Sidley Shale and Hydraulic Fracturing Report

Energy and Environmental Update

States

Oklahoma to investigate potential link between seismic activity and hydraulic fracturing. The Oklahoma Geological Survey is investigating the cause of recent seismic activity near Blanchard and whether it may be linked to hydraulic fracturing. The seismic activity is outside of the 15,000-square-mile area of interest where the Oklahoma Corporation Commission has implemented additional measures to regulate the underground injection wells used to dispose of wastewater from oil and gas production. However, several production wells in the Woodford Shale developed using hydraulic fracturing are located near where the recent events occurred, leading some to question whether there is a link between the production wells and the seismic events. Overall, seismic activity in Oklahoma has declined since the state increased its regulation of underground injection wells.

California moves forward with methane regulations for oil and gas wells. On July 21, the California Air Resources Board (CARB) moved forward with proposed regulations to control methane emissions from new and existing oil and gas wells. The proposed regulations are more stringent than EPA’s recent methane regulations, particularly because they would also cover existing wells. They include a variety of lead detection monitoring and repair requirements, natural gas capture requirements and installation of low bleed components to reduce methane leaks. CARB projects that the rules would reduce methane emissions by 1.5 million metric tons of CO2e per year and would also reduce the emission of volatile organic compounds including benzene, toluene, ethyl-benzene and xylene. The rules, which would be phased in between 2018 and 2020 could be approved as soon as spring 2017.

Studies

Researchers report statistical association between asthma and shale gas wells. Researchers from the Johns Hopkins School of Public Health recently published an article in JAMA Internal Medicine finding an association between asthma cases and shale gas wells. The researchers reportedly found that those living closer to a large number of active natural gas wells or bigger natural gas wells were statistically more likely to suffer asthma attacks. The researchers noted, however, that more research would be needed to determine the exposure pathway and whether there was a causal relationship between asthma and shale gas wells. Critics of the study suggested that the data did not show that asthma rates in counties with shale gas wells were any higher than those in other parts of the state.

GAO report urges more oversight for natural gas releases on federal land. In a July 21 report, the Government Accountability Office (GAO) urged greater oversight by the Bureau of Land Management (BLM) of flaring and venting of natural gas on public lands. The report found that BLM failed to provide adequate guidance to companies seeking to flare or vent natural gas and frequently approved flaring and venting without first obtaining necessary documentation from companies to determine whether flaring or venting is justified. The report also cited inconsistent practices among BLM offices with respect to flaring and venting approvals. When BLM determines that flaring or venting is justified, oil and gas companies are not required to pay royalties on the natural gas that is flared or vented. BLM concurred in part with the GAO findings and is developing new regulations for flaring and venting that it expects will address many of GAO’s concerns.

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jvisser@sidley.comBen Tannen

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