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North Dakota approves flare reduction recommendations

The North Dakota Industrial Commission adopted several recommendations from the Department of Mineral Resources to reduce the amount of flaring in the state.

These recommendations were based on work of the North Dakota Petroleum Council (NDPC) Flaring Task Force that was formed to study ways to increase the capture of flared gas. In December 2013, North Dakota flared 36% of its produced natural gas.

The NDPC estimates that, by adopting these recommendations, North Dakota could increase natural gas capture to 85% within two years, 90% within six years, and up to 95% thereafter.
The recommendations include:

  • After June 1, 2014,
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Michigan Court of Appeals holds that a well completed using hydraulic fracturing is not an injection well

Several Michigan citizens and the group Ban Michigan Fracking questioned the Department of Environmental Quality (DEQ) about its definition of “injection well” in Mich. Admin. Code , R. 324.102(x), urging that the definition should include wells completed with hydraulic fracturing (“frack wells”).

The DEQ responded by stating that “a frack well is not an injection well under Rule 324.102(x) because a frack well injects fluids for the ‘initial stimulation’ of oil and gas, whereas Rule 324.102(x) limits injection wells to wells that are used for disposal, storage, or secondary recovery of oil and gas.”

The citizens and Ban Michigan Fracking … Continue Reading

Kansas Governor creates panel to study possible connection between recent earthquakes and oil and gas activities

Governor Sam Brownback has created a 3-person task force to study whether oil and gas activities such as hydraulic fracturing are connected to the increased number of minor earthquakes occurring in south central Kansas, near the Kansas-Oklahoma border.

The Kansas Geological Survey has recorded more than 24 minor earthquakes in the past two years. Two earthquakes were recently measured in that area—one on December 16, 2013 and a second on February 3, 2014, with magnitudes of 3.8 and 3.9 respectively.

No damage was reported from these earthquakes, with one county official noting that “no cows tipped over.” According to the … Continue Reading

Emergency order requires testing and classification of crude oil transported by rail

On February 25, 2014, the US Department of Transportation (DOT) issued an emergency order requiring rail shippers of crude oil to test the crude’s makeup before shipping it and to classify the crude as Packing Group I (high danger) or Packing Group II (medium danger) hazardous material until further notice.

The DOT’s emergency order recognizes that the misclassification of petroleum crude oil as a Packing Group III (low danger) material is an “imminent hazard . . . that presents a substantial likelihood that death, serious illness, severe personal injury, or a substantial endangerment to health, property, or the environment may … Continue Reading

What’s shaking? Induced seismicity

The US Geological Survey (USGS) has long studied and prepared hazard maps predicting the risks of natural earthquakes. Now the USGS plans to integrate information relating to induced earthquakes and potentially induced earthquakes into its National Seismic Hazard Map.

Since its last earthquake map in 2008, the USGS has identified a “remarkable” spate of earthquakes triggered by industrial activities in parts of the country.

The USGS sees this increased induced seismicity to be a hazard that should be analyzed. In assessing the risk, the scientists need to determine whether the activity causing the earthquakes is likely to end quickly or … Continue Reading

US DOT discuss transport safety issues with oil and rail industry leaders

With the recent December 30, 2013 derailment of tanker cars carrying oil in Casselton, North Dakota, as well as other 2013 incidents  in western Minnesota, Baltimore, Alabama, and at three sites in Canada (Gainfield, Landis, and Lac-Mégantic, where 47 people were killed when  an unattended 72-car freight train derailed in the center of town), the US Department of Transportation (DOT) met with representatives from the oil and railroad industries to discuss transport safety issues relating to crude oil.

At the meeting on January 15, 2014, representatives from the American Petroleum Institute (API) and the Association of American Railroads (AAR) reportedly … Continue Reading

Safety alert relating to flammability of North Dakota Bakken crude oil transported by rail

On December 30, 2013, near the town of Casselton, North Dakota, a westbound train carrying grain derailed. Within minutes, an eastbound 106-car train transporting Bakken crude oil hit the derailed train. The collision caused eighteen oil cars to leave the tracks and catch fire. While no one was hurt, many of the town’s 2,400 residents temporarily evacuated their homes for two days due to explosions, intense flames, and heavy smoke from the burning cars.

Taking note of this and other similar incidents involving trains carrying crude oil (see below), the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a safety Continue Reading

House Democrats request hearing on induced seismicity

Reps. Henry Waxman (D-Calif.), ranking member of the House Energy and Commerce Committee, and Peter DeFazio (D-Ore.), ranking member of the House Committee on Natural Resources, issued a letter to their Republican counterparts requesting a joint hearing on the issue of seismic activity induced by the underground injection of wastewater from hydraulic fracturing activities. In the letter dated December 18, 2013, the members cite the increased seismic activity in previously seismically inactive locations, the critical need for additional data, and the potential regulatory gaps in current law that put people and property at risk from man-made earthquakes.

According to the … Continue Reading

President Obama promises to veto hydraulic fracturing bill and other energy-related legislation

On November 20, 2013, the U.S. House of Representatives approved two energy-related bills – one bill concerning hydraulic fracturing regulations on federal lands (H.R. 2728) and the second relating to applications for permits to drill (H.R. 1965). Two other energy bills are pending, one dealing with the permitting of natural gas pipelines (H.R. 1900) and the other with the standards to be used by the EPA in disseminating its report on the impacts of hydraulic fracturing on drinking water resources (H.R. 2850).

President Obama has threatened to veto at least three of these measures in the unlikely event they pass … Continue Reading

Illinois and California issue proposed administrative rules to implement hydraulic fracturing legislation

In Illinois, Governor Pat Quinn approved hydraulic fracturing legislation on June 17, 2013. The Illinois Department of Natural Resources (DNR) released proposed administrative rules to implement this legislation on November 15, 2013 – Proposed Administrative Rules for the Hydraulic Fracturing Regulatory Act and Proposed Administrative Rules for Seismicity to monitor Class II UIC wells receiving any hydraulic fracturing fluids.

The rules require oil and gas companies to disclosure chemicals used in fracking operations both before and after drilling and to test water before, during and after drilling. The rules also require the operators to provide information as to how the … Continue Reading

International Energy Agency predicts that the US will become world’s top energy producer in 2015 but will relinquish that position by 2020

The International Energy Agency (IEA), which was formed in the 1970s to keep track of trends and improve energy security, released its World Energy Outlook 2013 in London on November 12, 2013. The 2013 Outlook provides a review of key trends that IEA believes will shape the future of global energy through 2035. For the US, the IEA projects that it will pass Saudi Arabia and Russia as the world’s top oil producer by 2015 due to the use of hydraulic fracturing and other unconventional technologies in developing its shale gas resources. This will bring the US closer to energy … Continue Reading

Sixth Circuit upholds “fair market value” agreements in Ohio oil and gas leases

From 2008 to 2010, numerous landowners in eastern Ohio entered into oil and gas leases with Anschutz Exploration Company, which were later assigned to Chesapeake Exploration LLC. These leases contain a “Preferential Right to Renew” or a “fair market value” provision (Paragraph 14 in the lease).

This clause provides that, “[i]f, at any time during the primary term…or within one year from the expiration, cancellation or termination of this Lease, Lessor receives an acceptable bona fide third-party offer to lease the Leasehold, in whole or in part, Lessor shall promptly provide the Lessee, in writing, of all of the verifiable … Continue Reading

North Dakota mineral owners file ten class actions relating to royalties owed for flaring natural gas

Ten class actions were filed in North Dakota by mineral owners alleging lost income due to the flaring of natural gas by various oil and gas producers. According to a July 2013 report by Ceres, the flaring of natural gas in North Dakota has doubled in the past two years.
The lawsuits allege that  the producers have violated several North Dakota Industrial Commission rules relating to flaring and paying royalties for flared gas. After an oil well begins to produce, North Dakota allows limited flaring during the first year. After one year, the producer must apply for a written … Continue Reading

Michigan to tighten Its hydraulic fracturing rules

The Michigan Department of Environmental Quality (“DEQ”) plans to strengthen its hydraulic fracturing rules by adding provisions to protect water resources and to require additional chemical data submissions. This announcement comes after roughly 200 public meetings held since 2011 and attended by the DEQ. 

Michigan’s current fracturing rules went into effect on June 22, 2011 and require the operator or the service company of a high volume hydraulic fractured (HVHF) well (using more than 100,000 gallons of fracking fluid) to provide:

  1. Material Safety Data Sheets for the chemical additives used, 
  2. the volume of each additive, and 
  3. the records and associated
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Ohio advises drillers to comply with EPA chemical reporting requirements

In September 2012, the Ohio legislature passed regulations requiring oil and gas well operators to report the contents of fracking fluids, recycling fluids, and wastewater to the state’s Department of Natural Resources. These reporting regulations went into effect on September 11,2012, and require the disclosure of the trade name and volume of all “products, fluids, and substances,” maximum concentrations of additives in the fluid, Chemical Abstract Service (CAS) numbers, and maximum concentrations of ingredients intentionally added to the fluid. The total volume of any recycled hydraulic fracturing fluids must also be disclosed. Ohio Rev. Code Ann. § 1509.10(A). This information … Continue Reading

University of Michigan’s Technical Reports on Hydraulic Fracturing in the State

On September 5, 2013, the University of Michigan released seven technical reports concerning hydraulic fracturing. 

These Michigan-focused reports conclude the first phase of a two-year University project entitled Hydraulic Fracturing in Michigan Integrated Assessment. Public comment on these reports may be submitted through October 7, 2013.

A brief description of each report follows.

  • Technology: In view of the currently low price of gas, the high price of drilling deep shales, and the absence of new discoveries, it is unlikely that there will be significant growth of the oil and gas industry in Michigan. Hydraulic fracturing has not found widespread application
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Fracking disclosure rules proposed in Kansas

The director of the Kansas Corporation Commission’s Oil and Gas Conservation Division (KCCOGC) has proposed rules that would require oil and natural gas companies to disclose non-trade secret chemicals that they use in hydraulic fracturing activities. Pointing out that the physical act of hydraulic fracturing has been regulated for years under Kansas’ wellbore construction and waste handling and disposal rules, the director stated that chemical disclosure was needed due to the significant number of wells using the fracking procedure near larger population areas. Under the rules, the disclosures would be made directly to the KCCOGC or through the “chemical disclosure … Continue Reading

Illinois’ new hydraulic fracturing regulations

On June 17, 2013, Illinois Governor Pat Quinn signed into law hydraulic fracturing legislation that is possibly the strongest in the nation. The Hydraulic Fracturing Regulatory Act (S.B. 1715) (the “Act”) went into effect immediately and is being enforced by the Illinois Environmental Protection Agency (IEPA) and the Illinois Department of Natural Resources (IDNR). The disclosure of hydraulic fracturing chemicals is an important part of the Act. The Act requires the disclosure of hydraulic fracturing chemicals both before the process takes place and after the process is complete.

The hydraulic fracturing operation must be fully described in the permit application … Continue Reading

Ohio voters reject proposal to ban hydraulic fracturing in northeast Ohio

In February 2013, the City Council of Youngstown, Ohio agreed to include on its ballot a proposal to ban hydraulic fracturing within the city limits after an anti-fracking organization, Frackfree Mahoning Valley, collected sufficient signatures for a successful petition. The unofficial results of the election held on May 7, 2013 show voters rejected this proposal by a significant margin: 57 percent opposing the proposal vs. 43 percent supporting the proposal.

In Youngstown, the proposal resulted in an unusual alliance of interest groups united in their opposition to the ban. The local business community actively campaigned against the proposal and argued … Continue Reading

USGS assesses undiscovered oil resources in Bakken and Three Forks Formations

The U.S. Geological Survey (USGS) recently completed a geology-based assessment of the oil and gas resources of the Bakken and Three Forks Formations, located in North Dakota, Montana, and South Dakota, finding that these formations together hold an estimated mean of 7.38 billion barrels of oil, 6.7 trillion cubic feet (tcf) of gas, and 0.53 billion barrels of natural gas liquids. See USGS Fact Sheet 2013–3013: Assessment of Undiscovered Oil Resources in the Bakken and Three Forks Formations, Williston Basin Province, Montana, North Dakota, and South Dakota, 2013. The Three Forks Formation was found to have 3.73 billion barrels … Continue Reading

Pending hydraulic fracturing bills in Illinois legislatures

Currently there are four bills pending in the Illinois legislatures relating to high volume hydraulic fracturing activities. One bill creates the Illinois Hydraulic Fracturing Regulatory Act, two bills would ban fracking, and one requires fracking regulations to be added to the Illinois Oil and Gas Act. All of these bills are currently in committees.

House Bill 2615 which creates the Illinois Hydraulic Fracturing Regulatory Act has provisions requiring permits for hydraulic fracturing and the disclosure of fracking fluids.

  • High volume hydraulic fracturing operations require a permit. The permit application must contain detailed well and operations information, including:
  • A detailed description
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Flowback fluid recycling regulation in the Marcellus Shale

This is the second article in a series of blog posts evaluating the current status of flowback and produced water recycling regulations in the major shale play states. These waters are generated through the hydraulic fracturing process, and this blog post continues the discussion of the manner in which these waters are disposed.

The Marcellus Shale, the largest in the country by geographic area, extends throughout much of the Appalachian Basin, under Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia.

However, this post will focus on flowback and produced water recycling regulation in the most active hydraulic fracturing states, … Continue Reading

Illinois Lawmakers Propose Fracturing Legislation

On Thursday, February 21, two Illinois State Representatives proposed a bill to regulate hydraulic fracturing in the state. The proposed legislation, House Bill 2615, was prepared after months of negotiations between lawmakers, the oil and gas industry, and environmental concerns.

The bill includes a number of additional requirements for the oil and gas industry but has been hailed by the industry as a positive legislative step forward.
After the HB 2615 was proposed, Illinois Governor Pat Quinn praised the bill as being good for the state’s economy.

The bill is supported by the oil and gas industry, in … Continue Reading

Ohio Governor Seeks Radiation Testing Requirements For Oil and Gas Waste

On February 12, 2013, Ohio Governor John Kasich introduced his two-year, $63.2 billion budget, including a provision that would require drillers of oil and natural gas to test their drilling waste for radiation before disposal in Ohio landfills.

The budget proposal, introduced as Ohio House Bill 59, was developed by the Ohio Departments of Health and Natural Resources and the Ohio Environmental Protection Agency.

Under Section 1509.074 of the bill, drilling wastes containing more than certain thresholds for concentrations of technologically enhanced radioactive material (“TENORM”) must either be diluted under regulatory supervision or sent to one of the out-of-state … Continue Reading