Shale Gas - Slow Down Fracking in Athens County (SD

Report
Elizabeth Paranhos
Environmental Attorney
Overview
 Game Changer?
 Real Concerns
 Risk Management
 Crisis or opportunity?
Game Changer?
• On March 31, 2011 President Obama declared that
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“recent innovations have given us the opportunity to
tap large reserves-perhaps a century’s worth” of shale
gas.
Shale gas was less than 2% of total U.S. energy
production in 2001. Now it is approaching 30% and
anticipated to equal nearly 50% by 2035.
Domestic energy source—reduced energy
independence. Cheap $4 gas.
Jobs.
Cleanest burning fossil fuel. Is it?
Ground Truthing
 LCA-the science is still out. Howarth Study is on the
high end. Recent National Energy Technology
Laboratory study. Emissions 42 to 53 percent lower
than coal based electricity.
 NREL JISEA harmonization study out spring 2012.
 What about energy efficiency, renewables? Truth is
gas is here to stay.
 Economic prosperity,
energy independence,
drilling, cannot come at
expense of human health
and environment
Risk Management
How do we
protect our air,
water,
communities,
farms, and
ecosystems?
Air Pollution
 Oil and gas activities are the single largest source of
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methane emissions in the United States
In 2009, the methane emitted from oil and gas activities
equaled approximately 328 million metric tons of carbon
dioxide equivalent (MMT CO2e). This figure is roughly
equivalent to the carbon dioxide emissions emitted from 78
coal-fired power plants.
Potent GHG. Over a 100-year period, methane has a
warming potential 25 times that of carbon dioxide. Over
20 years, 72 times more effective. Short life span.
Contributes to background levels of ozone-also a GHG.
Waste from venting, flaring, fugitives
Inefficiencies and lost product
 According to a 2010 Government Accountability Office
report “around 40% of natural gas estimated to be
vented or flared on onshore federal leases could be
economically captured with currently available control
technologies.”
 Such reductions, if accomplished, could increase
federal royalty payments by $23 million annually.
 Technologies and practices to eliminate this waste are
available and often result in immediate or short-term
payback due to increased gas sales.
Ozone
 Ozone causes suite of health impacts including
respiratory ailments and premature mortality
 NOx and VOCs are released in abundance from
natural gas activities
 NOx and VOC emissions from gas production in the
Barnett Shale are comparable to the combined
emissions from all the cars and trucks in the Dallas
Forth-Worth metro area.
 Deterioration air quality previously pristine areas
Ground-level ozone
Winter-time ozone exceedances have occurred in Wyoming
near the Pinedale-Anticline natural gas field
Air toxics
 Air toxics cause suite of illnesses including cancer
 Studies conducted at various locations in Texas and
Colorado identified high levels of HAPs including
benzene, a known carcinogen, at oil and gas
exploration and production sites
 Benzene detected above TCEQ’s long-term,
health-based comparison value of 1.4 ppb
 11 of 32 unique areas sampled, most containing
or in close proximity to residences
 One fenceline site reached 1,100 ppb
EPA Action
 EPA recently proposed suite of standards to reduce
toxic and VOC emissions. Substantial methane cobenefits. Rules due to take effect April 3, 2010.
 Scope of rules cover most significant sources of
emissions
 Ohio General Permit for new production wells.
Controls for dehys, tanks, combustion devices,
equipment and pipeline leaks. Not to wells during
drilling or fracturing phase because are temporary.
Water concerns.
Do residents have
reason to be
concerned?
Federal Drinking Water Regulatory Regime
(for most industries)
 In 1974, the Safe Drinking Water Act (SDWA) was enacted
 The EPA’s Underground Injection Control (UIC) Program, under
the SDWA, protects underground sources of drinking water
(USDWs) from fluids injected into the ground for storage,
disposal or enhancing oil and gas recovery.
 In 1997, the U.S. Court of Appeals for the 11th Circuit (Atlanta)
ordered the EPA to regulate hydraulic fracturing under the Safe
Drinking Water Act. This decision followed a 1989 CBM fracturing
operation in Alabama that landowners say contaminated a
residential water well. The court determined that “injection,” as
used in the SDWA, means the act of “forc[ing] (a liquid) into a
passage, cavity, or tissue.” Legal Environmental Assistance
Foundation, Inc. v. EPA, 118 F.3d 1467, 1474 (11th Cir. 1997).
The “Haliburton Exemption”
While most underground injections of chemicals are subject to the protections of the
Safe Drinking Water Act (SDWA), Congress in 2005 exempted hydraulic fracturing as
“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” from the Act’s most protections. Energy Policy Act of 2005, Section 322.
Exception: if diesel fuel is used as part of fracking, operator must obtain a permit.
Furthermore, the injection of frack fluids, for storage purposes, is subject to the UIC
program, but is permitted into Class II wells rather than Class I because drilling fluids
and produced water are not considered hazardous under RCRA. Exception: diesel fuel.
Real Risks?
 DOE Shale Gas Subcommitte determined risk of frac
fluids leaking into drinking water is slim provided
large depth of separation between producing zone and
drinking water source.
 Surface spill migration into shallow drinking water
formation is however real concerns, as is methane
migration due to poor well construction.
PA Department of Environmental
Protection
What’s in frack fluids?
 Fracking fluids are also exempt from disclosure
requirements that would require oil and gas
companies to disclose to the public and regulators the
nature and concentrations of chemicals used in
fracking.
 Frac fluid is mixture of water, sand and chemicals.
 Human and animal health issue. Need immediate
access to info.
Disclosure: A Modest Proposal
Full disclosure of all fracking constituents –
• Voluntary self-disclosure is no substitute for mandatory disclosure
under an oversight regime that ensures accuracy of the disclosure and
appropriate penalties for mis-statements.
• A voluntary program offers little or nothing in the way of peace of
mind or assurances for residents, or water providers.
• Companies could opt out as fast as they are currently opting in.
• Reporting is a disincentive to use toxic chemicals and push
companies to be safe, towards industry-wide adoption of safe fracking
substances.
• MSDS not enough. Both composition and concentrations
• Wyoming has model rule-Public disclosure of everything but
proprietary. Latter disclosed to state.
“Green” Frac fluids
 Companies should use inert, environmentally safe
constituents.
 Public disclosure of contents of frack fluids will help
ensure this happens
 If Chesapeake’s CEO can drink fluids, all companies
should use safe, non-toxic constituents
Legislative fix? FRAC Act?
 2009 House and Senate bills to remove regulatory
SDWA exemption and require disclosure
 March 2011 Democrats reintroduce FRAC act
 April 2011 Dems release frack fluid report identifying
750 toxic chemicals used in fluids
 No legislative action expected soon.
EPA action?
 The U.S. EPA is investigating whether drilling poses
any threats to drinking water. This includes an
examination of the chemicals used in fracturing fluids.
Agency officials say they hope to have final
recommendations by 2014.
 Investigating reports of drinking water contamination
in Bradford and Susquehanna PA and prospective
study in Washington county PA
DOI
 August 2011 BLM announced consideration of new
regulations for frack fluid disclosure and best practices re
disclosure, well construction, wastewater, protection of
drinking water
 DOI has duty to manage public lands, including national
forests, in manner that protects water resources.
 Must also “prevent permanent impairment of the quality of
the environment” and “by regulation or otherwise, take any
action necessary to prevent unnecessary or undue
degradation of the lands.
BLM Regulatory Protections
The scope of review, recommendations and new policies should
define the fracking process and associated resource concerns as
broadly as possible. For all wells on federal leases, BLM should
follow the example of the STRONGER program and cover:
• Baseline surveys
• Casing and cementing plans
• Chemical information availability
• Prior notification of fracking operations
• Pit construction, maintenance and inspections
Source: STRONGER (State Review of O& NG Environmental
regulations) PA review
Stronger Protections
• Setbacks from domestic water wells and streams –
¼ or preferably ½ mile
• Knowledge is key: A Comprehensive baseline studies of
hydrological conditions, including an assessment of the
potential pathways for fluid movement into groundwater,
and plans to prevent such movement
• Tracers in fracking fluids to establish whether drilling and
development operations are the cause of contaminating
water resources.
Well construction
 Key to limiting methane migration is proper well
completion (cementing and casing) and pressure
management (pressure tests of casing and state-ofthe-art cement bond logs). Isolate gas-producing zone
from overlaying formations. Sufficient casing to
prevent communication between hydrocarbons and
aquifers.
 Also microseismic surveys to ensure fracturing is
limited to gas-producing formations
 Proper inspections and regulations are needed.
Susquehanna County,
Pennsylvania
Date: 2009
Company and Nature of Operations:
There were several reports of methane
gas migrating to the surface and of
drinking water well exploding. Upon
testing, the PA DEP found that nine
wells contained methane.
Isotopic analysis was conducted by the
PA DEP and it was determined that the
gas did indeed originate from a drilling
formation of Cabot Oil & Gas Corp.
Susquehanna County,
Pennsylvania
Case Resolution and Current Status: The PA DEP issued
Cabot a notice of violation on February 27, 2009, citing
the company’s failure to comply with Pennsylvania’s Oil
and Gas Act. The Notice also stated that “[PA DEP’s]
investigation revealed that Cabot had caused or allowed
gas from lower formations to enter fresh groundwater.”
Cabot must now get all casing and cementing plans
approved by the PA DEP. (PA DEP, DEP Continuing
Investigation Into High Methane Levels in Susquehanna
County Wells, PA DEP Daily News Releases, Jan. 23, 2009)
Bradford PA
 State fined Chesapeake Energy $1 million for
contaminating water supplies of 16 families. Likely
cause? Methane migration due to poor casing and
cementing that allowed gas to migrate into shallow gas
formations and contaminate wells.
 Chesapeake agreed to pay for water treatment for the
families and stated it has enhanced its well
construction and completion designs.
 Did not admit liability, however.
State Regulation: Casing
 “Surface casing shall be cemented into or through a
competent bed and at a depth that will allow complete
well shut-in without fracturing the formation immediately
below the casing shoe.”
 Production casing: “This casing shall be cemented and,
when required by the Division, tested for fluid shutoff
above the zone or zones to be produced” (CCR §1722.3)
 Must be in compliance with §3.13 and done “in such a
manner that the injected fluids will not endanger oil, gas,
or geothermal resources and will not endanger
freshwater formations not productive of oil, gas, or
geothermal resources.” (T.A.C. Title 16, Part 1, §3.46(f))
 CO requires requires operators monitor and record
bradenhead annulus pressure during fracking to alert
them to well construction failures. COGCC Rule 341
Fracking fluid
containment ponds:
is pitless drilling a
better management
practice?
Flowback and produced water
 Impoundments cause spills and release VOCs
 NYS: Impoundments significant source of HAPs
 New Mexico: Over half of incidents of ground water
contamination due to faulty pits
 In Pennsylvania, state authorities were forced to quarantine
cattle after a pit leaked into their field, pooling in a smelly
pool that killed the grass.
 In Colorado, leaky pits with torn liners spilled more than
6,000 barrels of waste, and one leaking pit contaminated
drinking water with benzene.
 And in Ohio, compromised pit liners and pit wall failures
have sent pollution spilling out into the environment.
Solution? Pitless drilling
 Storage tanks-reduce likelihood of spills and air toxic
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emissions
WY requires 98% control of HAPs and VOCs from tanks
CO: 90% pitless operations in both the DJ and Piceance
basins as of 2011.
Pitless drilling may not always be an option for horizontal
frack jobs-where not feasible, all pits should be lined,
fenced, and recycling or injection should be required as
much as possible to reduce truck traffic, minimize spills
and air pollution.
Multi-well pads encourage recycling. Water should be
piped, not trucked, in between wells.
EPA Action
• EPA recently announced rules to regulate wastewater.
Rules will require wastewater meets certain standards
before being sent to POTW. Proposed shale rule in
2014.
• Also rules for injection of diesel into underground
injection wells
Ecosystems
 Gas fields fragment the landscape, interfering with
migratory routes, breeding, nesting and winter
ranges.
Essential protections
 Landscape level planning that provides for connectivity
between important corridors and considers cumulative
impacts over broad geographic area
 Comprehensive drilling plans. Plan must describe
wildlife resources and proposed BMPs to mitigate
impacts. COGCC Rule 216.
 Science-based identification of crucial wildlife habitat
and corridors should be developed and disclosed and
used to inform CDPs. CO/NM coordination.
 Adequate enforcement and monitoring of surface use
stipulations, mitigation measures
Wayne and other State Forest
 Insist on landscape level planning
 Ohio NEPA review?
 Adequate mitigation measures to protect streams,
wildlife, fisheries.
 Setbacks
 Baseline monitorin
 NSO stips?
Boom Bust Cycle
Then what?
 “A growing body of credible research evidence in
recent decades shows that resource dependent
communities can and often do end up worse off than
they would have been without exploiting their
extractive reserves”. Cornell Dept. of City and
Regional Planning, CaRDI report. David Kay “The
Economic Impact of Marcellus Shale Gas Drilling:
What Have we Learned? What are the Limitations?”
Who should pay and how much?
 Severance tax is a tax imposed on the value of
nonrenewable resources that will be used the state
from which they are extracted
 All states except NY and PA impose severance tax
 Bill in PA legislature proposed to impose impact fee on
wells and toughen clean water protection laws and
penalties for environmental violations.
 Severance tax should pay for short and long-term
impacts of drilling to avoid undue burden on local
communities and governments
Do taxes and regulation deter
investment?
 WY suggests no. State has some of the most stringent
environmental regulations and a severance tax. Over
same period of time when WY increased tax rate to
approx 50% that of MT, and MT lowered it, the
production value (product of price times volume) in
WY was 5 times as high as CO.
 WY and CO have experienced considerable growth in
gas production, in some cases higher than US overall,
despite having some of toughest regs.
Should we follow France?
 Estimated 55 municipalities have some ban
 Santa Fe ordinance
 Pittsburg, Morgantown, and NJ have banned
 NY recently lifted ban. No drilling in NYC and
Syracuse watersheds, buffers of 500-4000 ft
Some places are too special
Communities need protections
Know your rights!
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Negotiate lease terms.
Lease term?
Access?
Baseline soil, air and water monitoring
Record crop production, animal fertility rates
Require companies clean up and compensate for any
contamination
 Ohio has mandatory pooling. If acquire 90% of
mineral rights, may force owners of 10% to participate.
But no surface access to holdouts.
No mud, no lotus
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Where do we go from here?
Stay informed!
Know your rights. Negotiate lease terms
Support tough rules that protect human health and the
environment; environmental review state/federal lands
 Make injured plaintiff whole. Stronger fines and
enforcement
 Protect special places and communities: moratorium,
setbacks, NSO stipulations
 Conserve and reduce energy. Energy independence starts
with each one of us

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