BLM Extends Public Comment Period on Proposed Rules until 9/10/12

Acting BLM Director
Mike Pool

On June 27, 2012, the Bureau of Land Management announced that it had extended the public comment period on its proposed rules (issued on May 4, 2012) to require companies to publicly disclose the chemicals used in hydraulic fracturing operations on federal and Indian lands.

Comments from the public, industry groups, and other stakeholders will now be accepted until September 10, 2012. 

The decision to extend the comment period for an additional 60 days was made to allow greater public participation. 

As of June 25, 2012, the Bureau had received more than 170 comments on the proposed rules. 

Acting Director Mike Pool explained that “it is critical that the public have full confidence that the right safety and environmental protections are in place…and additional time was warranted so that all parties had an opportunity to participate.”

In addition to the required disclosure of hydraulic fracturing chemicals, the proposed rules include new guidelines for how drillers case drilled wells and require that oil and gas operators have a water management plan in place for handling fracturing fluids that flow back to the surface. 

According to the Bureau, these rules will modernize the management of well stimulation activities, including hydraulic fracturing, to make sure that oil and gas operations conducted on federal and Indian lands follow common sense industry best practices. 

The Bureau asserts that these rules will build public confidence, while ensuring continued access to valuable resources needed for the country’s energy economy.

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

Senate Hearing on Induced Seismicity

On June 19, 2012, the U.S. Senate’s Energy and Natural Resources Committee heard testimony from members of the Committee on Induced Seismicity Potential in Energy Technologies.

 The chair of the Induced Seismicity committee, Dr. Murray W. Hitzman of the Colorado School of Mines, advised the Senators that, since the 1920s, it has been recognized that pumping fluids into or out of the ground has the potential to cause seismic events that can be felt. 

These induced seismic events, though small in scale, concern the public and raise questions about increased seismic activity and its potential consequences. Dr. Hitzman reported the following findings:

• Induced seismicity associated with fluid injection or withdrawal in energy development is “caused in most cases by change in pore fluid pressure and/or change in stress in the subsurface in the presence of faults with specific properties and orientations and a critical state of stress in the rocks.” 
• The total balance of fluid introduced into or removed from the subsurface is the factor that has the most direct consequence in regard to induced seismicity. 
• The very low number of felt seismic events (one unconfirmed in the U.S. and one confirmed in England) relative to the large number of hydraulically fractured wells for shale gas (more than 35,000 in the U.S.) is “ likely due to the short duration of injection of fluids and the limited fluid volumes used in a small spatial area.” 
• “The majority of…waste water disposal wells do not pose a hazard for induced seismicity.” The few induced seismic events that have been attributed to disposal injection wells are causally linked between the injection zones and previously unrecognized faults in the subsurface. 

Dr. Mark Zoback, a Geophysics professor at Stanford University, in his written testimony, stated that, while the risks of induced seismicity posed by injection of waste water are extremely low, these risks can be effectively managed by taking five (5) steps:

1. avoid injections into brittle rock faults; 
2. select formations to minimize pore pressure changes; 
3. install local seismic monitoring arrays; 
4. establish protocols “to define how operations would be modified if seismicity were to be triggered;” and 
5. reduce injection rates or abandon injection wells if triggered seismicity poses any hazard.

Additional information is available at the U.S. Senate's Energy and Natural Resources Committee web site.

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

National Research Council Releases Study On Seismicity Potential In Energy Technologies

At the direction of the U. S. Congress, the DOE requested the NRC to examine the scale, scope, and consequences of induced seismicity (earthquakes attributable to human activities) relating to energy technologies that involve fluid injection or withdrawal from the earth’s subsurface, including activities such as shale gas recovery and its use of hydraulic fracturing as well as disposal of waste water into the subsurface.

The NRC released its report on June 15, 2012 (download a prepublication version of the report).

The main findings of the NRC study relating to shale oil development and waste water disposal are, to quote the study:

1. the process of hydraulic fracturing a well as presently implemented for shale gas recovery does not pose a high risk for inducing felt seismic events; [and] 
2. injection for disposal of waste water derived from energy technologies into the subsurface does pose some risk for induced seismicity, but very few events have been documented over the past several decades relative to the large number of disposal wells in operation… 

The study points out that there has only been one possible case of felt seismicity in the United States and one confirmed case in England related to hydraulic fracturing activities.

The NRC recommends the development of a detailed methodology to assess the risk of induced seismicity; the collection by state and federal agencies of data related to fluid injection (well location, injection depths, volumes, and pressures); the adoption of best practices protocols relating to induced seismicity; and the coordination of federal and state agencies, such as the EPA, USGS, land management agencies, oil and gas commissions, geological surveys, and environmental agencies, to address induced seismic events.

The NRC’s findings will be presented to the U.S. Committee on Energy and Natural Resources at a hearing on June 19, 2012, at 10 a.m. EST . This hearing will be webcast live on the Committee’s website.

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

USFWS Withdraws Proposed Endangered Status for Dunes Sagebrush Lizard

Today, the United States Fish and Wildlife Service (“FWS”) withdrew its proposed rule to list the dunes sagebrush lizard as endangered under the Endangered Species Act of 1973 (“ESA”), finding that the best scientific and commercial data available indicate that the threats to the species and its habitat have been reduced to the point that the dunes sagebrush lizard does not meet the statutory definition of an endangered or threatened species.

According to FWS, the withdrawal is based on its conclusion that the threats to the species as identified in the proposed rule no longer are as significant as believed at the time of the proposed rule.

FWS originally proposed the dunes sagebrush lizard for listing on the Federal Lists of Endangered and Threatened Wildlife and Plants (commonly referred to as the “Endangered Species List”) on December 14, 2010. 

On December 5, 2011, FWS extended its final determination on whether or not to list the dunes sagebrush lizard as endangered until June 14, 2012, due to significant scientific disagreement regarding the sufficiency or accuracy of the available data relevant to the proposed listing.

Under the ESA, it is unlawful for any person to “take” an endangered and threatened species, which means “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” 

FWS regulations define “harm” for purposes of the Act to include “significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering.”

Environmental groups had been pressuring FWS for years to list the dunes sagebrush lizard on the endangered species list, claiming that the lizard was endangered primarily as a result of rapidly expanding oil and gas development in the Permian Basin of New Mexico and Texas. 

Placement of the lizard on the endangered species list would have greatly limited oil and gas activities in its habitat, thus significantly impacting oil and gas production in southeastern New Mexico and west Texas.

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This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) and Kristen Roche (kroche@fulbright.com or 713 651 5303) from Fulbright's Environmental Law Practice.

New Study Shows EPA Overestimation of GHG Emissions

A new study, released on June 1, 2012, indicates that EPA has significantly overestimated greenhouse gas (GHG) emissions for the natural gas industry, including emissions from the hydraulic re-fracturing of unconventional gas wells.

Where EPA reported 712.6 thousand metric tons of methane emissions from gas well workovers (including hydraulic re-fracturing) in its 2010 national inventory of GHGs, the study estimated emissions of 197.3 thousand metric tons.

Prepared by URS Corp. and The LEVON Group, the study was sponsored by the American Petroleum Institute and America’s Natural Gas Alliance (collectively, API/ANGA) in response to EPA’s revised calculation methodology for GHG emissions from natural gas systems.

The revised methodology was first adopted in 2011 for preparation of the 2009 national inventory and resulted in a 204% increase to estimated GHG emissions for the natural gas production sector.

The API/ANGA study analyzed data for nearly 91,000 natural gas wells and is being touted as the most comprehensive data set compiled for natural gas operations.

The data did not include measured emissions and, therefore, the study does not challenge the EPA’s assumptions regarding emission rates for various emission activities.

However, the API/ANGA data do indicate that the frequency and duration of these activities are much lower than assumed by EPA.

For hydraulic re-fracturing events, EPA had assumed a re-fracture rate of 10%, meaning 10% of fracture-completed gas wells are re-fractured every year. In contrast, the API/ANGA study found an average well re-fracture rate of 1.6% to 2.3%.

The study scope included emission activities other than those associated with the re-fracturing of natural gas wells. In particular, API/ANGA found that EPA appears to be overestimating the frequency and duration of liquid unloading events resulting in emissions to the atmosphere. EPA’s 2010 national inventory estimated 4.5 million metric tons of methane from unloading events.

In comparison, the API/ANGA study found only 0.64 million metric tons of emissions. Coupled with the hydraulic fracturing results discussed above, the study estimated total production sector emissions of 4.4 million metric tons of methane versus EPA’s estimate of 8.8 million metric tons.

The API/ANGA study was not prepared as a challenge to the EPA’s recently-issued New Source Performance Standards (Subpart OOOO) and National Emission Standards for Hazardous Air Pollutants (Subparts HH and HHH) for the oil and gas sector.

Therefore, the study does not discuss the VOC or HAP emission assumptions underlying those rules. Nevertheless, the API/ANGA study highlights the limited information regarding upstream emissions upon which EPA has historically relied and generally supports the positions taken by parties challenging the rules.

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This article was prepared by Bob Greenslade (bgreenslade@fulbright.com / 303 801 2747) from Fulbright’s Environmental Law Practice.