Hydraulic Fracking Blog: September 2014

Update on Texas Railroad Commission’s proposed rule amendments for injection wells – the EPA weighs in

The EPA recently sent a letter to the Texas Railroad Commission commenting on that agency’s recently-proposed rule amendments for wastewater injection wells. While the letter contains several minor, technical criticisms of the proposed rule amendments, the general tone of the letter is positive. In the words of the EPA’s managers, the “RRC’s proposed regulatory changes represent a step forward . . . .”

For more information, see our previous analysis of the proposed rule amendments.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Jim Hartle (jim.hartle@nortonrosefulbright.com or 713 651 5695) from Norton Rose Fulbright's Energy Practice Group.

Even more studies looking at fracking’s possible environmental effects

The possible environmental effects of hydraulic fracturing are evidently a hot subject for research. Yale University researchers recently released yet another s tudy on the topic, this one assessing the relative rate of residents’ rates of complaints regarding their health in relation to the proximity of those residents’ homes to natural gas wells. The study categorized proximity into three groups: those less than one kilometer from a gas well, those between one and two kilometers from a gas well, and those further than two kilometers from a gas well. The study found that residents living closer to the gas wells complained about health problems more frequently than those who lived further from the wells. However, the researchers cautioned that their results are tentative and that more research should be done on the topic.

Pennsylvania State University researchers also came out with a new study recently, this one on the topic of whether residual fracking fluid that remains in shale formations after production poses a risk to groundwater. The researchers found it quite unlikely that groundwater could be contaminated by such residual water, because “capillary and osmotic forces . . . propel [residual water] into, not out of, the shale.” While narrow in scope, this study may help put to ease concerns about groundwater contamination, at least with respect to any hypothetical risks posed by residual water left in shale that has been fracked.

US geological survey researchers release findings on reports of induced seismicity in Colorado and New Mexico

Researchers with the US Geological Survey recently released a study claiming a link between wastewater injection and reported seismicity in the Raton Basin of Northern New Mexico and Southern Colorado. The researchers sought to explain a series of August-September 2011 earthquakes in the region and claimed that there was “strong evidence that [the] earthquake sequence [was] induced by fluid injection in the area.” They came to this conclusion in part because “earthquake rate change” over time appeared “to be solely coming from the area of the wells.”

This is the latest in a series of studies seeking to explain reported earthquakes near areas with oil and gas operations. Previous studies have been conflicted on whether or not such a link can be drawn, and some have conflicted with this new study.

Review our our previous coverage on the topic.

Two studies raise doubt in links between fracking and groundwater contamination

Two studies concluding that hydraulic fracturing is not linked to groundwater contamination were released on Monday, September 22, 2014. The results of these studies could impact lawsuits claiming fracking caused groundwater contamination and shift the emphasis of regulators to the impact of faulty fracked wells themselves.

The United States Department of Energy released a study of fracking in the Marcellus Shale in western Pennsylvania which found no evidence that fracking fluid from the fracking operation contaminated groundwater. In the second study, researchers from Ohio State University, Duke University and the University of Rochester released the results of a study concluding that fracking in the Marcellus Shale and the Barnett Shale in Texas is not contaminating groundwater. However, the university study showed that wells that are improperly drilled may allow shale gas to leak into groundwater.

While the government study examined whether fracking fluids left behind after drilling could contaminate groundwater, the university study analyzed whether fracking fluids could migrate to groundwater during the drilling process. Ultimately, both studies reached the same conclusion. Though the university researchers expressed some concern that fracking operations could open pathways for water contamination from deep shale layers into shallow aquifers, the two studies are likely to provide support for regulators and oil companies who have argued that groundwater is not at risk from fracking operations.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Kathleen McNearney (katie.mcnearney@nortonrosefulbright.com or 713 651 3662)

BLM permit streamlining legislation passes Senate, heads to House

On September 16, 2014, the United States Senate passed by unanimous consent Senate Bill 2440 to permanently extend the Bureau of Land Management (“BLM”) permit streamlining program established by the Energy Policy Act of 2005, which is set to expire next year.

The 2005 pilot program directed BLM to open new offices in Western states and to use a portion of lease revenues in an effort to reduce the permitting backlog and speed up oil and gas development on federal lands. The director of the BLM says the program has led to faster permitting and better interagency consultation, but that the pending expiration of the program has created uncertainty in BLM’s hiring program and threatened to eliminate 200 current positions.

Senate Bill 2440, sponsored by Sens. Tom Udall (D – NM) and John Barrasso (R – WY), would make the program permanent and give BLM greater flexibility in opening new offices to meet shifting industry demand. The bill would also raise the fee for each drilling application from $6,500 to $9,500 and index the fee to inflation. BLM would not otherwise be able to raise the fee until 2026.

The bill now heads to the House of Representatives where supporters, including the Independent Petroleum Association of America, the American Petroleum Institute, the Western Energy Alliance, and the Western Governors’ Association, hope to see it passed prior to the end of the 113th Congress.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Michael Gaetani (michael.gaetani@nortonrosefulbright.com or 724 416 0400) from Norton Rose Fulbright's Energy Practice Group.

Study finds no link between hydraulic fracturing and water pollution in Marcellus and Barnett Shale regions

A report published Monday concludes that, in areas of the country where natural gas drilling is common, recent cases of natural gas migration into drinking water sources likely are not the direct result of horizontal drilling itself nor of the hydraulic fracturing process, but rather can be traced to instances of defective well construction.

Researchers from five universities sought to identify whether elevated gas levels were a result of human activity and what mechanisms caused the elevated levels. The report examines data from “eight discrete clusters of fugitive gas contamination”—seven from the Marcellus Shale area and one from the Barnett Shale area. The researchers, in what they believed to be a first-of-its-kind methodology, used noble gas isotope data to trace the geologic strata that was the source of any natural gas present in the drinking water.

The authors concluded that four clusters of fugitive gas contamination were caused by failures of annulus cement in the well itself, which allowed gas from intermediate strata to leak into water supplies. Three clusters were caused by faulty production casings, which allowed target production gasses to migrate into the groundwater. And one cluster of target production gas migration was caused by an underground gas well failure. The data “do not suggest that horizontal drilling or hydraulic fracturing has provided a conduit to connect deep Marcellus or Barnett Formations directly to surface aquifers.”

The report adds to the growing support that horizontal drilling and hydraulic fracturing are not abnormally dangerous when conducted properly. In an e-mail to the Dallas Morning News, lead author Thomas Darrah of Ohio State University said “[t]his is relatively good news because it means that most of the issues we have identified can potentially be avoided by future improvements in well integrity.”

Read "Noble gases identify the mechanisms of fugitive gas contamination in drinking-water wells overlying the Marcellus and Barnett Shales" article.

Researchers tout new substance for use in treating flowback water

Researchers with the Southwest Research Institute (“SwRI”) and The University of Texas at San Antonio (“UTSA”) reported last week that they have created and tested substances called “biochar” for use in treating flowback water from wells using hydraulic fracturing. In a press release, the researchers note that biochar is a stable, charcoal-like substance created from plant-based agricultural waste. The biochar operates by attracting and retaining water, trapping impurities in the water in the process.

The researchers tested the efficacy of different types of biochar in filtering from water the specific substances oil and gas companies use in their fracking fluids. UTSA mechanical engineering professor Zhigang Feng said that the team’s “research demonstrates that this is a product that can reduce the environmental impact of drilling in a way that is safe and inexpensive to industry.” While it remains to be seen whether the oil & gas industry adopts the use of biochar in its operations, the research seems promising.

For more information, see the SwRI press release.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Jim Hartle (james.hartle@nortonrosefulbright.com or 713 651 5695) from Norton Rose Fulbright's Energy Practice Group.

Shale and hydraulic fracturing updates – a complete offering

At Norton Rose Fulbright, we continue to lead the discussion on legal developments surrounding hydraulic fracturing. On Wednesday, September 17 at 11:00 am (Sydney/Session 1) and 3:00 pm (Cape Town/Session 2), we will host a web seminar focusing on the lessons learned in North America and how they apply globally.

Our web seminar speakers and moderators are at the forefront of the shale conversation and have authored and contributed to publications that explore key issues in developing unconventional resources.

Alan Harvie, Eddie Lewis ,Barclay Nicholson and Matt Ash have articles featured in The Shale Gas Handbook which acts as a quick reference guide for companies involved in the exploitation of unconventional gas resources.

Oil and gas companies have traditionally protected the composition of hydraulic fracturing liquids through state-level trade secret laws. Barclay Nicholson and Alan Harvie have contributed to Trade Secrets in hydraulic fracturing hydraulic fracturing which takes an in-depth look at the balance governments strive to maintain between protecting the health of their citizens and supporting energy development.

For the latest overview of recent litigation involving shale and hydraulic fracturing, the following publication authored by Barclay Nicholson is available for download.

Can biochar reduce the environmental impact of drilling?

In a press release, the researchers note that biochar is a stable, charcoal-like substance created from plant-based agricultural waste. The biochar operates by attracting and retaining water, trapping impurities in the water in the process.

The researchers tested the efficacy of different types of biochar in filtering from water the specific substances oil and gas companies use in their fracking fluids.

UTSA mechanical engineering professor Zhigang Feng said that the team’s “research demonstrates that this is a product that can reduce the environmental impact of drilling in a way that is safe and inexpensive to industry.”

While it remains to be seen whether the oil & gas industry adopts the use of biochar in its operations, the research seems promising.

For more information, see the SwRI press release.

Web seminar: Legal lessons learned in shale plays in North America

With North America leading the way in shale oil and gas production, interest is mounting globally in the unconventional hydrocarbon sector. On Wednesday, September 17th , we will host a web seminar on Legal lessons learned in shale plays in North America, which will look at the key legal issues that have arisen in North America related to shale development, the lessons learned, and the implications for countries where shale development is still in the early stages.

This web seminar will be broadcast in two separate sessions for Asia/Australia audiences (session 1) and Europe/South Africa audiences (session 2) respectively. If you are unable to register for a session, a recording of the web seminar which will be made available after the event.

Session 1: Wednesday, September 17

9:00 am – 10:15 am Hong Kong, Singapore
11:00 am – 12:15 pm Sydney, Melbourne

To learn more about the seminar and register please access the following link: Legal lessons learned in shale plays in North America – Session 1

Session 2: Wednesday, September 17, 2014

6:00 am – 7:15 am Los Angeles
7:00 am – 8:15 am Calgary
8:00 am – 9:15 am Houston
9:00 am – 10:15 am New York
2:00 pm – 3:15 pm London
3:00 pm – 4:15 pm Cape Town

To learn more about the seminar and register please access the following link: Legal lessons learned in shale plays in North America - Session 2

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