal • Chemical Disclosure • Hydraulic Fracturing/Stimulation Image courtesy of blog.pubquizusa.com

3. Mining & Energy Commission Committees • Administration of Oil and Gas Committee • Environmental Standards Committee • Water and Waste Committee • Rules Committee • Note: The “Fracking Board” does not exist. • http://portal.ncdenr.org/web/mining-and-energy-commission/ Photo courtesy of W.T. Haven, 2013

4. Mining and Energy Commission Study Groups • Funding Levels and Potential Funding Sources • Local Government Regulation • Coordinated Permitting • Protection of Trade Secrets and Proprietary Information • Compulsory Pooling

5. Water Acquisition and Management Rule • Approved by the Commission • Regulates quantity of water withdrawn from groundwater & surface water resources • Requires submission of a water use plan Photo courtesy of W.T. Haven, 2013

6. Well Construction Rule • Approved by the Commission • Notifications to DENR (cementing, loss of control, etc.) • Well casing & cementing standards • Well equipment standards • Well installation standards • Well control & blowout prevention Photo courtesy of R. Channell, 2013

7. Well Construction Rule • Surface casing • 100 ft below deepest freshwater zone • Cement returned to surface • Intermediate casing • Cemented from bottom • to 200 ft above previous • casing string • (non water zones) • Cemented from bottom • to 100 above top of • shallowest freshwater zone Image courtesy of Chesapeake Energy: Protecting Groundwater During Natural Gas And Oil Drilling, May 2012

8. Baseline & Subsequent Testing Rule • Draft passed by Commission • Testing of water supplies (5,000 ft radius) • First round: within 12 months of drilling (full list) • Next round: 6 to 12 months after drilling (full list) • Subsequent round: 18 to 24 months after construction completion (indicator list) • Sampling report sealed by P.E. or P.G.

9. Baseline & Subsequent Testing Rule • Full List: pH, specific conductance, total dissolved solids (TDS), turbidity, alkalinity, calcium, chloride, magnesium, potassium, fluoride, sodium, sulfate, arsenic, barium, boron, bromide, chromium, iron, manganese, selenium, strontium, lithium, lead, zinc, uranium, isotopic radium (226Ra and 228Ra), isotopic strontium (87Sr and 86Sr), trihalomethanes, benzene, toluene, ethyl benzene, xylenes (BTEX), diesel range organics (DRO), gasoline range organics (GRO), total petroleum hydrocarbons (TPH), polycyclic aromatic hydrocarbons (PAH) (including benzo(a)pyrene), and dissolved methane, propane, and ethane. • Indicator List: pH, specific conductance, TDS, chloride, sodium, divalent cations, and dissolved methane, propane, ethane.

10. Prohibited Chemical Constituents Rule • Approved by the Commission • Chemical Abstracts Service (CAS) Numbers • Restricts use of diesel fuels in the subsurface • US EPA: Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels – Draft: Underground Injection Control Program Guidance #84

11. Waste Management Rule • Under development with the Water and Waste Management Committee • Pits and tanks for management of fluids: • Drilling muds/cuttings, flowback, and produced water • Re-use preferred over injection • Leak detection for pits • Tanks are preferred over pits • Final fluids disposal/treatment methods - pending • Pit design will require P.E. certification (USFWS Photo by P. Ramirez)

12. Wellhead Standards Rule • Approved by the Mining and Energy Commission • Standards for wellhead area (fencing, vegetation, etc.) • Standards for wellhead completion (materials, valves, etc.) Photo courtesy of R. Channell, 2013

13. Well Closure (Draft) Rule • Approved by Administration of Oil & Gas Committee • Awaiting review by Rules Committee • Permanent well abandonment • Temporary well abandonment – 5 year period • Shut-in status – 1 year period .

14. Setback (Draft) Rule • Under review by Environmental Standards Committee • Stakeholder group review completed • Research included Alabama, Arkansas, Colorado, Ohio, Pennsylvania, California, Texas, Wyoming, and New York • Research included setbacks for other industries in North Carolina

15. Potential Local Level Interactions

16. North Carolina Oil and Gas Study under Session Law 2011-276, April 30, 2012, prepared by the North Carolina Department of Environment and Natural Resources and the North Carolina Department of Commerce.

17. Drilling and Well Construction 10,000 ft. down & horizontal 130 ft. tall 90 ft. drill rods at a time.

18. Typical Timeline for Installing an Oil or Gas Well • Well Pad Construction – 7 to 14 days • Drilling Operations – 28 to 35 days • Hydraulic Fracturing – 2 to 5 days • Brophy, C. & Wolfe, F. 2013, Noise Abatement, Odors, Dust, and Lighting presentation to Environmental Standards Committee, North Carolina Mining & Energy Commission Photo courtesy of www.greglatza.com

19. Hydraulic Fracturing Supply Lines Blowout Preventer Water Additives Sands

20. Does Fracking Cause Groundwater Contamination? Source: Groundwater Protection Council, 2011. State Oil and Gas Agency Groundwater Investigations And Their Role in Advancing Regulatory Reforms

21. Discussion

22. Current Staffing Walt Haven, P.G., Energy Program Supervisor Ryan Channell, Senior Geologist Katherine Marciniak, P.G. Senior Specialist Rosalind Harris, Administrative Support Ashley Barham, Intern