Energy & Environmental Law Blog

EIA: New Wells in the Eagle Ford

Vorys — Thu, 17 May 2012 07:25:49 -0500

The Energy Information Administration (EIA) has an interesting (and brief) report on new drilling in the Eagle Ford over the last several months: "New well starts in the Eagle Ford region in Texas increased 110% from January through March 2012 compared to the same period in 2011, according to reporting and analysis by BENTEK Energy LLC (Bentek)."

New Pipeline Capacity and Storage

Vorys — Wed, 16 May 2012 07:20:47 -0500

The Energy Information Administration (EIA) has published new information on planned additions to pipeline capacity and natural gas storage. The accompanying graphic:

GAO Testimony: Unconventional Oil and Gas Production

Vorys — Tue, 15 May 2012 07:23:40 -0500

This is interesting. Testimony from the U.S. Government Accountability Office before the U.S. House Subcommittee on Energy and Environment:

The Green River Formation *** contains the world’s largest deposits of oil shale. USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions. The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered. At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves. (Emphasis is ours.)

That seems to contradict the President's oft repeated statement that we have only 2% of the world's oil reserves ... and with only one shale formation!

New Eagle Ford Economic Impact Study

Vorys — Mon, 14 May 2012 08:12:43 -0500

The University of Texas at San Antonio’s Institute for Economic Development recently released an economic impact study for resource development out of the Eagle Ford shale: "'The Eagle Ford Shale has proven to be one of the most important economic engines in the state,' said Dr. Thomas Tunstall, director of the UTSA Center for Community & Business Research, and the study’s principal investigator. 'In 2011 alone, the play generated over $25 billion in revenue, supported 47,000 full-time jobs in the area, and provided $257 million in local government revenue.'"

Hit the link for a copy of the study.

PA: Another Test Dispels Landowner Groundwater Contamination Claims

Vorys — Sun, 13 May 2012 11:06:51 -0500

The Chicago Tribune has an article reporting on recent test results showing that groundwater contamination claims are linked to shallow, naturally occurring methane and not the producer's operations: "The analysis, a form of chemical fingerprinting, studies stable isotopes in the methane for signs of its origin.The procedure has become a frequent tool for regulators and companies seeking to distinguish between deep gas harvested by drillers, shallow gas caused by the breakdown of organic material and gas trapped in middle rock layers closer to the surface than the mile-deep Marcellus. *** Susan Oliver, a spokeswoman for WPX, said in an email that 'the characteristics of the methane in the three water wells match the characteristics of the shallow methane that has been in Franklin Forks and the Salt Springs area for many decades. The results do not match the chemical footprint of the natural gas coming from the Marcellus Shale.'"

Don't expect that to end the issue, though ...

TX: Lawsuit Over Local Fees

Vorys — Sun, 13 May 2012 08:01:01 -0500

The Star-Telegram is reporting that two Texas associations have filed suit to protect their members against discriminatory fees imposed by one local government (Arlington). "The Texas Oil & Gas Association and the Texas Independent Producers and Royalty Owners Association argue that the city, which has more than 300 gas wells, is trying to unfairly 'expand its revenues by taxing a single industry.' *** 'It's seven times higher than any other permit fee they charge to a particular business,' said Justin Furnace, president of the royalty owners association. 'We're really left with no alternative but to seek relief from the court.'"

It's to protect the people ... (and fund the local fire department)

PA: Billions in Investment in 2011

Vorys — Sat, 12 May 2012 10:50:27 -0500

Delaware Online is reporting on a recent study concluding that producers in Pennsylvania generated $3.5 billion in gross revenues last year. The interesting part for residents is buried in later paragraphs, however: "Patrick Creighton, a spokesman for the Marcellus Shale Coalition *** estimated that it costs the industry about $5 million to bring a well into production. With about 2,200 active wells in the state, that comes to $11 billion in additional investments, mostly over the last four years. [Moreover,] *** Creighton said the minimum royalty in Pennsylvania is 12.5 percent of well revenues, meaning property owners here were paid more than $400 million last year." And - "Gheit [an analyst with Oppenheimer & Co.] said the real value of shale gas is that the lower energy cost is making American industry more competitive around the world. That opens doors for long-term investments, such as Shell Oil’s plan to build a huge petrochemical plant in western Pennsylvania."

Should be viewed as good, if not great, news, right?

Ohio Submits Well Construction Rule Package to JCARR

Vorys — Wed, 09 May 2012 12:42:35 -0500

Today the ODNR's Division of Oil and Gas Resource Management submitted its long expected Well Construction Package to the Ohio Joint Committee on Agency Rule Review. These rules will implement the well construction provisions within Ohio Revised Code section 1509.17, and establish minimum standards for the construction and mechanical integrity monitoring of oil and gas wells drilled in Ohio. The rules are expected to take effect August 1, 2012.

U.S. EPA Issues Draft Hydraulic Fracturing Guidance

Vorys — Wed, 09 May 2012 08:46:37 -0500

U.S. Environmental Protection Agency (EPA) has issued a draft guidance document to be used when "permitting the underground injection of oil- and gas-related hydraulic fracturing using diesel fuels where EPA is the permitting authority." From the related press release: "Today, the U.S. Environmental Protection Agency (EPA) released draft underground injection control (UIC) program permitting guidance for class II wells that use diesel fuels during hydraulic fracturing activities. EPA developed the draft guidance to clarify how companies can comply with a law passed by Congress in 2005, which exempted hydraulic fracturing operations from the requirement to obtain a UIC permit, except in cases where diesel fuel is used as a fracturing fluid."

Comments are due 60 days from its publication in the Federal Register.

BLM Frac Rule

Vorys — Tue, 08 May 2012 08:33:55 -0500

The Bureau of Land Management (BLM) has issued a draft rule governing hydraulic fracturing on federal lands. See here. Not all the environmental groups are happy - "'This is a free pass to the oil and gas industry at the expense of public health,' Jessica Ennis, a Washington-based legislative associate for the environmental group Earthjustice, said today in an e-mail." (from BusinessWeek). But then again, they never are.

The Sierra Club Is Not A Fan of Natural Gas Development

Vorys — Mon, 07 May 2012 08:26:42 -0500

But you already knew that. The National Journal has an article on the Sierra Club's targeting of natural gas production: "The rocky relationship between one of the world’s most influential environmental groups and the natural-gas industry is headed toward full-scale combat. *** The Sierra Club is intensifying its natural-gas reform campaign and renaming it ‘Beyond Gas,’ a spin-off of its decade-old “Beyond Coal” campaign seeking the phaseout of coal-fired power plants."

No surprise - wonder when they'll turn to wind energy ... [see yesterday's post].

New Energy Report

Vorys — Sun, 06 May 2012 07:51:47 -0500

The Institute for Energy Research has issued a new report entitled Hard Facts: An Energy Primer. A sample: "Policymakers should take time to understand the facts about energy and the obstacles to making it affordable and reliable given its critical role in our lives and our economy. America is home to vast natural resources, but many of our energy policies are built on the notion that energy is scarce and becoming more scarce. The reality is that we have more combined oil, coal, and natural gas resources than any other country on the planet. We have enough energy resources to provide reliable and affordable energy for decades, even centuries to come. The only real question is whether we will have access to our abundant energy resources, not whether sufficient resources exist."

Very interesting.

First They Came For Fossil Fuels ...

Vorys — Sun, 06 May 2012 07:45:10 -0500

The Telegraph is reporting on a study that wind farms also contribute to global warming: "Satellite data over a large area in Texas, that is now covered by four of the world's largest wind farms, found that over a decade the local temperature went up by almost 1C as more turbines are built. *** This could have long term effects on wildlife living in the immediate areas of larger wind farms." Needs more study ...

Transportation: Natural Gas?

Vorys — Sun, 29 Apr 2012 12:23:19 -0500

The Christian Science Monitor has an interesting article on the potential for CNG (compressed natural gas): "From his suburban home in a wooded neighborhood once known for its shipbuilding prowess, Mann is crafting automotive gadgets for a future that many believe could help solve the nation's long-intractable energy woes – one fueled mostly by natural gas. During the past five years, Mann has converted more than 10 cars to run on compressed natural gas, in addition to gasoline, using a device he invented, the 'CNG Fogger,' which boosts the vehicles' mileage. Commuters in the Boston area have snapped up his cars from Craigslist as have CNG enthusiasts as far away as Wisconsin."

Of course, the article wouldn't be complete without discussing environmental fears ...

You're Not Paranoid - They Do Want to 'Crucify' You

Vorys — Sat, 28 Apr 2012 10:47:43 -0500

Politico is reporting on statements made by the Administrator for U.S. EPA Region 6 concerning his regulation of U.S. oil and gas companies: "It was kind of like how the Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage for the next few years … So, that’s our general philosophy." (Emphasis is ours.) This is the same Administrator we've reported on before regarding his ill-advised prosecution of Range Resources - see, e.g., "U.S. EPA Backs Off On Enforcement Action".

For a video of the statement itself, see here.

You're not paranoid. They are out to get you.

[Update: We thought you might be interested in a related letter sent by Senator Inhofe to U.S. EPA Administrator Jackson - see here. (Bumped).]

A Potential Stop to Clean Water "Power Grab" via EPA Guidance?

Vorys — Fri, 27 Apr 2012 12:39:28 -0500

The Congressional Committee on Transportation and Infrastructure announced today that H.R. 4965 was introduced to "prohibit the Obama Administration from finalizing or implementing the EPA and Corps Clean Water Act 'guidance' in order to significantly broaden the scope of federal jurisdiction under the Act." The press release is good reading if your position is that USEPA and the Army Corps are illegally expanding federal power under the CWA without any public vetting of what is being called "de facto federal regulation." This will be an interesting bill to follow.

Indian Tribes Oppose BLM Frac Regulation

Vorys — Tue, 24 Apr 2012 05:30:57 -0500

This is interesting. The Minot Daily News is reporting that there is opposition to the application of hydraulic fracturing regulations proposed by the Bureau of Land Management to Indian reservations. "The chairman of the Three Affiliated Tribes questions whether the Bureau of Land Management has authority to regulate hydraulic fracturing on Indian reservations. *** 'I can find no authority for the Bureau of Land Management to regulate activities on Indian lands, including hydraulic fracturing,' Tex Hall told members of the House Natural Resource Committee's Subcommittee on Indian and Alaska Native Affairs at an oversight hearing in Washington, D.C., Thursday." The concern - the negative impact these regulations might have on the reservations' economies.

The response from BLM might be considered by some to be a little patronizing. A Department of Interior spokesman said, "As we continue to expand domestic natural gas production, it is essential that the public have full confidence that the right safety and environmental protections are in place." What? The tribes aren't doing enough to protect their own lands?

Chemical Industry Boom

Vorys — Sat, 21 Apr 2012 15:22:34 -0500

The Houston Chronicle has an interesting article on the boom the chemical industry is seeing as a result of increased natural gas supplies. "The shale boom's bounty of cheap natural gas is fueling an industrial renaissance on the Texas coast, one that was in full focus Thursday as Dow Chemical announced the latest piece of a $4 billion expansion of its chemical operations in Southeast Texas." Interesting ...

"Induced Seismicity"

Vorys — Sat, 21 Apr 2012 15:10:21 -0500

That's the term used to describe minor seismic events attributed to human activity. Recently, a number of news articles have characterized an abstract of a soon-to-be-published USGS (i.e., U.S. Geological Survey) report as linking minor earthquake events to hydraulic fracturing - i.e., induced seismicity. Responding to those articles, Deputy Secretary Hayes of the U.S. Department of the Interior wrote in a DOI blog post: "USGS’s studies do not suggest that hydraulic fracturing, commonly known as 'fracking,' causes the increased rate of earthquakes." (Emphasis is ours.) Rather, "USGS’s scientists have found, however, that at some locations the increase in seismicity coincides with the injection of wastewater in deep disposal wells."

Read the whole thing. (Who knew the DOI blogged?)

Shale Gas

Vorys — Sat, 21 Apr 2012 15:03:15 -0500

CNN Money has an interesting article on hydraulic fracturing and the shale gas boom. Best quote in response to distortions from opponents of oil and gas development: "If you want to live by the precautionary principle, then crawl up in a ball and live in a cave."