Jim Cramer of MSNBC has mentioned this all week long. I wonder if it has potential to come true?

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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

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


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Here is my simplistic view on this. As the governor of any energy producing state “Screw you EPA, see you in court! Oil/Gas companys continue fracking!” The EPA is not the be all end all, they are just another layer of government with no direction or purpose other than to soak up MY tax dollars!

Thanks for your support:)

I like this...would back up any governor that had the balls to do this.

One thing that always irritated me in Dallas was all those home owners who complained about DFW planes.  When that airport was built it was out in the prairie..then those folks flocked out there to buy houses that were built right up to the fences..Duh...didn't they know that planes come to an airport?  Stupid lawsuits..

Like ...there wasn't even a Euless before the airport.

keep on fracking...

I wasn't very smart but I knew Nuclear plants were not a good gave us Three Mile Island and numerous accidents that never went away.  Where were the govt watch dogs then?  They were invested in those plants.

One thing kind of off the grid is that there was a nuclear plant in the earth quake zone last week in Maine...not much said about that..and it would have been much worse then 1000 times what fracking could do...

Just trying to get some perspective in my mind.

Now fox news is making comments pertaining to the EPA, current administration, and impending Fed regs that will hinder fracking. Located at the top of their website no less.

Actually, this could be very good for us. Look at this statement in the article, that coal is "virtually eliminated". Natural gas would be used in place of coal for electricity.

“The requirements are so strict they virtually eliminate coal as a fuel option for future electric power generation,” the report states. “In a thinly veiled political move, the agency has put off finalizing the proposal until after the election.

This report covers new regs on "such issues as farm dust, air quality, coal ash and water-quality in Florida."

I don't think any administration would release a lot of new regs during an election season. It also reads like these new regulations are ready to go now. But, aren't the new fracking regs coming late in 2013 or 2014?


Totally agree it could be good for those of us with wells in place. If one doesn't have a well, though, it might not be the best news. If one trades in gas it can also be great news as prices would jump. The current administration's energy policy makes me nervous so I don't think it is beyond them to take such drastic measures next year depending on the election results. All I know is that for two weeks now CNBC has been hinting at EPA regulations and now FOX News is jumping on this potential story. I also never thought I'd see a deep water moratorium in the Gulf for a solid year.

CNN just had an energy program say fracking would replace coal easily and how much oil and gas we will need in the future (lots)

I have not seen any credible source for the idea that fracking is going to be significantly restricted. In an election season both sides make outrageous claims about the other.

But, are there any executives of natgas companies saying fracking will be halted? Nope. Aubrey was on CNBC and said nothing. Boone has not said anything about it. If the industry is worried I don't see it.

This came from the Q and A off the site. I had no idea Desoto Parish and the Haynesville were a part of the study.

Q: Where is EPA conducting case studies and how were those sites chosen?

A:EPA has selected seven case studies that the Agency believes will provide the most useful information about the potential impacts of hydraulic fracturing on drinking water resources under a variety of circumstances.

Two sites are prospective case studies where EPA will monitor key aspects of the hydraulic fracturing process at future hydraulic fracturing sites. They are located in:

Haynesville Shale - DeSoto Parish, Louisiana
Marcellus Shale - Washington County, Pennsylvania

The five retrospective case studies, which will investigate reported drinking water contamination due to hydraulic fracturing operations at existing sites, are located in:

Bakken Shale - Kildeer, Dunn County, North Dakota
Barnett Shale - Wise County, Texas
Marcellus Shale - Bradford and Susquehanna Counties, Pennsylvania
Marcellus Shale - Washington County, Pennsylvania
Raton Basin - Colorado

The case studies were identified, prioritized and selected based on a rigorous set of criteria and site visits by EPA scientists who will be conducting the research. Decision criteria included proximity of population and drinking water supplies, evidence of impaired water quality (retrospective only), health and environmental concerns (retrospective only) and knowledge gaps that could be filled by the case study. Sites were prioritized based on geographic and geologic diversity, population at risk, site status (planned, active or completed), unique geological or hydrological features, characteristics of water resources, and land use.

Parkdota, could you provide a LINK?  Which Q&A?

Nothing in your post is about banning fracking. All I am asking for is a link to any credible natgas executive about any ban on fracking.

You say that CNBC has been talking about it all week, but I have not heard anything on it and I watch CNBC. Aubrey said nothing about a ban when he was on Cramer and that's where you said you had heard about it.

If there was any big chance of a ban on fracking the execs would be talking about it. It would be huge news in the oil patch - but there is zero about any ban on fracking except a very few highly partisan press releases and stuff that is way out of date.

Max provided a link above to EPA as the EPA is doing a study.  Jim Cramer talked about the old ND story two weeks in a row, another CNBC reporter talked about it also, and yesterday Fox had on the front of their web site at the top the EPA story I provided a link to.  They talk about a short term ban or regulatory interference which is the title of my post.  They all state that if the current administraction wins re-election that it is possible the EPA might enact a short term ban until they are done with their findings and, or enact a drinking water policy that might effect is also.  Aubrey has said nothing nor has Pickens. 

Happened again today in a short comment per Cramer minute 3:15.

Parkdota, if you watch starting at 3: it is clear this is about natgas as a long investment. Cramer says that IF a ban was put in then natgas would skyrocket. He also said that there was a glut of natgas and that the stocks have been hammered recently.

Since no one else is talking about this (industry names please?) I can only believe that Cramer is trying to cover his predictions since he has been long natgas so long. I am waiting to hear from someone in the industry.

Cramer has a lousy track record for predicting. There are websites that track his statements and results. Here are two of the bigger ones. I wonder if Cramer is trying to boost his natural gas returns?? (which I appreciate, but I really believe in basic supply and demand)



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