hydraulic fracturing - myths and maneuvers
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Presented on August 26, 2012TRANSCRIPT
Hydraulic Fracturing Myths and Maneuvers
Presented by
Cindy Bishop
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August 26, 2012
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Hydraulic Fracturing: Myths and Maneuvers
I. Hydraulic Fracturing 1011. What is it?2. Why do we care?3. What’s the problem?
II. Regulations – Who’s on First?1. Texas2. EPA
III. Myths (Studies)IV. Maneuvers
1. US v. Range Production Company2. Maryland v. Chesapeake Energy Corp. 3. Town of Dish v. Atmos Energy, et al.
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General Steps •Obtain water source•Well construction•Fracing•Waste disposal
Fracing•Liquid pressure•Fissures•Propping agent•Flowback water
What is Hydraulic Fracturing (“Fracing”)?
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•Natural gas heats ½ of US homes•Natural gas fuels more than 20% of annual electricity production•Natural gas use will increase as coal plants are retired•20% of U.S. gas supply will be from shale gas by 2020
Why do we care?
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NATURAL GAS PRODUCTION BY SOURCE (TCF/YEAR)
It is projected that shale gas will comprise over 20% of the total US gas supply by 2020 (EPA)
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•Since 2003 15,675 gas wells drilled and fracked in North Texas•2,000 wells in Fort Worth
Effect Locally
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About 1/3 flowback liquid returns
Disposal well Surface impoundment Land surface
Wastewater Disposal
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Waste Disposal – Surface Impoundment
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WHAT’S THE PROBLEM?
Natural Gas in Well Water
What’s the Problem?
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•Water for fracing•Fracing• Chemicals in frac water•Methane release•Disposal of flowback water•Air emissions•Noise, light, odor•Earthquakes
What’s the Problem?
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Regulating Fracing
Who’s on First?
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The Texas Railroad Commission has primary jurisdiction over oil and gas drilling. Tex. Nat. Res. Code § 81.051; 16 Tex. Admin Code § 3.5
Texas Commission on Environmental Quality has primary jurisdiction over conservation of natural resources and protection of the environment 30 Tex. Admin Code § 5.012
Texas Regulations
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• Well Drilling/re-completion• Disposal wells• Pits for storage of oil field fluids or oil
and gas wastes.• Spills associated with production• Oil and Gas Waste• Applicable Regs: 16 Tex. Admin. Code §3.8 (Water Protection); §
3.13 (Casing, Cementing, Drilling, and Completion Requirements); RRC Rule 38; 40 CFR §261.4(a)(12)
• Surface casing program (eff. 9/1/11)
Railroad Commission
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Disclosure of Fracing Chemicals (16 TAC § 3.29)
◦ Applies to fracturing operations where RRC has issued an initial drilling permit on or after Feb. 1, 2012
◦ Supplier/service company to operator – 15 days after completion of fracing
◦ Operator to RRC – disclose into online database on or before submission of well completion report to RRC (30 days after well completion)
Railroad Commission
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Disclosure of Fracing Chemicals (16 TAC § 3.29)
◦ Disclose: Volume of water used Each fracing chemical Concentrations Suppliers
◦ Exception for trade secrets
Railroad Commission
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Surface water use
Spills of hazardous substances
Nuisance Odor Complaints
Air Emissions◦ Permit by Rule (30 TAC §106.352)
New PBR: applies to Barnett Shale operations constructed or modified after April 1, 2011
◦ Existing operations in Barnett Shale claiming old PBR must notify TCEQ by Jan. 1, 2013
TCEQ
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Memorandum of Understanding: 16 TAC § 3.30
RRC or TCEQ?
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Wastewater discharges
Stormwater
Underground injection wells involving diesel
TSCA § 8(c)
NSPS/NESHAP revisions (final rule 8/16/12)
Federal Regulation
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Energy Policy Act of 2005 specifically excludes hydraulic fracturing operations.◦ Exemption for: “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.” 42 U.S.C. § 300h(d)(1)(B)(ii).
Federal Regulation
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No EPA action after 2005 Energy Policy Act Summer 2010 – EPA posts on its website
that fracing with diesel requires a UIC permit
August 2010 – Independent Petroleum Association v. EPA (D.C. Cir.)
Federal Regulation
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Federal Air RegulationsNSPS Revised:• Equipment Leaks (KKK)• SO2 (LLL)
New (OOOO):• Hydraulic Fracturing• Gas-driven Pneumatic Devices, Centrifugal and
Reciprocating Compressors• Storage Vessels
Applies to new facilities that were constructed or modified after August 23, 2011
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Federal Air RegulationsNESHAP Revised• Oil & Gas Production Facilities (HH)• Gas Transmission and Storage (HHH)
New• Small Glycol Dehydrators• Storage Vessels at Major Sources
Must Notify EPA within 1 year after rule becomes final
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Conceptual equipment layout
REC timelineAugust 23
NSPS Applicability June 1-ish
Predict Final
Publication
Phase I “Flare-Friendly”
2011 2012 2013 2014 2015 2016 Etc.
Phase II “Full REC”
60 Days from Publication August 1-ish
Gas vented during flow-back for hydraulic fracturing of gas wells must be controlled and contained, sold or used
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Chemical disclosure statutes in Arkansas, Pennsylvania, Wyoming and Colorado, Michigan, Texas, California
Drilling moratoriums: NY, Maryland, PA
State Actions
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Barnett Shale
◦ City of Fort Worth rules on drilling
◦ Town of Dish blocks drilling
◦ City of Dallas has not issued any drilling permits
task force for considering drilling requirements
Local Attempts at Regulation
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Current Studies
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Sampled 68 drinking water wells in PA and NY
Methane concentrations were 17 times higher in water wells near active vs. inactive wells
Methane was thermogenic “Methane Contamination of Drinking
Water Accompanying Gas Well Drilling and Hydraulic Facturing”
Duke Study (May 2011)
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85% of wells sampled contained thermogenic methane – regardless of location
No fracing fluid detected in shallow water
Water properties consistent with historical data
Methane likely did not come from actual fracing
Duke Study (May 2011)
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Methane is a GHG Fracing has a higher carbon footprint than
coal 3.6 to 7.9% escapes in fracing 1.7 to 6% escapes in regular drilling “Hogwash”
Cornell Study (April 2011)
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January 6, 2012 New Cornell Study Prior study was “seriously flawed” Fracing has a carbon footprint that is half
to a third that of coal
Cornell Study
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2012 - EPA proposed year to release interim results
2012 to 2014 - additional results to be released as particular investigations completed
2014 - EPA proposed year to release another report
New EPA Study of Hydraulic Fracturing for Shale Gas
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Draft Study – Dec. 8, 2011 Studied rural water wells in response to
complaints Wells in area since the 1950s 169 production wells 33 surface pits EPA collected soil and gw samples Conclusions: (1) pits are a source of
shallow gw contamination (2) likely impact to gw from hydraulic fracturing
EPA Wyoming Study
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Draft Study – no peer review Area has a shallow gas field EPA drilled monitoring wells into a gas
reservoir and found natural gas – duh Results from water well tests do not exceed
drinking water standards Pits are already in remediation program May 2012 - An independent review concluded
federal regulators had insufficient data to suggest the natural gas drilling technique allowed methane to contaminate groundwater
EPA Wyoming Study - Problems
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UT Energy Institute Groundwater study in Barnett, Haynesville
and Marcellus formations Findings – no direct link between fracing
and groundwater contamination Undergoing independent review
UT Study
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Austin American-Statesman : “Study links fracking and earthquakes”
Lubbock Avalanche Journal: “Study finds no relation between fracking,
earthquakes”
UT Study – Part 2Earthquakes (August 2012)
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LITIGATION
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• 12/7/10 – EPA issued Emergency Administrative Order against Range under SDWA
• Methane in 2 drinking water wells in Parker County “likely” due to fracing from Range wells in the area
United States v. Range Production Co.
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4/19/11 – Chesapeake well blowout releases flowback water onto neighboring farmlands and into nearby creek
4/29/11 – Maryland files Notice of Intent to Sue under RCRA and CWA◦ Injunctive relief◦ Attorneys’ fees
5/17/11 – Chesapeake Settles with PAfor $1 million
Maryland v. Chesapeake Energy Corp.
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February 2011, Town of Dish, Texas sued six natural gas pipeline companies that own and operate compressor stations near the town for releasing harmful substances into the air
Town of Dish v. Atmos Energy, et al
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Allegations of Drinking Water Contamination◦4 cases in TX
Other Lawsuits
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Lone Pine Order◦ Expert Opinion on Causation
◦ Data Showing Contamination
◦ Medical Records
◦ Evidence of Diminution in Value
Defense of Litigation
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Where’s the science? Evolution of Regulations/Laws
Conclusions
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Hydraulic Fracturing Myths and Maneuvers
Presented by
Cindy Bishop
www.cbishoplaw.com