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The New Land Race

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….

Oily Pasts and Futures (book review)

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?

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Oklahoma Quakes, the Infrastructure Side

Last November, a M5.0 quake caused some damage in Cushing, Oklahoma.  A number of folks at the time were relieved that there wasn’t any noticeable damage to the nation’s largest oil storage facility.  This was only a few months after the Oklahoma Corporation Commission ordered a cutback in disposal of wastewater in injection wells. Since then, seismicity has mostly quieted down, but it seems that recognition of the scale of the hazard has been seeping into the awareness of a broader part of the media, leading to a lengthy piece in Politico Magazine on the potential disaster lurking in Cushing from facilities not really designed to survive an earthquake. While most of the stories of earthquake hazards in Oklahoma have been more focused on falling chimneys and old brick buildings, this piece exposes a pretty critical flaw in Oklahoma’s infrastructure.

So we will hope that there isn’t another unrecognized fault slowly being lubed up under Cushing.  But remember, the largest events from the infamous Rocky Mountain Arsenal injection adventure in the 1960s came more than a year after injection was totally stopped.  Oklahoma hasn’t stopped injecting fluids, and the volume of water injected so far dwarfs anything that happened in Denver in the 1960s…

All quiet on the plains…

Its been awhile since Oklahoma earthquakes made news and so it seems timely to look in on the Sooner State to see how things are going.

Last we looked in, numbers of earthquakes were down but the moment release was still pretty high. Predictions from Stanford late last year were that the decreased injection of wastewater would lead to a decrease in earthquakes over the succeeding five years. The USGS, in contrast, has continued to note that the decrease in the number of events does not mean a decrease in damaging earthquakes.

So far, the news is good.  Not too surprisingly, the number of earthquakes continues to drop:

OKEQ-2015_to_7-17

So that continues the trend from 2016.  What about moment release?  Well, given the absence of news reports, you’d guess there is a decline there, too, and you’d be right:

OK_Cum_moment_to_7-17

And, indeed, 2017 has been dead quiet moment-wise as well.

Does this mean that the seismic risk is now gone?  Well, no.  That M5.7 earthquake in late summer last year was on an unrecognized fault.  The fluids migrating in the basement could encounter another critically stressed fault and trigger a significant earthquake. But for now, this is good news for Oklahoma residents.

Rock, teach oil, or maybe vice versa

GG attended a workshop here at CU on lessons from mining that could help guide oil and gas development (since the conveners encouraged outcomes to be shared on social media, figure this is OK). In kind of an odd way, the focus was more on what happens at the end of mining or oil development more than what happens at the start, so that will tend to be the focus here.

So a quick summary of points GG noticed.

  • Mining is highly focused, oil and gas far more distributed with a web of infrastructure.
  • Mines active today have to meet bonding requirements and increasingly have to have reclamation plans; oil and gas wells have far less specific requirements (e.g., bonding is not by well but by state or even nation).
  • Mines are a single use of the land; oil and gas production often shares the land with other rural uses.
  • Problem mines are problems for thousands of years–there is no true long term remediation. They can foul a lot of water for a long time. Wells are more insidious, typically failing silently until you know groundwater is compromised or a house blows up.
  • Mines these days are rarely totally shut down; they frequently are mothballed and then brought back online.  Oil and gas wells are frequently plugged and closed.
  • Mining’s main impact seems to be contaminating surface waters.  Oil and gas activity mainly affects subsurface waters.
  • Modern mining remains dominantly rural [save for mining towns!], but oil and gas has moved into suburbia. However, old mines are around a lot of western towns and there is renewed activity (and opposition) from time to time.

So what would the public want for post-development lands? In both cases, one can presume a safe environment available for any subsequent use. In many cases, they might want something resembling the pre-mining landscape. How realistic is this?

For mines, it depends on the mine. Big, modern open pit mines with sulfides are likely nearly hopeless. Strip mines for coal probably can be reclaimed provided they are not in areas where erosion is likely. Many small legacy mines can be shuttered to have an acceptably low level of impact. You can probably tell when a mine can be safely shut down.

For oil and gas wells, there is a surprisingly high level of uncertainty. Modern plugging procedures will usually work for the near term, but if gas continues to migrate up the well bore, any weaknesses that develop in the well plug or around the outside of the well bore will allow the gas to vent to the surface. Degradation of the well materials will connect shallow and deep aquifers, which can be troublesome if the deep aquifers have sufficient pressure to invade a shallower drinking water aquifer.  Or if the deep aquifer has negative pressure, you can lose drinking water to the deeper aquifer. That oil and gas wells are not of the same material as the surrounding rock means that it is likely over long periods of time that some kinds of failures of the well’s plug will occur (chemistry and stress will focus on that interface).  How often is this likely? How often will a failure produce surface problems? We really aren’t certain.

One suggested solution for problem mines is to make use of the waste material. This might help for acid mine drainage, but is less helpful for some other environmental hazards from mines. It is unlikely that a plugged oil or gas well that leaks has any economic utility.

So at the end, what does full closure of mines or wells look like?  Mines are unlikely to have their footprint totally erased, and some will be problems for centuries, but many others will be available for other uses. Oil and gas wells are tougher.  Most rules require a plugged well’s pad to be returned to something looking like the original landscape. When bonding is insufficient (as has been the case in Wyoming, for instance), failed companies’ wells might not be reclaimed. But even where surface reclamation is done (and oil and gas companies like to show pictures of old well sites to show they don’t look particularly bad), the well below is still subject to failure and leaking. While some mine sites might well be safe to build on (and many mountain resort towns are in fact built on old mine sites), building on an old well is playing a bit of Russian roulette. Shallow aquifers could fail as well. Perhaps monitoring for natural gas and pollutants in the water would permit full reoccupation of well sites, but it seems just as likely that rules will prevent building on or too near old well sites.

What do local communities need to know? They should probably understand that oil and gas wells are forever–plugged wells in most cases will cause no problems, but given that we haven’t watched a bunch of wells plugged with modern techniques for a really long time, that there is a non-zero risk of future leakage, and so monitoring appropriate for the subsequent use of the land should be required. Ripping out as much of the oil and gas infrastructure as possible is wise. For mines, it kind of depends. Any mine with underground workings can later collapse, so building on top of such mines should be considered with caution. If a mine is leaking colorful water into streams, odds are this will continue for centuries and some kind of action is desirable, but know there are not, at present, permanent fixes.

Root problems of oil and gas

Here in Colorado there is a tremendous amount of anger, frustration, and finger-pointing going on over the risks and rights associated with oil and gas development. In part because of sloppy language, in part because of deliberate misrepresentation, in part because of financial gain, in part because of different assessments of risk, the controversy has people talking past one another. It reached something of a silly level when protesters in Boulder recently protested a performance of Beethoven’s Ninth Symphony because the symphony had accepted some money from an oil company. [GG isn’t sure what the message really amounted to: don’t let oil companies support the arts? Not like the symphony was investing in oil companies].

How did we end up in this mess?

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The Great Colorado Oil Blowup

Well, it was the well. In Firestone, Colorado, a house exploded because a cut gas line that should have been abandoned but was still connected leaked gas into the soil five feet from the house.  The odorless gas seeped into the basement of the house and was ignited. This determination is almost certain to ignite another, thankfully figurative, firestorm.

Leaving aside the inevitable lawsuits over that explosion, what does this mean and what should it mean for oil and gas development?

Let’s start with the easy part: what it should mean. Oil companies need to be responsible for the safety of their facilities (that includes being legally liable). New construction near existing oil and gas facilities needs to be aware of oil and gas infrastructure, including these flow lines. Government should enforce inspections of existing oil and gas infrastructure and assure the proper sealing and plugging of wells and flow lines being abandoned. Ideally, government should sponsor means of detecting unusual levels of hydrocarbons leaking at well sites and employ them as a means of recognizing trouble spots (CIRES and NOAA have been working on such tools).

Frankly, if GG lived near a well, he’d be trying to find out about the feeder lines and the history of the well. And quite possibly monitoring gas levels in the basement.

The good news is that the state has ordered oil and gas companies to pressure-test all lines within 1000′ of occupied buildings and to make sure abandoned lines are properly marked and capped. It is unlikely that industry will protest.

Unfortunately, that probably won’t be enough to prevent some future tragedy unless something else changes.

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