SEISMIC ACTIVITY
As reported in the OKOGA Highlights last week the Oklahoma Corporation Commission issued an advisory stating they are investigating all oil and gas activity in the Blanchard area in response to recent earthquakes in the area. This week, Oklahoma City News 9 and Tulsa’s News On 6 expounded on their short coverage last week of the possible cause of earthquakes in the Dibble area, felt by residents in Blanchard. The news stations reported that the Oklahoma Geological Survey (OGS) is investigating what may have been causing the recent earthquake spike in Blanchard, and they don’t believe it’s the usual suspects. According to the OGS, the area had 11 earthquakes during a six-day period. The largest was a magnitude of 3.4. Then, they stopped as suddenly as they started. “We’re a little mystified about what the cause is,” said Dr. Jeremy Boak, Director of the Oklahoma Geological Survey. “I think we have to give serious consideration to the possibility that these could be earthquakes that have to do with a hydraulic fracturing job triggering a small fault in the area and producing these smaller earthquakes.” Boak said the OGS is working with oil companies drilling in the area to investigate further. He said those companies are cooperating. If the OGS does determine the earthquakes were caused by the actual fracking process it would be very unusual. “It’s quite rare,” he said. Boak said earthquakes caused by fracking are usually smaller and there are fewer. But if they do determine that fracking caused these earthquakes, they would work with the state corporation commission to come up with a plan to keep it from happening in the future. (OK Energy Today also reports)
The Chickasha Express-Star (Grady County’s news source) also reported on the investigation into quakes in the Blanchard area. "We're still extremely uncertain [about] what's going on," Boak said. "We have to consider the possibility [of] hydraulic fracturing." Boak did say that it is rare for something like hydraulic fracturing to be the cause of these earthquakes. The OGS is also working closely with the oil and gas companies in the area. Boak mentioned the companies have cooperated and have been very forthcoming. "We've had some very good conversations," Boak said. While earthquakes might be considered rare in this part of the state, that might not necessarily be the case. Boak said that when he looked in the catalog back to 2010, he noticed several hundred events across Grady, McClain and Cleveland Counties.
Before a 4.1 magnitude earthquake occurred in Perry late Sunday, the Tulsa World had printed articles about the decline in seismic activity in Oklahoma, with one focusing particularly on Perry, OK. Some Perry residents see the decline in energy prices and slowing of earthquakes as anecdotal proof of the quakes’ cause. They’ve seen the latest oil boom fade in recent months, and the shaking has mostly subsided with it. The hotels and rental properties are no longer full. Landmen who once perused deeds at the courthouse no longer dine at local establishments. For most Perryans, the damage is slight and sometimes difficult to distinguish from the usual marks of time. Unless someone notices before and after a quake, it can be nearly impossible to attribute some cracks and crumbling to an earthquake. While the quakes — and occasional damage — became common, the town appreciated the increased business. “It’s kind of a balancing act because our area was benefiting from the drilling operations,” said Mary Rupp, Perry city manager. “Our hotels were packed every night, our restaurants were doing gangbuster business. And so, on one hand, the drilling was really, really good for our area, but the earthquakes were not so good. ... How do you come to terms with that?” Casey Wilson said her family just sold its house that had slight earthquake damage in the foundation. She said the wastewater injection wells probably cause most of the activity. “It could be because we live on the fault, it could be fracking, it could be the world is going to come to an end,” said Wilson. “You just got to deal with it.”
Additionally, the Tulsa World reported on the Oklahoma Insurance Commissioner’s concern of a noncompetitive market for earthquake insurance. Earthquake insurance used to be dirt cheap in Oklahoma. Now, in the wake of hundreds of recent earthquakes, premiums and rates are on the rise, so the state insurance commissioner decided to hit the “pause button.” Last month, Oklahoma Insurance Commissioner John Doak called the market noncompetitive. It was more than just a statement — it allowed him and the Insurance Commission, by state statute, to review some of the rising earthquake insurance rates before they were enacted instead of them just going into effect. The move came after Doak and his department saw massive — 300 percent — increases in insurance rates. (Insurance Business America also reports) As part of the agency’s education effort, the Oklahoma Insurance Department, released this fact sheet on earthquake insurance to educate consumers.
Oklahoma City KOCO, Channel 5 news also reports on the decline of seismic activity in Oklahoma, but recognizes researchers are still scratching their heads over the continuation of 4.0 or greater magnitude earthquakes in the Fairview area.
Environment & Energy Publishing covered changes in Oklahoma’s seismic activity in two separate articles this week. First, E&E News reported on the decline in earthquakes in Oklahoma, but questioned what may happen if oil prices rise and production increases in the area of interest. The decrease comes after a sustained effort by state officials to reduce the amount of wastewater being injected underground in oft-shaken areas. In the earthquake-prone northwest and north-central parts of the state, companies have cut injection by about 500,000 barrels a day beyond the state's directives, said Jerry Boak, director of the Oklahoma Geological Survey. So they could increase that much without violating those directives. (sub req’d)
Next, E&E News also covered the Oklahoma Corporation Commission’s investigation into all oil and gas activity in the Dibble and Blanchard area. (sub req’d)
OKOGA IN THE NEWS
This week the U.S. Fish and Wildlife Service officially removed the lesser prairie chicken from the Federal List of Endangered and Threatened Wildlife, fulfilling a federal court ruling and drawing praise from Oklahoma's oil and natural gas industry. In September 2015, the court ruled in favor of the oil industry and vacated the final listing rule, effectively ending Endangered Species Act protection for the chicken. The agency in March said it would not appeal. In a comment to The Oklahoman, OKOGA President Chad Warmington said, “It's a very positive ruling out of the Fish and Wildlife Service and is confirmation that the lesser prairie chicken shouldn't have been listed in the first place. The oil and gas industry has argued all along that the listing and requirements weren't necessary. The science is bearing out that the species has increased and decreased through natural cycles. We're seeing the prairie chicken see some positive response due to natural cycles and because the industry in five states has put together its own plan to protect it.”
Cindy Allen, Strategic Communications Advisor for Oklahoma Oil & Gas Association, also wrote a blog post concerning the delisting.
One of the headlines coming out of the Republican National Convention this week is the possibility of Oklahoma’s Harold Hamm being selected as Energy Secretary if Donald Trump were to become president (see story under Election Update). KOCO, Channel 5, asked OKOGA President Chad Warmington how that would affect the oil and gas industry in Oklahoma and nationwide. Warmington responded, “Harold Hamm is an innovator and pioneer in the oil and gas industry, and he has helped lead our nation’s shale renaissance. Having someone with his experience and perspective advising the White House on energy policy, and particularly on developing the nation’s oil and natural gas resources, would help continue the nation’s march toward energy security and independence. Oklahoma is a Top 5 oil and natural gas state. Positive pro-energy and pro-business policies at the national level will help grow Oklahoma’s economy and create jobs.”
LEGISLATIVE NEWS
Rep. Richard Morrissette, D-Oklahoma City, plans to convene one more public hearing to examine potential options for disposing of brine produced during oil and gas exploration. The House Committee on Energy and Natural Resources will convene an interim legislative study on the subject later this year at the request of Rep. Morrissette. “This is a critical public policy issue,” he said. “Although oil and gas exploration in Oklahoma has slowed considerably in recent years, it hasn’t stopped entirely, and we can anticipate another uptick at some point in the future.” Morrissette has become aware of three alternatives to disposal wells, all of which involve evaporation and distillation of the brine and crystallization of the salts. In a press release posted in OK Enegy Today, he admits an evaporative system “may not be economically feasible at this time,” Morrissette said.
ELECTION UPDATE
Prior to the start of the Republican National Convention, Governor Mary Fallin was one of three people who co-chaired the party’s Platform Committee. The platform addresses states rights’ as it relates to energy issues and regulation, stating, “Congress should give authority to state regulators to manage energy resources on federally controlled public lands within their respective borders.” The platform also explains the GOP position on Waters of the US Rule that was to be implemented last August, but was stopped by litigation since that initial day of implementation, “The EPA’s Waters of the United States (WOTUS) rule, issued jointly with the Army Corps of Engineers, is a travesty. It extends the government's jurisdiction over navigable waters into the micro-management of puddles and ditches on farms, ranches, and other privately-held property. Ditches, dry creek beds, stock ponds, prairie potholes, and other non- navigable wet areas are already regulated by the states. WOTUS is now subject to judicial review and must be invalidated, but that will not be sufficient. Unelected bureaucrats must be stopped from furthering the Democratic Party’s political agenda through regulatory demands forced upon citizens and businesses beyond that which is required by law. We must never allow federal agencies to seize control of state waters, watersheds, or groundwater. State waters, watersheds, and groundwater must be the purview of the sovereign states.” (OK Energy Today reports)
At the Republican National Convention this week, during the roll call of the delegate votes for the Republican presidential nominee, Oklahoma Republican Party Chair, Pam Pollard, included in her remarks, “Oklahoma is proud to produce and supply the energy and agriculture that fuels this country and the world.” (NewsOK reports)
Following Continental Resources CEO, Harold Hamm’s speech about American energy independence at the Republican National Convention on Wednesday night, Reuters reported that Republican presidential nominee Donald Trump is considering appointing Oklahoma oil and gas developer Harold Hamm as energy secretary if elected to the White House, according to four sources close to Trump’s campaign. Hamm would be the first U.S. energy secretary drawn directly from the oil and gas industry since the cabinet position was created in 1977, a move that would jolt environmental advocates but bolster Trump’s pro-drilling energy platform. Click here for a video of Hamm’s speech. (Journal Record (sub req’d), OK Energy Today, News 9 also report)
On the final night of the Republican National Convention, Oklahoma Governor Mary Fallin addressed the crowd a few speakers before presidential nominee Donald J. Trump. Fallin said, “Our nation has united time and time again on our core values of freedom, individual liberty and justice for all — the principles on which our country was founded, and Donald Trump unapologetically stands for those values.” Click here for a video of Governor Fallin’s speech. (NewsOK reports)
State Question Changes
The Oklahoma Supreme Court has rewritten the ballot title for the proposed state question that would increase the state sales tax one cent to fund education initiatives. The court found the latest version deficient. The proposal would be State Question 779 if it makes it to the ballot. After a challenge brought before the Supreme Court by OCPA Impact, the court said, "We agree that the ballot title is misleading if it does not mention the Board of Equalization's role in limiting appropriations," the court wrote. "In addition, the ballot title should refrain from partiality and should clarify the amount of the sales and use tax as well as its allocation." (Click here for the Court opinion.)
Click here to read the court's ballot title. Issues surrounding the state question must be resolved by near the end of August for it to appear on November's general election ballot. As a result, the court reduced the time period for the filing of petitions for rehearing from 20 days to five days from the date of the opinion. (ECapitol reports)
INDUSTRY NEWS
A new study published in the JAMA Internal Medicine claims fracking may worsen asthma in children and adults who live near sites where the oil and gas drilling method is used, according to an 8-year study in Pennsylvania. The Associated Press points out that the study did not establish that fracking directly caused or worsened asthma. In addition, there's also no way to tell from the study whether asthma patients exposed to fracking fare worse than those exposed to more traditional gas drilling methods or to other industrial activities. EnergyInDepth points out that the authors are the same team of researchers who published a study claiming premature birthrates were higher in counties closest to shale wells, even though they were right in line with the national premature birth rate. One of the researchers that stands out is Brian Schwartz, a fellow at the Post Carbon Institute which has called fracking a “virus.” Considering that background, it’s not surprising that, despite the fact that study after study, including data from the Environmental Protection Agency, has shown that fracking does not harm air quality, the researchers apparently started the study with the following preconceived (and debunked) assumption.
News from the STACK continues to be positive. Oklahoma Energy Today reports that Chesapeake, Devon, Marathon and Newfield have successful wells in the area. Also in good news for Oklahoma’s energy industry, Newfield Exploration has reported two new wells producing more than 1,000 barrels of oil a day each in Garvin County's Woodford play.
As previously shared, on July 5th, the city of Norman’s flood plain permit committee approved a request for Plain All American to build a 16-inch crude pipeline. The pipeline will connect from Cushing to Longview, Texas. This week, the Journal Record reported that on July 15, a Norman resident Steve Ellis appealed the permit approval. He’s concerned about pollution so close to Norman’s water source, but his appeal is based on a question permit committee member Neil Suneson, who is also a geology professor at the University of Oklahoma, asked about the potential for a major flood to erode enough soil to expose the pipeline. Ellis said Suneson’s erosion questions were important to understand the potential risk the infrastructure could face. Flood plain permit chairman and Public Works Director Shawn O’Leary said an assistant city attorney is examining whether Ellis has standing to file the appeal. He said he’s unsure how the committee will address Plains All American Pipeline’s application if the Board of Adjustment accepts Ellis’ appeal. It’s possible the company could amend the application, but it might have to file a new one, O’Leary said. “Though some residents have oil and gas concerns, we’re managing flood plains, not oil and gas operations,” he said. “The committee saw a complete application and a very lively discussion and debate.” Ellis said he has worked on political campaigns with some local activists who oppose the pipeline entirely but filed the appeal on his own behalf. He said his skepticism isn’t necessarily about whether the pipeline will be built safely. (sub req’d)
In other midstream news, Oklahoma City’s Fox 25 news reports on residents seeking answers months after a natural gas line exploded in a neighborhood. Residents are still in the process of cleaning up, and getting claims handled from their insurance to deal with the damage. This week, homeowners met with leaders from the Oklahoma City Council, Oklahoma Natural Gas, and the Corporation Commission to try and get some answers at a Town Hall meeting. The corporation commission says the investigation is still ongoing, but ONG says the explosion was caused by a 3-inch crack in underground pipes that caused gas to quickly build up. They're still not sure what in the home ignited the gas.
REGULATORY NEWS
BLM
Wyoming Federal Judge Sides with States Industry, Strikes Down BLM Hydraulic Fracturing Rule. Oil & Gas Financial Journal. On June 21, 2016, the US District Court for the District of Wyoming struck down the US Bureau of Land Management’s (BLM’s) hydraulic fracturing regulations, finding that BLM “lacked Congressional authority to promulgate the regulations.” This decision is a win for industry and states’ rights, setting aside a federal rule that is unnecessarily duplicative, burdensome and beyond the scope of BLM’s statutory authority.
EPA
Green activists get Obama’s ear: Federal land grab is assault on private property. Farm Futures (Blog). The Wall Street Journal wrote that half of the land west of the Mississippi belongs to the federal government, which includes 48% of California, 62% of Idaho, and 81% of Nevada. The WSJ wrote, “In partnership with green activists, the Department of Interior may attempt one of the largest federal land grabs of all times.” The article claims the sage grouse population occurs on private property and that such property “…could become subject to some of the most invasive private land-use rules…in the history of protected-species law.” A new administration will have its hands full in protecting property rights in the West and needs to issue a new Executive Order protecting property rights.
FEDERAL REGISTER
Endangered and Threatened Wildlife and Plants: Lesser Prairie-Chicken Removed from the List of Endangered and Threatened Wildlife. The U.S. Fish and Wildlife Service is issuing a final rule to comply with a court order that vacated the final rule listing the lesser prairie-chicken (Tympanuchus pallidicinctus) as a threatened species under the Endangered Species Act of 1973, as amended. This final rule amends our regulations by removing the lesser prairie-chicken from the Federal List of Endangered and Threatened Wildlife and by removing the rule issued under section 4(d) of the Act for the lesser prairie-chicken. This rule is effective July 20, 2016.
Alternative Test Procedures for the Analysis of Contaminants under the Safe Drinking Water Act: Analysis and Sampling Procedures; Expedited Approval. The U.S. Environmental Protection Agency’s announces approval of alternative testing methods for use in measuring the levels of contaminants in drinking water and determining compliance with national primary drinking water regulations. The Safe Drinking Water Act authorizes EPA to approve the use of alternative testing methods through publication in the Federal Register. EPA is using this streamlined authority to make 16 additional methods available for analyzing drinking water samples. These test methods become effective July 19, 2016.
Requests for Information: Oil and Natural Gas Sector; Emerging Technologies. The Environmental Protection Agency is issuing this request for information to the public to obtain information about monitoring, detection of fugitive emissions, and alternative mitigation approaches in the oil and natural gas sector. Responses must be received on or before November 15, 2016.
ARTICLES OF INTEREST
OK Energy Today: Energy Tax Credits in Line for State Review
Oklahoma Watch: A Natural Gas Well Next Door
EurekAlert!: Better understanding post-earthquake fault movement
Forbes: Lawler Targets Oklahoma Among Other Sites for BP’s Lower 48 Production
Natural Gas Now: Banning Pineapple Farms and Other Meaningless Fractivity
Fortune: Why Alphabet's Drone Guru Is Pleased with New FAA Regulations
The Oklahoman: U.S. oil production falls; global demand climbs
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