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Friday, February 7, 2014

Pipeline problems

There's a tsunami of natural gas production coming from the Marcellus play, and another wave is racing to catch up – the development of pipelines to get all that gas to markets.

The lag in pipeline development is wreaking havoc with local gas pricing for producers as the glut of gas that can’t connect to more distant demand pushes prices down. That situation is likely to continue for some time, as this article points out: 
The gas industry has made progress on this persistent problem in the last two years. In June 2011, 38 percent of the state's unconventional wells were producing, many because they lacked pipeline connections... By 2013, two-thirds of all the wells in the state were connected and producing…
There are currently close to 4,400 shale gas wells reporting production in Pennsylvania, over 7,900 shale gas wells drilled or under development, and about 14,000 wells permitted. So, the percentage of wells that are yet to be connected to pipelines shows no sign of going down soon. Indeed,  
...with gas production growing so fast, the pipeline investment will have to go on into the next decade and maybe longer to keep pace.
That attractive, distant demand that could help producers avoid price crashes is explained here:  
The cold weather has pushed demand for energy very high. In our energy markets, demand rising faster than supply translates into higher prices. Electricity prices in the Mid-Atlantic and natural gas in the Northeast are showing this today, and this isn’t new or unique.  Supplies to meet demand are limited by the capacity of the delivery systems...
There is a boom in U.S. natural gas production, but that does not get the gas to markets. Natural gas delivery is limited by the capacity of the pipelines that move gas from production areas to consumers. The supply and demand for natural gas has outstripped the infrastructure to deliver.  
It all adds up to a push for more natgas pipeline development. That will be accompanied by gathering lines to connect the wells to the pipelines, hundreds more compressor stations, and other infrastructure. Landscape industrialization will accelerate. Cumulative impacts will grow. As will local conflicts and siting controversies

Smart planning can reduce some of these impacts. Those reductions will be critically important, given the scale of development needed to get all that Marcellus gas – and gas from other shale basins - to market. How these pipeline problems are solved will greatly affect the natural world and our  our fundamental rights as Pennsylvanians

Will Pennsylvania - and the gas industry - get pipelines right?

Thursday, February 6, 2014

Ceres: shale boom at risk from water shortages

In May, 2013, the non-profit sustainability organization Ceres issued a report that found that nearly half of the 25,000 US oil and gas wells that were drilled in 2011-2012 and that employ hydraulic fracturing have been drilled in water-stressed areas. In a new report, Ceres – pardon the pun – drills even deeper into the existential threat to shale gas development from water shortages. Indeed, it finds that fracking is on a collision course with other water users.

analyzes escalating water demand in hydraulic fracturing operations across the United States and western Canada. It evaluates oil and gas company water use in eight regions with intense shale energy development and the most pronounced water stress challenges. The report also provides recommendations to investors, lenders and shale energy companies for mitigating their exposure to water sourcing risks, including improvement of on-the-ground practices.
The report also identifies companies facing the biggest water sourcing risks both regionally and nationally.

The report states: 
Future water demand for hydraulic fracturing will only grow with tens of thousands of additional wells slated to be drilled, and many shale basins and plays are just beginning to be developed. In addition, the shale development business model requires continual drilling cycles to maintain production growth.
All across the country, regulators, producers and service providers are scrambling to find technological and regulatory solutions to mitigate localized water sourcing risks from rapid shale energy development. Some pockets of success can be found…
Viewed more widely, however, water management best practices are lagging and no single technology alone—whether recycling, brackish water use or greater use of waterless hydraulic fracturing technology—will solve regional water sourcing and water stress problems. Ultimately, all shale operators and service providers should be deploying a variety of tools and strategies— including substantially improved operational practices related to water sourcing, more robust stakeholder engagement, and stronger disclosure—to protect freshwater resources for the future. Investors and lenders, in particular, require fuller disclosure on water use trends and requirements to better balance risk-adjusted returns on their dollars invested. 
The report and its numerous recommendations are essential reading, and should spur action from investors, lenders, companies, and regulators.

In my view, Ceres' latest effort cements the business case for a race to waterless, chemical free fracking.

Wednesday, February 5, 2014

Burning the furniture to heat the house - again

In his proposed budget for fiscal year 2014, Pennsylvania Governor Tom Corbett has proposed lifting the moratorium on state forest leasing that John Hanger and I wrote, that I fought for, and that was signed by Governor Rendell in October, 2010. He would also, for the first time, allow leasing of state park land for gas development. Governor Corbett's purpose is to raise $75 million dollars that he can spend on favored priorities as he runs for reelection

I'm quoted about it in the Philadelphia Inquirer and the Pittsburgh Tribune-Review.

The Governor's claim is that the leasing will involve no surface disturbance. Theoretically, that would involve drilling horizontally underneath previously unleased state land from existing well pads on - or existing or new well pads off  - state land. But even if new leasing involved absolutely no surface disturbance to state forest or park lands, there will still be risks and impacts to air quality, water quality and quantity; and to recreation, habitats, aesthetics and more. 

DCNR has never allowed leasing of state park land for oil or gas development where the state owns the mineral rights - only about 20% of park land. And DCNR’s 2010 leasing analysis found that all of the unleased state forest land was environmentally sensitive and required a higher standard of stewardship. So, how this “non-impact” leasing is defined – and put into practice – will crucially affect the future of the state forest and the state park system, the forest's independent certification as being sustainably managed, the state's tourism and timber economies, the communities of the Pennsylvania Wilds - and all of us.

And there are other issues. As it was in 2008-2010, the state forest - and now the added insult of the state park system - are being used as the cash cow to be milked – if not slaughtered – to balance the state budget, or to fund things that politicians want to do without (shudder) raising taxes or making tough choices. This abuse of the public lands is already the subject of courageous pending litigation. Further, by lifting the moratorium and egregiously opening state parks to leasing, the Governor thumbs his nose at the state Supreme Court’s recent decision on Act 13 and its central ruling that the public natural resources of the Commonwealth constitute a public trust that state officials are obliged to preserve.

Lifting the moratorium and leasing park land amount to burning the furniture to heat the house. Again. It is short-sighted and very bad public policy.

May 23, 2014 update: Corbett lifts the moratorium, and I restrain myself.

Tuesday, February 4, 2014

A second alarm bell rings on fracking and infant health? - Updated

A profoundly troubling new study published in the journal Environmental Health Perspectives finds that living near hydraulic fracturing operations presents a danger to unborn children.

Birth Outcomes and Maternal Residential Proximity to Natural Gas Development in Rural Colorado looked at 124,842 births between 1996 and 2009 in rural Colorado and examined birth outcomes in relation to proximity to natural gas development. The study concluded: 
In this large cohort, we observed an association between density and proximity of natural gas wells within a 10-mile radius of maternal residence and prevalence of [congenital heart defects] and possibly [neural tube defects – birth defects of the brain, spine, or spinal cord]. Greater specificity in exposure estimates are needed to further explore these associations.
Preliminary findings from a similar study Pennsylvania released last month found other disturbing potential risks to infant health from proximity to hydraulic fracturing operations. Neither study identified the exposure pathways that may be responsible for the the associations identified.

Environmental Health Perspectives' mission is to serve as a forum for the discussion of the interrelationships between the environment and human health by publishing high-quality peer-reviewed research and news of the field.” It’s increasingly clear that the impacts of hydraulic fracturing on public health demand urgent discussion, more research – and strong action.

Feb. 11 update: The chief medical officer of the Colorado Department of Health has cautioned against a "rush to judgment" on this study: 
The state official criticized the study’s design and highlighted its limitations. Inactive wells weren’t distinguished from active wells...while findings on neural tube defects didn’t account for factors like prenatal health care, drinking or smoking. On top of that, the study only made use of the mothers’ addresses at the time of their babies’ birth, and didn’t account for women who might have moved after the first trimester, when most birth defects occur... 
The story notes, however, that the study was peer-reviewed, and that it:  
…was punctuated with a long list of acknowledged limitations in the available data — including many of the same caveats highlighted by the health department. 
In other words, it was not – nor was it presented as – definitive.

Was the state’s reaction to the study “defensive”? Judge for yourself. The scientific process is supposed to be about presentation of data and conclusions, rigorous peer review and criticism - and then more science. The bottom line is that more research on fracking's impacts on public health is urgently needed. The scientific process must be allowed to work - and then we must go wherever the science leads. 

Monday, February 3, 2014

This just in from the Ministry of Bad Ideas

From the Pittsburgh Post-Gazette:
RangeResources wants to start using gas well drilling "cuttings" -- the waste rock material brought to the surface at well drilling sites -- as a paving material to build Marcellus and Utica shale gas drilling pads and access roads...
"The project involves the beneficial use of vertical drill cutting from natural gas wells as an aggregate in a stabilized soil pavement for construction of Marcellus and Utica Shale well pads and access roads," according to a notice in today's Pennsylvania Bulletin, where state permitting actions are recorded...
The drilling cuttings material is classified as residual waste and now is either buried on site or transported to a landfill for disposal. In 2012, shale gas drillers disposed of about a million tons of waste in Pennsylvania landfills, most of it drill cuttings...
Some of those drill cuttings trucked to landfills set off radiation alarms, causing the DEP, in January 2013, to start studying and testing for radioactivity in drill cuttings, wastewater and equipment at more than 100 sites across the state...
...Briana Mordick, a petroleum geologist and staff scientist with the Natural Resources Defense Council, said drill cuttings can potentially contain radiation or other contaminants associated with drilling mud. If used as paving material, those contaminants can leach or wash out of the material and pollute soil and nearby waterways. 
Range apparently claims it would use vertical drill cuttings only. As if they don't present a risk of radioactivity  or public health impacts.

This use is hardly "beneficial" to any entity besides the company. In the name of cost-saving, it would create an unnecessary risk to water, soil, wildlife, habitats, and human health. And give the industry more of a bad name. It should be categorically rejected by DEP.

September 17, 2014 update:  Alas, DEP approved this bad idea, and environmental groups have appealed the permit.