American Oil and Gas Reporter - August 2015 - 18

IndustryDigest
California Water Board
Unveils SB 4 Standards

SACRAMENTO, CA.-The
California State Water Resources
Control Board has released
requirements for monitoring
groundwater near well stimulation
activities, including hydraulic
fracturing. The board says the new rules
will improve transparency and reporting
about groundwater conditions.
SB 4, signed by Governor Jerry
Brown in 2013, ordered the state water
board to develop model criteria for
groundwater monitoring near well
stimulation activities.
According to the board, the model
criteria sets the standards for monitoring
plans that oil and gas operators must file
with it before conducting stimulation
activities. The new standards include
requirements for monitoring and
sampling methods, identifies chemicals
to analyze, and set sampling frequency
and areas to monitor.
The California Independent
Petroleum Association points out that in
addition to the area-specific and
operator-required monitoring, the model
criteria cover designated contractor
sampling and testing requirements, and
establish a regional groundwater
monitoring program.
"These rules will enhance our ability
to protect groundwater by requiring
comprehensive monitoring of
groundwater near oil and gas
operations-the strictest monitoring
criteria in the nation," says Felicia
Marcus, chairwoman of the state water
board. "The goal is to prevent pollution
of water that can be used for drinking,
agriculture and other beneficial uses.
And if we then find threats to our
groundwater, these rules will allow us
to quickly identify and help trace the
cause to require those responsible to
clean it up."
The water board reports it developed
the model criteria in consultation with
the California Division of Oil, Gas and
Geothermal Resources, regional water
boards, public stakeholders, and
technical experts. ❒

Coming In September
Special Report:
Well Logging

18 THE AMERICAN OIL & GAS REPORTER

Oklahoma Expands
Areas Included In Order
Restricting Injection

OKLAHOMA CITY-The Oklahoma
Corporation Commission in July
expanded an earlier directive limiting
depths and volumes of Class II disposal
wells injecting into the Arbuckle
formation in seismic "areas of interest."
The March order, which affected
more than 300 wells, ordered operators
to prove they weren't injecting into the
crystalline basement below the
Arbuckle, and in some cases reduce
injection volumes by 50 percent
(AOGR, April 2015, pg. 18).
The OCC says its July order expands
the affected area and applies to an
additional 211 wells. Operators of wells
in areas of interest, which the OCC says
include 21 of Oklahoma's 77 counties,
had until Aug. 14 to prove their wells
were not injecting below the Arbuckle.
Tim Baker, director of the OCC's
Oil & Gas Conservation Division, notes
that the March directive allowed some
disposal wells to continue operating at
reduced volumes. "Those operators are
being told now that they must reduce
their depths if they are below the
Arbuckle," he says.
In response to the March order, OCC
reported in July that 140 Arbuckle
disposal wells had been or were being
plugged back, 54 were limiting their
injection volumes to less than 1,000
barrels a day, 96 had proven they were
at the proper depths, 25 had cut their
injection volumes in half, and 37 were
not injecting.
Baker says the OCC's focus remains
on high-volume Arbuckle disposal
wells. However, he adds, "We have had
seismicity in some areas that don't have
any of the high-volume, deep wells
considered the highest potential risk-
most notably in northern Oklahoma
County and southern Logan County.
Operators of low-volume Arbuckle
disposal wells in those areas that have
long been proven to be operating at the
proper depths have voluntarily shut
down their wells to aid research efforts."
Baker praises "the cooperation and
input of Oklahoma's oil and gas
producers," which he says "not only
have cooperated on the operational
level, but also have provided essential
and sometimes proprietary data to the
Oklahoma Geological Survey." ❒

Illinois Appeals Court
Upholds Fracture Rule

MT. VERNON, IL.-The Appellate
Court of Illinois for the 5th District
moved the state's hydraulic fracturing
regulations one step forward in July by
upholding a lower court's denial of a
preliminary injunction against the final
rule implemented by the Illinois
Department of Natural Resources last
November.
"Although the IDNR's regulations
still must survive a decision on the
merits of the case, denying the
preliminary injunction moves Illinois
closer to the benefits of modern shale
development-in particular, the New
Albany Shale," assesses attorneys Baker
& Hostetler LLP in an executive alert.
The firm says four days after IDNR
issued its final frac rule on Nov. 6, a
consortium of landowners and an
environmental group filed for a
preliminary injunction, alleging IDNR
violated the Illinois Administrative
Procedures Act. The Circuit Court of
Madison County, Il., denied that motion
on Nov. 21, Baker & Hostetler says,
and was affirmed by the appellate court
on July 10.
The appellate court "concluded the
consortium's blanket allegation of harm
was too speculative to justify a
preliminary injunction," Baker &
Hostetler says.
According to Brad Richards,
executive vice president of the Illinois
Oil & Gas Association, IOGA was not
overly concerned, given that the basis
for the lawsuit was a claim that the
public lacked ample opportunity to
comment on the proposed rules, despite
the fact that "more than 38,000
comments were submitted, including
thousands from the very group that filed
the lawsuit."
Nevertheless, he adds, "Even with
the favorable ruling, operators face
regulatory uncertainty until the
litigation reaches its ultimate
conclusion. The consortium still may
petition the Illinois Supreme Court for
review of the preliminary injunction,
and litigation on the merits could take
months or years to finish."
Richards credits IDNR and Illinois
Attorney General Lisa Madigan for
doing "an admirable job of defending
the rule-making process. ❒
American Oil and Gas Reporter - August 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - August 2015
