July 2011 Archives

July 28, 2011

EPA Issues Proposed Rules to Reduce Emissions from Well Drilling and Production

The U.S. Environmental Protection Agency has issued proposed rules to cut down on emissions of volatile organic compounds (VOCs) and methane from well drilling and production sites. The rules were issued pursuant to a settlement of a suit by environmental groups alleging that EPA was not enforcing air emissions laws against the E&P industry.

Among other things, the proposed rules would require installation of vapor recovery units on storage tanks at wellsites and other E&P facilities to prevent emission of VOCs. The EPA has calculated that the rules would cost the industry $754 million, but that the gas and condensate captured by the vapor recovery units would be sold for $783 million. The rules would apply to oil and gas wells, natural gas processing plants, compressor stations and pipelines.  Similar emissions control requirements have been recommended by the New York Department of Environmental Protection in its study of the impact of Marcellus Shale drilling in New York.

For more information about the proposal on EPA's website, go here.

July 27, 2011

New York Issues Revised Study of Fracing in the Marcellus

The New York State Department of Environmental Conservation (DEC) has been engaged in a comprehensive review of the potential environmental impacts of development of the Marcellus Shale in New York since 2008. The DEC is the regulatory agency in New York responsible for issuing drilling permits and regulating oil and gas exploration and production. The DEC had previously studied the environmental impacts of hydraulic fracturing in 1992, at which time it issued a Generic Environmental Impact Statement recommending certain safeguards in that practice. In 2009, the DEC issued for public comment a "Draft Supplemental Generic Impact Statement" analyzing the impact of hydraulic fracturing of horizontal Marcellus wells. As a result of comments received, the DEC has issued a revision of that draft report, which will be finalized later this year and again issued for public comment. During this study, New York has imposed a moratorium on issuance of any permits for horizontal wells in the Marcellus Shale.

The Marcellus extends over a huge area from West Virginia through Pennsylvania and covers a substantial part of New York State. Potential Marcellus reserves in New York are huge, and exploration companies have leased huge areas in New York for exploration. New York landowners have watched impatiently as wells have been drilled in Pennsylvania, while environmental activists in New York have opposed any drilling in that state.

The most recent version of the New York DEC's study and recommendations is several hundred pages and provides a thorough study of the potential impacts of drilling Marcellus wells on the environment, including impacts on groundwater, surface water, air quality and wildlife. The report proposes many revisions to DEC's existing regulations concerning the construction of well pads, the drilling and casing of horizontal wells, the handling and disposal of frac fluids and chemicals, the disposal of returned frac water and drill cuttings, the use of best available technology to reduce emissions from equipment during drilling and completion operations, and the protection of groundwater and surface water. The report discusses the current state of technologies for use of fluids other than fresh water for hydraulic fracturing and for the recycling of frac water. The authors also discuss recent incidents in Pennsylvania of groundwater and surface water contamination from drillsites and their cause. There is a comprehensive summary of the geology of shale formations and water resources in New York.

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July 13, 2011

Recent News: EPA Fracing Study, Report on Eagle Ford, Frac Water Recycling, Range v. EPA,

WSJ Weighs In On Fracing Controversy

The Wall Street Journal gives its opinion on the dangers of hydraulic fracturing, siding with the industry: "The shale gas and oil boom is the result of U.S. business innovation and risk-taking. If we let the fear of undocumented pollution kill this boom, we will deserve our fate as a second-class industrial power."

Powell Shale Digest Issues Report on Eagle Ford

The Digest reported on wells drilled so far in Eagle Ford fields in Texas. Enough information is now publicly available to begin to see where the play is headed, and where it's most successful.

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The counties with highest oil and gas production are Dimmit, Karnes, Webb and La Salle. The counties with the best results per well are Karnes and DeWitt:

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Baker Hughes' oil rig count reached 1,000 for the first time since it began tracking oil and gas rigs separately in 1987. 843 oil and gas rigs are currently located in Texas. 


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