Oil and Gas Lawyer Blog

Published on: August 14, 2013

Gasland Part II

Here is the Washington Post’s review of Josh Fox’s sequel documentary Gasland Part II, recently shown on HBO. I’ve previously written about Fox’s controversial criticisms of hydraulic fracturing, including a “counter-documentary” called FrackNation. In following news coverage of the growth of shale exploration and development in the popular media, I have learned that the media does not do a good job of covering complex issues like hydraulic fracturing, global warming, and gun control, issues that are easily exploited by parties on both sides of the issue by invoking scare tactics and consipiracy theories to frighten the public. I have also seen how such complex, controversial topics are politicized, like so much of public discourse today, into black and white, red and blue, with no middle ground, making it very difficult for the ordinary citizen to become informed about the facts and policy issues that political leaders should be investigating and deciding. Where is Walter Cronkite when we need him?

Published on: August 12, 2013

Does Hydraulic Fracturing Deplete Water Supplies?

By John McFarland

I recently ran across an article on the Energy In Depth website titled “Turning Natural Gas Into Water: Hydraulic Fracturing Doesn’t Deplete Water Supplies.” Energy In Depth is a website of the Independent Petroleum Association of America dedicated to “a research, education and public outreach campaign focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base ” The article responds to an argument made by many organizations concerned about the large quantities of water used in fracing. The concern is that, while many uses of water return that water to the water cycle, water used in fracing is usually disposed of by injecting it underground, where it will never return to the water cycle.

Energy In Depth’s response to this argument is that, while injecting the used frac water — called “flowback” — does remove that water from the water cycle, the burning of the gas (or oil) produced by the wells creates more water than was used in the fracing of the wells. So, the argument goes, fracing of wells actually “creates” new water that is added to the water cycle. EID’s article goes on to calculate that, while a typical Marcellus gas well will remove 4 million gallons of water from the water cycle, that well will produce two billion cubic feet of gas which, when burned, will yield about 22 million gallons of “new” water. Within the well’s first six months of production, the gas it produces will create more than 4 million gallons of water when burned as fuel. Problem solved!

I asked a hydrologist friend of mine to look at EID’s calculations. He agreed that their math is correct, but he cautioned that the problem is not so simple. EID’s argument assumes that the energy created by burning the natural gas from EID’s typical well would not have been created by the burning of other fossil fuels. If, in other words, the gas is burned to create electricity, and if that electricity would have been created by burning coal if the well had not been drilled, then the net result is that water has been lost to the water cycle by injecting the flowback from the well.

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Published on: August 6, 2013

George Mitchell, R.I.P.

By John McFarland

A memorial service, open to the public, will be held today for wildcatter and philanthropist George P. Mitchell – actually, three memorial services, as befits one of the great Texans of the 20th century. The Houston Chronicle in fact named him Houstonian of the Century. By all accounts, he was not only an entreprenurial genius, but a kind and generous man, a family man, and a man who gave back to his communities in many ways.

In one of his last public interviews, Mr. Mitchell addressed the issue of the safety and environmental risks of hydraulic fracturing and horizontal drilling. I wrote about that interview. He said that he supports tough regulation of independent operators. “I’ve had too much experience running independents,” Mitchell said. “They’re wild people. You just can’t control them. And if it doesn’t do it right, penalize the oil and gas people. Get tough with them.”

Last year, Mr. Mitchell and Mayor Michael Bloomberg published an op ed piece in the New York Times supporting tighter regulation of the industry. What they said bears repeating. They pledged that their foundations

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Published on: August 5, 2013

Good Article on Pipeline Condemnation

By John McFarland

State Impact Texas’ Mose Buchele has a good article on increased litigation over pipeline condemnations. My partner Bill Christian, who represents landowners in condemnation matters, is quoted in the article. Even has his picture!

Last week I presented a paper at the Texas State Bar Advanced Real Estate CLE Conference for attorneys in San Antonio. I was asked to write a paper giving real estate attorneys a basic introduction to negotiating oil and gas leases. It might seem odd that real estate attorneys would want a primer on oil and gas leases; most people would assume that an attorney practicing real estate law in Texas would know about oil and gas leasing. And that used to be true, when the majority of attorneys had a rural general practice. General practitioners in Texas knew the basics of real estate and oil and gas law and often helped their landowner clients negotiate leases. Today, most real estate attorneys have little to do with oil and gas matters, and as practices have become more specialized the oil and gas specialty has diverged from the real estate specialty.

I was given thirty minutes to make my presentation – hardly enough time to do justice to the subject of oil and gas leases. The exercise of preparing my remarks caused me to focus on some basic concepts that I’ve not recently thought about, and I decided they would make a good topic for discussion here.

The oil and gas lease is in many ways a unique form of contract. It is the foundation of the oil and gas industry in the U.S. Because most minerals in the U.S. — unlike most of the world — are privately owned, some way had to be found for those willing to risk capital to exploit oil and gas to obtain rights to those resources. The oil and gas lease was the result. In its basic form, the oil and gas lease has remained unchanged since the early days of the industry.

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