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Regulators voice concerns at Marcellus shale conference

Nick Snow
OGJ Washington Editor

STATE COLLEGE, Pa., Oct. 11 -- Producers and government officials should anticipate potential problems with shale gas development and be prepared to respond to them, participants on two panels said Oct. 11 at the 2010 Marcellus Summit in State College, Pa. This involves issues beyond hydraulic fracturing, they emphasized.

“While I've seen that many operators are stepping up to the plate with voluntary control programs, we still have worker deaths and natural gas migration problems,” said Scott R. Perry, director of the Bureau of Oil and Gas Management within Pennsylvania's Department of Environmental Protection. “Wells on their way to the Marcellus shale have encountered gas at shallower levels with drilling string and cement that couldn't contain it. We just can't let gas migrate without doing something about it.”

The state's environmental quality board is expected to finalize new well construction requirements when it meets Oct. 12 in Harrisburg, but the rules won't take full effect until they have been published a few days later, he said as he appeared with regulators from New York and Ohio during the 2-day conference at Penn State University cosponsored by the Interstate Oil & Gas Compact Commission.

Perry said the new regulations include a requirement for operators to respond to and investigate complaints that gas from one of their wells may have reached a rural homeowner's private drinking water supply. “We've seen cases where gas showed up 4 miles from the original well,” he said.

New York is continuing to develop a revised generic environmental impact statement despite its legislature's halting shale gas drilling there, according to Bradley Field, mineral resources director in the state's Department of Environmental Conservation. The existing GEIS, which dates back to 1992, addresses several questions already, but higher water volumes and surface management of fluids have emerged as new questions with producing from shales, he said.

Additional concerns
Field noted that New York also is looking at air quality and other impacts from the longer duration of shale gas operations and the greater number of wells that are drilled from a single pad. The state also is taking a closer look at reserve pits and other surface activities' potential groundwater impacts, he said, adding, “A study we commissioned found no fracing fluid impact from activity 2,000 ft below groundwater supplies or with 1,000 ft vertical separation between the target zone and fresh water.”

Producers still will be required to submit a casing and cementing plan with each fracing water use application, he continued. “Operators are going to be held to a very high standard,” Field said.

Ohio has had more time to consider its policies than the two other states because it's on the edge, instead of the middle, of the Marcellus formation, observed Richard Simmers, enforcement manager in the state's mineral resources management division. The state began to increase its enforcement resources with more funding and employees 2 years ago, which has helped since Marcellus activity there has grown in the last year, he said.

“Roads are obviously involved,” he said. “We're working with county officials on bonding requirements and efforts to address access and egress, particularly in terms of safety. Sometimes, we make companies hire off-duty police officers to direct traffic while they are drilling.”

Ohio has placed a high priority on having inspectors during all well construction phases, Simmers said. “We feel if we can be confident that a company has taken the right steps here, there will be fewer problems later with fracing and other operations,” he said. Containment pit standards have been developed which give state inspectors authority to halt construction if the requirements haven't been met, he added.

Louisiana partnership
An earlier session described a Louisiana success story when state regulators, producers and scientists from Louisiana State University worked together to start solving water problems with the Carrizo-Wilcox Aquifer around Shreveport as Haynesville shale gas production intensified. The aquifer, which historically had provided good water supplies for residents and agriculture in a generally rural part of the state, started to run dry when producers drilled a large number of wells for water.

“The situation required the cooperation of state oil and gas regulators, local governments, interested parties, and of course producers,” said Jim Welsh, the state's conservation commissioner. “It's a tremendously good source that's restocked by the Red River alluvial aquifer. The solution was for Haynesville well operators to start using water from other sources.”

Louisiana State University established its Red River Watershed Institute 10 years ago at its Shreveport campus, which was already working with local communities and parishes and had constructed a riverside research park, recalled Gary Hanson, the institute's director. “It's very fortunate we were in place when the Haynesville boom hit,” he said. “We were able to provide some order during a period which normally would have been chaotic.”

The institute's 17 water monitoring stations helped show a relationship between the gas producers' water well withdrawals and shortages other users encountered after forming a water-energy working group, he said. “Once the industry saw there was a problem with groundwater, it started using more surface water,” he said. “Now, the Haynesville shale's three biggest producers—Chesapeake Energy Corp., Encana Corp., and Petrohawk Energy Corp.—primarily use surface water.”

Mike Mathis, Chesapeake Energy’s regulatory affairs director for water programs, said the independent producer gets about 90% of its Haynesville fracing water from surface sources. “There's a lot of surface water in this play and we're fortunate to have it,” he said. “Some of it is in inconvenient locations, which can pose a challenge. We try to work closely with communities, water authorities, and landowners. It's incumbent on the industry for its members to be at the table and be good corporate citizens.”

“We have to be willing to work with facts, not fear,” said Hanson. “We have to be ready to sit across the table from each other and work together to produce this gas and protect the environment.”

Contact Nick Snow at nicks@pennwell.com.


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