Short term fracking halt?
Jim Cramer of MSNBC has mentioned this all week long. I wonder if it has potential to come true?
Article Below
With millions, if not billions, of dollars hanging over the ledge, the boom in the oil patch would go into a free-fall if drilling suddenly stopped.
Thousands of workers unemployed overnight, housing starts abandoned, businesses shuttered and bustling oil towns from Williston to Belfield emptying out instead of filling up are all part of a future few would prefer — even if they despair of the changes to land and lifestyle wrought by the upswing of oil.
Even with oil near $100 a barrel and 200 rigs drilling in North Dakota last week, the specter of some sort of free-fall caused by a federal push to regulate hydraulic fracture treatment weighs heavily on Lynn Helms. He’s the director of the Department of Mineral Resources, the one man most in charge of this seemingly unstoppable surge centered on the Bakken.
Every single well in the Bakken and associated formations is fracture-treated. By now, that amounts to 3,000 wells, a fraction of future oilfield development. Fracking, with high-pressure injections of water, sand and chemicals, has so far proved the only successful way to make oil flow from the dense source rock.
Helms believes the Environmental Protection Agency is on track to stop fracking as soon as January, when state regulators must write new rules for fracture treatment based on an EPA guidance document that is under review by the Office of Management and Budget.
The document will tell states how to comply with the federal Safe Drinking Water Act and write permits under the act’s underground injection control Class II well program when diesel fuels are used in fracking fluids, an authority the EPA said it has in a statement to the Tribune.
Here’s how Helms said he sees that evolving.
In January, the EPA will release the guidance document to states. Then, his department will write a new section of state rules to comply with the document. Those are referred to the State Industrial Commission for adoption, but first are opened for public hearing.
By January 2013, the state would be able to complete its rulemaking, which the EPA must first publish in the Federal Register, possibly in the first quarter of that year, before the state could begin permitting hydraulic fracturing.
In the meantime, Helms said, he believes there will be a moratorium on fracking because of the history of many-months moratoriums in Alabama, when the EPA, because of an environmental lawsuit, revoked Alabama’s underground injection program until the state wrote new rules specific to fracking under Class II well standards.
“I believe it will be stopped cold for 12 to 24 months. The best case is 15 months and that’s only if we red-lighted everything else and got nothing else done,” Helms said.
Three separate fracking moratoriums came and went in Alabama as the situation went through courts and appeals that were based on the reasoning that fracking is a temporary injection leading to production, unlike Class II saltwater disposal wells, which are injection wells for their lifetime.
Helms said drilling in Alabama never regained its pre-moratorium vigor.
Once the regulatory dust settles and the rules are in place, the process to permit fracking as Class II wells will be lengthy, at least if it must follow the same protocol as saltwater disposal well permitting.
Helms said there’s an area of review around saltwater wells, requirements to sample all existing water wells, surface rules that come into play, public hearings — all followed by an Industrial Commission order, a process that takes 60 to 90 days.
His message: Once any moratorium is over and rules are in place, the result will be a lengthy red-tape process for each and every fracture treatment.
This begs the question: If the EPA is using diesel as its handle to regulate fracking as a Class II well under the Safe Drinking Water Act, why not just eliminate the diesel? It’s a relatively small part of what goes into fracking fluid.
Helms said — and so does the national FracFocus Chemical Disclosure Registry for some 7,000 wells, including many in North Dakota — the typical amount of diesel is around .088 percent of the fracture fluid. That amounts to 4,400 gallons in 5 million gallons of fracking fluid.
Monte Besler, a fracture treatment consultant with a company called FracN8tr, said many companies have already eliminated diesel and use mineral or vegetable oil as the gelling agent that helps suspend sand particles in the injection fluid.
Diesel or some distillate gets used only when it’s very cold and other oils would freeze or when there’s no available alternative.
“If you didn’t have cold in North Dakota, probably no one would use diesel,” Besler said.
Helms said it may not be that simple.
The EPA has indicated it will define diesel fuel based on its physical and chemical characteristics, not with a precise Chemical Abstract Services number. A definition that broad could throw a blanket over any oil, even canola oil, if it has the same characteristics as diesel, Helms said. Mineral oil, used in fracking instead of diesel as well as for many household purposes, is a highly-refined petroleum product.
The State Industrial Commission recently sent a letter to the EPA that underscores its opposition to federal regulation.
The letter said, in part, “As late as 2008, EPA had done nothing with regard to nationwide regulation of hydraulic fracturing operations utilizing diesel fuels and continued to stand by its 2004 study finding that hydraulic fracturing poses little or no threat to Underground Sources of Drinking Water. The typical North Dakota Bakken frac contains 0.088% petroleum distillates. If EPA persists with regulation of diesel fuel hydraulic fracturing under UIC Class II along with a new and unique definition of diesel fuel, North Dakota oil and gas investment and jobs would come to a standstill, and potentially never return to the activity and growth we are seeing today.”
No one at the EPA returned phone calls for this story, including Ann Codrington, the acting director for EPA’s Safe Drinking Water Act program.
An EPA spokeswoman issued a statement in response to questions from the Tribune, but said it was attributable to the agency, not her.
The statement explained the agency’s authority and goals in developing guidance for fracking under the Class II underground injection control program. It said that the “EPA has not made a decision on the definition of diesel fuels at this time.”
The Legislature allocated $1 million in the recent special redistricting session for a legal challenge against the EPA. Helms said it’s likely North Dakota will band with other oil- and gas-producing states for an injunction while it asks the court to weigh in.
The EPA is once again studying the effects of fracking on drinking water, and aquifers at a well near Killdeer that blew out during fracture treatment have been sampled as part of the study.
At the very least, the EPA should await its own study results before proceeding with fracture treatment regulation, the Industrial Commission said in its letter.
Helms said, “The EPA needs to stop this until they finish their study, and then we can talk about who should regulate how.”
Reach reporter Lauren Donovan at 220-5511 or lauren@westriv.com.
Tags
Petroleum Production, Oil, North Dakota, Hydraulic Fracturing, Energy, Environmental Protection Agency, State Industrial Commission, Epa, Safe Drinking Water Act, Oil Well, Oil Patch, Oil Towns, Monte Besler, Ann Codrington
Views: 1237
Replies to This Discussion
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Permalink Reply by Hopeful About Natural Gas on -
Parkdota, I'm bad with math and numbers, but isn't this a year old? By his prediction we should already be in the ban phase right now.
According to him The EPA was supposed to issue a moratorium on all fracking in Jan 2012 (which already passed) He is "predicting" events that were supposed to happen in 2012 We are to be able to frac again after Jan 2013 - until that date, no fracking according to his prediction.
I admit I am the guy who usually reads numbers wrong. most of my teachers would tell you how dumb I was. But, his prediction should already be underway with a blanket moratorium all over the US.
here is a link to the article. i guess the date did not copy and paste in your post.
http://bismarcktribune.com/news/state-and-regional/helms-says-epa-c...
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Permalink Reply by Parkdota on
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I posted the article because Jim Cramer of MSNBC has been talking about it all week.
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Permalink Reply by Hopeful About Natural Gas on
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Parkdota,
Do you have a link to the Cramer story? Was that where this old ND story came from? It seems like we have heard this week Jim Cramer (of Mad Money?) said there could be a ban on Fracking? He's been a strong supporter.
Or, did he say that natgas needs a ban on fracking to rise in price? that is very significant if he did and I would like to know. Did Cramer say that natgas NEEDS a ban on fracking to rise in price?) (but we are up to $3.60 so that does not make sense either if he said it this week)
You said that Jim Cramer has been talking about this all week on "MSNBC" (your words) Isn't that the liberal TV station and doesn't Jim Cramer have a show on CNBC, the biz news station? I don't watch MSNBC, but I could not find anything about it on their website either.
Here are the search results from CNBC for the words fracking and ban (in any other) The only recent story is Oct 4, where a court struck down a local moratorium (ruled in favor of fracking) Nothing else recently even comes close - and I've read the show recaps and nothing is mentioned on them.
However, I admit I am usually the dumb one here and I may have missed it. But, all these other smart folks on GHS apparently missed it also because no one else has reported it. It seems like if Cramer seriously said there would be a ban on fracking that our blog would light up like an old fashioned pinball machine. The only reference to a ban on fracking is a NY court striking down a local ban on fracking (yea!!)
1http://search.cnbc.com/main.do?partnerId=2000&target=all&keywords=fracking%20ban&categories=exclude
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Yeah, it was CNBC not MSNBC. The latter is on my mind bc of the elections et al. I don't have a link but I specifically heard him say 3 times this week on 3 different days that he's concerned about a possible moratorium in the short term if the current administration wins reelection. I watch the show most all of the business day(s). His comments really caught my attention bc like you said I haven't heard anything about the topic, although I understand that our area is pro drilling. It was so out of the blue that it concerned me especially seeing as how pro natgas Cramer is. I have no doubt that he can spew hot air at times but the fact that he kept mentioning it really made me want to explore the topic to see if any of the pros on this site were also concerned. He specifically mentioned the old article with the name of the gentleman head of drilling oversight in that state. I day trade UNG many days so my ears are highly sensitive to natgas info.
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Permalink Reply by Hopeful About Natural Gas on
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OT/ I've thought about trading UNG myself. I haven't traded any kind of commodities in many, many years (since about 1980? when I got massacred from the gold collapsed. that still hurts 30 years later!)
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Yeah, and they mentioned today on CNBC again....two weeks in a row. You're brilliant.
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Permalink Reply by Krkyoldhag on
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Question: Once the well is in and producing is that the end of fraking for that well?
Reason asking..have been wondering why Cheaspeak is drilling several wells in Johnson county and capping them til all wells are completed...if they were trying to bring them in before fraking was halted.
Seems like a smart move on their part.
Just wondering.
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From what I understand once the well is completed fracking is finished. I would assume that Chesapeake and others are drilling and capping due in part to prices. If memory serves, Chesapeake did not hedge not 1% for all of 2012. It is possible, however, that they might be trying to perform a gas factory concept like Encana if the wells you mention are in the same section(s). Encana drills all wells at once in a section (they aren't doing this often btw) and completes them at the same time at the end of the process.
I would like to think that the Fed doesn't have the nerve to halt fracking but it is concerning. NY and some other states are having issues and I know the EPA would love to flex their muscles.
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Permalink Reply by Krkyoldhag on
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Note there are no Windmills on East Coast ...regulated out. And we see what happened to Coal. And the few Steel plants we used to have here...two in Texas gone. Offshore drilling was halted in Gulf and not allowed at all to begin with in other locations.
So EPA can do whatever they pretty much are told to do.
Thanks Parkdota for the answer.
Yes the 11 CHK wells are all in one section or unit in Johnson Country..
Tonight I will be worrying and watching the debate.
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Permalink Reply by Skip Peel - Mineral Consultant on -
Vertical wells can be fraced multiple times, horizontals can not ( I'm not speaking of frac stages here). Wells are drilled to TD and cased and then wait for the contractor that provides completion services (fracing). In other words the drilling contractor does not provide completion services. When drilling is done, the rig is off to the next well. The completion contractor usually works for multiple operators and can't be standing by every time a well is ready for completion. So wells often sit drilled but not completed waiting their turn in the schedule. I seriously doubt any moratorium on fracing will be implemented. And I wouldn't waste my time on the pronouncements of Mr. Cramer.
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Permalink Reply by Krkyoldhag on
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Yes I have watched the Halliburton crews move in..Its beautiful..they have long cavarans of their equipment rolling to the sites...its a sight to see all that expertise moving in.
My Daddy talked about Red Adair back in old days of how his team would move in and go to work..said it was really a show..as they fought the well fires back when.If it had not been for the fire fighters from here in Texas going to Saudi to fight the fires there would be fewer wells there to this day. It took Texas and US technology to fight those fires...just as it did to figure out the fracking tech.
I miss those Halliburton rigs coming in around here.
But I get a kick out of watching those huge huge pieces of equipment work in the Lignite mines near here...those are really impressive things.
I enjoy watching the doziers and track hoes building the pad sites...
It is always fun to watch construction moving along.
Miss all that in this 'slowdown' or whatever it is this period of time is called.
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