Monday, December 17, 2012

Teaching Fracking, Part II: Resources for Unconventional Gas and Hydraulic Fracturing

As 2012 draws to a close, I offer a partial list of some of the best resources for learning, teaching, and writing about drilling and fracturing for natural gas. 

1. Opinion section:  The biggest threat posed by domestic natural gas may be the displacement of renewables and the associated demise of climate solutions.

Abundant natural gas--the cleaner fossil fuel in terms of greenhouse gases and conventional pollutants--may ultimately lead to the demise of climate goals.  In 2012, when the International Energy Agency reported that the United States would become "self sufficient" in energy by 2035 and would possibly become the world's largest producer of oil, its Chief Economist, Faith Birol, also issued dire warnings:  Because of the U.S fascination with shale gas and oil, and our new knowledge that we have abundant, accessible unconventional fossil resources, we are ignoring the climate problem and forgetting the urgent need to build renewables.  "Climate change has been slipping down the agenda," he said. "It is not having a significant impact on energy investors."  Birol concluded: "I don't see much reason to be hopeful that we will see reductions in carbon dioxide. . . . We have seen more carbon dioxide emitted this year." The warning, then, is that the United States will remain blindly optimistic as we wallow in a sea of abundant oil and gas--so blind, in fact, that we will ignore our shrinking coastlines and vanishing species. The solution is not to ignore or stop extracting gas:  It has displaced coal at a rapid rate and has reduced energy-related greenhouse gas emissions in the United States; it's also cheap.  But we must continue building renewable generation at a rapid rate; natural gas is supposed to be a bridge to something more sustainable, and if we miss that essential point, we will fail to address what may be the greatest threat to the health of our planet.  The abundance and cheap price of gas--particularly in the absence of a carbon tax to accurately price the impacts of fossil fuels--could make it increasingly difficult to maintain a renewable energy focus. This is unfortunate, particularly in light of the fact that natural gas and renewables make a natural pair; gas plants, which can start up rapidly, are a key back-up source for intermittent renewables.

2.Section on natural gas and environmental impact "facts" (Warning: the facts in this area change quickly).  2a. the numbers

International Energy Agency 2012:  The United States is likely to be self sufficient in energy by 2035 and a major exporter of energy, whereas many other countries will import from us.  This does not make us "energy secure," however, as fuels, like other goods, are part of a global market. As the IEA reminds us, "No country is an energy 'island' and the interactions between different fuels, markets and prices are intensifying." (This report is worth getting from your library.)

Energy Information Administration 2012: "As of January 1, 2010, total proved and unproved natural gas resources are estimated at 2,203 trillion cubic feet," but this number changes frequently and is much disputed.

By 2035, the EIA projects that shale gas will account "for 49 percent of total U.S. natural gas production."

There are approximately 16,346 shale gas wells in the Barnett Shale of North Central Texas. There are approximately 1,483 producing gas wells within the City of Fort Worth.

Energy companies have registered approximately 33,277 well sites on FracFocus, the website on which companies voluntarily report chemicals used in hydraulic fracturing.

In 2010, the states with the largest shale gas production numbers included Texas, Louisiana, Arkansas, Oklahoma, and Pennsylvania.

2b. The global gas situation

On December 13, 2012, the British government decided to allow hydraulic fracturing for natural gas within the United Kingdom. 

In September 2012, South Africa lifted a ban on fracturing in one region.

In the following Energy Information Administration map, red areas have been studied most closely. Large_new-map

2c. Useful risk assessments from the United States

One of the most comprehensive assessments of the effects of drilling and fracturing:  New York Department of Environmental Conservation Revised Draft Supplemental Generic Environmental Impact Statement on the Oil, Gas, and Solution Mining Program (exploring most of the effects but ignoring the impacts of seismic testing to locate gas underground).

One of the best, brief summaries of drilling and fracturing risks begins on page 3 of the U.S. Fish and Wildlife Service document "Summary of Oil and Gas Development, Hydraulic Fracturing and Issues Associated with Conservation of U.S. Fish and Wildlife Service Trust Resources in the Southwest Region."

The Government Accountability Office, in two reports that examine the scientific studies to date, has concluded that we cannot currently quantify fracturing risks from the sparse data currently available.

Rozell and Reaven, Water Pollution Risks Associated with Natural Gas Extraction from the Marcellus Shale (estimating the likely total volume of spills). 

Wisconsin Department of Natural Resources, Silica Sand Mining in Wisconsin (describing the environmental  impacts of mining sand for fracturing proppant).

Two Duke studies:  potential methane contamination of groundwater from drilling and fracturing, and potential contamination of groundwater with brine (naturally produced salty water from formations).

Reply by Richard Davies arguing that methane contamination is unproven.

Duke scientists' reply to Davies.

EPA Pavillion, Wyoming report on potential contamination of groundwater with fracturing fluids.

For excellent information on chemicals in fracturing, see the EPA's Proceedings of the Technical Workshops for the Hydraulic Fracturing Study: Chemical & Analytical Methods.  See also the Congressional report "Chemicals Used in Hydraulic Fracturing."

The EPA has evaluated the potential impact of fracturing wastes on microbial processes in wastewater treatment plants.

The U.S. Fish and Wildlife Service has a brief discussion of the impacts of natural gas drilling and fracturing on fish and wildlife.

Earthquakes caused by underground injection control wells for the disposal of oil and gas wastes:  see Ohio Department of Natural Resources Youngstown report and the Oklahoma Geological Survey report by Austin Holland.

The Texas Water Development Board has a good report on water use in the Barnett Shale. 

WorldWatch has a good comparison of lifecycle studies addressing methane emissions from gas development.

2d. Recent regulation and associated legal action

Federal

EPA's final Clean Air Act rules: NSPS for volatile organic compounds from newly fractured and refractured wells; NSPS for sulfur dioxide emissions from gas processing plants and for VOCs from various compressors and storage vessels used in oil and gas production.  The American Petroleum Institute claims that the rules will be very expensive and will slow down unconventional development--a familiar industry response, of course, to most environmental regulations.

On December 11, 2012, seven states issued an intent to sue EPA for failure to control methane from oil and gas production.

BLM has proposed fracturing rules for federal and Indian lands, which would require, among other things, testing mechanical integrity of the well before fracturing to ensure that the well can withstand fracturing pressures, continuous monitoring of well pressures during fracturing, reporting of chemicals used, and reporting of total volumes of water used and quantities and methods of waste handling and disposal.

Hydraulic fracturing using diesel fuel--a practice that still occurs--is not exempt from the Safe Drinking Water Act, unlike other types of fracturing. The EPA has issued draft guidance for this type of fracturing, which would require, among other things, that permit writers consider potential interaction of the fuel with the formation into which it is injected as well as potential reactions that could occur after injection, and a plan for cementing casing (lining) into a well that would "ensure proper cement design and volume."  The guidance would also more broadly define diesel to include kerosene, home heating oils, automotive diesel fuel, and others.

In October 2011 the EPA initiated a Clean Water Act rulemaking process "to set discharge standards for wastewater from shale gas extraction."

The EPA is continuing its study of the impacts of hydraulic fracturing (primarily fracturing in shales) on water and is hosting a number of technical roundtables and workshops in 2012 and 2013.

State and regional

The New York Department of Environmental Conservation has issued proposed rules for drilling and fracturing with high volumes of water.  The public comment period ends on January 11, 2013.

Texas, which has long resisted revising most of its oil and gas rules despite a major rise in shale gas well numbers, has proposed revisions to its casing regulations and other rules.  The Railroad Commission (the state's oil and gas agency) also has, as required by the state legislature, issued rules requiring the disclosure of chemicals used in fracturing.

Oklahoma, Mississippi, and a number of other states also have adopted disclosure rules.

Montana changed some of its oil and gas rules to address fracturing, and North Dakota has proposed a similar revision. 

Colorado (follow “Rules” hyperlink in blue menu to the left of the page, then follow “2008 Rulemaking” hyperlink, then follow “COGCC Amended Rules Redline”), Ohio (particularly for urbanized areas), Pennsylvania (through several different acts and rulemakings), and West Virginia have made some of the most comprehensive changes to their oil and gas codes.

The Delaware River Basin Commission proposed somewhat extensive rules for well site development, drilling, and fracturing within the Delaware River watershed, but the rules have not yet been finalized.  New York's attempt to require a NEPA environmental impact statement before the rules were released failed due to a lack of standing, but the judge made it clear that once the rules were finalized, the state could probably return to court.  2012 WL 4336701.

Preemption:  Pennsylvania attempted to remove municipalities' authority over many aspects of drilling and fracturing by requiring them to allow the practice in most zones, in exchange for more protective state environmental regulation.  The Commonwealth, which had long refused to impose a severance tax on gas, also provided that municipalities could charge an unconventional gas well fee, the proceeds of which would go to a central fund that would be redistributed to fund road infrastructure, environmental clean-up, and other projects. A divided Commonwealth Court of Pennsylvania found that the Act essentially forced municipalities to violate their comprehensive plans and declared portions of the Act null and void.  The state's supreme court has heard oral argument. Robinson Twp. v. Commonwealth of Pennsylvania, 52 A.3d 463 (Pa. Cmwlth. 2012).

Colorado's governor instituted a task force on municipal-state relations in regulating natural gas. The task force issued recommendations, but the state has threatened to sue the town of Longmont, which banned fracturing.

Ordinances in Fort Worth,Texas and Farmington, New Mexico (see Chapter 19, Oil and Gas Wells) provide examples of relatively comprehensive local ordinances that address drilling and fracturing.

Several New York courts have allowed towns to ban fracturing despite generally preemptive language in the state's Oil, Gas, and Solution Mining Law, which supersedes "all local laws or ordinances relating to the regulation of the oil, gas, and solution mining industries."  N.Y. ENV. LAW § 23-0303. Municipalities wishing to avoid preemption must apparently write their gas regulations as land use laws that happen to limit (or ban) gas development--these, the courts have said, don't "relate to the regulation of . . . gas" but rather to the regulation of land use.   See, e.g., Anschutz Exploration v. Town of Dryden (NY 2012).  For more discussion of federalism in fracking, see my other post.

The University of Colorado's Intermountain Oil and Gas BMP Project collects regulations from several states, as does FracFocus. FracFocus adds some editorialization to its regulatory summaries, however, arguing, "The best-suited regulators of hydraulic fracturing are the states." The website is run by the Ground Water Protection Council, a nonprofit association of state regulators, which has spoken out against federal regulation of fracturing in certain areas, and the Interstate Oil and Gas Compact Commission, which receives industry funding for certain events and more clearly opposes federal regulation of fracturing and oil and gas development.

Common law:  For a good summary of fracturing litigation, see Keith Hall and Lauren Godshall's article in "The Advocate." The Texas Supreme Court in Coastal Oil & Gas v. Garza held that Garza could not obtain trespass damages for fractures into a formation that drained the gas from the formation; the issue remains open in other states.  Plaintiffs in Pennsylvania have alleged nuisance, negligence, trespass, and strict liability, among other claims, as a result of contamination from drilling and fracturing. The courts, which have not yet had the opportunity to reach the substance of these claims in the cases I'm aware of, have noted that it is not yet clear whether gas drilling is an abnormally dangerous activity in Pennsylvania.  See, e.g., Fiorentino v. Cabot, 750 F.Supp.2d 506 (M.D. Pa. 2010).  Federal district courts addressing cases that arise in Arkansas also have not yet determined whether fracking is abnormally dangerous.  See, e.g., Tucker v. Southwestern Energy Co., 2012 WL 528253 (E.D. Ark. 2012).

2e. Data on enforcement of oil and gas and environmental laws at well sites, and types of violations

The Arkansas Public Policy Panel found a number of stormwater violations at Fayetteville Shale sites.

The Pennsylvania Department of Environmental Protection's compliance database allows you to create spreadsheets of all violations at Marcellus Shale sites (select "Oil and Gas Compliance Report" from the menu on the right.  From the dropdown menu, select "unconventional only" "Yes.").

The New Mexico Oil Conservation Division has a spill database and a list of oil and gas pits that have caused underground water contamination.

I've begun to try to collect and analyze data but am still in the very early stages.

2f. Fracking theory

Professor David Spence, University of Texas, has a great piece on federalism in fracking, arguing that many of the effects are local and that for impacts that don't cross state lines, local control is generally good. 

Professor Michael Burger has an excellent reply to Spence forthcoming in PENNumbra.

In an op-ed, Professor Jody Freeman has argued for implementation of federal fracturing standards with a cooperative federalism approach.

I'm working on a piece that argues that when regulations are written, rule writers balance the cost of regulation against anticipated harms with a certain scale of activity in mind, and they fail to anticipate or automatically account for needed regulatory changes when scale rapidly changes, as has occurred with drilling and fracturing.  Agencies and regulations need to better project scalar change and include automatic provisions for seamless transitions to new scales, including automatic increases in agency staffing and provisions to address potential threshold and interactive effects as activities expand in scale.  I'll post this on SSRN soon and will welcome critiques and suggestions.

3. Best practices and needed regulatory changes

The Marcellus Shale Advisory Commission Final Report made a number of recommendations for changes, such as increasing civil penalties for well violations and improving various casing and substantive requirements, many of which Pennsylvania adopted in the disputed Act 13 (House Bill 1950).

The Secretary of Energy Advisory Board Shale Gas Production Subcommittee 90-day report recommends, among other things, disclosure of fracturing fluids, not using diesel in fracturing and reducing the use of diesel in drilling and fracturing equipment, and "managing short-term and cumulative impacts on communities, land use, wildlife, and ecologies."  The final report makes similar and more detailed recommendations.

The State Review of Oil and Natural Gas Environmental Regulations--a public-private group that took on the responsibilities of a predecessor group after the EPA exempted most oil and gas wastes from Subtitle C of the Resource Conservation and Recovery Act--has guidelines for hydraulic fracturing and drilling.  It has conducted a number of voluntary reviews of states' hydraulic fracturing regulations (for the states that have agreed to be reviewed) and has recommended improvements in regulation and enforcement.

The American Petroleum Institute has a number of standards and guidelines for drilling and fracturing, including, for example, "Water Management Associated with Hydraulic Fracturing."

This is only a partial list, but I hope that it's useful.  Happy holidays to all.

--Hannah Wiseman

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