Tuesday, October 18, 2011

Teaching Hydraulic Fracturing - Environmental Law Prof

September 30, 2011
Environmental Law Prof Blog

In response to the recent discussion on the Environmental Law Professors' Listserv about teaching hydraulic fracturing, I'd like to provide a few thoughts. I have been following hydraulic fracturing since 2008, and I learn new things about fracturing daily. Unconventional oil and gas drilling in the United States (including fracturing of drilled wells) is expanding so rapidly--and state and local regulation is changing so quickly--that it's difficult to provide one consistent and accurate picture. As of today, though, the following list describes how I would approach a whirlwind classroom tour of hydraulic fracturing:

1) Hydraulic fracturing has been around for a long time--indeed, for more than half a century--and is used to extract both oil and gas. In Coastal Oil v. Garza, the Texas Supreme Court suggested that fracturing has been applied commercially since 1949. Oil and gas operators have used hydraulic fracturing in a variety of formations, including tight sands, shales, and coalbeds (see the somewhat controversial EPA study of coalbed fracturing here), among other formations, and the effects of fracturing may vary substantially depending on the type of formation fractured--particularly the depth at which fracturing occurs. Although fracturing itself is not new, one type of fracturing only emerged within the last several decades and has boomed within the last ten years. "Slickwater" or "slick water" fracturing, developed in Texas's Barnett Shale in the 1990s, is "new" in several respects: It often involves the drilling of both a horizontal and vertical well, and it typically requires large volumes of water--somewhere between two and eight million gallons (or between 1.2 and 3.5, depending on the information source) for each fracture treatment--and small quantities of chemicals (about 0.5 percent by weight).

2) Many of the stages of producing oil or gas from a fractured well are identical to conventional oil and gas well development. An operator constructs an access road and well pad; drills, cases, and cements a well; and temporarily stores on site drilling wastes, including drill cuttings, used drilling mud, and produced water that comes up from the formation when drilled. The operator then disposes of this waste. Depending on the state regulation, some waste may be buried on site or applied to certain land surfaces, while other waste must be sent a landfill, disposed of in an underground injection control well permitted under the Safe Drinking Water Act, sent to a wastewater treatment plant, or disposed of through other methods approved by the state. Depending on state regulation, an operator that drills and fractures a well also completes certain site restoration after drilling and fracturing is finished, as does a conventional developer after drilling.

Fracturing also requires additional processes, however, including withdrawing large quantities of water; trucking or pumping in water and storing it in a pit or tank on site or in a centralized impoundment; trucking chemicals on site and mixing them with water; perforating (punching holes in) certain portions of the well casing (although many conventional wells also are perforated); treating the shale around the wellbore with an acid to clean it; injecting water and chemicals into the well at high pressure to fracture the shale around the well and/or expand existing fractures; injecting "proppant" into the well to prop open the fractures once formed; and capturing and disposing of "flowback" water--the water and chemical mixture used for fracturing, some of which flows back up out of the well. For a detailed description of the fracturing process and its potential environmental effects, see chapter 5 of the New York DEC's preliminary revised Supplemental Generic Environmental Impact Statement for high-volume fracturing. For a report on the chemicals used in fracturing, see this House Committee on Energy and Commerce Minority Staff Report.

3) Fracturing is increasingly common. Industry estimates that more than 90 percent of gas wells in the United States are hydraulically fractured. I am not familiar with the numbers for oil, but certain shales with oil--such as the Bakken Shale--have experienced a fracturing boom. (Shale oils are not to be confused with oil shales, which must be mined to extract oil.) The rise in fracturing for natural gas has been astounding. In 2000, the Texas Railroad Commission issued 273 permits for gas drilling in the Barnett Shale. In 2008, it issued 4,145 permits, and operators received 2,157 Barnett permits in 2010. In 2008, operators drilled 195 wells in the Marcellus Shale in Pennsylvania; in 2010, they drilled 1,386 wells. The U.S.

Energy Information Administration has a useful map of all shale plays and of shale gas production, much of which so far has occurred in Arkansas, Louisiana, Michigan, Oklahoma, and Texas. West Virginia's and Pennsylvania's production numbers will continue to rise, and New York will be an important player when the New York Department of Environmental Conservation finalizes the conditions that it will place on high-volume fracturing and begins to approve permits. Shale oil and tights sands formations also typically are fractured and have generated increased interest in states like Colorado, Montana, New Mexico, North Dakota, and Wyoming, among others.

4) Portions of the development process for a fractured well are federally regulated. Operators may not dispose of pollutants into navigable waters without a Clean Water Act NPDES permit, of course. They are potentially liable under the Comprehensive Environmental Response, Compensation and Liability Act for pollution caused by hazardous substances other than oil or gas, and they must maintain material safety data sheets on site for certain chemicals, as required by the Occupational Safety and Health Act and the Emergency Planning and Community Right-to-Know Act. (See this recent post summarizing disclosure and the MSDS requirement.) Operators also enjoy a number of federal exemptions, however, including exemptions of exploration and production (E&P) wastes from subtitle C of the Resources Conservation and Recovery Act (see 42 U.S.C. 6982 (m)(1), 42 U.S.C. 6921(b)(2)(B), and 53 Fed. Reg. 25,446); reporting of annual toxic chemical releases under EPCRA (see 42 U.S.C. 11023(c), which references the document with the Standard Industrial Classification codes to which the reporting requirement applies); and oil and gas pollution from CERCLA liability (42 U.S.C. 9601(14) excludes petroleum and natural gas from the definition of "hazardous substance.") For the fracturing process itself--injecting water and chemicals at high pressure down the well--an operator also is not subject to the Safe Drinking Water Act unless the operator uses diesel fuel. See 42 U.S.C. 1421(d). The EPA currently is developing UIC permitting standards for fracturing with diesel fuel. If the operator disposes of drilling or fracturing wastes in a UIC well, then SDWA applies. Operators also must comply with the Migratory Bird Treaty Act and the Endangered Species Act, and the EPA has proposed new source performance standards for VOCs from fractured and re-fractured wells under the Clean Air Act.

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