New infrastructure boosts West Virginia, southern Pennsylvania natural gas production – “A notable increase since early 2012 in natural gas production in West Virginia and nearby counties in southern Pennsylvania continued through July 2013. Although producers have increasingly shifted their attention to more liquids-rich shale gas in the wet gas regions of these states, production in the dry gas regions has benefitted from the addition of infrastructure, improving takeaway capacity from their gas fields. From July to September last year, the following projects expanded the production capacity of West Virginia and southern Pennsylvania by almost 1 billion cubic feet per day (Bcf/d):
July 2012: Equitrans placed its Sunrise Project into full service, with capacity to carry 0.31 Bcf/d from Wetzel County, West Virginia, to Greene County, Pennsylvania, and providing access to five separate interconnections serving Mid-Atlantic consumers.
September 2012: Dominion Transmission initiated service from the four new compressor stations and 110 miles of new pipeline built for its Appalachian Gateway Project, providing capacity to carry 0.47 Bcf/d of natural gas from production areas in West Virginia and southern Pennsylvania to an interconnect with the Texas Eastern Transmission Pipeline.
Natural gas production in West Virginia and southern Pennsylvania has risen as these expansions provided increased access to markets. Production in West Virginia averaged 2.34 Bcf/d through mid-July 2013, compared to 1.55 Bcf/d through mid-July 2012, a 51% increase. Production in the nearby dry regions of southern Pennsylvania doubled during this period, from 0.86 Bcf/d to 1.73 Bcf/d. Additional growth in West Virginia is expected as Texas Eastern announced plans to build a 0.39 Bcf/d pipeline lateral to its mainline from Dominion's 0.20 Bcf/d Natrium processing plant in West Virginia by the end of 2014. Planned processing plant expansions through the end of this year could also add significantly to the state's processing capacity, which totaled 0.85 Bcf/d in 2012.”” (U.S. Energy Information Administration)
After Delayed Vote, E.P.A. Gains a Tough Leader to Tackle Climate Change -ANNAPOLIS, Md. -- When Lisa P. Jackson announced at the end of last year that she was stepping down as the administrator of the Environmental Protection Agency, President Obama faced a choice. He could play it safe by appointing her deputy or he could confront Congress head-on and signal a strong commitment to tackling climate change by appointing the agency's head of air quality, Gina McCarthy. "Why would you want me?" Ms. McCarthy said she asked the president when he offered her the top job. "Do you realize the rules I've done over the past three or four years?" Ms. McCarthy, an earthy, tough-talking New Englander who drew criticism as the head of the agency's air and radiation office during Mr. Obama's first term, then ticked off a list of controversial air pollution regulations she had helped write: tough greenhouse gas standards for vehicles, a tighter ozone limit that the White House rejected, the first rule on mercury emissions from power plants, and a regulation on smokestack pollution that crosses state lines, which has been blocked by a federal court. She warned that earning confirmation from the Senate might be difficult and that safer choices were available. The president told Ms. McCarthy that his environmental and presidential legacy would be incomplete without a serious effort to address climate change. "I'm so glad he said that, because if he hadn't, I wouldn't have wanted this job," she said. "It's an issue I've worked on for so many years, and it just can't wait." Mr. Obama's decision to nominate Ms. McCarthy, 59, was an act of defiance to Congressional and industry opponents of meaningful action on climate change. It was also a sign of his determination to at least begin to put in place rules to reduce carbon pollution. Ms. McCarthy was right about her confirmation. She was flooded with more than 1,000 questions from Senate Republicans, who held up a confirmation vote for 136 days, one of the longest delays of any of Mr. Obama's senior nominees. She finally won approval on July 18 on a 59-to-40 vote, as part of a deal reached after Senator Harry Reid of Nevada, the majority leader, threatened to change Senate rules to prevent filibusters on executive branch nominations. Six Republicans crossed the aisle to vote for her. One Democrat, Joe Manchin III of West Virginia, voted against her, complaining that the administration was waging a "war on coal." Ms. McCarthy discussed the battles won and the battles yet to be waged on Wednesday, during her first trip outside Washington and her first extended interview as the E.P.A. administrator. Addressing employees at the Chesapeake Bay program office overlooking Annapolis harbor, she said the agency would play a crucial role in dealing with climate change, both in writing the rules to reduce greenhouse gas emissions from new and existing power plants and in helping communities adapt to the inevitable changes wrought by a warming planet. She also said the agency had to do a better job of explaining its mission to hostile constituencies, including Congress and the agriculture, mining and utility industries. "We need this agency to reinvent itself, to the extent an agency of 17,000 people can," Ms. McCarthy said in a staff meeting in a waterfront conference room known as the Fish Shack. "I spend a lot of time protecting what we are doing rather than thinking about what we should be doing. The challenges of today are very different from the challenges of 40 years ago. Not every environmental problem deserves a rule." Ms. McCarthy said Mr. Obama had handed her an epic challenge in his address on climate change at Georgetown University in June. He said that in the face of resistance and inaction in Congress, he would use his executive authority to begin to rein in the emissions that are contributing to global warming. The most meaningful of those powers reside in the E.P.A., which will write regulations governing carbon emissions from power plants, the source of roughly 40 percent of the nation's greenhouse gas pollution. Under the president's timetable, the first of those rules, covering new fossil fuel plants, is due Sept. 20. The agency must produce draft standards for existing plants, a vastly more complex and controversial undertaking, by next June. "We worked with him on the schedule," Ms. McCarthy said, referring to the president. "He impressed on us how important it was to get started now. He said to get it done, and get it done right." Those rules will require a shift in power generation from coal to cleaner-burning natural gas, or development of new cost-effective means of capturing and storing carbon dioxide emissions. The regulations, along with proposed new rules governing coal-mining waste and the disposal of coal ash from power plants, are what Mr. Manchin and others mean when they say the E.P.A. is waging a war on coal. Ms. McCarthy rejected the charge. "We don't have a war on coal," she said. "We're doing our business, which is to reduce pollution. We're following the law." She declined to take a position on the Keystone XL oil pipeline, even though the E.P.A. has submitted two harsh critiques of the environmental impact statements produced by the State Department, which must rule on the pipeline project because it would span the border with Canada. "That's a matter for the Department of State, and I'm going to leave it there," she said. Ms. McCarthy is a proud native of the Boston area and a die-hard Red Sox fan. Before going to Washington, she served as a top environmental aide to a half-dozen governors of Massachusetts and Connecticut, including Mitt Romney, the 2012 Republican presidential nominee. She and her husband, Kenneth McCarey, a wholesale florist, have three adult children, all living in the Boston area. Her eldest, Daniel, 28, married two weeks ago. In a video message to E.P.A. employees at the beginning of her first full week on the job, Ms. McCarthy looks straight into the camera and says in her thick Hub accent: "Last week was a big week, and I am so pumped. My son got married, our E.P.A. headquarters was renamed after President Clinton, and of course there was this little thing with the U.S. Senate and my confirmation." She thanked Robert Perciasepe, the E.P.A. deputy who served as acting administrator during the months of vacancy in the top job, and noted that Carol Browner, President Bill Clinton's E.P.A. chief, had held the Bible at her swearing-in ceremony. Ms. McCarthy also paid tribute to the workers in the E.P.A.'s air office, calling them dedicated, action-oriented and "supah smaht." Those last two words have become something of a catchphrase at the E.P.A. in recent days, but Ms. McCarthy disavowed them. "Somebody else wrote that," she said later. "It should have been 'wicked smaht.' "” (New York Times)
Energy Secretary Ernest Moniz discusses Obama's plan with Pittsburgh officials – “Ernest Moniz, the Department of Energy's new secretary, met privately with a group of Pittsburgh business and government leaders Monday and stressed that coal and natural gas would not be left out of President Barack Obama's energy plan. In the room, executives from U.S. Steel, Alcoa, Phipps Conservatory, the University of Pittsburgh, Carnegie Mellon University and Consol Energy shared their concerns and suggestions for energy development. Steven Winberg, Consol's vice president for research and development, said after the meeting he doesn't think the administration is putting enough money into coal and gas and that investment should be proportional to the role fossil fuels play in supplying the country's electricity. Mr. Winberg once chaired the board of directors of the FutureGen Alliance, a multibillion dollar government-supported project to build a power plant that captures carbon dioxide and pipes that into underground storage. The effort has been around for years and has changed and stalled several times. Consol pulled out of the project earlier this year. The federal government's efforts to push carbon capture and sequestration into the market place has at times faltered or been abandoned by industry partners who saw no regulatory pressure to control emissions and decided not to spend substantial capital doing so voluntarily. "For many years there was a lot of talk," Mr. Moniz said. "Now we walk the talk." He noted that $6 billion has been spent on clean coal technology research since Mr. Obama took office and that, in a recent announcement, the administration made $8 billion more available for energy innovation. U.S. Rep. Tim Murphy, R-Upper St. Clair, asked Mr. Moniz to take into consideration the economic impact of regulations that attempt to limit greenhouse gas emissions. The Environmental Protection Agency, which writes the rules, doesn't do so, Mr. Murphy charged. The Department of Energy is aiming at about a 10-year time frame for commercializing carbon capture and sequestration, but the EPA is poised to issue rules pushing for carbon dioxide limitations possibly in the next year. Critics have questioned if the cart isn't being put before the horse. "I am not the EPA," Mr. Moniz said, but the environmental agency takes into account what technology is available to comply. "Our job at DOE is to go as fast as we can to make sure the marketplace knows what the options are," he said. "I've always said, the point of clean energy technology innovation is cost reduction."” (Post-Gazette)
EDF to exit US nuclear power over impact of shale gas – EDF, the world’s biggest producer of nuclear-powered electricity, is to pull out of nuclear production in the US, citing the “revolution” in US energy markets caused by the advent of shale gas. But Henri Proglio, chief executive of the French group, said the drop in prices caused by shale gas had “no significant impact” on plans to build new nuclear capacity in Britain, where EDF is locked in long-running negotiations with the government over terms for constructing new atomic power stations. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. “We continue to work with the British government and expect to have a decision by the end of the year,” Mr Proglio said, declining to give more details. He was speaking as EDF, boosted by the effects of a cold winter in its main European markets, reported a better than expected 6 per cent like-for-like growth in core earnings and raised its forecast for the full year to growth of at least 3 per cent, from a range of 0-3 per cent. EDF, majority owned by the French state, announced that it was pulling out of CENG, its joint venture in the US with Exelon which operates five nuclear plants. Exelon will take over operation of the CENG plants while EDF will exercise a put option to sell its 49.9 per cent stake in the venture between 2016 and 2022. EDF will also receive an immediate special dividend of $400m. The French company, which operates France’s 58 nuclear plants, had originally planned to build four new nuclear plants in the US. But Mr Proglio said the prospects for nuclear power in the US had been hit by “a true revolution” caused by the exploitation of shale deposits, which had “completely reshaped the landscape of electric power generation in favour of gas”. Mr Proglio said EDF would switch its focus in the US to renewable energy sources. However, he said the effects of shale gas would not alter the “well reasoned” long-term decision by successive British governments to opt for new nuclear capacity to help the UK meet carbon emission targets without the lights going out…”” (Financial Times)
China's shale auction winners barely start seismic work – “(Reuters) - Most of the companies that won blocks in China's second shale gas auction have barely started seismic work seven months later because of lack of expertise or funding, state media said on Tuesday. China, believed to hold the world's largest resource of shale gas, hopes to replicate the production boom seen in the United States, but it faces technological and environmental challenges due to complex geology and scarcity of water. The government in late 2012 awarded 19 exploration blocks to 16 local companies, mostly non-oil companies, in an attempt to introduce broader competition in an industry long dominated by several state giants. But experts have warned that failures by these smaller firms could slow development. "Some companies have lingered at the stage of picking the right survey plans, having only done some surface investigation work," according to a report by a newspaper controlled by the Ministry of Land & Resources on its website (www.mlr.gov.cn), which cited an unidentified ministry official. "A small number of them have focused on fund-raising rather than prospecting their blocks." Lured by hopes of a gas bonanza, the 16 prospectors pledged in the auction to spend at least $2 billion over the next three years. The ministry is monitoring their progress and will urge the companies to develop as they pledged or risk losing the blocks. "For those who do not put in exploration work or even in the extreme case using the acreage as excuse for fund-raising, (we) will reduce the size of their blocks or even revoke them," the report said. So far, companies have completed a total of 627 kilometres of two-dimensional seismic survey in five out of the 19 blocks, and preparation is under way for the drilling of several exploratory wells, but no well has been sunk, it said. Among the 16 winning firms, six are state-run and mostly affiliated with big utilities and coal miners, including Huadian Group, Shenhua Coal Group and China Coal Group. Eight are energy investment firms freshly formed under the auspice of local governments, and two are little known private firms. Utility firm Huadian is among the few that have done more work than the rest, the MLR report said. Industry sources say that so far all companies, including those that won blocks in the first auction, have drilled fewer than 150 shale gas wells and that commercial production is tiny.”” (Reuters)
'Minimal impact of shale gas on GCC nations for next 20 yrs' – “DUBAI: The negative impact of shale gas on GCC countries will not be significant for at least 20 years due to high cost of the natural resource and its projected growth in Asia's oil consumption, according to a new report. The report, by Kuwait-based Asia specialist investment firm Asiya Investments, says that Asia's oil consumption growth will outpace natural gas consumption during the same period. The findings were presented in Asiya Investments' report "Shale gas impact on the Gulf Cooperation Council (GCC)". The GCC countries are -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The report outlines three factors that will sustain the GCC's leading global position as an energy exporter despite advancements made in fracking technologies. Commenting on the report, Asiya Investments' Economist, Dana Al Fakir said: "There is much hype about shale oil and gas these days, and much of it is true, especially in the US. But on the global scene we see no major changes in the dynamics of Gulf oil in the next two decades". Consumption is projected to continue to grow driven by fossil-fuel hungry Asian economies. And the Gulf is successfully shifting their attention to cater to that demand. According to Asiya Investments' Senior Economist, Francisco Quintana, Asia will play a more central role in the Gulf's exports. "However prices will probably be affected, reducing oil revenues in the GCC and making Asia more competitive due to cheaper inputs," he said. According to the report, there are high costs for importers to bear when they switch from conventional oil to natural gas, add to that a second factor of time required to establish a more stringent regulatory framework for shale energy to adhere to environmental concerns. "Last, and most importantly, Asian demand is rising for conventional oil, which will prevent the world's energy landscape from rapidly changing. In fact, the EIA expects China to rely massively on coal and oil to cover around 80 per cent of its energy needs in the next two decades," the report said. Even though China has the largest reserve of shale gas in the world (19 percent of the total, putting it ahead of the US, which holds 13 per cent), and enjoys a regulatory framework that supports the development of shale gas technology, the country has technical issues that make exploitation extremely expensive like the lack of water, depth of the gas deposits, proximity to urban areas and other factors outlined in the report. Even with all the efforts in place, China will barely match 40 per cent of US shale production by 2020, and that's according to Chinese energy authorities. OPEC projects China's imports of crude oil to outpace the US crude oil imports by 2014, as its rising refining capacity is propping up demand.”” (Economic Times)
Bakken Shale Flaring Burns Nearly One-Third Of Natural Gas Drilled, New Study Finds – “NEW YORK, July 29 (Reuters) - Oil drillers in North Dakota's Bakken shale fields are allowing nearly a third of the natural gas they drill to burn off into the air, with a value of more than $100 million per month, according to a study to be released on Monday. Remote well locations, combined with historically low natural gas prices and the extensive time needed to develop pipeline networks, have fueled the controversial practice, commonly known as flaring. While oil can be stored in tanks indefinitely after drilling, natural gas must be immediately piped to a processing facility. Flaring has tripled in the past three years, according to the report from Ceres, a nonprofit group that tracks environmental records of public companies. "There's a lot of shareholder value going up in flames due to flaring," said Ryan Salmon, who wrote the report for Ceres. "Investors want companies to have a more aggressive reaction to flaring and disclose clear steps to fix the problem." The amount lost to flaring pales in comparison to the $2.21 billion in crude oil production for May in North Dakota. Still, energy companies are working to build more pipelines and processing facilities to connect many of the state's 9,000 wells - a number expected to hit 50,000 by 2030. But it is a process that takes time and is not always feasible. "Nobody hates flaring more than the oil operator and the royalty owners," said Ron Ness of the North Dakota Petroleum Council, an industry trade group. "We all understand that the flaring is an economic waste." Alliance Pipeline is spending about $141 million on a 79-mile pipeline that will carry natural gas from Bakken wells to Alliance's larger interstate pipeline, which cuts through North Dakota from Alberta. Hess Corp is spending $325 million to more than double its Tioga, North Dakota, processing plant's daily capacity once it opens in May…Roughly 29 percent of natural gas extracted in North Dakota was flared in May, down from an all-time high of 36 percent in September 2011. But the volume of natural gas produced has nearly tripled in that timeframe to about 900,000 million cubic feet per day, boosting flaring in the state to roughly 266,000 million cubic feet per day, according to North Dakota state and Ceres data. North Dakota's flaring, which NASA astronauts can see from space, releases fewer greenhouse gases than direct emission of natural gas into the air, but it is essentially burning product that could be sold at a profit if there were pipelines. In Texas and Alaska, which have a well-developed energy infrastructure, less than 1 percent of natural gas extracted along with oil is burnt off, according to state data. Oil production remains king in North Dakota, outpacing the amount of natural gas extracted and funding many infrastructure projects. Yet production of natural gas likely will double by 2025, increasing flaring, according to state forecasts. Drillers have promised to end the practice. Continental Resources Inc, the second-largest Bakken operator with 1.1 million acres under its control, famously declared in March it wants to reduce flaring to "as close to zero percent flaring as possible." Continental says it flares 10.8 percent of natural gas it produces, and is working with pipeline companies and landowners to cut the number further. "Internally, it's a front-and-center focus for our company to have wells connected," said Jeff Hume, Continental's vice chairman of strategic growth initiatives. "Everybody makes money when that product is sold, not flared." The components of natural gas, including low-value methane and lucrative butane, a so-called "natural gas liquid" highly prized by chemical makers, are worth roughly $13 per million cubic feet of natural gas before taxes and transportation fees, at current prices. With more than 266,000 million cubic feet flared each day in North Dakota, that's roughly $3.6 million in lost revenue, more than $100 million per month. Roughly 2,300 miles of new pipeline were installed in North Dakota in 2011, the latest year for which data is available. Still, the Bakken spans 18,000 square miles and is the largest oil field in North America. And about 13 percent of natural gas flared is at wells that already have pipelines that are too small to handle the high volume of natural gas being drilled, an additional infrastructure problem. "Everyone's on the same page as far as getting the flaring reduced," said Justin Kringstad, head of the North Dakota Pipeline Authority, a state agency. "It's going to take time to get all the necessary infrastructure built out." (Reporting by Ernest Scheyder; Editing by Patricia Kranz and Leslie Gevirtz)”” (Reuters)
Jobs and education needed to win British over to fracking: survey – “(Reuters) - Government incentives for affected communities must be followed up by education and job creation to convince a skeptical British public that fracking for shale oil and gas is right, according to a survey of industry professionals. Some 70 per cent of almost 200 respondents to the survey by data provider Rigzone believe the British government was right to offer incentives to communities where hydraulic fracturing, known as fracking, and horizontal drilling will be used. But 51 per cent believed this will not be enough to win the public debate. None of the respondents flagged the need to provide additional incentives to exploration companies, Rigzone said. The government proposed earlier this month that tax payable on income from shale production should be 30 percent - down from 62 percent for traditional oil and gas. For the communities, the industry will have to provide 100,000 pounds($152,000) in benefits and 1 percent of the revenue from each production site, the government has said. Education on the economic benefits of the technology followed by job creation were viewed as the two most important messages to promote now, the survey found. Industry estimates suggest Britain may have major shale reserves which could help reverse a rising dependency on energy imports, but the industry is having to tread carefully to reassure the public and a vocal environmental lobby…"In the U.S., shale gas extraction has helped stimulate a low cost energy boom that has seen the cost of natural gas effectively drop by 50 per cent since 2007," said Dominic Simpson, Head of Sales of Rigzone in EMEA and APAC regions. "For the UK to reap a shale gas dividend, it is clear more will need to be done to win the public debate and ensure exploration companies pursue the sizeable onshore market opportunity." On Thursday last week protests blocked access to a drilling site in southern England as part of a campaign against fracking. The drilling company, Cuadrilla Resources, has said it got deliveries through over the weekend and hopes to start drilling midweek. The well in question is not due to be fracked, but Cuadrilla has used the technology elsewhere and holds more shale acreage, so has become a target for protestors. Rigzone said it surveyed UK-based oil and gas professionals between July 2 to July 8. Nearly 200 responded, with 21 per cent at organizations that have fracking-related operations in Europe and another 13 per cent with operations in another part of the world.”” (Reuters)
State forest proposed as fracking site – “A federal agency has plans to open most of Blue Rock State Forest in Muskingum County to fracking. The proposal, according to the U.S. Bureau of Land Management website, would open 4,525 acres of mineral rights beneath the 4,578-acre state forest and two townships for bids from oil and gas companies during a Dec. 12 public sale. The sale has environmental-advocacy groups questioning why neither federal nor state officials took any additional steps to inform the public. A page on the bureau’s website lists parcels for oil and gas lease sales, but it doesn’t specifically name the Blue Rock State Forest. It is described as “state-owned surface/federally owned minerals, lands in Ohio.” A subsequent link leads to documents that name Blue Rock. “It was posted in March with a public comment period of 30 days,” Buckeye Forest Council attorney Nathan Johnson said yesterday. “Unfortunately, it seems nobody in the state of Ohio got the message.” In a statement, Ohio Department of Natural Resources officials said the decision to auction the mineral rights under Blue Rock was made without their input. “The Bureau of Land Management has not shared their environmental assessment with us, nor did they notify us of their public comment period,” spokeswoman Bethany McCorkle wrote. “(Natural Resources) owns a minority share in the mineral rights of the forest, but the decision to lease the mineral rights rests solely with the Bureau of Land Management.” But Robert Gillcash, a Bureau of Land Management spokesman, said the agency followed rules for public notification and that it put the land up for auction only after ODNR officials gave their consent.“In this instance, the Department of Natural Resources gave consent to nominate the parcels in Blue Rock,” Gillcash said. “The (Bureau of Land Management) followed our standard procedures." He said the public-review period closed April 25 without comment. Proposals for fracking in government forests and parks have drawn public protests…Environmental groups say it’s a pollution threat; industry officials insist it’s safe. Oil and gas companies also have offered bonuses of $2,000 to $5,000 an acre to those who own the mineral rights to sign leases. A 2011 state law gave a five-member commission the authority to put state-owned mineral rights up for bid to interested oil and gas companies. That panel has yet to be appointed. A Bureau of Land Management proposal to open 3,300 acres of mineral rights under the Wayne National Forest drew public protests in 2011. U.S. Forest Service officials announced that fracking in August and said at the time that drilling could start by 2016. The area that became Blue Rock State Forest was bought by the U.S. Resettlement Administration in the 1930s after it was extensively logged and deemed unsuitable for farming. The administration transferred surface ownership to Ohio but kept control of the mineral rights. The Buckeye Forest Council also questioned an unrelated proposal involving an 8,000-acre region of the Shawnee State Forest. The Ohio Department of Natural Resources issued a proposal to open a road in the Shawnee Backcountry Area to allow visitors vehicle access. Johnson said his group is worried that the proposal would lift other protections, including logging limits.”” (Columbus Dispatch)
Does Fracking ‘Steal’ Oil & Gas From Neighbors? – “When it comes to settling disputes over who owns the oil & gas in Texas, the state’s law struck a federal judge as anything but fair. After reviewing an opinion by the Texas Supreme Court, he said it was more like theft. “The Garza opinion gives oil and gas operators a blank check to steal from the small landowner,” wrote John Preston Bailey, a United States District judge in Wheeling, West Virginia. Bailey had been asked to throw out a case involving a dispute between a landowner in West Virgina and a company drilling a horizontal well for natural gas. The company’s lawyers cited the Texas case, Coastal Oil & Gas v. Garza Energy Trust. In that 2008 opinion, Texas justices overturned a multimillion dollar verdict awarded to families that owned farmland in Hidalgo County. The landowners had sued an energy company, alleging hydraulic fracturing led to the “draining” of the families’ natural gas over to the company’s well on an adjacent property. But the Texas Supreme Court found that the longstanding “rule of capture” protects drillers from such “trespass” claims when drillers obey state law (as opposed to maliciously drilling a “slant well” to cross under a property line to steal oil & gas from under a neighbor’s property). The Texas court said that when a well is drilled legally using hydraulic fracturing, “some drainage is virtually unavoidable”. The whole point of fracking is to use a mix of water, sand and chemicals injected deep underground to crack open rock formations so the oil & gas in them can flow over to the well. But those fractures can penetrate past a property line and “drain” oil or gas from that neighboring property for which the driller does not have a lease. The Texas Supreme Court said one remedy for landowners who feel they’re being robbed of their minerals by a neighbor’s well is to simply drill their own. “If the drained owner has no well, he can drill one to offset drainage from his property,” wrote Texas Justice Nathan Hecht. In the West Virginia lawsuit, it was noted that “not all property owners are sophisticated enough or have the resources to drill their own well”. Earlier this year, the judge in that federal case ruled against the driller and allowed the lawsuit by the landowner to move forward…Talking about that case, he called it a “blatant example of stealing” and said there was “overwhelming evidence the fractures would penetrate the Garza’s” property and drain away natural gas. He said Texas drilling regulations need to be changed to better protect property owners. To the contrary, the oil & gas industry believes, as held in the Texas Supreme Court opinion, that fracking is now essential to the oil & gas industry and while it may result in draining of neighboring minerals, drillers must be protected from charges of “trespassing”. “It would have been a litigation nightmare,” said Keith Strama, an attorney with the Texas Oil & Gas Association. “That would be a very difficult dispute to resolve through science. The court recognized the best way to resolve this is to allow everyone to benefit from the rule of capture and if there’s drainage occurring, their remedy is go drill a well.” For some landowners involved in disputes, that remedy doesn’t sound practical. “We have a garden, we like to sit in our back yard, we don’t want to drill,” said Ranjana Bhandari. She and her family live in the Dallas suburb of Arlington. It’s in the Barnett Shale region of North Texas that in the past decade has seen the drilling of thousands of wells for natural gas production. Bhandari said they didn’t like what they’d heard about the environmental impact of fracking so they declined to sign a deal with an energy company wanting to drill nearby. But she said while they tried to challenge the company by attending hearings held by state regulators, they lost. “We could have gone to court but we don’t have the resources to go up against a company,” Bhandari told StateImpact. When faced with such landowners who haven’t signed leases with drillers, those drillers can apply to the state regulator, the Railroad Commission of Texas, for what’s called a Rule 37 exception. If granted, “the wells can potentially capture hydrocarbons from beneath the adjacent, unleased property, and the neighboring mineral owner will receive no compensation for those minerals”, according to critical analysis last year by the Texas Tech Law Review. It found the Railroad Commission is granting such exceptions in far greater numbers as drilling has boomed, accelerating from an average of 582 exceptions a year since 1919 to an annual average of 3,916 since 2006. “The existing methods by which Texas deals with unleased tracts in urban oil and gas fields leave unleased, small-tract mineral owners out in the cold,” according to the Law Review article. The Railroad Commission of Texas disagrees. In an email to StateImpact, the commission’s media liaison Ramona Nye wrote that getting an exception isn’t easy, requiring “a lengthy Rule 37 hearing process”. Nye said drillers might therefore find it easier to negotiate with their neighbors to work out a lease deal. Even when a driller is granted an exception, Nye said the wells cannot actually tap the oil or gas next door. But they can if the driller pursues what’s called “forced pooling” which, if approved by the state, does allow a driller to take oil & gas from an unleased property.”” (StateImpact Texas)