Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the use of hydraulic fracturing for oil and gas extraction. With numerous state legislatures now in session, HBW Resources is monitoring these activities to ensure that responsible and feasible policies based on sound science are advanced.
State Legislative Update
Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
The Association of California Water Agencies (ACWA) and the California-Nevada Section of American Water Works Association sent a letter to the California Department of Conservation’s Division of Oil, Gas and Geothermal Resources on the discussion draft regulations on hydraulic fracturing. Among the requests included in the letter is a request that the regulations include provisions requiring the operator to conduct pre-and post- well development groundwater and surface water monitoring, possibly by working through the State Water Resources control Board’s Surface Water Ambient Monitoring Program (SWAMP) and Groundwater Ambient Monitoring and Assessment (GAMA) Program.
Federal authorities have delayed their next sale of oil-drilling leases in a swath of California that has become a battleground in the nationwide fight over fracking. The Bureau of Land Management has postponed a May 22 salethat would have offered oil companies the chance to drill on four parcels in Fresno and Kern Counties. Both counties sit atop the Monterey Shale, an immense geologic formation that the federal government estimates could hold 15 billion barrels of oil. The bureau did not set a new date for the lease sale but said it won’t happen in this fiscal year.
Shell Oil announced that it will utilize hydraulic fracturing at its Harper Hill pad near Hamilton and at its Hart Gulch pad.
The Boulder City Council will consider a moratorium on fracking within city limits and on city-owned lands at its June 4 meeting. Council members asked the City Attorney’s Office to prepare a moratorium and present it at the first meeting in June.
Carter Stewart, who runs Cardinal Oil and Stewart Geological Inc. of Billings, MT, entered his 3 year old thoroughbred horse, Frac Daddy, named as a tribute to oil field workers in last weekend’s Kentucky Derby. Frac Daddy has made six career starts, with one first-place finish, three seconds and $288,116 in earnings — with $200,000 coming from the Arkansas Derby, which was one of the last major prep races. Frac Daddy finished 16th.
The Michigan Chamber of Commerce voted unanimously to support of fracking, a day before a mineral rights auction and a planned protest on the method of accessing natural gas. The Chamber opposes “job-killing petition drive to ban hydraulic fracturing.” The Michigan Department of Natural Resources will hold an auction for state-owned oil and gas lease rights to more than 37,000 acres in 17 Michigan counties. Last fiscal year the leasing program generated $42.7 million for the State Parks Endowment Fund and the Game & Fish Protection Trust Fund.
Anti-fracking laws passed in two New York towns were upheld by an appeals court, which rejected arguments by a dairy farm in Cooperstown Holstein Corp. v Town of Middlefield, and a Norwegian energy company in Norse Energy Corporation USA v Town of Dryden, that the anti-fracking bans are superseded by state law. The State of New York’s Supreme Court, Appellate Division, Third Judicial Department in Albany ruled that drilling bans in the towns of Dryden and Middlefield don’t conflict with state regulations for the oil and natural-gas industry. The cases upheld zoning laws that allowed the towns of Dryden and Middlefield to ban oil and gas exploration and production.
A new report from the Manhattan Institute, “The Economic Effects of Hydraulic Fracturing on Local Economies: A Comparison of New York and Pennsylvania” found that residential incomes would increase in Marcellus Shale counties if New York allows fracking. Using data from Pennsylvania and extrapoliting its effects, the report found that during the beginning of the shale boom, per-capita income in Pennsylvania counties with more than 200 wells rose by 19 percent, while the rate for communities with less than 20 wells rose by 12 percent; those without drilling only saw an 8 percent increase in income. The production potential for New York communities above the Marcellus shale could boost resident’s income by 15 percent over the next four years if the state lifts its moratorium on the practice.
A new rule set for approval by the North Carolina Mining and Energy Commission requiring some disclosure of chemicals used in hydraulic fracturing has been. The standard spells out which chemicals operators must publicly disclose when drilling natural gas wells. The chemical disclosure rule, as approved March 25 by the commission’s Environmental Standards Committee, would exempt certain chemicals from public disclosure if the company demonstrated they are trade secrets. But the rule is contentious because it would require fracking operators to submit those trade secrets under seal to the N.C. Department of Environment and Natural Resources, in case the data is needed to treat injuries during an emergency.
Voters in Youngstown went to the polls on Tuesday to decide whether or not to approve the Charter Amendment, the “Community Bill of Rights” which would ban the hydraulic fracturing inside City limits. By a vote of 57-43, the citizens of Youngstown rejected the proposal to ban hydraulic fracturing.
House Democratic lawmakers are preparing new legislation to expand safeguards for the impact of Marcellus Shale drilling on the environment and public health. The two areas drawing the most attention are water and air protection.
R3 Fusion Inc., a clean technology company, based in Rensselear Technology Park, Troy, N.Y., announced that it has executed a contract with Hydro Recovery LP of Blossburg, Pennsylvania, to install its patented SPaCeRTMtechnology for the recovery and reuse of produced water, generated by hydraulic fracturing “fracking” operations located in the Marcellus Shale Region. The SPaCeRTM system is capable of high volume, energy efficient separation of pure water from a range of fluids including briny solutions, industrial waste stream, frac water, completion fluids in oil and gas drilling, and many others. Installation will commence during the last week of May at Hydro Recovery LP’s Blossburg Pa. site and the unit is anticipated to be operational by early June. The unit will convert produced and flowback brine into pure water meeting WMGR123 Appendix A standards that will be reused for fracking.
Sen. Joe Scarnati (R, District 25) has introduced, SB 555 wants to create an advisory panel to examine possible health issues related to Marcellus Shale natural gas drilling. The Health Advisory Panel on Shale Gas Extraction would look at potential public health impacts from drilling, along with potential health benefits from natural gas use.
Findlay Township supervisors voted 3-0 to approve the development of three Marcellus Shale natural gas wells. The project will include construction of the well pad and a 1,128-foot-long access road, vertical and horizontal drilling, hydraulic fracturing and flaring.
The Texas Railroad Commission – the body that today oversees oil and gas operations in the Lone Star State, not rail lines, as it originally did when founded in 1891 – may soon get a more appropriate moniker. The state Senate approved with a 31-0 vote, SB 212, introduced by Sen. Robert Nichols (R, District 3) and Sen. Joan Huffman (R, District 17) which would change the TRC’s name to the Texas Energy Resources Commission. The bill was sent to the House for consideration.
Sen. Wendy Davis (D, District 10) filed, SB 514, which relates to the installation, maintenance, operation, and relocation of saltwater pipeline facilities passed the Senate with a 31-0 vote and was referred to the House Energy Resources Committee.
The House Energy Resources Committee passed HB 2767, sponsored by Rep. Phil King (R, District 61) 11-0 out of the Energy Resources Committee which would excuse energy companies engaged in fracking and other oil and gas exploration from possible litigation involving recycled waste water.
State Attorneys General representing twelve states sent a letter to the EPA regarding potential EPA settlement negotiations with seven northeastern states regarding the regulation of methane emissions. The Attorneys General are worried that the seven Northeastern States, New York, Connecticut, Delaware, Maryland, Rhode Island, Vermont and Massachusetts, may file suit under section 304 of the Clean Air Act for EPA’s decision not to regulate methane emissions from new and existing oil and natural gas drilling, production and processing facilities under the New Source Performance Standards Program. The concern is over EPA’s practice of negotiating settlements of “friendly lawsuits” that would bind all states to the outcome. The letter states that the notice of intent to file suit, “admits that methane emissions from oil and gas facilities are adequately controlled by including an EPA statement that many of the (over 100) methane control technologies and practices identified by the joint EPA and industry Natural Gas STAR program have been implemented by industry.” The states signing the letter were: Alabama, Arizona, Indiana, Kansas, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Texas, West Virginia and Wyoming.
On May 7th and 8th, the EPA hosted a meeting of the Hydraulic Fracturing Science Advisory Board to provide an opportunity for independent expert members of the ad hoc panel and the public to provide comment on EPA’s study of the potential impacts of hydraulic fracturing on drinking water resources. The two day meeting included a number of presentations and discussions on the questions posed to the Advisory Board in its formation. EPA will host a teleconference on May 16 to provide an update on the status of the Research Advisory Panel activities.
A group of scientists from the Pennsylvania Geological Survey and the Pennsylvania Council of Professional Geologists have published a rebuttal of hydrologic geologist Tom Myers’ “Potential Contaminant Pathways from Hydraulically Fractured Shale to Aquifers” which appeared in the November/December 2012 issue of Groundwater, the journal of the National Groundwater Association. The scientists determined that Myers’ is fatally flawed with misinformation, including that Myer’s based his model on predominantly sandstone overlying the formation and Myer’s assumption that the fracture orientations were presumed to be vertical throughout the entire sequence of sedimentary rock.
The Small Business and Entrepreneurship Council (SBE Council) released a new report showing liquefied natural gas (LNG) exports will benefit the U.S. economy and spur job creation. The report highlights how the natural gas industry has helped stimulate employment and small business growth across the country in recent years, especially in those states with expanded production. Looking at the vast economic benefits natural gas production has brought to our economy, the report asserts that increasing LNG exports will expand opportunities for small businesses to grow and create jobs.
The House Natural Resources Committee held a hearing on the “DOI Hydraulic Fracturing Rule: A Recipe for Government Waste, Duplication and Delay.” Panelists included the Honorable Alan Olson, Chairman, Montana Senate Energy and Telecommunications Committee; Lynn Helms, Director, North Dakota Department of Mineral Resources; Cindy DeLancey, Executive Director, Wyoming County Commissioners Association; John Byrom, President & CEO, D.J. Simmons, Inc.; John Amos, President, SkyTruth; and Sara Kendall, DC Office Director, Western Organization of Resource Councils. Chairman Doc Hastings (R, WA 4) stated, “Technological advancements in hydraulic fracturing and horizontal drilling have sparked an energy renaissance in this country.”
Senator Ron Wyden (D, OR) and Senator Lisa Murkowski (R, AK), the Chairman and Ranking member of the Energy and Natural Resources Committee, announced the participants of their upcoming Natural Gas Forums. The three forums focus on Infrastructure, Transportation, Research and Innovation (May 14), Domestic Supply and Exports (May 21) and Shale Development – Environmental Protection and Best Practices (May 23). Panelists include representatives from the corporate community, trade associations, federal and state governments and ENGOs.
Gary Gray, the recently-appointed federal minister for resources, has commented that the development of shale gas industry in Australia could lead to a massive boost for Australian industry, citing what’s been called the U.S. “manufacturing renaissance.”
The Liberal party’s candidate in Peace River South, Mike Bernier, has spoken out in favor of a review on hydraulic fracturing. The comments come after the Liberal party repeatedly criticized a plan by the New Democrats – if the party is to form government – to launch a scientific review into fracking, the process used to extract natural gas. In its platform, the NDP has called for an “independent, expert-led public review” of the process. The party came under fire earlier this week when its candidate in Cariboo-Chilcotin, Charlie Wyse, promised a two-year moratoriumon fracking to make way for the review.
Municipal Councillors in Inverness County have passed a bylaw that bans hydraulic fracturing, but the bylaw would not supersede provincial authority over mineral rights.
NuEnergy Gas Limited announced that it has commenced hydraulic fracturing using radial jetting techniques at its Muara Enim Production Sharing Contract pilot production site located in Sumatra, Indonesia. The program will hydraulically fracture five new untested coal seams covering 29 meters of coal thickness. The total lateral penetration exceeds 480 meters and the program is expected to enhance production rates at the pilot project.
Talisman Energy Inc. is pulling out of exploration for shale gas in Poland is a blow to the country’s hopes that its deposits of the hydrocarbon will soon cut its dependence on Russian supplies and support the weakening economy. Talisman said Wednesday it had not found enough gas to warrant further expensive exploration or extraction procedures. It will sell its Polish interests to a European company, San Leon Energy, and focus on easier-to-get deposits in North and South America, Southeast Asia and the North Sea.
Romania’s Environment Protection Agency has issued permits to US energy giant Chevron to explore shale gas in two blocks near the Bulgarian border. The permits to explore shale gas deposits using the hydraulic fracturing technology have been granted for the Constanta municipality – the blocks of Costinesti and Vama Veche, according the Romanian Environment Ministry.
For additional information, please contact Bo Ollison with HBW Resources. His contact information is below.
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