December 2010 Archives

December 31, 2010

Plaintiffs' Attorney Windle Turley Enters Fray on Barnett Shale Groundwater Contamination

Dallas attorney Windle Turley has filed three lawsuits in federal court in Dallas on behalf of landowners alleging contamination of their groundwater by Barnett Shale Wells: one on behalf of Jim and Linda Scoma of Johnson County, against Chesapeake, filed last June; one on behalf of Doug and Diana Harris, against Devon Energy, and one on behalf of Grace Mitchell against Chesapeake and Encana. The suits contend that plaintiffs' groundwater has been contaminated by drilling and hydraulic fracturing operations. A copy of the Harrises' suit can be viewed here.  Turley says more such suits will follow. Turley's website has a page dedicated to such suits, which says that, "when hydro-fracking occurs, it is possible for the property owner's groundwater to become contaminated and/or for gases to be forced into the groundwater. When this happens, the oil company may be liable to the property owner for property damages and injuries. ... The Turley Law Firm is very concerned over the damage done and future risk to property and individuals in the Barnett Shale area, and is filing damage suits on behalf of property owners." Groundwater contamination lawsuits may become new fertile ground for plaintiffs' attorneys.
December 29, 2010

Range Letter to EPA Denies Responsibility for Parker County Pollution

Range Resources has written to Al Armendariz in EPA's Dallas office again asserting that it is not responsible for the groundwater contamination in Parker County.  Range's letter can be viewed here:  12-27 Armendariz letter.pdf  For my previous posts on this controversy, go here and here.

Range met with EPA staff on December 15, and it says that, as a result of the meeting, Range and EPA agree that "hydraulic fracturing in the Barnett Shale cannot be the cause of natural gas occurring in the domestic water wells identified by the EPA."  Range also made clear in the letter that, while it was complying with the requirements of EPA's order, it did not believe that the EPA had authority to issue its order, since Range was not responsible for the pollution and the order was issued "without any prior notice or opportunity for Range to present important objective facts."

December 28, 2010

Brownlow Article on Eagle Ford Shale Play and the Carrizo Aquifer

Darell T. Brownlow, Ph.D, has published an article giving his analysis and opinion of the ability of the Carrizo Aquifer to supply water demands caused by fracing of wells in the Eagle Ford play.  The article was published in the newsletter of the Texas Ground Water Association, Fountainhead, and can be found here: Brownlow Article.pdf

Dr. Brownlow, a hydrologist, concludes that there is plenty of water in the Carrizo, in most places, to meet the demands for frac water. His estimates:

  • There are about 6 million acres in the Eagle Ford play, and a possible 20,000 oil and gas wells (one well per 300 acres).
  • An average frac job uses 15 acre-feet of water (4,887,765 gallons, or 115,375.5 42-gallon barrels).
  • So, the frac jobs on those 20,000 wells would use about 300,000 acre-feet of water over the life of the play.
  • Current withdrawals from the Carrizo Aquifer are about 275,000 acre-feet per year; so the entire demand for frac water from Eagle Ford wells would equal about one year's withdrawal of water from the aquifer.  At a rate of withdrawal of 275,000 acre-feet per year, groundwater management studies estimate that the Carrizo water table will drop an average of 30 to 35 feet by 2060.

Dr. Brownlow says that, if a successful Eagle Ford well makes 300,000 to 400,000 barrels of oil at $80/bbl, the return to the landowner would be $520,000 per acre-foot ($1.60 per gallon). In contrast, the return to a farmer using  the same acre-foot of water to irrigate corn, peanuts or coastal hay would be $500 to $1,000 per acre, or about $250 per acre-foot of irrigation water. "The point here is that using groundwater from the Carrizo for hydraulic fracturing in the Eagle Ford Shale has enormous economic potential for landowners, oil production companies and the entire region. Moreover, from a geologic and water planning perspective, additional impact on the aquifer appears minimal."

Dr. Brownlow is a resident of Wilson County, a cattle rancher in LaSalle County, serves on the South Central Texas Regional Water Planning Group (Region L), and was the governor's appointee to the Evergreen Underground Water Conservation District from 2000-2010.

December 23, 2010

Update on EPA Order Against Range Resources, Parker County

EPA's order against Range Resources for allegedly charging groundwater with gas from its Barnett Shale wells has caused quite a stir.

The Texas Railroad Commission has issued two news releases, one on December 7 and one on December 8.  Commission Chairman Victor Carrillo said that he has told EPA Regions 6 Administrator Al Armendariz that "EPA's actions are premature as the Railroad Commission continues to actively investigate this issue and has not yet determined the cause of the gas. This EPA action is unprecedented in Texas, and commissioners will consider all options as we move forward." Commissioner Michael Williams said "this is Washington politics of the worst kind.  The EPA's act is nothing more than grandstanding in an effort to interject the federal government into Texas business." The December 8 press release said that the Commission has called a hearing for January 10 and "expects both parties, the EPA as well as Range Resources representatives, to appear before Hearings Examiners and testify as to the allegations made yesterday." Range has said it will attend the hearing, but it understands that the EPA will not.

Continue reading "Update on EPA Order Against Range Resources, Parker County" »

December 17, 2010

News Around the Oil Patch

Recent news items of interest:

Southwest Energy and Environmental Defense Fund Developing Best Practices for Hydraulic Fracturing.

         Scott Anderson, senior policy advisor for the Environmental Defense Fund, and Mark Boling, Executive Vice President of Southwestern Energy, have begun talks to bring together representatives of energy and environmental groups to propose uniform standards for best practices for hydraulic fracturing, in hopes that such standards will be adopted by states and give the public assurance of the safety of the completion technique.    The talks have resulted in a 40-page draft of proposed model regulations to be presented to state officials, covering public disclosure of frac fluid additivies, standards for casing and cementing wells, and pressure monitoring.  An inverview of Scott Anderson on the efforts can be found here.  "It is our obligation as an industry to let [the public] know what the issues and obstacles are and show them we are willing to work with environmental groups and state regulators to come up with solutions," said Boling.

Dr. John Baen Paper on Estate Planning Opportunities for Mineral Owners.

     Dr. John Baen, a professor of real estate at the University of North Texas, has written a paper, "Contemporary Land, Oil and Gas Valuations, Estate Planning Opportunities, and Possible Strategies in the New Estate and Tax Environment," presented at the recent meeting of Texas Land & Mineral Owners' Association in San Antonio.  The paper can be found here:  John Baen Article.pdf

EPA Subpoenas Halliburton for Data on Hydraulic Fracturing

    The EPA has issued a subpoena to Halliburton to obtain a description of the additives used in its frac fluids.  Halliburton was the only one of nine oilfield services firms to refuse EPA's request for information on the content of their frac fluids. Halliburton posted a response on its website, here. Halliburton has also announced an "eco-friendly" frac fluid that has additives "sourced entirely from the food industry."

State Senator Wendy Davis Introduces Barnett Shale-Related Bills

     Senator Davis, D-Fort Worth, has introduced several bills for the 2001 legislative session aimed at issues in the Barnett Shale:

  • SB 102 - allocation of funds to monitor air quality in the region
  • SB 103 - to allow saltwater pipelines to be placed in state rights-of-way
  • SB 104 - to require operators to capture natural gas produced in testing the well instead of flaring it - "green completions"
  • SB 105 - to require that commercial salt water disposal wells be drilled to the Ellenburger formation or below
  • SB 106 - regulation of the condemnation of municipal property for pipelines, and municipal regulation of such pipelines
  • SB 107 - regarding Railroad Commission inspection of pipeline leaks and reporting results to municipal authorities

NY AG-Elect Opposes Hydraulic Fracturing

     The Attorney General-Elect of New York, Eric Schneiderman, has announced that he will oppose hydraulic fracturing in his state until it has been determined that it is a safe practice. See story here.

PA Board Approves Water Line, PA DEP Says Cabot to Pay For It

     A Pennsylvania board has voted to approve a six-mile water line costing about $12 million to provide water to residents of Dimock Township, PA.  The Pennsylvania Department of Environmental Protection blames wells drilled by Cabot Oil & Gas for contaminating the residents' groundwater, and has ordered Cabot to pay for the water line. Cabod denies that its wells are the cause of the contamination. See article here.

December 10, 2010

James Fallows on the Future of Coal

James Fallows is a national correspondent for Atlantic Monthly. ( jamesfallows.theatlantic.com )  In the last few years he has lived in and written about China. He has written the cover article for Atlantic's December issue, "Dirty Coal, Clean Future." I am a big fan of James Fallows; he writes clearly about big-picture issues, is a deep thinker, and does not talk down to his readers. Mr. Fallows' article is about the future of coal as a source of energy in the world, and how China is developing "clean coal" technology.

Much has been made recently of new discoveries of natural gas in the U.S.; it has been touted as a solution to our dependence on foreign oil and as a way to reduce emission of greenhouse gases, by replacing coal-powered electric generating plants. Mr. Fallows does not write about new gas discoveries, but his discussion of the future of coal puts our domestic natural gas discoveries in perspective. Below are some excerpts from and summaries of Mr. Fallows' discussion. I recommend that you read his article in full.

Continue reading "James Fallows on the Future of Coal" »

December 7, 2010

EPA Orders Range Resources to Investigate Drinking Water Contamination in Parker County

The Dallas Office of the Environmental Protection Agency issued the following press release today:

The U.S. Environmental Protection Agency (EPA) has ordered a natural gas company in Forth Worth Texas to take immediate action to protect homeowners living near one of their drilling operations who have complained about flammable and bubbling drinking water coming out of their tap. EPA testing has confirmed that extremely high levels of methane in their water pose an imminent and substantial risk of explosion or fire. EPA has also found other contaminants including benzene, which can cause cancer, in their drinking water.

EPA has determined that natural gas drilling near the homes by Range Resources in Parker County, Texas has caused or contributed to the contamination of at least two residential drinking water wells. Therefore, today, EPA has ordered the company to step in immediately to stop the contamination, provide drinking water and provide methane gas monitors to the homeowners. EPA has issued an imminent and substantial endangerment order under Section 1431 of the Safe Drinking Water Act. Parker County is located west of Fort Worth, Texas.

In late August, EPA received a citizen's complaint regarding concerns with a private drinking water well. During the inspector's follow-up inquiry, EPA learned that the homeowner had previously complained to the Texas Railroad Commission as well as the company, but their concerns were not adequately addressed by the State or the company. EPA then conducted an on-site inspection of the private drinking water well with the homeowner and a neighboring residence, and returned to collect both water and gas samples. These samples were sent to an EPA certified laboratory for analysis. The data was received in late November 2010 and was carefully reviewed by EPA scientists. The EPA scientists have conducted isotopic fingerprint analysis and concluded the source of the drinking water well contamination to closely match that from Range Resources' natural gas production well.

EPA has asked the company to conduct a full scale investigation. EPA is requiring Range Resources under this order to:

  • Immediately deliver potable water to the two residences;
  • Immediately sample soil gas around the residences;
  • Immediately sample all nearby drinking water wells to determine the extent of aquifer contamination; and
  • Provide methane gas monitors to alert homeowners of dangerous conditions in their houses.
  • Develop a plan to remediate areas of the aquifer that have been contaminated.
  • And, to investigate the structural integrity of its nearby natural gas well to determine if it is the source of contamination.

EPA has data showing the presence of natural gas at two wells. EPA is ordering Range to investigate other nearby properties to determine if their drinking water is at risk. EPA has been in contact with a rural water system operator approximately 1 mile away, and they are taking steps to test their water for natural gas constituents. Residents of other homes are advised to contact EPA immediately if their wells seize up or if their water begins to effervesce. EPA will contact nearby private well home owners to advise them of our actions and to let them know that we've required the company to test their wells.

The uncontrolled release of natural gas can be dangerous since it is odorless and flammable and it escapes facilities. Uncontrolled release of natural gas inside a building or home can cause a fire or explosion. Drinking water contaminated with natural gas impurities such as benzene is unhealthy.

EPA believes that natural gas plays a key role in our nation's clean energy future and the process known as hydraulic fracturing is one way of accessing that vital resource. However, we want to make sure natural gas development is safe. As we announced earlier this year, we are in the process of conducting a comprehensive study on the potential impact of hydraulic fracturing on drinking water.

In the meantime, EPA has made energy extraction sector compliance with environmental laws one of EPA's National Enforcement Initiatives for 2011 to 2013. The initiative focuses on areas of the country where energy extraction activities such as hydraulic fracturing are concentrated, and EPA's enforcement activities will vary with the type of activity and pollution problem presented.

To my knowledge, this is the first time the EPA has directly intervened in response to a complaint by landowners of groundwater contamination from horizontal shale wells. The EPA's press release emphasizes that the Texas Railroad Commission did "not adequately address" the landowners' complaints.

The EPA's letter to Plains Resources may be found here:  http://www.epa.gov/region6/6xa/pdf/range_letter.pdf 

The EPA's emergency order may be found here: http://www.epa.gov/region6/6xa/pdf/range_order.pdf 

The two Range wells are the Butler Unit 1H and the Teal Unit 1H, both Barnett Shale wells drilled in 2009. The owner of one water well first noticed gas in his water in late December 2009, about four months after the Range wells began producing.  One of the water wells lies about 120 feet in horizontal distance from the track of the Butler well bore, and the other about 470 feet from the Butler well bore.  The EPA did a chemical analysis of the gas found in one domestic water well and found that it was substantially likely that it came from one of the Range wells.

The EPA order says that it consulted with the Railroad Commission and shared its findings with the Commission, and that "appropriate State and local authorities have not taken sufficient action to address the endagerment described herein and do not intend to take such action at this time."  The EPA ordered Range to (1) provide replacement potable water supplies for the owners of the affected water wells, (2) install meters in the landowners' dwellings to detect gas, (3) provide EPA a list of all private water wells within 3,000 feet of the two Range wells along with a plan to sample the water in those wells, (4) submit a plan to conduct testing of soils and indoor air around the dwellings served by the water wells, and (5) submit a plan to identify the gas flow pathways to the aquifer, eliminate such flows, and remediate areas of the aquifer impacted by the gas flows into the aquifer.

Update:  Range Resources has denied that its wells have contaminated groundwater in Parker County.  "The investigation has revealed that methane in the water aquifer existed long before our activity and likely is naturally occurring migration from several shallow zones immediately below the water aquifer," the company said. Two producing Range natural gas wells in the area "are completed in the Barnett Shale formation, which is over a mile below the water zone." The Texas Railroad Commission has scheduled a hearing on the matter for January 10.  http://www.star-telegram.com/2010/12/08/2690723/range-resources-denies-epa-allegation.html