Steward also serves on DCED’s PA Grade Crude [Oil] Development Advisory Council and was the former owner and founder of D&I Silica, the largest independent provider of hydrofracking sand during the first 10 years of the Marcellus Shale natural gas boom in Pennsylvania. [Read more here.]
D&I Silica was sold to Hi-Crush Partners in 2013 for $125 million. Read more here.
Steward started his presentation by saying if you want to understand Pennsylvania’s orphaned and abandoned well problem you have to compare the history of conventional oil and gas drilling to the Old and New Testaments of the Bible.
He also repeatedly made the point in recounting the history of conventional drilling that drillers took no action to properly plug or case their oil and gas wells to protect groundwater and prevent methane migration, unless there was a law and regulations making them do it.
Note as well, Stewart said the first oil and gas well hydrofracked in Pennsylvania was in Warren County in 1963-- and it was a conventional well. Before that, he said, they used to “stimulate” more production out of wells using nitroglycerin.
Here is the text of his remarks comparing conventional drilling to the Bible--
“I was thinking this morning of a way to describe this. The well on the left [in the top row of photos with this article] would be representative [of] the Old Testament of the oil and gas industry in Pennsylvania, and the well on the right, the New Testament.
“And each Testament is filled with multiple chapters.
“And the well on the left would represent some time well after 1859 because the wells drilled in 1859, and for the first quarter century, basically flowed oil on their own without the need to hydraulically or manually lift that oil to the surface.
“And then wells began to deplete, and we learned to shoot those wells with nitroglycerin and stimulate the wells in that fashion.
“But they still had to be pumped, and they were pumped with those old fashioned devices on the left.
“And this is the time when literally, hundreds of thousands of wells were drilled in Pennsylvania, and the chapters that would stand out in prominence would be World War I, when a great deal of water flooding occurred in the Bradford area to bring Pennsylvania production back to prominence, production of oil, and we powered the country through World War I with those wells, in a great sense.
“And then, World War II was the last chapter, the last hurrah of the Old Testament, and there was quite a bit of drilling during World War II because the oil is of great lubricating quality, and highly valued.
“It was in the crank cases of the P-51s, B-17s [aircraft], and so forth because of it's marvelous lubricating quality.
“All during the time of the Old Testament, these wells were not registered with the state.
“There was no [state] Oil and Gas Act, and there was a perfunctory regulation that essentially said when you walk away from a well, put a plug in it, which amounted to a wooden plug or sometimes, literally cannonballs, which we know today are not adequate means of plugging a well.
“And then, after the final chapter in the Old Testament, drilling essentially halted in Pennsylvania from 1940 up to about 1960, and that brings us to the New Testament.
“I should say this, with respect to the Old Testament on the left, those wells were all powered by a single ancient old engine that connected to multiple wells, six, seven, in some cases, 25 wells, and that's the nature of that jack that you see on the left.
“So, we close out the Old Testament, and we come to the New Testament, and that started, at least in my neck of the woods, in 1963.
“The first well was hydrofractured in Pennsylvania in Warren County, which was my county of residence, and it launched the New Testament because it took the old oil fields and brought them back to a significant level of production.
“And we graduated away from a number of things. We graduated away from the single engine operating multiple pump jacks to instead, the modern version on the right hand side.
“We certainly graduated away from no wells being registered because in 1955 there was a registration requirement imposed by the state [by law], and in 1984 we had the state's first comprehensive Oil and Gas Act, and we migrated away from simply putting casing in the ground to moving to a place where we cemented the casing in the ground in the New Testament [because the law and regulations required it].
“And the New Testament essentially went through perhaps three phases.
“The excitement with the discovery of hydrofracturing's effectiveness in the early '60s [in conventional wells], and then the oil crisis in the 1970s brought a proliferation of drilling across western Pennsylvania.
“That carried all the way through into the '80s, we were drilling as much as 5,000 conventional wells a year in the 1980s, and then in 1985, where the oil and gas prices collapsed and we went into a period of hiatus in Pennsylvania, and then back to prominence in the early 2000s, where oil and gas prices began to rise.
“And again, in the mid 2000s, we were again drilling 5,000 new conventional wells per year.
“I submit to you that the bulk of the wells that make up the 100,000 that are currently produced in Pennsylvania are the New Testament variety on the right.
“That's not entirely the case, I actually pump some wells from the Old Testament era. I have modern pump jacks on them, but they are far and away the minority of my company's inventory, as well as other PGCC member's inventory.
“And I submit to you that the bulk of wells that are abandoned or orphaned are from the Old Testament category on the left.”
Filling In The Gaps
Stewart’s comparison of the history of conventional drilling to the Bible left out a few things.
The conventional oil and gas drillers and their politicians like to say over and over again they take care of the environment because they work where they live-- except for the most obvious fact of course that they abandoned 200,000+ oil and gas wells around their homes for taxpayers to cleanup-- a percentage of which are leaking oil, gas, methane and serve as a conduit for contaminating ground and surface water and drinking water wells.
During his presentation, Stewart dramatically illustrated the methane problem with a photo of a gas well with a flame saying, “I lit this well so that you could get a visual image of what's happening every minute of every hour of every day of every month that that well has been sitting there.” [photo with this article]
And even today, conventional operators are given hundreds of notices of violation by DEP every year for attempting to abandon wells without plugging them.
The industry and their politicians have a history of systematically fighting any law and regulation setting even basic requirements on their industry tooth and nail, as Stewart’s presentation clearly states.
That was especially true leading up to the 1984 Oil and Gas Act.
It wasn’t until hearings in the General Assembly that showed people lighting their garden hoses and sink faucets on fire from methane migration and holding up quart jars full of contaminated well water that the 1984 law was enacted. And even then it was tough.
The industry continues this pattern today.
In 2016, the conventional drillers killed final regulations that would have put in place a comprehensive update to environmental protection standards covering their oil and gas wells. Read more here.
As a result, DEP had to start the rulemaking process all over again and is just now developing a new set of proposed regulations that the industry is pressing the agency to make less protective. Read more here.
On another front, the conventional industry backed legislation that would rollback regulation of its industry to at least 1984 and make practices like disposing of their wastewater by spreading it on dirt and gravel roads legal.
Gov. Wolf vetoed the initial bill that made it to his desk in 2020 [Read more here], but the House passed even worse legislation in May 2021 that is pending in the Senate [Read more here].
The industry has also been party to a variety of legal challenges to DEP regulations, including protecting schools, playgrounds and species of concern in DEP’s oil and gas permit review process. Read more here.
The conventional oil and gas drilling industry has an extremely poor record of compliance with environmental existing safeguards, especially compared to the unconventional (shale) gas drillers.
As an example, conventional oil and gas well drillers are still trying to abandon wells without plugging them by the hundreds.
In 2019 and 2020, according to a DEP report, 813 notices of violation were issued to conventional oil and gas drillers for attempting to abandon their oil and gas wells without plugging them. Read more here.
Stewart didn’t mention the fact conventional oil and gas wells drilled before 1985 are not required by law to have any bond to protect taxpayers from paying the cost of plugging if drillers walk away and the bonding required for other wells is totally inadequate.
Pre-1985 wells are the overwhelming number of wells now active, according to DEP. [Read more here.]
The Pittsburgh Post-Gazette reported DEP has less than $15 per well available to plug the over 100,500 active conventional oil and gas wells in Pennsylvania.
The Pittsburgh Post-Gazette also reported-- PA Faces A New Wave Of Abandoned Conventional Oil and Gas Wells.
In November, the Environmental Quality Board accepted a petition for study to increase the bonding amounts for both conventional and unconventional oil and gas wells to the cost taxpayers would have to pay to plug them if abandoned by drilling companies, again to protect taxpayers. Both industries are opposing the proposal. Read more here.
Overall, conventional well drillers had 4,386 violations of environmental regulations in 2021-- nearly two and a half times the violations reported just two years ago and four times the violations of the unconventional (shale) gas drilling industry. Read more here.
The conventional industry got 836 notices of violations for not doing basic things like reporting where their solid and liquid waste is being disposed of in 2019 and 2020. Read more here.
The general trend of violations has been increasing in recent years.
From 2018 to 2020, conventional oil and gas operators also reported disposing of nearly 2.3 million gallons of wastewater by spreading it on dirt and gravel roads without any environmental standards.
In 2021, DEP reviewed these cases and found they were disposing of their wastewater illegally by not meeting the requirements of the Residual Waste Regulations. Read more here.
DEP’s Current List Of Oil And Gas Waste Facilities identifies 84 municipalities in 13 counties where conventional oil and gas wastewater is disposed of by road spreading as “waste facilities.” Read more here.
In addition, recent studies by Penn State and others are documenting the adverse impacts of conventional drilling wastewater on human health and the environment, including increases in cancer risk. Read more here. Read more here.
While inspecting and reviewing permits for conventional oil and gas wells represents about 40 percent of the cost of DEP’s Oil and Gas Regulation Program-- $10.6 million-- conventional oil and gas drillers only pay 0.4 percent of those costs-- $46,100 in FY 2020-21. Read more here.
As much as Stewart wants to separate the history of conventional drilling into the Old and New Testaments, that history is one continuous story.
The 1984 Oil and Gas Act recognized, in a small way, that current conventional oil and gas drillers have a responsibility to help pay to plug wells the conventional industry abandoned in the past by establishing a $50 surcharge on each new well permit to pay for plugging those wells.
That was continued in the 2012 Act 13 re-write of the oil and gas law.
These are just the highlights of what Stewart missed in his presentation.
If you compare your history to the word of God in the Bible, you need to tell the whole story, not just part of it.
Click Here to watch a video of the hearing. Stewart’s comments come about 33 minutes into the hearing. Written testimony includes--
-- Scott Perry, DEP Deputy for Oil and Gas Management
-- Arthur Stewart, PA Grade Crude Oil Coalition
(Photos from Stewart’s presentation.)
Related Articles This Week:
-- Protect PT Hosts Feb. 15 Webinar On Proposed Increase In Oil & Gas Well Bond Amounts To Protect Taxpayers Paying To Plug Wells Conventional, Unconventional Drillers Abandon
Related Articles:
-- EQB Accepts Petitions For Study To Increase Oil & Gas Well Bonding; DEP Has $15 Per Well Available In Bonds To Plug Conventional Wells
-- DEP To Report $4.7 Million, 17.6% Deficit, In Funding Oil & Gas Regulatory Program To EQB Feb. 15; Conventional Drillers Only Pay 0.4% Of Their Regulatory Costs
-- Penn State: Potential Health Impacts Of Oil and Gas Wastewater On Roads
[Posted: February 11, 2022] PA Environment Digest
No comments:
Post a Comment