GG has written a few times about the state of oil and gas regulations here in Colorado. A lot of that is now changing as Senate Bill 181 has passed the Colorado Legislature and heading for the governor’s desk, where it is expected to be signed.
As is typical these days, the public debate was overheated. Claims that passing this legislation would end petroleum development and cripple the Colorado economy were broadcast in commercials, while some advocates felt that the bill didn’t go far enough and were upset when amendments loosened some of the language of the original bill. Others felt that this was overturning the voters’ rejection of proposition 112 last fall (e.g., comments here). Votes in the legislature were along party lines.
So is this the death knell of oil and gas in Colorado? Best to see what passed rather than rely on public pronouncements. So let’s look at what is in here.
A disaster has befallen a major city. Scientists offer to shift planned research to help understand the extent of the disaster and perhaps help guide remedial efforts with more concrete information. You head a government agency asked to allow this scientific research. What do you say?
If you work in the current administration, you say “no.”
The particulars, as outlined in a Los Angeles Times story, are that NASA was getting ready to run a calibration flight of a pollution-sensing aircraft as floods hit Houston. The scientists were eager to shift from their original test flight to a flight over Houston, but somehow the EPA as asked if this was OK. They said thanks but no thanks, we have this with a few ground crews. NASA higher ups decided not to cross the EPA and so the flight never happened.
Nobody knows what might have turned up–maybe nothing. Maybe major pollution sources that were unrecognized on the ground. But why not do this? Frankly, it is hard to see the answer being anything but “what we don’t know we can’t penalize or correct,” and the most likely folks facing penalties or corrective action would be in the oil and gas and chemical industries. After all, if there were no measurements of, say, a release of volatilized hydrochloric acid, then residents who had developed nasty respiratory symptoms would probably be unable to sue responsible companies.
The Times piece has inspired a Congressional inquiry, but that will mainly be a game of seeing whose ass was least covered. The mindset of “the less we know, the better” is foolish and dangerous. And, down the road, the backlash might be far more damaging, as the oil and gas industry in Colorado has been learning. Faced with community opposition to some development plans, industry has largely followed a policy of opposing any intrusion on their plans. They are now faced with a bill in the Colorado Legislature that would give local governments the ability to limit drilling, would increase forced pooling requirements from a single mineral rights holder to 50% of those holding rights, would require public disclosure of where critical infrastructure is, and would require pressure testing of abandoned lines. While the fate of this bill is uncertain, that it has reached the floor of the state senate is a major step up from the past when similar legislation never got a hearing.
Each time industry tries to cover its failures, that Green New Deal currently being vilified gets a bit closer to being something Americans will come to demand. Opponents might want to defang such desires by behaving as though they care about knowing the risks citizens face both day-to-day and during disasters; asking for less information is not that behavior.
Just a quick pointer to a real rarity–an op-ed on oil and gas development that seems firmly based on fact. The Boulder Daily Camera weighed in on the rather ridiculous forced pooling laws in Colorado (the next time some oil and gas advocate claims that Colorado is the strictest state in the country for development, remind them about Colorado’s forced pooling laws, which are the nation’s loosest). As a quick reminder, forced pooling means that your minerals can be developed against your wishes; GG discussed this at somewhat greater length awhile back. In some states it takes 50% or more of the rights holders to trigger this. In Colorado, it is a single rights holder. In some areas, oil companies have canvased neighborhoods looking for one resident willing to sign over development rights, which would unlock the whole area.
Its been quite awhile since we checked in on the seismicity in Oklahoma. As we’ll see, on the whole the news is good, but there are a couple of things worth watching…
First, the number of quakes has steadily dwindled…
This is what you’d hope to see with decreases in wastewater injection. Some of this is regulatory, but a big piece is because the low price of oil made the more water-rich (an thus injection-heavy) fields less attractive.
If instead we look at seismic moment, things are somewhat less clear:
Now first off you see the big drop in increase of seismic moment starting in late 2016; that rate has continued to the end of 2018 (the red curve is new since the last post). But curiously it hasn’t dropped: the M4.6 in April of 2018 offsets the seemingly slowing rate since then–a straight line from the end of 2016 through early 2018 projects right to where the cumulative seismic moment stood at the end of 2018. At present it seems the moment release rate is pretty constant. For this to coexist with a decreasing number of earthquakes means that earthquakes are getting larger even as they are less frequent.
What this means is that while things are a lot better, they might not be improving as much as you could hope.
One of the fixtures of modern life seems to be the hearty embrace of uninformed certainty. People who just know that certain things are an unqualified bad and will go to any lengths to fight those things seem to make up the vast majority of social media contributors. Although there are many fine examples of this on the political right, let’s complain about some on the political left.
Two such issues are centerpieces of complaints here in Boulder. One is the presence of genetically modified organisms used in crops (GMOs) and the other is the practice of fracking. Neither warrants the blanket condemnation they receive.
Most opponents of GMOs know little about how we’ve ended up with the food crops we have now, though occasionally you get clues, like if you stumble on wild strawberries and wonder why they are so tiny. Our food crops are the products of generations of hit or miss efforts of artificial selection (picking the outcomes you like best) and crossing of different plants to get useful hybrids. The genetic tools now available remove a lot of the hit and miss part of the effort allowing scientists to directly target the aspects of a plant that are causing trouble.
When you say that all GMOs are bad, you might as well say all spot welds in a car are bad and you only want a car assembled with no welds. The use of genetic tools is a technique and not an end per se. A spot weld might make a tougher car, but it will not make a better computer. It is what you do with the tool that matters.
Does this mean all GMOs are good? Hardly, if for no other reason than the law of unintended consequences. For instance, there was a desire to have a variety of common golf green grass be resistant to Roundup; as High Country News tells the story, the new variety was successful–but when it escaped from where it was being grown, it became a troublesome weed along irrigation ditches in eastern Oregon. Human endeavors are filled with such mistakes, many having nothing to do with GMOs (think of all the times an exotic species was introduced and found to be a pest, and then the effort to use the pest’s natural enemy simply created another problem). Just as we recognize that bringing exotic species into someplace requires some forethought, development of GMOs needs to face similar scrutiny.
Fracking is a slightly different issue, though it shares the same blanket opposition that has little to do with what it is and does. Most of the concerns with fracking have nearly nothing to do with the actual process of fracturing rock deep in the earth to release hydrocarbons. Instead when you hear the actual harms people complain about, it is the industrial noise and associated air pollution of the drilling and fracking operations, the greater density of drill pads often needed for the current “non-traditional” horizontal drilling, surface water pollution from spills, aquifer contamination from improperly sealed wells, earthquakes from injection wells disposing of accessory fluids from production, or even the antiquated forced pooling laws that greatly limit the options for those holding both surface and mineral rights. When people talk of banning fracking, it would be like a city banning a car company from using welds–it is not the welding that is the problem, it would be the noise and impacts of the car factory that are being opposed. Fracking is really being used as a proxy for resurgent oil and gas development.
Is fracking then an unalloyed good? Well, no. There are some very positive aspects of it: by increasing the recovery of hydrocarbons from an existing field, it can slow the desire to expand production into virgin areas. The recent application in associated with horizontal drilling has opened up a lot of natural gas, which has been replacing dirtier coal in electricity generation as a result. But there are some instances where fracking is indeed a direct evil. In a few places, it has indeed caused larger earthquakes (though far, far fewer than injection wells). There is an indication that fracking in some shallow rocks immediately below an aquifer in Wyoming has indeed directly contaminated fresh water. And no doubt a few fracking operations have spilled fracking fluids into surface waters. And, of course, the application of the technique has opened up areas that previously were uneconomic (which is a mixed bag depending on where you are and what the land use looks like).
Most folks would probably like the world to be black and white, good or bad. But there is gray all over the place, and GG earns his nom de plume when encountering absolutism. This desire to polarize to the extreme removes all sensible middle ground. We would all win if GMOs were not so misrepresented but also if the regulation on their development made more sense. We would all win if oil and gas development was throttled back by a more driven effort to move on to renewable energy sources. Recognizing the strengths and weakness of things like GMOs and fracking could focus our attention on the specific instances that are most troublesome. But when you just paint the whole thing one color, you lose the ability to separate the dangerous from the innocuous.
Occasionally stories are written about the conflict between suburbs in Colorado and the oil and gas industry. What often eludes reporters, especially those from outside the area, is that the battle lines are not static but moving, and that acts to reinforce rather than temper the conflict.
Here’s the deal. One of the hotter oil and gas plays in the U.S. is the Watternberg field, a northeast trending belt of Denver Basin rocks cooked enough to yield both oil and gas. This field stretches from Boulder to the northeast, encompassing rapidly growing communities like Erie and Longmont and on out into the plains near Greeley. When first exploited in the twentieth century, the region was rural; Erie, for instance, was a shrinking coal mining town at that time with a population under 5% of its current population. Oil and gas wells were pretty widely placed but widespread.
What has happened this century has been to put a modern twist on an old conflict. In the very early days of oil development, forests of oil derricks could be found in cities like Long Beach and Dallas. At that time there was no question that you’d drill for oil wherever it was. But today?
The state of Colorado regulates where operators can drill for oil and gas, but local communities regulate where you can build buildings. Since 2013, oil and gas wells have to be 500′ from an occupied building. Seeing development covering large areas in the southwestern Wattenberg field, companies have wanted to move quickly to drill before available lands are off limits. This has led to a flurry of permit requests in these rapidly growing areas. Ironically, the efforts residents have made to preserve open space now boomerang as open space lands often offer locations where drilling is feasible; even when the government holds the mineral rights, Colorado pooling laws mean that a single mineral rights holder can force drilling in an area, and once that is approved, surface rights’ owners can not prevent drilling.
There is pressure on the other side, too. Surface land owners in these growing communities want to take advantage of the red-hot housing market in the region; construction is largely limited in the region by the availability of construction workers. Right now many communities allow new buildings to be placed much closer to existing wells–150 feet in the case of Firestone, where a house blew up awhile back. Some communities are considering larger setbacks, though this is typically expressed as an attempt to expand on the state’s rules on where new wells can be sunk rather than a limit on new construction. Nevertheless, developers and landowners don’t want to be caught having to leave open land because of an abundance of wells.
The result is an intense competition along the I-25 corridor north of Denver. You can find drill rigs seemingly a few feet from new houses in Erie, for instance, as the wells are being drilled as the houses are being constructed. As with any such race, the best solutions fall by the wayside. Given the need to move away from fossil fuels, leaving the oil and gas under the southwestern part of the field makes a lot of sense, both for locals and the global environment. Shifting to an emphasis on developing the rural, northeastern part of the field would seem a better outcome for all save the mineral rights holders in the southwestern part of the field. And the reality is that for most of those folks, those rights are found money–until recently there wasn’t much value to those rights. [Congress never intended for mineral rights to go to homesteaders and the like, but that is another story].
Instead the only legal out is to buy your way out, which is what the city of Longmont decided to do. Or cover everything with houses, which seems to be some other cities’ approach….
Politics and industry make strange bedfellows. Politics is often short-sighted, with most politicians locked in to the next election, or even the next round of polls, but multifaceted. Industry, on the other hand, can look over longer timespans but is narrowly focused (“can” is not always “does”). You might hope that the pair could produce public policy that was both broad and longterm, but the reality seems to combine the worst characteristics of each.
Nowhere is this more evident than in peering into the future of oil. Mason Inman’s recent biography of M. King Hubbert, The Oracle of Oil (Amazon link), provides a nice reminder of this interaction from an earlier time. Hubbert’s views on oil, which were made with an eye towards a fully sustainable economy, conflicted with corporate and political motives. Corporations are in a specific business and like to hear that their future is bright, a disastrous approach when the future is changing (see Eastman Kodak’s fall as digital photography bankrupted their film business). Thus there is a tendency within a company to both develop rosy forecasts and believe them (the more pessimistic will tend to leave). Politicians want happy news about tomorrow–Cassandras don’t tend to get elected. So what happens when unhappy predictions are made?