ODNR Officials Tout New Regs for Oil and Gas
NILES, Ohio -- The director of the Ohio Department of Natural Resources says existing state regulations governing the oil and gas business, plus new rules being written, help ensure that the industry is properly managed and monitored.
"We never want to say that this is a simple business and accidents won't happen," said Jim Zehringer, ODNR director. "But, hydraulic fracturing has been around in Ohio since the 1950s. It's been done safely -- there's never been a reported case of water contamination because of hydraulic fracturing."
Zehringer, along with ODNR's oil and gas division chief Richard Simmers, delivered presentations during the Youngstown/Warren Regional Chamber's Government Affairs Council Luncheon at Ciminero's Banquet Center Thursday.
In the last three years, the agency has tripled the size of its staff to more than 100 employees, including more than 50 inspectors charged with overseeing construction, development and production operations at well and pipeline installations.
"They're involved with the whole process of well development," Zehringer told the chamber members. "They're living right where these wells are."
Ohio's regulations on drilling need to be more stringent than other states’ because the population density is greater in the Utica than in other shale plays across the country, he says.
The Utica shale region, for example, averages 198.7 people per square mile, Zehringer notes. In other shale plays such as the Marcellus in Pennsylvania, there are just 88.7 people per square mile, while the Eagle Ford in Texas averages just 34.5 people per square mile.
"It has to be done differently in Ohio," Zehringer said, because residents are more likely to live near a drilling site. "Companies have to do more for residents. If you want to do business in Ohio, you have to be a good neighbor."
ODNR's Simmers said new rules governing how the energy industry conducts business are imperative since the state expects oil and gas exploration activity to increase this year.
Investment in infrastructure -- that is, the construction of pipelines, compressors and processors -- stands at approximately $12 billion in the Utica up to this point, Simmers reports, with more investment on the way.
"We have reason to believe there might be as much as $6 billion worth of investment in this year," Simmers said.
Over the last two years, ODNR has adopted rules related to well construction to ensure the materials used to build the well are suitable, and that the construction methods are in line. "We put a very high focus on our field staffing addressing all the important phases of well construction so we have an assurance that they're built right," he said.
Among the first of the new rules expected to roll out this year is one affecting well construction, Simmers said. These rules are highly technical, written by engineers to a large extent. That helps to explain why any permit or well construction plan has to be examined by an ODNR engineer before it's approved, he explained.
There are also new rule proposals for the construction of oilfield waste recycling centers, which is apt to increase over the next several years, Simmers says. The same technical oversight applied to well construction would also be applied to the development of wastewater recycling and treatment centers.
"It includes many engineering standards," he noted.
ODNR would have supervisory control over construction recycling centers, and once they're built, require the company to file an application to operate the plant. Such an application would contain entire details of the operation, including processes, management and safety measures such as spill prevention.
"There'll be a lot of criteria the company has to answer and implement before the facility is granted a permit to go into operation," Simmers said.
Plus the new ODNR rules are expected to be more comprehensive than federal regulations, he added.
The federal government, for example, has regulations mandating spill prevention measures but lacks a presence in Ohio to address the issue for oil and gas facilities, Simmers continued. Ohio, however, does have the authority.
Also, the federal code limits spillage regulations to cover just oil and wastewater, where new Ohio rules would include all fluids at an oil and gas site.
"The rule that we're proposing goes beyond what the federal code does," he said.
Other rules in the works include water impoundments -- either storage tanks or open-air ponds -- found at well sites across the state.
Should the company be holding fresh water, it needs to identify the source, which gives the ODNR the ability to monitor water withdrawals from streams or lakes, Simmers said.
Rules governing wastewater impoundments will be much more stringent as ODNR will oversee their construction and operation very closely, Simmers said.
All of these rules will be subject to public comment for a 30-day period after they are posted, he elaborated. "It will allow a review period, and the law requires us to take each of the comments on that rule, read them, and evaluate them."
Should these comments be deemed appropriate, the rules could be tweaked or modified, Simmers said, before they are considered for approval and whether the law makes sense.
This year, Ohio should expect a more robust drilling program across the state as infrastructure projects fall into place in both the northern and southern tiers of the Utica, ODNR's Zehringer noted.
"We had three wells drilled in 2011," he said of the Utica. "We're approaching 650 wells drilled and over 1,000 permits. This Utica play is moving faster than the Eagle Ford [Texas] or Bakken North Dakota] plays. We're excited about it.”
The ODNR officials were greeted Thursday by five protesters who stood across from the banquet center holding placards and voicing their concerns over the location of wells positioned so close to the Meander Reservoir, the primary source of drinking water in the Mahoning Valley.
“The worst has happened,” declared Lynn Anderson, a local activist opposed to hydraulic fracturing. "Halcon of Houston, which has proposed to frack under the Meander Reservoir, was just granted a permit Dec. 17 for the Liming well," she reports. That well is about 2,000 feet from the banks of the reservoir, she said.
What’s most troubling, Anderson continued, is the many abandoned wells in the vicinity that leave open the possibility of methane migrating through these older wells should new horizontal drilling proceed. There is also the potential for fluid contaminated by hydraulic fracturing to surface through the older wells, she cautioned.
There is also the possibility of a casing failure within the well, Anderson warned, which could contaminate Meander.
“We don’t want them to frack at all,” she said.
The ODNR director said he understands the activists’ concern for water resources, and agrees that measures are needed to ensure that they are protected.
"I appreciate their concerns," Zehringer said. "Our regulations are going to be tough and thorough, clear and complete. This enables us to fairly monitor this growing industry."
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