Fulbright Partner to Co-Chair IEL 4th Annual Law of Shale Plays Conference

Barclay Nicholson, partner in the Fulbright Houston office, has been chosen to co-chair the Institute for Energy Law’s (IEL) 4th Annual Law of Shale Plays Conference.

The conference will be held June 6-7, 2013 in Fort Worth, Texas, where Range Resource’s Senior Vice President and General Counsel David Poole will also serve as the other co-chair of the conference.

In conjunction with the conference there are several upcoming planning meetings. These planning meetings will be held over lunch and are key events in developing the program for the conference, allowing conference chairs to gather ideas for topics and speakers from practitioners.

These meetings will be held in the following locations:

Fort Worth:  Register Wednesday, November 28th from Noon-2 p.m. Petroleum Club 777 Main Street, Suite 4000 Fort Worth, TX 76102

Houston:  Register Thursday, November 29th from Noon-2 p.m. Downtown Club at Houston Center 1100 Caroline Street Houston, TX 77002

Southpointe:  Register Thursday, January 10, 2013 from Noon-2 p.m. Fulbright & Jaworski, Southpointe Energy Complex 370 Southpointe Boulevard, Suite 300 Canonsburg, PA 15317

Learn more about Fulbright’s Shale and Hydraulic Fracturing Task Force at www.fulbright.com/fracking.

U.K. Lifts Ban on Hydraulic Fracturing

On December 13, 2012, Edward Davey, the U.K.’s Secretary of State for Energy and Climate Change, announced that hydraulic fracturing could resume in the U.K., subject to new controls to mitigate the risks of seismic activity. This follows the European Parliament’s rejection of a Europe-wide moratorium on hydraulic fracturing on November 21, 2012.

In the U.K., hydraulic fracturing was banned in May 2011 after two small earthquakes occurred near Lancashire, England.

In mid-2012, the U.K. Department of Energy and Climate Change (DECC), the Royal Society, and the Royal Academy of Engineering concluded that “the health, safety, and environmental risks associated with [hydraulic fracturing] can be effectively managed” with new controls.

Under the new rules, in addition to obtaining all other necessary permits and consents before fracking, the operator must:

• Conduct a pre-fracking review of all information on seismic risks and the existence of faults in the area; 
• Submit to the DECC a progressive fracking plan showing how seismic risks will be addressed; 
• Perform seismic monitoring before, during, and after the frac; and 
• Implement a “traffic light” system which will be used to identify unusual seismic activity requiring reassessment or halting of operations. 

Secretary Davey also announced that the recently formed Office for Unconventional Gas and Oil will be overseeing the regulation of hydraulic fracturing and that a study will be commissioned to investigate possible impacts of shale gas development on greenhouse gas emissions and climate control.

Read Secretary Davey's complete statement.

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This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.

CAPP Releases Hydraulic Fracturing Operating Practice on Anomalous Induced Seismicity: Assessment, Monitoring, Mitigation and Response

In November 2012 the Canadian Association of Petroleum Producers (CAPP) released it's seventh Hydraulic Fracturing Operating Practice, entitled Anomalous Induced Seismicity: Assessment, Monitoring, Mitigation and Response.

The Operating Practice outlines the requirements for CAPP member companies to assess the potential for anomalous induced seismicity—also known as earthquakes—and where necessary, establish appropriate monitoring procedures and procedures to mitigate and respond to anomalous induced seismicity in shale gas and tight gas development areas.

CAPP is the industry association representing members which account for about ninety percent of Canada's natural gas and crude oil production.

Under the Operating Practice, companies are required to assess the potential for anomalous induced seismicity for each hydraulic fracturing program. Given the unique geologies where hydraulic fracturing takes place, each hydraulic fracturing program or location requires a tailored approached that draws from the Operating Practice.

The Operating Practice includes:

• Assessing the potential for anomalous induced seismicity using available engineering, geologic and geophysical data.
• Complying with applicable regulatory requirements and employing sound wellbore construction practices.

Where assessment indicates the potential for anomalous induced seismicity exists companies are to:

• evaluate wellbore placement and drilling design to account for geologic conditions;
• communicate with onsite personnel and establish procedures and preparedness for the possibility of anomalous induced seismicity;
• establish procedures to monitor for induced seismicity during hydraulic fracturing operations; and
• establish procedures to mitigate and respond to anomalous induced seismicity

The Operating Practice follows previous Operating Practices dealing with fracturing fluid additive disclosure, fracturing fluid additive risk assessment and management, baseline groundwater testing, wellbore construction and quality assurance, water sourcing, measurement and reuse, and fluid transport, handling, storage and disposal. The Operating Practices are built upon CAPP's Hydraulic Fracturing Guiding Principles and Operating Practices published in January 2012.

Read: CAPP Hydraulic Fracturing Operating Practice: Anomalous Induced Seismicity: Assessment, Monitoring, Mitigation and Response.

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This article was prepared by Alan Harvie (alan.harvie@nortonrose.com or +1 403.267.9411) from Norton Rose - Canada's Energy Practice.

Alberta's Energy Resources Conservation Board Releases draft Hydraulic Fracturing Directive

On Thursday, December 6, 2012 Alberta's Energy Resources Conservation Board (ERCB) released for public comment a draft Hydraulic Fracturing Directive.

The ERCB is Alberta's primary energy regulator and establishes the rules under which oil and gas development can take place.

The ERCB already has in place numerous directives that apply to hydraulic fracturing. However, given the increasing use of hydraulic fracturing technologies with horizontal drilling, the ERCB is proposing additional rules on subsurface activity during hydraulic fracturing operations.

The draft Hydraulic Fracturing Directive is proposing:

• new requirements to prevent the loss of well integrity during hydraulic fracturing operations; 
• new requirements for a well licensee to assess, plan for, and mitigate the risks of interwellbore communication with offset wells; 
• new requirements to protect freshwater aquifers from hydraulic fracturing operations at depths less than 100 metres (m) below the base of groundwater protection; 
• increased vertical setback distances for hydraulic fracturing operations near water wells; 
• increased vertical setback distances for hydraulic fracturing operations near the top of the bedrock surface; 
• pumping volume restrictions and exemptions to setback distances for nitrogen fracturing operations for coalbed methane wells; and 
• new notification requirements to ensure that well licensees notify the ERCB prior to commencing hydraulic fracturing operations and in the event that hydraulic fracturing operations cause an unintended communication event with an offset well or a nonsaline aquifer. 

The ERCB is accepting public comments until January 18, 2013. 

Read: draft Hydraulic Fracturing Directive and the December 6, 2012 Bulletin.  

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This article was prepared by Alan Harvie (alan.harvie@nortonrose.com or +1 403.267.9411) from Norton Rose - Canada's Energy Practice.

Republican Congressional Leaders Question Objectivity of Shale Gas Study

In a letter dated November 30, 2012, members of the House Energy and Commerce Committee urged the Secretary of Health and Human Services (HHS) to ensure the objectivity of a study on the health impacts of hydraulic fracturing and other shale development activities.

The committee members are concerned that the scientific objectivity of the HHS is being “subverted” because of, among other things, the alleged predisposed bias against hydraulic fracturing of the Director of the Agency for Toxic Substances and Disease Registry (ATSDR) within the Centers for Disease Control (CDC), the agency tasked with this study. 

The Director has previously stated that shale gas development “has been a disaster in some communities,” that fracturing fluid contains “potentially hazardous chemicals,” and that work near drilling sites “is turning up data of concern.” 

Further, in prior studies related to oil and gas activities, the ATSDR has referred to naturally occurring groundwater substances as “contaminants” and has failed to consider all data available from other sources or consult with state regulatory and public health officials, such as the United States Geological Survey, Groundwater Protection Council, and state environmental and/or oil and gas agencies.

The committee members want the HHS to adopt an approach based on sound scientific principles and analysis and to submit the report to a robust peer review process.

Seeking transparency, the Committee re-urged its September 12, 2012 request for a CDC briefing so that “Congress, the states, [and] the public” can be included in the reporting process and hold the CDC to “high standards of scientific objectivity and validity.”

Read the November 30, 2012 letter from the House Energy and Commerce Committee.

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This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.

NYDEC Publishes Revised Proposed High-Volume Fracking Regulations

On Thursday, November 29, 2012, the New York Department of Environmental Conservation (NYDEC) published revised proposed regulations relating to high-volume hydraulic fracturing (wells using more than 300,000 gallons of water as the base fluid).

The NYDEC developed these revisions and additions after receiving more than 66,000 public comments (most against hydraulic fracturing) on the original proposals that were released on September 28, 2011.

The 30-day public comment period on the revised proposed regulations begins on December 12, 2012, and allows a 90-day extension for completion of the New York Commissioner of Health’s review of the draft Supplemental Generic Environmental Impact Statement.

The NYDEC advised that it would not take any final action or make any final decision regarding hydraulic fracturing until after the health review and the work from three outside experts—Colorado School of Public Health professor John Adgate, George Washington University School of Public Health and Health Services professor Lynn Goldman, and University of California Los Angeles Fielding School of Public Health professor Richard Jackson—is completed.

According to the NYDEC, “the proposed regulations are to apply to the use [of fracking] statewide,” with the initial targets being the Marcellus and Utica shale formations.

The revised proposals include additional reporting requirements for drillers who want to re-fracture an existing well and allow for public and private water treatment plants to accept fracking waste water.

The proposed revised regulations for high-volume hydraulic fracturing include requirements for blow-out preventer use and testing plans, detailed mapping, enhanced disclosure of chemical additives, and well pad siting setbacks.

The chemical disclosure must identify each chemical constituent intentionally added to the base fluid and its proposed concentration. 

There are also new well construction, site preparation, operational, and maintenance requirements.

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This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.