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Vol. 21, No. 52 Week of December 25, 2016
Providing coverage of Alaska and northern Canada's oil and gas industry

Fracking issues aired

AOGCC hears pros, cons on requiring public comments, hearings for applications


For Petroleum News

Kenai Peninsula Borough Mayor Mike Navarre has waded into the controversy over hydraulic fracturing of oil and gas wells, risking flak from some of his Kenai constituents who want more public notices and public hearings.

“I don’t believe a public hearing is needed for every well,” the mayor said. “The existing public process for state review of drilling applications is working well,” Navarre’s comments were in a statement given by the borough’s oil and gas advisor, Larry Persily, at a contentious hearing by the Alaska Oil and Gas Conservation Commission Dec. 15.

The AOGCC was taking testimony from the public on whether it should change its rules to require public notice and hearings when an oil and gas operator wants to do a hydraulic fracture job on a well.

Bob Shavelson, director of Cook Inletkeeper, an environmental group, had filed a petition asking the commission to require notice and a hearing.

Industry operators objected, arguing that a rule for public notice and a hearing would create delays in drilling and completing wells and open the process to possible litigation.

National issue

Navarre said the residents of the Kenai Borough have become more aware of the controversies around large-scale hydraulic fracturing due to national news stories and, closer to home, plans by BlueCrest Energy to use the procedure with development of its Cosmopolitan field just offshore Anchor Point.

“I follow these national headlines and the concerns, anxieties and the economic interests of almost 58,000 residents on the peninsula,” he said. However, “adding one more public hearing per well is not going to appreciably improve the process,” of the AOGCC in reviewing plans for the well.

“Nor will it resolve the national, and even international debate over hydraulic fracturing,” Navarre said.

“The AOGCC does excellent work in policing oil and gas operations in the state. The existing public process for state review of drilling applications is working well, and I cannot see any regulatory deficiencies in the process of the (drilling) application in need of correction,” the mayor said.

Public record

Drilling applications to the AOGCC are already public record, both with hydraulic fracturing and the drilling of disposal wells to inject produced water back underground for storage, Navarre said.

He pointed out that two other state agencies besides the AOGCC are involved in approvals of fracturing. One is the Department of Environmental Conservation, which must approve any use of surface water in a drilling operation. A second is the Department of Natural Resources, which gives approval for any extraction of water from an underground source, the mayor said in his statement.

Navarre said the AOGCC had adopted stringent new regulations on hydraulic fracturing in 2015 that include new disclosure requirements on well operators of the content of fluids used in fracturing, including chemical additives.

“Even before those regulations, more than 160 wells in Cook Inlet have been fractured, the first in 1965. I am not aware of any significant environmental damage from any of those operations,” Navarre said.

Emotional testimony

The mayor’s comments were in stark contrast to often-emotional testimony of Kenai residents at the AOGCC hearing.

Although fracturing is a common industry practice the news accounts of problems in other states including claims of contamination of drinking water and concerns by scientists of a connection between large-scale fractures and localized earthquakes has set off alarm bells with some Kenai residents.

In support of the application, Shavelson said Cook Inlet is an active seismic region and it makes sense for the public to be able to review and comment on proposed fracturing. “The AOGCC makes opportunities for public comment available in well spacing applications, enhanced oil recovery and disposal of drilling waste, and we believe the same opportunities should be there for hydraulic fracturing.”

Shavelson complimented BlueCrest for being open and transparent about its plans but said hydraulic fracturing is still complicated and deserving of more scrutiny.

As for delays in drilling, Shavelson said, “We look at the cost of delay as a cost of doing business in a community that cares about a healthy environment and clean water.”

Industry opposed

Industry spoke at the hearing in opposition to the changes. In comments submitted by the Alaska Oil and Gas Association, Joshua Kindred, AOGA’s environmental counsel, said a number of states including Alaska have updated regulations on fracturing to address public concerns “to a process (fracturing) that is largely misunderstood.”

“AOGA believes that (Alaska’s) regulations as currently constructed provide ample protection for public input. The proposed modification is unnecessary and appears to be nothing more than a veiled attempt to frustrate oil and gas recovery as opposed to articulating legitimate concerns with the current regulations,” Kindred said in his comments.

BlueCrest’s proposed fractures are larger than those done previously on Cook Inlet wells but they are not on the scale of the very large fracturing done in the Eagle Ford and Bakken shale oil developments in Texas and North Dakota, or the Marcellus and Utica shales in Pennsylvania and eastern Ohio.

Most of what is actually injected in the well is water along with natural materials, but there are quantities of chemical additives that have caused worry if they were to leak.

Engineers review plans

Preventing leakage is the job of AOGCC, however. Engineers at the commission not only review the drilling plans for integrity of the well, which is typically more than a mile underground, but also the nature of the rock formations around, and particularly above, the well. The goal is to ensure an impermeable rock barrier so that if drilling or injection fluids do leak they remain underground.

On the North Slope there is an additional barrier, the permanently frozen layer of soil and rock that underlies the North Slope usually to a depth of 2,000 feet.

At the hearing AOGCC Commissioner Hollis French asked Shavelson, of Cook Inlet Keeper, if he would support hearing requirements only for south Alaska, where there are drinking water aquifers at shallow depths, or if he would prefer the requirements extended to all parts of the state including permafrost areas.

Shavelson said he thought it should be statewide because climate change may melt permafrost someday and there may be communities on the North Slope taking drinking water from below ground.

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