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DEP Concludes Seismic Activity in Pennsylvania “Likely Correlated” with Hydraulic Fracturing 02-22-2017

On Friday, February 17, the Pennsylvania Department of Environmental Protection (“DEP”) published a report concluding that four specific low-magnitude seismic events that occurred on April 25, 2016 “were likely correlated” with hydraulic fracturing activity. The seismic events at issue were registered on the Pennsylvania Seismic Network and consisted of a series of four “microseismic events” at magnitudes unlikely to be noticed by humans. The report concludes that these seismic events showed a “marked temporal/spatial relationship” to hydraulic fracturing activities at a nearby well pad, but ultimately cautions that “there is no definitive geologic association of events at this time.” 

Nonetheless, the DEP’s report includes several recommendations that will likely have an impact on how operators conduct their fracturing activities in certain areas of the Utica Shale formation. The technique used at the time of the April 2016 seismic activity is called “zipper fracturing,” and involves conducting hydraulic fracturing operations concurrently at two horizontal wellbores that are parallel and adjacent to each other. The DEP report describes that DEP and the operator agreed to a seismic monitoring plan in November 2016 that requires the operator of the well at issue to (i) discontinue the use of the “zipper fracturing” technique during any future completions when there is less than a quarter mile between lateral portions of adjacent wellbores; (ii) maintain its own seismic network to detect events; and (iii) adopt a specific seismic reporting and response plan. The plan also requires the operator of the well at issue to abide by a “traffic light” system, whereby the operator must, among other things, (i) notify DEP of seismic activity above 1.0 magnitude within 6 miles of a wellbore path, (ii) suspend operations if three seismic events between 1.5 and 1.9 magnitude occur within three consecutive days within 3 miles of a wellbore path, and (iii) shut down well operations if a seismic event magnitude 2.0 or greater occurs within 3 miles of a wellbore path. The report recommends that other operators in North Beaver, Mahoning, and Union Townships in Pennsylvania follow similar plans.

The report’s “traffic light” system recommendations are particularly notable because they apply at conservative levels of seismicity compared to other jurisdictions. For example, Well Completion Seismicity Guidance applicable to operators in the Scoop and Stack plays published by the Oklahoma Corporation Commission in December 2016 requires reporting of seismicity at magnitude 2.5 or greater within 1.25 miles of fracturing operations, a temporary pause in operations at magnitude 3.0 or greater, and the suspension of operations at magnitude 3.5 or greater. It remains to be seen whether the report’s recommendations will affect the level of hydraulic fracturing activity in the affected townships.

EPA Releases Final Assessment of Fracking Impacts on Drinking Water 12-13-2016

On December 13, 2016, the United States Environmental Protection Agency (“EPA”) released its Final Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources. Issuance of the final report comes over eighteen months after EPA released a draft report for external review in June 2015, and approximately a year after an EPA Science Advisory Board panel released its initial recommendations regarding the closely-followed hydraulic fracturing study. Pursuant to those recommendations, the final report reflects the removal of the draft report’s overarching conclusion that EPA “did not find evidence that” hydraulic fracturing activities “have led to widespread, systemic impacts on drinking water resources in the United States.” In an accompanying set of “ Questions and Answers about EPA's Hydraulic Fracturing Drinking Water Assessment,” EPA explains that its scientists concluded that the conclusion of the draft report “could not be quantitatively supported” and that it did not “clearly communicate the findings of the report.” Instead, the final report concludes that “hydraulic fracturing activities can impact drinking water resources in the United States under some circumstances.” 

Importantly, however, EPA’s findings that underlie the final report’s conclusion are generally consistent with those set forth in the June 2015 draft report. For example, both the draft report and the final report identify above- and below-ground mechanisms in the hydraulic fracturing water cycle that “have the potential to impact drinking water resources.” Similarly, both the draft report and the final report characterize the number of identified cases of drinking water resource contamination as “small” in comparison to the number of hydraulically fractured wells in the United States. Finally, consistent with the draft report, most of the small number of "impacts on drinking water resources" identified by EPA appear to be unrelated to fracturing activity itself. Nonetheless, like the draft report, the final report identifies the “potential for hydraulic fracturing fluids . . . to reach underground drinking water resources” via the fracture network. On this topic, the final report identifies with more specificity those areas in which hydraulic fracturing activity has occurred within underground drinking water resources—namely “in some areas in the western United States (e.g., the Wind River Basin near Pavillion, Wyoming, and the Powder River Basin of Montana and Wyoming).” 

Unlike the draft report, the final report includes a list of “combinations of activities and factors” associated with hydraulic fracturing activity that EPA concludes “are more likely than others to result in more frequent or more severe impacts” to drinking water resources. That list consists of:

  • Water withdrawals in times or areas of low water availability, particularly in areas with limited or declining groundwater resources;
  • Spills during the management of hydraulic fracturing fluids, chemicals, or produced water that reach groundwater resources;
  • Injection of hydraulic fracturing fluids into wells with inadequate mechanical integrity, allowing gases or liquids to reach groundwater resources;
  • Injection of hydraulic fracturing fluids directly into groundwater resources (a practice primarily associated with coalbed methane production)
  • Discharge of inadequately treated hydraulic fracturing wastewater to surface water resources; and
  • Disposal or storage of hydraulic fracturing wastewater in unlined pits, resulting in contamination of groundwater resources.

Notably absent from this list of increased risk activities is hydraulic fracturing of deep shale formations. Indeed, the final report acknowledges that the presence of “thousands of feet of rock between hydraulically fractured rock formations and underground drinking water resources can reduce the frequency of impacts on drinking water resources” during well injection. Read the final report in full here.

For more insight on water laws and regulation, visit V&E’s Water Blog.

Two Lawsuits Relating to Induced Seismicity Filed in Oklahoma 11-23-2016

Two lawsuits recently filed in courts in Oklahoma allege claims relating to induced seismicity following a September 8, 2016 earthquake, which measured magnitude 5.8 and had an epicenter approximately 8 miles northwest of Pawnee, Oklahoma.  That quake was the largest reported in Oklahoma since seismic record-keeping began.

The first case, filed in Oklahoma state court on November 17, is a putative class action brought by an Oklahoma resident against 27 oil and gas companies that have engaged in injection well operations near Pawnee, 25 of which are unnamed in the class action petition. The petition generally alleges that defendants’ disposal of fracking wastewater in injection wells caused dozens of earthquakes near Pawnee from September through November 2016 (including the magnitude 5.8 earthquake on September 3) and asserts claims of absolute liability for ultrahazardous activities, negligence, private nuisance, and trespass.  The petition seeks damages for physical damage to real and personal property, market value losses to real property, and punitive damages, and alleges that the defendants are jointly and severally liable for such damages.  Read the Class Action Petition in James Adams et al. v. Eagle Road Oil LLC et al., case number CJ201678, in the District Court of Pawnee County, Oklahoma here.

The second case, brought by the Pawnee Nation of Oklahoma (the “Pawnee Nation”) in federal court, involves claims against the United States Bureau of Indian Affairs, the Bureau of Land Management, and Sally Jewell as Secretary of the Interior.  Specifically, the complaint alleges that defendants’ approval of various oil and gas leases and drilling permits on Pawnee land failed to comply with several federal laws, including the National Environmental Policy Act (“NEPA”), the National Historic Preservation Act, and the American Indian Agricultural Resource Management Act of 1993. The complaint links these failures to various impacts on Pawnee land that have occurred as a result of oil and gas development, including earthquakes allegedly caused by hydraulic fracturing operations.  Like the petition in Eagle Road discussed above, the Pawnee Nation’s complaint makes specific reference to the magnitude 5.8 earthquake that occurred on September 3.  Among the myriad of violations alleged in the complaint is a claim that environmental assessments prepared to comply with NEPA in association with the issuance of drilling permits were deficient for failing to consider earthquakes as an “indirect impact.”  The complaint asks the court to set aside 17 leases approved in 2013, as well as at least 10 related permits to drill and associated sundry notices, and to enjoin the defendants from approving any other activities on the relevant leases until defendants have complied with all federal laws.  Read the complaint in Pawnee Nation of Oklahoma et al. v. Jewell et al., case number 4:16cv00697, in the U.S. District Court for the Northern District of Oklahoma here.

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