Fracking study spurs call for stricter gas drilling regulation

Fracing study spurs call for stricter gas drilling regulation

JIM SNYDER, JIM POLSON and BRADLEY OLSON

WASHINGTON, D.C. (Bloomberg) -- A study that found natural gas drilling polluted drinking water is fueling calls for stricter standards for well construction that could increase costs for energy companies.

The analysis by academic researchers backed the oil and gas industry in one respect: the authors said “fracing” wasn’t to blame for harmful methane seeping into groundwater studied in Texas and Pennsylvania. Some environmentalists contend that by blasting underground rock with a mix of water, chemicals and sand, producers can force the gas into drinking water near the surface.

The bigger concern, according to the analysis published Sept. 15 by the peer-reviewed Proceedings of the National Academy of Sciences, are leaks in the steel-and-cement casings surrounding the well bore. They let gas escape before it gets to the surface, making water undrinkable and in some cases explosive.

“The study appears to be attracting a lot of attention for the sometimes sleepy issue of well construction,” said Scott Anderson, a senior policy adviser at the Environmental Defense Fund, who has worked with gas driller Southwestern Energy Co. to develop well integrity guidelines. “This will help underscore the importance of recent and still-needed revisions in state regulations governing the drilling of wells.”

The Bureau of Land Management, part of the Interior Department that regulates oil and gas production, three years ago said it planned to update rules for natural gas production on federal lands, given the increased development enabled by hydraulic fracturing. The rules haven’t been issued.

Rules Update

Bob Abbey, the bureau’s director when it proposed the rules, said federal standards for well construction are key to limit risks of water pollution from drilling. The proposed rule will also focus on the release of information about the chemicals used in fracing, and the disposal of wastewater produced in the process.

“There are some good companies operating out there, and there are some not so good ones,” Abbey said. Federal rules can “provide assurance to the public that drilling can be done safely,” he said.

Jessica Kershaw, a spokesman for the Interior Department, said a draft of proposed rules was sent to the White House for review.

The rules will update “old regulations of hydraulic fracturing procedures, and bring these requirements into the 21st century to keep pace with modern best practices,” she said in an email.

Leak Tests

As proposed, the BLM rule would require testing for leaks before hydraulic fracturing begins. Wells that penetrate underground drinking water sources also would have to record data on their cementing of wells to prevent leaks, and report the results to the government.

The draft could still be rewritten by the Obama administration before the rule becomes final. Some producers objected to the proposal, saying ordering tests would delay fracturing and tie up expensive rigs.

Another critical component, Abbey said, is having enough inspectors to ensure the standards are being followed.

States also have updated and toughened drilling rules, though advocates said more steps were required.

Pennsylvania tightened its regulations on well casings in February 2011 after concluding that wells drilled by Cabot Oil & Gas Corp. had leaked methane into nearby water wells.

Fewer Taints

The state also set standards for cement, used to seal the casing to keep gas from leaking. Reported cases of water supply contamination by stray gas from wells fell to two last year from 12 in 2010, according to department statistics.

Texas tightened requirements on well construction including casing in May 2013.

Wells must be tested to withstand the maximum pressure expected during fracing, and any failed test must be reported to the state, according to a statement by the Railroad Commission of Texas, the oil and gas regulator.

Colorado, meanwhile, requires the casing to extend from the surface to at least 50 ft below the groundwater aquifer at the site, according to an October 2011 report from the State Review of Oil & Natural Gas Environmental Regulations, a nonprofit that works with states on drilling and production standards.

The group has received funding from the U.S. Environmental Protection Agency, the U.S. Department of Energy and the American Petroleum Institute.

Pressure Tests

Wells must be pressure-tested in Colorado. The state imposed tighter casing standards in Garfield County, where water-well contamination has been reported, and for areas where gas is known to be under exceptionally high pressure, according to the State Review report.

Rob Jackson, a professor of earth sciences at Stanford University who helped write the new paper on leaks, said new rules are required to reduce pollution risks.

“We should be comparing states and adopting the most stringent standards we can,” he said in an interview.

A number of industry operators say that fracing poses little to no risk of fouling water supplies, although shoddy wells have the potential to do so. The more the distinction can be made, “it allows a rational conversation to take place,” said Paul Goodfellow, V.P. for Royal Dutch Shell Plc who helps oversee shale drilling in the U.S. and Canada.

Shell’s Wells

“We’ve spent a fair amount of time talking about well construction,” said Goodfellow, who sits on the board of a non-profit that advocates for more environmentally friendly drilling practices. “Regulation is critical in this space, but even more important than good regulation is enforcement.”

While much of the debate over drilling has focused on fracing, Jackson said the general public doesn’t care in what way drilling posed risks to drinking water, only that it did.

“The differentiation between fracing and well integrity is important to the professionals, but to the public they don’t care about that distinction,” Jackson said.

“Fracing and horizontal drilling has enabled the whole process, and they don’t care what step their water has been harmed by.”