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INDUSTRY NEWS
An attempt by opposing parties to appeal the Norman floodplain committee’s decision to approve the Plains All American Pipeline’s permit failed Wednesday evening, according to a report by KOCO-TV. In July, resident Dr. Stephen Ellis made an attempt to appeal the floodplain committee’s decision to approve the permit for the construction of the Red River II pipeline. Officials with the city of Norman said in July the floodplain committee found that the Red River II pipeline met the requirements of the floodplain ordinance. After hearing Ellis’ argument, a representative with the city attorney’s office told the members that it didn’t appear Ellis had “standing” to file the appeal because he had no pecuniary interest or property right. He has 10 days to file an appeal. There were vocal protests before and during the meeting. (KFOR TV, OK Energy Today also report)
SEISMIC ACTIVITY
Earthquake activity over the last six months has decreased in Oklahoma. At the same time, while state regulators have enacted new directives designed to reduce earthquakes, including the directive issued last Friday for the Luther/Wellston area, oil and natural gas activity has also slowed because of two years of low commodity prices.
Oklahoma Secretary of Energy and Environment Michael Teague told The Oklahoman, "This is going to take time. This is not a light switch. You can't hang a 'mission accomplished' banner and then go away. It's going to take time to roll down." The question is how much of the decrease in activity is due to stricter regulations at the Oklahoma Corporation Commission and how much is because of the slowing drilling activity. "It's both. I don't know how to separate that," Teague said. "If an operator decided to reduce the volume of water he was going to dispose of and a commission regulation set a top limit, either way the volume is going down."
“The reality is that in the Mississippi Lime, drilling is not going to go back up,” said Chad Warmington, president of the Oklahoma Oil and Gas Association. “The caps in place aren't going anywhere, and they're going to be restrictive to the amount of new production that can be added in the Mississippi Lime. That will limit the amount of production brought online.”
As drilling activity has slowed over the past two years, companies have limited activity to the areas that offer the highest return. In Oklahoma, drilling largely has moved away from the Mississippian and toward central Oklahoma's STACK and SCOOP plays, which produce less water. “In the SCOOP and the STACK, not many operators use the Arbuckle, and the water volume is small,” Warmington said. “New production is not going to be in the Mississippi Lime until we can resolve this issue.”
While researchers and regulators have focused their efforts on disposal volumes in the Arbuckle formation, several questions remain. “I believe it is an issue of volume, but we still don't know what specifically it is,” Teague said. “Is it all the volume being injected at the same time or total volume overall? Does it happen over 10 miles? If we've undershot the range, we need to raise it. If we've overshot it, we need to lower it. We still need more research. There's still a piece of this we don't understand. It's our role to study it until we do understand.”
Oklahoma Geological Survey Director Jeremy Boak told The Oklahoman that he expects the earthquake decline to continue. “The reduction in volume will continue to stay lower,” Boak said. “There is still some interest in bringing back online some of the wells shut in in the Mississippi Lime, but I think the current directives of the Corporation Commission are going to restrain that.” While drilling likely will increase, companies will have to be more creative in finding ways of disposing of the water. “I think it will be very difficult to get new disposal in the Arbuckle anywhere,” Boak said.
OGS stated in 2015 that the injection of produced water in disposal wells triggers the majority of recent earthquakes in central and north-central Oklahoma. Legislation to galvanize the state Corporation Commission’s authority to regulate disposal well operations to reduce the risk of induced earthquakes was signed into law by Gov. Mary Fallin in April. (Edmond Sun and Argus Media also report)
The Oklahoma Department of Transportation (ODOT) is teaching county officials in Rogers County to inspect bridges for earthquake damage. While the earthquake activity has stayed primarily in western and central Oklahoma, County Commissioner Dan Delozier believe it’s best to prepare anyway just in case. Now they know when they need to inspect bridges, how to inspect them for earthquake damage, and how to begin the process for repairs. Bridges in Oklahoma are already inspected yearly or every two years. (Fox 23 reports)
James Woodard, an insurance program manager, is scheduled to address the Oklahoma State School Boards Association this evening. He tells KOCO that they will discuss safety issues relating to earthquakes and how to equip the schools in case of power outage, disruption of service or gas leaks. In the Crescent quake last year, the high school had a half million dollars in damage. One of the questions to be discussed, do we equip schools with tornado shelters and earthquake structures which are built completely different?
KOCO reports that Angela Spotts, organizer with Stop Fracking Payne County that proposed a restrictive municipal ordinance, has moved to New Mexico. She says the move is due to earthquakes she experienced near Stillwater, OK.
Federal regulators believe “there is a significant possibility” that recent earthquakes in North Texas are linked to oil and gas activity, even if state regulators won’t say so. That’s according to the U.S. Environmental Protection Agency’s annual evaluation of how the Texas Railroad Commission oversees thousands of injection and disposal wells that dot state oilfields — underground resting places for millions of gallons of toxic waste from fracking and other drilling activities. The Texas Tribune quotes the EPA report, saying, “In light of findings from several researchers, its own analysis of some cases and the fact that earthquakes diminished in some areas following shut-in or reduced injection volume of targeted wells, EPA believes there is a significant possibility that North Texas earthquake activity is associated with disposal wells.”
ELECTION UPDATE
Tuesday was the statewide runoff election. Official results will be posted here, once certified. The race between Adam Pugh and Paul Blair in Edmond’s Senate District 41 was one of the summer's most contested primaries as the two candidates spent a combined $241,000 in an effort to succeed outgoing Sen. Clark Jolley, R-Edmond. Pugh, who was eight votes away from winning the primary outright in June, will face a Democratic opponent in November, but he is considered the favorite in this heavily Republican district. Pugh said he believed his background in the Air Force resonated with voters, and they were seeking a candidate who was focused on economic development and transparency, especially in the budget process. (NewsOK, eCapitol report)
Business owner and former Mayor of Ada, Greg McCortney defeated “The Amazing Race” contestant Jet McCoy in the Republican primary runoff in Senate District 13. The two were the top finishers in a three-way GOP primary in June, but neither secured the majority vote needed to avoid a runoff. McCortney now advances to the November general election against Democrat Eric Hall, a public school teacher from Ada. The two are vying to succeed Democratic state Sen. Susan Paddack from Ada, who is term limited. (NewsOK reports)
This week Governor Mary Fallin signed election proclamations that places five additional proposed state questions on the November 8 general election ballot:
- State Question (SQ) 779, which would increase the state sales tax by 1 percent to fund teacher pay raises and other education causes
- SQ 780, which reclassify some criminal offenses, such as drug possession and property crimes, as misdemeanors instead of felonies
- SQ 781, which would take money saved from implementing SQ 780 and allow counties to fund community rehabilitation programs
- SQ 790, which would remove a section of the Oklahoma Constitution prohibiting use of state resources for religious purposes
- SQ 792, which would allow wine and full-strength beer to be sold in grocery stores and convenience stores
The deadline for the governor to sign election proclamations for state questions to be placed on the November 8 general election ballot is today. Two other state questions are already on the ballot. SQ 776 would declare that the death penalty is not cruel or unusual punishment and would allow the Legislature to designate any method of execution if a current method is declared unconstitutional. SQ 777 would prevent lawmakers from passing legislation to regulate agriculture unless there is a compelling state interest, commonly referred to as Right to Farm.
LEGISLATIVE NEWS
Gov. Mary Fallin and legislative leaders will meet next week to discuss the possibility of holding a special session, the governor said. Fallin stressed Monday she wants to move forward with a teacher pay plan, either in a special session or when the 56th Legislature convenes in January. That's because, she said, there is no guarantee State Question 779 will pass. If there is no special session and the state questions fails, Fallin said she wants to "be ready to go with a teacher pay plan for next legislative session." Asked Monday whether a lawsuit challenging her administration's decision to withhold the $140.8 million from the agencies to which it originally was appropriated might affect a possible special session, Fallin said, "We feel confident we are in a good position in the lawsuit and will win it." (eCapitol reports)
The following House Interim studies are scheduled for hearings:
- September 7: H 16-4 Lease Revenue Bonds
- September 7: H 16-20 Agency Realignment
- September 13: H 16-49 Agency Fees
OKOGA COMMITTEE NEWS
OCC
Draft proposed rules for the OCC Petroleum Storage Tank Division will be discussed at the next Storage Tank Advisory Council (STAC) meeting on Monday, August 29, 2015, at 3:00 p.m. in Room 105, at the Jim Thorpe Office Building, 2101 N. Lincoln Blvd., Oklahoma City, Oklahoma. You are invited to attend and participate in the discussion. Linked are copies of draft proposed rules for Chapter 5 (OCC) Rules of Practice, Chapter 15 Fuel Inspection, Chapter 16 Antifreeze, Chapter 25 Underground Storage Tanks, Chapter 26 Aboveground Storage Tanks, Chapter 27 Indemnity Fund and Chapter 29 Corrective Action of Petroleum Storage Tank Releases.
All agency rules signed by the Governor earlier this year, after being adopted by agencies and sent to the legislature for review, including OCC rules, went into effect on August 25, 2016. Among the OCC chapters amended are: Chapters 5, 10, 15, 25, 26, 27, and 29.
The Oklahoma Corporation Commission has released the order establishing the annual proration formula for the period of October 1, 2016, through September 30, 2017.
REGULATORY NEWS
BLM
Feds, law professors say judge wrong to block fracking rules. AP. According to a group of law professors and lawyers for the federal government in new court documents, a federal judge in Wyoming was wrong to block rules for hydraulic fracturing on federal land. U.S. District Judge Scott Skavdahl of Casper ruled in June that the U.S. Bureau of Land Management (BLM) lacks the authority to regulate fracking — a technique of injecting materials underground to increase energy production. The Obama administration filed a brief with the 10th U.S. Circuit Court of Appeals in Denver arguing the BLM has the power to regulate fracking. John Powell, spokesman for the U.S. Attorney's Office in Wyoming, declined to comment on the case Thursday. Wyoming Attorney General Peter Michael said Thursday that he has not yet reviewed the new filings. The state and others must file their responses in mid-September.
EPA
EPA Watchdog Says Government Fails to Study Ethanol's Impact. ABC News (AP). The Obama administration has failed to study, as legally required, the impact of requiring ethanol in gasoline and ensuring that new regulations intended to address one problem do not actually make other problems worse, the Environmental Protection Agency inspector general said. The conclusion in the new audit confirmed findings of an Associated Press investigation in November 2013. The AP said the administration never conducted studies to determine whether air and water quality benefits from adding corn-based ethanol to gasoline. Such reports to Congress were required every three years under the Energy Independence and Security Act of 2007. The AP investigation described the ethanol era as far more damaging to the environment than the government predicted. As farmers rushed to find new places to plant corn, they wiped out millions of acres of conservation land, polluted water supplies and destroyed habitat.
FAA
The Federal Aviation Administration’s new small drone rule for non-hobbyists takes effect August 29. OK Energy Today. On June 21, the FAA released its first operational rules covering safety regulations for unmanned aircraft systems. Oklahoma’s House Bill 2599, requested by OKOGA, becomes effective on November 1, 2016. This new state law prohibits the operation of a UAS within 400 feet of a critical infrastructure facility without site authorization. Critical infrastructure, as defined in the bill, includes petroleum refineries, electrical power generating facilities, chemical manufacturing facilities, water treatment plants, natural gas compressor stations, liquid natural gas terminals or storage facilities, telecommunications switching office and cell towers, railroad yards and trucking terminals, gas processing plants, dams regulated by state or federal government, natural gas distribution utility infrastructure and any aboveground pipeline enclosed by a physical barrier.
US DEPT OF LABOR
As reported in the May 20, 2016, OKOGA Highlights, the Obama Administration unveiled a plan extending overtime pay to over four million workers within the first year. The regulation makes anyone earning up to $47,476 a year, or roughly $913 a week, eligible for overtime pay. The effective date of the final rule is December 1, 2016. This week Rep. Charles Ortega (R-Altus) asked Attorney General Scott Pruitt to intervene because the regulation could significantly impact small businesses. (KFOR, eCapitol report)
US DOT
The U.S. Department of Transportation's (US DOT) Transportation Safety Institute has announced two Pipeline Safety Compliance Training seminars specially designed for the energy industry in Oklahoma. The course will cover US DOT pipeline safety regulations and acute, critical, and serious safety violations. This course is designed to assist pipeline safety personnel with fewer than 10 years’ industry experience. For more details, please click here.
2016 Pipeline Safety Compliance Training – Gas
November 15-18, 2016, Oklahoma City, OK
2017 Pipeline Safety Compliance Training – Liquid
January 10-13, 2017, Oklahoma City, OK
FEDERAL REGISTER
Air Quality State Implementation Plans; Approvals and Promulgations: Fine Particulate Matter National Ambient Air Quality Standards. The Environmental Protection Agency is finalizing requirements that state, local and tribal air agencies would have to meet as they implement the current and future national ambient air quality standards for fine particulate matter (PM2.5). This final rule is effective on October 24, 2016.
Revisions to the Petition Provisions of the Title V Permitting Program. The U.S. Environmental Protection Agency proposes to revise its regulations to streamline and clarify processes related to submission and review of title V petitions. Comments must be received on or before October 24, 2016.
ARTICLES OF INTEREST
Fuel Fix: Commentary: University study backs safety of fracking
EE News: Okla. shaking disrupts lull; 2 disposal wells to close (sub req’d)
NewsOK: U.S. oil companies export 501K barrels per day
Ada News: Council approved an agreement with OWRB and USGS for stream gauging
NewsOK: Fallin will get her first opportunity to appoint Supreme Court justice
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