Governor Signs Bill Banning Hydraulic Fracturing in Maryland
On April 4, 2017, Governor Larry Hogan signed into law a bill that makes Maryland the third state (following New York and Vermont) to ban hydraulic fracturing. Maryland’s ban is particularly notable as the Marcellus Shale formation extends into the western part of the state. Hydraulic fracturing has been under various moratoria in Maryland since June 2011, when former Governor Martin O'Malley issued an Executive Order directing the Maryland Department of the Environment ("MDE") and the Maryland Department of Natural Resources to study economic, environmental, and public health issues related to horizontal drilling and hydraulic fracturing in the Marcellus Shale. The final study, which was released in November 2014, concluded that any environmental or health risks from hydraulic fracturing could be adequately managed through regulatory measures, but, shortly after that study’s release, Maryland enacted a two-year moratorium that prevented the MDE from issuing any drilling permits for hydraulic fracturing before October 1, 2017. The new permanent ban on hydraulic fracturing takes effect on that same date—October 1, 2017. Read the full text of Senate Bill 740 here.
DEP Concludes Seismic Activity in Pennsylvania “Likely Correlated” with Hydraulic Fracturing
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.