ABOUT THE REPORT · About the HBW Fracking Report HBW Resources’ Fracking Report monitors shale...

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Transcript of ABOUT THE REPORT · About the HBW Fracking Report HBW Resources’ Fracking Report monitors shale...

Page 1: ABOUT THE REPORT · About the HBW Fracking Report HBW Resources’ Fracking Report monitors shale energy activities across the U.S., assesses the non-technical risk factors, and qualifies
Page 2: ABOUT THE REPORT · About the HBW Fracking Report HBW Resources’ Fracking Report monitors shale energy activities across the U.S., assesses the non-technical risk factors, and qualifies

ABOUTTHEREPORT

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TableofContents

AboutHBWResources .................................................................................................................... 1

ExecutiveSummary......................................................................................................................... 2

California,Colorado ........................................................................................................................ 3

Florida,NewMexico ....................................................................................................................... 4

Oklahoma,Pennsylvania ................................................................................................................. 5

WestVirginia .................................................................................................................................. 6

References ...................................................................................................................................... 7

AbouttheHBWFrackingReport

HBWResources’FrackingReportmonitorsshaleenergyactivitiesacrosstheU.S.,assessesthenon-technicalriskfactors,andqualifiesthethreatstoproductionaseitherhigh(RED),medium

(YELLOW),orlow(GREEN).Thereportisupdatedmonthly,reassessingeachstate’sthreatlevelandanalyzingnewdevelopments.Thereportandfurtherupdatesareavailableonlineat:hbwresources.com/intelligence.

AboutHBWResources

HBWResourcesisanintegratedstrategicconsultingandadvocacyfirm.Ourmultidisciplinaryapproachprovidesourclientswithinnovativethinkingandhands-on,seasonedexperience.Ourapproachcutsthroughpartisanviewstorepresentnationalandinternationalcompanies,trade

associations,laborunions,non-for-profitorganizations,Federal-andState-levelofficialsandagencies,academia,andnon-governmentalorganizations(NGOs).WithofficesinHouston,Washington,D.C.,Denver,Lexington,LittleRock,andCalgary,HBWResourceshasforgedasolid

reputationofworkingeffectivelyatthecross-sectionofthepublicpolicy,regulatory,technicalandpoliticalarenastoprovidehighvalue,strategiccounselneededtoachieveresultsforourclients.

FormoreinformationontheHBWFrackingReport,contactAndrewBrowning,Partner,[email protected].

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ExecutiveSummary2016beganwithaslowstartascrudepricesdroppedtonewlowsandrigcountscontinuedtoplummet.Thoughnotahigh-volume,producingstate,Floridahasbecomeaproxybattlegroundasactivistscontinue

theirtacticstopushforlocalfrackingbans.Currently,nearly70localgovernmentshavebannedfrackingwithintheirjurisdictions.Theseeffortsshouldfacesignificantchallenges,however,astheFloridaHouse

advancedlegislationinsupportofoilandgasdevelopmentstatewide.TheStateSenateisnowconsideringthebill.Meanwhile,stateofficialsinColoradohaveapprovedrulesthatwilllimitlocalcontrol

overoilandgasoperations.

Nationally,onshoreenergydevelopmentischallengedbygrowingeffortstohaltfrackingonfederallands.GroupshaveimplementingpetitiondrivesandprotestsareplannedatseveralBureauofLand

Managementofficesinthecomingmonth.Also,thefederalScientificAdvisoryBoardissuedastatementexpressingconcernovertheU.S.EnvironmentalProtectionAgency’sassessmentoftheimpactsof

hydraulicfracturingondrinkingwaterresources.TheBoarddisagreeswiththeagency’sconclusionthatthereareno“widespread”and“systemic”impactstowaterresourcesandwillbeholdingpublicmeetings

throughoutFebruaryandMarchtodiscussisanalysis.

State-by-StateThreatLevel

HighThreat ModerateThreat LoworNon-ExistentThreatCalifornia Delaware NewMexico Alabama Mississippi

Colorado Illinois NorthCarolina Alaska Missouri

Florida Kentucky Ohio Arizona Montana

Maryland Louisiana Oklahoma Arkansas NorthDakota

NewJersey Maine Oregon Connecticut SouthCarolina

NewYork Massachusetts RhodeIsland Georgia SouthDakota

Pennsylvania Michigan Texas Hawaii Tennessee

Vermont Minnesota Virginia Idaho Utah

Nebraska Washington Indiana Wyoming

Nevada WestVirginia Iowa

NewHampshire Wisconsin Kansas

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CALIFORNIA(HIGH)RegulatorsImposeMoratoriumonAlisoCanyonNaturalGas:OnJanuary28,CalifornialawmakersbeganmovingtoenactamoratoriumonwellsinAlisoCanyon.ThisnewscomesinthewakeofaleakataSouthernCaliforniaGasCo.’soperationthatforcedapproximately3,000residentsofPorterRanchtoleavetheirhomes.Theleakoccurredatanolderwellandthecompanyhassincedecidedtostopproductionat18othersimilarwellsfollowingfurtherinspection.TheDivisionofOil,Gas&GeothermalResourceswillconducttheinspectionsofthewellsandallowcontinuedoperationoncetheyaredeemedsafe.ThebillwillnextgototheAssemblybeforeitisputintoplace.1

COLORADO(HIGH)ColoradoRegulatorsApproveLocalControlRules:OnJanuary25,regulatorsfromtheColoradoOilandGasConservationCommissionapprovedrules“dictatingwhenlocalgovernmentshaveasayinthestate’soilandgasdevelopments.”2Therewascontentionoverthespecificsoftherules,inparticularthat“largescale”facilitiesaredefinedaseightnewwellsor4,000barrelsofneworexistingstorage,notincludingwater.CountygroupswerenotappeasedbytherulesandmighttrytotakethisissuetotheNovemberballot.TheColoradoOilandGasAssociationisconcernedthattherulesgivelocalgovernmentstoomuchsay,whilelocalgovernmentsandotheropponentsarguethattherulesarenotstrongenough.Thenewrulemayonlyintensifytheconflict.TherulingcomesfromthefindingsofataskforcethatGov.Hickenlooperappointedtoeasetheconflictoverenergydevelopmentandhydraulicfracturinginparticular.3

AdamsCountyCommissionersRejectFrackingMoratorium:OnJanuary26,AdamsCountycommissionersrejectedaproposedmoratoriumtobannewoilandgasactivityinurbanpartsofthecounty.ThedecisiontonotimposeamoratoriumcomesfromtheeconomicopportunitiesthatoilandgasdevelopmenthasprovidedforAdamsCounty.Thedecisionalsocomesfromthecountywantingtoavoidgettingsuedbythestateorindustrylikeothercitiesthathaveplacedsimilarmoratoriums.Commissionersdidapproveamotiontoreviewhowthecountyshouldapproachfutureoilandgasdevelopment.4ThemajorconcernresidentsofAdamsCountyhavewithoilandgasdrillingistheproximitytoschoolsandhomes.Theyareworriedabouthealthconcernsaswellasnoiseandpropertyvalues.5

ReadmoreaboutfrackingdevelopmentsatthestateandlocallevelonHBWResources’IntelligenceBlog

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FLORIDA(HIGH)FloridaHouseApprovesFrackingBill:OnJanuary27,theFloridaHouseapproved,HB191,allowingthestatetoauthorizehydraulicfracturing.Thebillalsopreemptslocalgovernmentsfrombanningthepracticeintheircommunities.Thebillincludesamoratoriumonfracking,untilthecompletionofanenvironmentalstudytodetermineimpactsonthestate’sgeology,duein2017.6Uponcompletionoftheenvironmentalstudy,regulationswillbeproposedforlegislativeapproval.ThisisthethirdyearthattheHousehasapprovedthisbill.ItnowneedsapprovalbythestateSenate.LocalGovernmentsContinuetoOpposeFrackinginTheirCommunities:OnJanuary26,BrowardCountycommissionersvotedtooutlawfrackingwithinthecounty.ThisactionwaspromptedbyapplicationforaproposedwellonEvergladeslandwithinthecounty’sjurisdiction.ThisinterestalongwiththestateHouseandSenatebillstotakecontrolandregulationoverfrackinghasledthecountycommissionerstocometothedecisiontobanfrackinginBrowardaltogether.7OnJanuary5,LakeCountycommissioners,“unanimouslyvotedtoopposebillsmovingquicklythroughtheLegislaturethatwouldstripcountiesoftherighttoregulateorbanfracking.”8LakeCounty’sobjectionmarksthe33rdcountytoopposethestateintheirbilltocontrolfracking.Nowclosetohalfofthe67countiesinFloridaareopposingtheproposedrule.However,LakeCountyCommissionersdonotsupportastatebanonfrackingaltogether.TheirmainconcernisoverthehealthandsafetyofthecitizensofLakeCounty.Additionally,AlachuaCountyisseekingtodraftanordinancetobanfrackingasothercountiesandcitiesinFloridahavedone.TheproposedlegislationforthestatetocontrolfrackingintheFloridaHouseandSenatehascausedabacklashfromlocalgovernmentsinthestate.9

NEWMEXICO(HIGH)SandovalCountyPlanningandZoningBoardRecommendsAgainstFrackingPermit:TheSandovalCountyPlanningandZoningBoardvotedThursday,January28,torecommendcountycommissionersdenyafrackingpermit.Therewassignificantpublicsupportatthemeetingtodenythepermit.Citizenswereconcernedaboutthegroundwaterprotectionrules.TheSandovalCountyCommissionwillvoteanddecidethefinaloutcomeofthepermitattheirnextmeetingonFebruary18.10

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OKLAHOMA(HIGH)OklahomaCorporationCommissionOrdersReducedInjectionWellVolumes:TherecentincreaseinseismicityhasforcedtheOklahomaCorporationCommissioncameupwithaplantopreventmoreearthquakesfromhappening.ThisplanwillincludereducingthevolumeofwastewaterbeingdisposedinnorthwestOklahomabyabout18percent.Theremaybemorechangesaddedtothisplan.“TheOklahomaGeologicalSurveyhassaiditis‘verylikely’thatmostoftheearthquakesweretriggeredbythesubsurfaceinjectionofwastewaterfromthedrillingoperations.”11GovernorFallinFundsSeismicResearch:OklahomaGovernorMaryFallindedicatedasumof“$1.4millionfromanemergencyfundtopayformoreseismicresearch.”12TherateofearthquakesinOklahomahasincreasedsubstantiallysince2009andhassincegarneredpublicanger.Fallinisbeingcriticizedforherslowresponsetoaddressthisissue.Somehaveattributedtheincreasednumberofearthquakestohydraulicfracturingandnaturalgasproduction.ThemoneywillgototheOklahomaCorporationCommissionandthestate’sgeologicalsurvey.

PENNSYLVANIA(HIGH)GovernorWolfAnnouncesPlantoReduceMethaneEmissionsfromOilandGas:GovernorWolfofPennsylvaniaissuedanewrulingthatwillputmoreregulationsonnaturalgasproducers,specificallyinregardstomethaneemissions.Thesenewruleswillcoverbothnewandexistingwells.Industrywillberequiredtocheckformethaneleakseverythreemonthsaspartofthenewregulation.Industryrepresentativessaytherulesareredundantbecausetheyalreadyhavesystemstopreventmethaneleaks.GovernorWolf’sruleswillexceedthemethanerulessetbytheEPA.Thisisaresponsetoenvironmentalistswhowere,“concernedthatpendingfederalrulescoveronlynewwellsandfacilities.”13Thenewpermitswillgointoeffecteitherlaterthisyearorin18monthsfornewandexistingwellsrespectively.14

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WESTVIRGINIA(MEDIUM)FayetteCountyApprovesBanonWasteInjection:OnJanuary12,FayetteCounty,commissionersapprovedanordinancebanning“thestorage,disposaloruseofoilandnaturalgaswastecountywide.”15ThisvotecomesafterpublicoutcryfromastudyDukeUniversitythatidentifiedfrackingwasteinthedrinkingwaterfromWolfCreek.Industrywilllikelychallengetheordinanceincourt.Countyleadersincludedaseverabilityclausetokeeptherestoftheordinanceintactevenifonepartofitischallenged.

StateBoastsImpressiveNaturalGasProductionNumbers:Reportsfor2014fromtheWestVirginiaGeological&EconomicSurveyshowthatWestVirginiaexceededexpectationsandproducedfarmoreoilandnaturalgasthanexpected.“OilproductioninWestVirginiahasincreasedfromabout27,000barrelsin2009tothe5.2millionbarrelsproducedin2014.”16AlackofpipelinesinWestVirginiaiskeepingcompaniesfrommaximizingprofitsfromthisboom.TherearemultiplepipelinesbeingconsideredthatwouldaidWestVirginiaandOhioinreachingfullproducingpotential.Inthelong-term,theindustryispreparingforevengreaterproduction.

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REFERENCES1McGreevy,Patrick,“MoratoriumonAlisoCanyonnaturalgasoperationsgetsSenateapproval,”LosAngelesTimes,January28,2016,accessedFebruary3,2016,http://www.latimes.com/politics/la-pol-sac-moratorium-on-aliso-canyon-natural-gas-operations-20160128-story.html2Beck,Madelyn,“Colo.CommissionOksruleonlocalcontrol,”Energywire,January27,2016,accessedFebruary3,2016,http://www.eenews.net/energywire/2016/01/27/stories/10600311883Elliott,Dan,“ColoradoOksoil-gasrulesgivingcities,countieslimitedsay,”Bakken.com,January28,2016,accessedFebruary3,2016,https://bakken.com/news/id/250989/colorado-oks-oil-gas-rules-giving-cities-counties-limited-say/4Aguilar,John,“AdamsCountycommissionersnotinfavorofdrillingmoratorium,”TheDenverPost,January27,2016,accessedFebruary3,2016,http://www.denverpost.com/news/ci_29436572/adams-county-mulls-10-month-ban-new-oil5Gelardi,Liz,“HeateddebateaboutoilandgasdrillinginAdamsCounty,”DenverSevenNews,January27,2016,accessedFebruary3,2016,http://www.thedenverchannel.com/news/local-news/heated-debate-about-oil-and-gas-drilling-in-adams-county6Klas,MaryEllen,“FloridaHouseapprovesbilltoauthorize,regulatefracking,”MiamiHearld,January27,2016,accessedFebruary3,2016,http://www.miamiherald.com/news/politics-government/state-politics/article56938703.html7Sweeney,Dan,&Wallman,Brittany,“Browardoutlawsfracking,”SunSentinel,January27,2016,accessedFebruary3,2016,http://www.sun-sentinel.com/local/broward/fl-broward-anti-fracking-20160125-story.html8“Lakecommissionersdemandhomeruleinfrackingcontroversy,”OrlandoSentinel,January5,2016,accessedFebruary3,2016,http://www.orlandosentinel.com/news/lake/os-lk-fracking-lake-commission-20160105-story.html9Warren,April,“Countyasksattorneyforfrackingordinance,”Gainesville.com,January5,2016,accessedFebruary3,2016,http://www.gainesville.com/article/20160105/ARTICLES/16010986310Gregorczyk,Kasia,“SandovalCountyboardrecommendsdenyingfrackingsiteapplication,”KOB4,January28,2016,accessedFebruary3,2016,http://www.kob.com/article/stories/s4031958.shtml#.VrJ3rLIrKCj11“Oklahomaregulatorsorderreducedinjectionwellvolumesafterquakes,”Fuelfix.com,January13,

2016,accessedFebruary3,2016,http://fuelfix.com/blog/2016/01/13/oklahoma-regulators-order-

reduced-injection-well-volumes-after-quakes/12Soraghan,Mike,“Fallinputs$1.4MtowardseismicresearchinOkla.”Energywire,January29,2016,accessedFebruary3,2016,http://www.eenews.net/energywire/2016/01/29/stories/106003136413Conti,David,“Pa.Gov.Wolftargetsmethaneemissionsfromoilandgas,”TribLive,January19,2016,accessedFebruary3,2016,http://triblive.com/business/businessprojects/onthegrid/gas/9820927-74/gas-wells-methane#axzz3xmXJDfZt14Harball,Elizabeth,“Pa.planstoregulatemethanefromdrillingindustry,”Energywire,January20,2016,accessedFebruary4,2016,http://www.eenews.net/energywire/2016/01/20/stories/106003085715Plummer,Sarah,“Commissionapprovesfirstcounty-widebanonwasteinjection,”TheFayetteTribune,January14,2016,accessedFebruary4,2016,http://www.fayettetribune.com/news/commission-approves-first-county-wide-ban-on-waste-injection/article_b2440196-ba2a-11e5-b9ed-3f82b6d3ba3b.html

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16Junkins,Casey,“W.Va.ProductionNumbers‘Shocking’,”TheIntelligencer,January17,2016,accessedFebruary4,2016,http://theintelligencer.net/page/content.detail/id/651654/W-Va--Production-Numbers--Shocki---.html