Thursday, June 4, 2009

House Hearing on Hydrofracturing

This morning the House Committee on Natural Resources Subcommittee on Energy and Mineral Resources held a Hearing, motivated by (among others) Congresswoman Diana DeGette of Denver, to remove the Safe Drinking Water Act exemption from the hydraulic fluids used in hydraulically fracturing (hydrofracing) oil and gas wells. The exemption was granted in 2005. It is particularly relevant to today and tomorrow’s supplies of energy since it is only through the extensive use of hydrofracing that it is possible to viably recover the large quantities of natural gas that are now being developed from the gas shale deposits around the country.

I was led to listen in by Joe Romm at Climate Progress who seems to have just discovered both Peak Oil and the Gas Shales, and I am glad that I did. The issue seems to have become of increasing public interest since the discovery that one of the larger gas shale deposits in the country is the Marcellus, which can be found under parts of New York and Pennsylvania, and with the large volumes of fluid that are used in the hydrofracing process (of which more in a bit) there is a growing concern (and some rumors generated) that the fluids from that process will get into the local drinking water and surface waters; that the fluids contain toxic materials, and thus the public is being put, unnecessarily, at risk.


The witnesses before the Sub-Committee were:

Mr. Douglas Duncan who is 
Associate Coordinator for the Energy Resources Program of the United States Geological Survey.

Mr. Scott Kell
, President
 of the Ground Water Protection Council and a State Regulatory , Official from Ohio.

Mr. Mike John who is the 
Vice President of Corporate Development and Government Relations, for the Eastern Division
 of Chesapeake Energy Corporation.

Mr. Lynn Helms who is the 
Director of the Oil and Gas Division of the 
North Dakota Industrial Commission, and who spoke of the activity of the Interstate Oil and Gas Compact Commission.

Mr. Albert F. Appleton who is a consultant on 
Infrastructure and the Environment and a 
former Director of the New York City Water and Sewer System.

Of these, Mr. Duncan spoke of the size of the gas shale resource, on land in the United States (and did mention that the USGS was working out how much there was in the rest of the world) but otherwise seemed to try and stay outside of the debate. Interestingly, later in the debate, ho noted that the USGS had data for the public lands in the United States, but had not finished the survey as to what lay beneath private lands.

In his opening statement Scott Kell spoke to the work that the States already do in this regard. He specifically cited two reports, though I only got the reference to the first. That was “Modern Shale Gas Development in the United States – A Primer”, (pdf) and it appears to be an excellent reference to the topic, and I am going to use it to substantiate some of the comments from the panel of witnesses.

He noted that the rumors of ill health caused by hydrofrac fluids suggested up to 1,000 cases of environmental damage focused on six states. He contacted the relevant agencies in those states and found that the reports were unfounded. The Ground Water Protection Council was founded by State Oil and Gas Regulators and is designed to protect the public’s water.

Mike John, speaking on behalf of Cheasapeake, noted that the Marcellus is likely to be a real game changer in regard to US reserves. It will provide an “ocean of natural gas,” with production being limited by demand, since there is now too much supply. They have 94 rigs operating and he described defining the shale in their lease, identifying the sweet spots with 3-D seismic and then drilling, from a single 5-acre site, perhaps 6 t0 10 wells that go down 8 – 10,000 ft (depending on the deposit) and then turn lateral and go out a mile horizontally. He believes that the four major gas shales (Haynesville, Fayetteville, Marcellus and Woodford) will generate half the US demand for natural gas by 2020, at 30 bcf/day.

Lynn Helms spoke of the benefits to come from the Bakken in North Dakota, as a State Official he has no greater priority than protecting the water, but has seen no credible real threat to the water and believes that the industry is adequately regulated.

Thus the first four speakers (or at least the middle three) were of the “it ain’t broke so why fix it,” school, and it was left to the last member of the panel, Albert Appleton, to explain the concerns that had led to the Hearing and possible change in legislation). He has been, as one concerned with the NY water supply, a critical evaluator of what goes on in the watershed that feeds water to the city and the state. He spoke to the fact that we are supposed to be moving away from fossil fuels toward renewable ones, that there are concerns with the fluids that are used in hydrofracing, and the industry that says it can’t afford more regulation is the one that makes these huge profits. His main concern was that the fluids used are toxic and do not biodegrade, so that even though they are stored in deep wells, they are still there as a threat. But there are also concerns that there are not enough regulators to ensure compliance with the regulations, and that water withdrawal may have severe and negative impact on communities. And he returned to the point that the Government is now pouring billions into green energy but this will compete with natural gas, so that if we subsidize the gas by easing the regulations we are undercutting the green energy program. And we have to be concerned about global warming. (Joe Romm is quoting NASA as saying that we will set a new global temperature record within a year or two).

Well after these opening statements, the Sub-Committee members had their say, some speaking more themselves, and one or two merely asking questions. The ad hominem argument that appears in other discussions also popped up here. Congressman Hinchey (I believe) from New York asked Mr Kell where he got his funding and focused in on the oil and gas companies that therefore “bought” the conclusions he had provided. (This was rebutted by the witness). He was particularly concerned with the benzine in the fluid, and returned to its toxic nature and longevity once spilled.

Congressman Boren from McAlester, OK talked about the rigs that are laid down, and the high unemployment in the oil and gas business in his district, for him $4 gas was too cheap. He did note that then Senator Obama voted to provide the exemption, and he wondered why they were trying to “solve a problem that doesn’t exist.” He got the witnesses to differentiate between the depth of the wells (8-10,000 ft) where the fluid is used, and the 2-300 ft of the water supplies of concern. They also pointed out that without the hydrofrac, gas from the shales can’t happen. He noted that the prevailing backup to the wind and solar farms being installed today is natural gas, and so we really need it.

Congresswoman Lummis from Wyoming talked of the “game change” nature of the natural gas, and asked of the consequences of the proposed change. The example given in response was the effect of the LEAF (Legal Environmental Assistance Foundation) legislature in Alabama which was directed at control of coal bed methane and hydrofracing (historic review.) The result of the judgement was to place a two-year drilling moratorium in the state. She urged the Sub-Committee not to remove the exemption.

The State regulators pointed out that the States had been handling this problem for years, without documented cases where there were problems in over 20 years of operation.

Congressman Gohmert of Texas pointed out that they are drilling into the Barnett shale in downtown Ft Worth without problems. Congressman Fleming of Louisiana commented on the developments in the Haynesville shale and how they were a great boost for the local economy, without incidents.

Yet in a reply Mr Appleton returned to the point that non-Federal regulation of the industry was a subsidy to the National Gas Industry.

Congressman Sarbanes of Maryland went back to the toxic chemical point, seeking to determine if any of the fluids were Class 1 chemicals (they are Class 2) He was answered that all sites (to comply with OSHA) must have the pertinent MSDS data sheets for all the chemicals at the site and available – so the fluid chemistry is determinable. However, it was pointed out that the chemistry changes from well to well and site to site, and thus it is impossible to generate a single “one mix fits all.” The fluids from the well are stored on site, in either tanks or double clay-lined pits, from which the fluid (monitored by the agencies on a per barrel basis) is transported to injection wells and pumped deep underground. There are some issues with water quantity however, (though this was not followed up on very much).

In terms of price, Mr John said that Chesapeake could live with $4 gas (per thousand cu ft) but that he expected the price to return to $6 to $8 fairly soon. They have not shut in any of their wells in the Marcellus. In response to the question as to what a typical fracing fluid contains as a chemical package he began to read the table (exhibit 36) below.

Typical fracing fluid contents

Congresswoman DeGette then came into the Hearing and asked questions as to the objection to the legislation. If the chemicals are reported anyway, why is there a problem. Some foks say there are no incidents, but incidents don’t always get reported. And there are stories of contamination, and injuries.

There had been one break in the Hearing and I was distracted a couple of times so that this is not a full and complete report, just what I was able to note.

My sense was that most of the Sub-committee did not see the reason for change, with only two or three members pushing the need for a change in regulation, but I suspect that not all the members were there and that this may have more passion on the part of those seeking the change.

22 comments:

  1. While I "get" the notion that some states are well experienced in regulating hydrofracing, it does not appear that the states above the Marcellus formation are members of that group. Here is the list of states that have active Underground Injection Control programs:
    Alabama, Arkansas, Colorado, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maine, Missouri, Montana, Nebraska, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington, Wyoming.

    Notice that neither New York nor Pennsylvania are on that list. Since they apparently do not have experienced regulators, how long will it take for them to develop the expertise to adequately ensure public safety? Though fracing properly does not appear to endanger water supplies, there are several steps in the process where an incompetent, greedy or uncaring operator can put public water supplies at risk. Though most of the fracing does occur at depths well away from aquifers, the initial drilling has to go through the aquifer and the chemicals have to be injected from the surface where there is a possibility of spills and contamination.

    If an industry cannot afford adequate oversight, perhaps it simply cannot afford to be in business. Of course, there is little likelihood that anyone would call the oil and gas industry too poor to afford compliance with reasonable, consistent standards established by experience regulatory bodies.

    (Disclosure: I have financial interests in alternative energy technology that competes for market share against natural gas. I also have financial interests in entities that extract natural gas using hydrofracing under the oversight of experienced state regulators.)

    Rod Adams
    Publisher, Atomic Insights
    Host and producer, The Atomic Show Podcast
    Founder, Adams Atomic Engines, Inc.

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