BLM announces California oil, gas strategy as CCST issues report

The US Bureau of Land Management’s California state office announced a comprehensive strategy for its oil and gas program in the state after receiving an independent review of well stimulation technologies it asked the California Council on Science and Technology (CCST) to conduct in September 2013.

The strategy incorporates results from public scoping on oil and gas development in addition to information from the CCST’s review, and provides internal guidance for processing drilling permit applications and sundry notices, BLM California State Director Jim Kenna said on Aug. 28.

The report, comments, and internal guidance will help lead to better decisions concerning the US Department of the Interior agency’s future management of onshore federal oil and gas resources in the state, he said.

“With these pieces in place, we will be able to both contribute to meeting America’s energy needs and implement appropriate, safe, and responsible measures to protect groundwater and other critical resources,” Kenna maintained.

He said that BLM sought a rigorous, independent expert assessment in order to gain a comprehensive understanding of the best available science and potential impacts of using well stimulation technology in California’s unique geology.

Wide range of expertise

“The authors of this report possess a wide range of technical expertise relative to advanced petroleum production and its impacts,” Kenna said. Lawrence Berkeley National Laboratory and the Pacific Institute conducted the review, analysis, and synthesis of existing data and scientific literature regarding well stimulation in California. The US Geological Survey conducted a peer review of the report, in addition to the already rigorous CCST peer review process.”

Information from the independent science review will be incorporated into future federal onshore oil and gas lease sales and permitting statewide, according to Kenna. The work is being coordinated with the California Natural Resources Agency (CNRA) and the California Department of Conservation, which is implementing a similar effort directed by California Senate Bill 4 (SB 4), he said.

In a separate announcement about the report’s release, CCST said that its findings describe current well stimulation activities in California, how, when and where they are currently applied, where they might be applied in the future and how this practice differs from other states.

The report assesses information relevant to the potential future use of these technologies, and how they might or might not directly impact water supply, water quality, air quality, greenhouse gas emissions, seismicity, traffic, noise, and the environment, it added. A second, expanded report on the subject is also being prepared for the CNRA in response to SB 4, CCST said.

Using existing data and literature about the nature of well stimulation in California, CCST said its report reached 11 main conclusions, with points that include:

• Well stimulation in California is different from other states primarily because of differences in petroleum reservoir geologies. Hydraulic fracturing has been the main type of well stimulation applied to date and is performed on an estimated average of 100-150 wells/month, compared to a US average of about 2,900/month as reported by FracFocus.

• Fracing in California generally tends to be performed in shallower wells that are vertical as opposed to horizontal; requires much less water; but uses fluids with more concentrated chemicals than fracing in other states.

• The most likely scenario for future oil recovery using fracing is expanded production in and near existing oil fields in the San Joaquin basin, where more than 85% of California’s well stimulation activities now take place. Current Los Angeles basin production does not depend heavily on well stimulation, and similar future production there could likely occur without these technologies.

• Recent US Energy Information Administration reports indicate there may be a new class of very deep unconventional reservoirs in the source rocks themselves, especially in the Monterey formation. CCST’s report said EIA originally suggested in 2011 that 15 billion bbl of recoverable oil exists in these source rocks, but reduced the estimate to 0.6 billion bbl in a 2014 correction. Recovering these resources would certainly require well stimulation, but Lawrence Berkeley Lab investigators found no reports of successful production from the Monterey formation source rocks and questioned EIA’s estimation methodology.

• Current fracing operations in California require a small fraction of statewide water use. An average fracing operation in the state can consume an average 130,000-210,000 gal of water per well, compared with about 4 million gal/well in Texas’s Eagle Ford formation. “Even with the relatively low water use of California operations, [fracing] can contribute to local constraints on water availability given the extreme drought in the state,” CCST’s report said.

• There are no publicly reported instances of potable water contamination from subsurface releases in California. However, more than half of the stimulated oil wells in the state are less than 2,000 ft and potentially could pose a risk for groundwater if usable aquifers are nearby. “California needs to develop an accurate understanding about the location, depth, and quality of groundwater in oil- and gas-producing regions in order to evaluate the risk of well stimulation to groundwater,” the report said.

• Well stimulation technologies, as currently practiced in California, do not result in a significant increase in seismic hazard. The pressure increases from fracing are too small and too short in duration to be able to produce a felt, let alone damaging, earthquake, CCST’s report said. “In contrast, disposal of water produced from oil and gas operations into deep injection wells has caused felt seismic events in several states,” it continued. “Expanded oil production for any reason, including expanded use of [fracing], would lead to increased volumes of produced water which, if injected underground, could increase seismic hazards.”

• Overall, in California, using today’s industry practices, the direct environmental impacts of well stimulation activities appear to be relatively limited. If these well stimulation technologies enable a significant increase in future production, the primary impacts on California's environment will likely be caused by the higher production in general, the report said.

BLM’s California state office also published results from more than 130 public comments on possible oil and gas development for the Hollister Field Office’s Environmental Impact Statement for a Resource Management Plan amendment, and an instruction memorandum directing its field offices to request information the state requires under SB 4, as well as information BLM already requires, when processing drilling permit applications and other notices.

Contact Nick Snow at nicks@pennwell.com.

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