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Fracking – An Update

Fracking – An Update. Keith Turner Watkins & Eager. The Issues. Water usage Fracking fluid disclosure Infrastructure – lack of Transportation – direct Support – indirect Fracking wastewater discharge Groundwater protection. Issues. Other side effects Earthquakes Air pollution

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Fracking – An Update

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  1. Fracking – An Update Keith Turner Watkins & Eager

  2. The Issues • Water usage • Fracking fluid disclosure • Infrastructure – lack of • Transportation – direct • Support – indirect • Fracking wastewater discharge • Groundwater protection

  3. Issues • Other side effects • Earthquakes • Air pollution • Loss of insurance coverage

  4. Federal ActionsHydraulic Fracturing

  5. Federal ActionsHydraulic Fracturing • April 2012 – EPA promulgated new air regulations with a goal to reduce VOC emissions: • Phased requirements for all NEW natural gas wells • Before Jan 2015 – flare or capture • After Jan 2015 – capture New requirements for production controllers, storage vessels and dehydrators

  6. Federal Actions • Exceptions for new wells: “Green” completions are not required for: • New exploratory (“wildcat”) wells or delineation wells (used to define the borders of a natural gas reservoir), because they are not near a pipeline to bring the gas to market. • Hydraulically fractured low-pressure wells, where natural gas cannot be routed to the gathering line. • Owners/operators must reduce emissions from these wells using combustion during the well-completion process, unless combustion is a safety hazard or is prohibited by state or local regulations.

  7. Federal Actions • EPA has added notification and reporting requirements: • must notify EPA by e-mail no later than two days before completion work begins. • owners/ operators must submit a report on their well completions that is certified by a senior company official attesting to the report’s truth, accuracy and completeness

  8. Federal Actions • Requirements for Storage Vessels at the Well Site • New storage tanks with VOC emissions of 6 tons a year or more must reduce VOC emissions by at least 95 percent. EPA expects this will generally be accomplished by routing emissions to a combustion device.

  9. Federal Actions • NSPS Requirements for New and Modified Compressors • Capture and reroute or flare • Required maintenance schedules on seals etc.

  10. Title V case – 6th Circuit • Summit Petroleum • 41 sites • Common Control • Court overturn EPA

  11. Prior Federal ActionHydraulic Fracturing • Energy Policy Act of 2005, Congress revised the SDWA definition of “underground injection” to specifically exclude from UIC regulation the “underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities

  12. Hydraulic Fracturing • EPA published on May 10, 2012, Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels—Draft. The initial public comment period for this proposal was 60 days –the deadline was extended to August 23, 2012 • Not exempt activity (as other hydraulic fracturing fluids currently are) - diesel hydraulic fracturing will require UIC permit • Important threshold question – how will diesel be defined?

  13. EPA's Study of Hydraulic Fracturing • At the request of Congress, EPA is conducting a study to better understand any potential impacts of hydraulic fracturing on drinking water and ground water • first progress report is planned for late 2012. A final draft report is expected to be released for public comment and peer review in 2014

  14. EPA Web Site

  15. Bureau of Land Management Proposing Hydraulic Fracturing Rule • May 2012 – Rule will regulate hydraulic fracturing on public land and Indian land. The rule would: • (1) provide disclosure to the public of chemicals used in hydraulic fracturing on public land and Indian land • (2) strengthen regulations related to well-bore integrity • (3) address issues related to flowback water (wastewater) • Public comments were extended thru September 10, 2012

  16. BLM – not just out west – in the Southern Section of AWMA • Currently there are several oil and gas leases in process in Alabama and Mississippi for oil and gas leasing in 2012 and 2013 • Recent oil and gas leases completed in Alabama and Mississippi in 2012 • US Forest Service delayed certain leases this year due concerns over environmental issues

  17. National Academy of Sciences -Report on Hydraulic Fracturing and Earthquakes • Three major findings emerged from the study: • (1) the process of hydraulic fracturing a well as presently implemented for shale gas recovery does not pose a high risk for inducing felt seismic events • (2) injection for disposal of waste water derived from energy technologies into the subsurfacedoes pose some risk for induced seismicity, but very few events have been documented over the past several decades relative to the large number of disposal wells in operation • (3) Carbon Capture and Storage operations, due to the large volumes of injected fluids, may have potential for inducing larger seismic events.

  18. Recent State Action • North Carolina passed new law – new commission with broad authority, prohibits certainhydraulic fracturing chemicals, requires additional controls and reporting • Vermont banned hydraulic fracturing in May 2012 (had no oil or gas ongoing activities) • New York and New Jersey – under moratorium

  19. Other State Legislation • Maryland – • new law this summer that creates a presumption that contamination found in a drinking water well in the area (a 2500 foot radius) of a gas well is caused by the gas exploration or production activity. • Presumption lasts one year from the last drilling, well completion or fracking activity. • Eliminate presumption if offer to test, share results and land owner refuses to allow access to drinking water well • Note - Maryland under drilling ban until study complete in 2014

  20. Water withdrawal permits Threshold In 1000’s gallons Fracking Water Withdrawal Permitting

  21. EPA new rules will create consistent requirements

  22. EPA rules will now control

  23. New York 30 town bans 80 town moratoriums

  24. Shale Gas Plays

  25. Mississippi • Current operators in early stages of development thru 2013 – limited number of wells utilizing fracking • If decision makes business sense – by 2014 could see up to 20 wells a month underway

  26. Mississippi Oil and Gas Board • Proposed Rule 26 – Requirements For Hydraulic Fracture Stimulation - Report Of Shooting Or Treating • Must obtain prior approval • Demonstrate casing is sufficient to protect • Reporting • Disclosure • Identify fracking fluids - (Fracfocus.org) • Based on recently passed Louisiana regulations • Will be taken up at September 19th Board meeting • Potentially effective early November Currently 2 wells reported in Miss and 55 in Ala.

  27. Mississippi Department of Environmental Quality • Working closely with operators • Wells using up to 12 million gallons of water to develop up to 8000 foot horizontal well • 300,000 to 400,000 gallons per stage • Local geology is important – for example the average amount of water used in hydraulic fracturing in California is 164,000 gallons per job

  28. Mississippi • Currently using surface water – rivers and farm ponds • Limit to flows above minimum • Trucking and piping water to sites • Industry considering pipe line from Mississippi River • No requests to use groundwater - yet

  29. Mississippi - Wastewater • To date no NPDES permits issued for wastewater disposal

  30. Hydrocarbon Formations – Post Removal • Who has legal ownership of the pore space post gas/oil removal ?

  31. Kansas • S.B. 271 – Ownership of Pore Space • The ownership of all pore space in all the strata below the surface lands and waters of Kansas would be vested in the owners of the surface above the strata.

  32. Wyoming • 34-1-152. Ownership of pore space underlying surfaces. • (a) The ownership of all pore space in all strata below the surface lands and waters of this state is declared to be vested in the several owners of the surface above the strata

  33. North Dakota • Title to pore space. Title to pore space in all strata underlying the surface of lands and waters is vested in the owner of the overlying surface estate.

  34. Mississippi Geologic Sequestration of Carbon Dioxide Act (§53-11-1) • Oil and Gas Board determines use of reservoir • Oil/gas production or carbon storage or both • If determined (by O & G Board)that sequestration is best use – must obtain approval of the majority interest of surface owners • Must obtain full approval from owners within 12 months from Order

  35. Questions ? Keith Turner 601-965-1958

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