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Hydraulic Fracturing - Myths and Maneuvers

Hydraulic Fracturing - Myths and Maneuvers



Presented on August 26, 2012

Presented on August 26, 2012



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    Hydraulic Fracturing - Myths and Maneuvers Hydraulic Fracturing - Myths and Maneuvers Presentation Transcript

    • Hydraulic FracturingMyths and ManeuversPresented byCindy Bishop1August 26, 2012
    • Hydraulic Fracturing:Myths and ManeuversI. Hydraulic Fracturing 1011. What is it?2. Why do we care?3. What’s the problem?II. Regulations – Who’s on First?1. Texas2. EPAIII. Myths (Studies)IV. Maneuvers1. US v. Range Production Company2. Maryland v. Chesapeake Energy Corp.3. Town of Dish v. Atmos Energy, et al.2
    • General Steps•Obtain water source•Well construction•Fracing•Waste disposalFracing•Liquid pressure•Fissures•Propping agent•Flowback water3What is Hydraulic Fracturing (“Fracing”)?
    • 4
    • 5
    • 6•Natural gas heats ½ of US homes•Natural gas fuels more than 20% ofannual electricity production•Natural gas use will increase as coalplants are retired•20% of U.S. gas supply will be fromshale gas by 2020Why do we care?
    • 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)7
    • •Since 2003 15,675 gas wells drilledand fracked in North Texas•2,000 wells in Fort Worth8Effect Locally
    • 9
    •  About 1/3 flowbackliquid returns Disposal well Surface impoundment Land surface10
    • 11Waste Disposal – SurfaceImpoundment
    • Natural Gas in Well WaterWhat’s the Problem?
    • 14
    • 15•Water for fracing•Fracing•Chemicals in frac water•Methane release•Disposal of flowback water•Air emissions•Noise, light, odor•EarthquakesWhat’s the Problem?
    • Regulating FracingWho’s on First?16
    •  The Texas Railroad Commission hasprimary jurisdiction over oil and gasdrilling. Tex. Nat. Res. Code 81.051; 16 Tex. Admin Code 3.5 Texas Commission on EnvironmentalQuality has primary jurisdiction overconservation of natural resources andprotection of the environment 30 Tex. Admin Code 5.01217
    • • Well Drilling/re-completion• Disposal wells• Pits for storage of oil field fluids or oiland 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); RRCRule 38; 40 CFR 261.4(a)(12)• Surface casing program (eff. 9/1/11)18
    •  Disclosure of Fracing Chemicals (16 TAC § 3.29)◦ Applies to fracturing operations where RRC has issuedan initial drilling permit on or after Feb. 1, 2012◦ Supplier/service company to operator – 15 days aftercompletion of fracing◦ Operator to RRC – disclose into online database on orbefore submission of well completion report to RRC (30 days after well completion)19
    •  Disclosure of Fracing Chemicals (16 TAC § 3.29)◦ Disclose: Volume of water used Each fracing chemical Concentrations Suppliers◦ Exception for trade secrets20
    •  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 constructedor modified after April 1, 2011◦ Existing operations in Barnett Shale claiming old PBRmust notify TCEQ by Jan. 1, 201321
    •  Memorandum of Understanding:16 TAC § 3.3022
    •  Wastewater discharges Stormwater Underground injection wells involving diesel TSCA § 8(c) NSPS/NESHAP revisions (final rule 8/16/12)23
    •  Energy Policy Act of 2005 specificallyexcludes hydraulic fracturing operations.◦ Exemption for: “The underground injection offluids or propping agents (other than dieselfuels) pursuant to hydraulic fracturingoperations related to oil, gas, or geothermalproduction activities.” 42 U.S.C. 300h(d)(1)(B)(ii).24
    •  No EPA action after 2005 Energy Policy Act Summer 2010 – EPA posts on its websitethat fracing with diesel requires a UICpermit August 2010 – Independent PetroleumAssociation v. EPA (D.C. Cir.)25
    • Federal Air RegulationsNSPS Revised:• Equipment Leaks (KKK)• SO2 (LLL) New (OOOO):• Hydraulic Fracturing• Gas-driven Pneumatic Devices, Centrifugal andReciprocating Compressors• Storage Vessels Applies to new facilities that were constructed ormodified after August 23, 201126
    • 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 becomesfinal27
    • 28
    • August 23NSPSApplicabilityJune 1-ishPredictFinalPublicationPhase I “Flare-Friendly”2011 2012 2013 2014 2015 2016 Etc.Phase II “Full REC”60 DaysfromPublicationAugust 1-ish Gas vented during flow-back for hydraulicfracturing of gas wellsmust be controlled andcontained, sold or used
    •  Chemical disclosure statutes in Arkansas,Pennsylvania, Wyoming and Colorado, Michigan,Texas, California Drilling moratoriums: NY, Maryland, PA30
    •  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 requirements31
    • 32
    •  Sampled 68 drinking water wells in PAand NY Methane concentrations were 17 timeshigher in water wells near active vs.inactive wells Methane was thermogenic “Methane Contamination of DrinkingWater Accompanying Gas Well Drillingand Hydraulic Facturing”33
    •  85% of wells sampled containedthermogenic methane – regardless oflocation No fracing fluid detected in shallowwater Water properties consistent withhistorical data Methane likely did not come from actualfracing34
    •  Methane is a GHG Fracing has a higher carbon footprint thancoal 3.6 to 7.9% escapes in fracing 1.7 to 6% escapes in regular drilling “Hogwash”35
    •  January 6, 2012 New Cornell Study Prior study was “seriously flawed” Fracing has a carbon footprint that is half toa third that of coal36
    •  2012 - EPA proposed year to releaseinterim results 2012 to 2014 - additional results to bereleased as particular investigationscompleted 2014 - EPA proposed year to releaseanother report37
    •  Draft Study – Dec. 8, 2011 Studied rural water wells in response tocomplaints Wells in area since the 1950s 169 production wells 33 surface pits EPA collected soil and gw samples Conclusions: (1) pits are a source ofshallow gw contamination (2) likely impactto gw from hydraulic fracturing38EPA Wyoming Study
    •  Draft Study – no peer review Area has a shallow gas field EPA drilled monitoring wells into a gasreservoir and found natural gas – duh Results from water well tests do not exceeddrinking water standards Pits are already in remediation program May 2012 - An independent review concludedfederal regulators had insufficient data tosuggest the natural gas drilling techniqueallowed methane to contaminate groundwater39EPA Wyoming Study - Problems
    •  UT Energy Institute Groundwater study in Barnett, Haynesvilleand Marcellus formations Findings – no direct link between fracingand groundwater contamination Undergoing independent review40UT Study
    •  Austin American-Statesman : “Study links fracking and earthquakes” Lubbock Avalanche Journal: “Study finds no relation between fracking,earthquakes”41UT Study – Part 2Earthquakes (August 2012)
    • • 12/7/10 – EPA issued EmergencyAdministrative Order against Range underSDWA• Methane in 2 drinking water wells in ParkerCounty “likely” due to fracing from Rangewells in the area43
    •  4/19/11 – Chesapeake well blowoutreleases flowback water ontoneighboring farmlands and into nearbycreek 4/29/11 – Maryland files Notice of Intentto Sue under RCRA and CWA◦ Injunctive relief◦ Attorneys’ fees 5/17/11 – Chesapeake Settles with PAfor $1 million44
    •  February 2011, Town of Dish, Texas suedsix natural gas pipeline companies that ownand operate compressor stations near thetown for releasing harmful substances intothe air45
    •  Allegations of Drinking WaterContamination◦ 4 cases in TX46
    •  Lone Pine Order◦ Expert Opinion on Causation◦ Data Showing Contamination◦ Medical Records◦ Evidence of Diminution in Value47
    •  Where’s the science? Evolution of Regulations/Laws48
    • Hydraulic FracturingMyths and ManeuversPresented byCindy Bishop49214-893-5646cbishop@cbishoplaw.comwww.cbishoplaw.com