By Dustin Bleizeffer, WyoFile.comoriginally published December 11, 2012
Wyoming regulatory officials, and oil and gas operator Chesapeake Energy, are facing criticism from some Converse County homeowners over the flaring — or burning — of natural gas. Flaring is a big loss of private and public revenue (to the tune of millions of dollars). And for people who live close to the development, it’s a major health concern.
“We have four wells that have been drilled and fracked around our home, and we are dealing with flares, and gardens dying, animals sick, kids sick,” said Kristi Mogen, whose family lives in a rural neighborhood six miles east of Douglas.
One of Chesapeake’s flares apparently burned improperly (usually a sign of petroleum liquids in the flare) for nearly three months this past summer, and it wasn’t corrected until Mogen and her neighbors contacted the Wyoming Department of Environmental Quality (DEQ).
That’s something Chesapeake officials say their crews should have caught, and they promise to be more diligent. John Dill, who manages Chesapeake operations in the Rockies, said the company is working to reduce the amount of flaring from its well sites. “We know that we are having an impact on the county, and we think most of what we do is a positive for the county,” Dill said at a recent town hall meeting in Douglas hosted by Chesapeake. The meeting hall was packed with more than 200 people.
Health concerns had already solidified back in April 2012 when there was ablowout of Chesapeake’s Combs Ranch Unit 29-33-70 1H well a few miles outside of town, triggering a voluntary evacuation of 50 to 70 residents as the well spewed a variety of toxins unmitigated. Since then, complaints of natural gas flaring and other drilling activities have intensified.
At the town hall meeting this month, Chesapeake provided an overview of their drilling and, in particular, their flaring activities in the area and answered questions from locals. Wyoming regulatory officials and Converse County officials also spoke at the meeting.
“I have to disagree that things are being taken care of,” said Janice Switzer, who lives in the same East Antelope Road neighborhood as Mogen. Switzer said the flaring is sometimes so loud it shakes her house, and she sometimes finds an iridescent film in water tanks for her horses. “I haven’t been contacted by anybody to say ‘We’re sorry, what can we do?’”
Wyoming’s new shale oil play
Over the past couple of years, operators have drilled hundreds of horizontal oil wells in thesouthern Powder River Basin, using intense hydraulic fracturing — or “fracking” — technology to unlock shale oil. Already, the state has issued some 864 horizontal oil well permits in Johnson, Campbell and Converse counties.
Wouldn’t you know it; operators set out to test all of eastern Wyoming — a mostly empty land mass so large it could cover the Florida peninsula — for sweet spots to produce shale oil, and one of the promising areas appears to ring the town of Douglas. Chesapeake Energy — the Oklahoma City-based natural gas giant that attracted a lot of unwantednational publicity this past year, due in part to its CEO’s questionable finances — has nine rigs working within a 15-mile radius of Douglas with intentions of drilling steadily into the foreseeable future.
Along with the heavy industrial activity comes dust from traffic (one lonely county road went from eight vehicles per day to 800) and a good deal of gas emissions and flaring.
This scenario — the expansion of drilling coming into conflict with the expansion of residential development — is playing out all over the United States. This isn’t Wyoming’s first time to the rodeo, either. Intense drilling in the Upper Green River Basin has, on occasion, triggered hazardous ozone spikes, forcing orders for the young and elderly to remain indoors.
The current conflict once again exposes the state’s struggle to keep up with its oversight of a quickly changing industry, as well as the frustrating inability to provide solid answers about the air and water quality risks to those who find themselves living with intense oil and gas development. Baseline testing of air quality and water quality is seriously lacking in some areas of Wyoming. It takes good baseline data and ongoing monitoring to perform a forensic investigation to prove a connection between energy development and something like illnesses, nosebleeds, or even a garden that went to ruins.
This apparent lack of liability for the oil and gas industry is infuriating for citizens such as Mogen, who say they expect more from Wyoming’s regulatory agencies. “One of the biggest problems, you know, is we have regulations and they’re (industry) getting variances for them,” Mogen told WyoFile. “It seems like they’re (Wyoming DEQ) a permitting agency and not a regulatory agency.”
State officials say they’re on top of the flaring issue, but admit it’s a moving target.
“The biggest challenge is industry changes overnight; it’s the boom-and-bust thing. So it is a challenge to react quickly and meet the needs of everyone,” said Keith Guille, spokesman for Wyoming DEQ.
Complicating the situation is the division that occurs when some citizens are heavily burdened while many others eagerly cheer the development as an economic boon. Even neighbors tend to marginalize each others’ concerns.
“We have cows out there (near the Combs Ranch well blowout) … and I don’t see any side effects on the cows or us, actually,” Converse County rancher Wayne Paris said at the Chesapeake town hall meeting. “I thought Chesapeake worked well with us. … The dog is still chasing the damn cats up the tree. What the hell more can you ask for?”
County commissioners promise to be tough but fair with the operators, while also expressing that they’re ever-grateful for the economic benefits the drilling brings to the community. Chesapeake alone is estimated to inject $3 million into Carbon County’s coffers in taxes. “Just remember the bad times we had and be thankful for the good times we got,” Converse County commissioner Major Brown told the town hall audience.
There’s nothing new or sinister about flaring. It’s been a logistical reality for the oil and gas industry since its inception. It’s sort of the unavoidable gut-pile that complacent energy consumers never see or have to think about. But it’s a damn shame on many levels.
First, it’s a significant source of greenhouse gas emissions. Second, it’s an obvious waste of a valuable resource. Famously, oil operators in the Bakken field in North Dakota flare more than 100 million cubic feet (Mmcf) of gas per day — enough to serve 1,165 homes for a year.
On Wyoming state lands alone, some 411,789 thousand cubic feet (mcf) of gas from state-owned mineral leases was flared from October 2009 to October 2011, according to the Office of State Lands and Investments, which has the fiduciary responsibility to maximize revenue from state-owned lands and minerals to fund Wyoming schools.
There are more than three dozen active flaring permits (by special approval of the Wyoming Oil and Gas Conservation Commission supervisor) in Wyoming authorizing up to 21.18 Mmcf per day, according to figures provided by the Wyoming Oil and Gas Conservation Commission. That’s enough gas to serve about 233 homes for a year. At this week’s spot price in Wyoming, that’s $71,164 of missed gas sales per day. That’s a potential $25.9 million loss in sales over the course of a year, and about $1.55 million in lost severance taxes.
And that only represents special flaring permits, which can allow for up to 250 mcf of gas flared per day for 180 days. Under state regulation, operators are allowed to flare at any volume for the first 15 days after a well is drilled, and they’re allowed to flare — without a permit — at volumes of 60 thousand cubic feet (mcf) per day in perpetuity. Wyoming Oil and Gas Conservation Commission interim supervisor Bob King said his agency saw a big increase in the number of special flaring permit requests — and flaring volume. So in June, the commission board granted the supervisor discretionary authority to approve special flaring permits and at increased volumes and durations (up to 250 mcf per day for 180 days).
Actual flaring and gas emissions are likely larger than what’s represented on the regulatory books. A 2010 Government Accountability Office report suggested that data reported by operators under-estimates the volumes of gas flared and the volumes of gas that are vented unmitigated. “GAO found that the volumes operators reported to Interior do not fully account for some ongoing losses such as the emissions from gas dehydration equipment or from thousands of valves — key sources in the EPA, WRAP (Western Regional Air Partnership), and Interior offshore air quality studies,” the report stated.
Why flare at all?
Even when drilling for oil, there’s a lot of gas in the petroleum-bearing formation and it comes up the well with the oil, especially during the initial flows of a new well. Operators flare the gas to destroy dangerous volatile organic compounds (VOCs) and other toxins. For workers onsite, flaring is a safety precaution; it gets rid of some toxins and lessens the potential for explosion.
“The goal here is to remove 98 percent of the VOCs and hazardous air pollutants. That is similar to EPA’s (Environmental Protection Agency) regulations. The only difference is EPA’s threshold is to remove for 95 percent of VOC and hazardous air pollutants,” said Wyoming DEQ administrator Todd Parfitt.
Typical of a new drilling play, the pipeline infrastructure to carry gas from the well site doesn’t come until several months after a well is drilled. “Like all oil and gas producers, Chesapeake does not want to flare any more natural gas from well sites than is necessary. We would much prefer to sell the natural gas we produce, and as infrastructure is built in the field, flaring should decrease,” Chesapeake spokeswoman Kelsey Campbell told WyoFile in a prepared statement. In fact, Chesapeake has shut in several wells as they await pipelines to gather gas, according to company officials.
The gas that comes with initial flow from the Powder River Basin oil wells contains butanes, propane and ethanes — elements that must be separated at a gas processing plant before the natural gas can be pumped into the commercial pipeline network. There’s at least one major gas processing plant in Converse County. However, operators like Chesapeake must strike deals with the plant for processing capacity, and strike deals with pipeline companies to construct “gathering” lines to take the gas from each well site to the plant.
Once that happens, there’s ready access to the market. Chesapeake officials say they’ve already connected some of the wells of biggest concern to gathering pipelines for processing and sales.
“As long as you can get it processed, given the drop off in CBM (coal-bed methane) volumes, we’ve got lots of gas pipeline capacity, so that won’t be an issue,” said Brian Jeffries, executive director of the Wyoming Pipeline Authority.
Meanwhile, for those who live near massive drilling operations, flaring represents an annoyance and a potential health hazard.
If there is a sinister aspect to flaring, it’s this; nobody seems to be saying with any certainty exactly what toxins are emitted, how much, where the emissions blow before they dissipate and what is the human health risk. The EPA lists a host of toxins related to oil and gas emissions and potential health risks, but site-specific assessments are lacking.
“I want to know what the chemicals were that blew out of that well, right away. The first 24 hours that (petroleum compounds) vaporized and we inhaled them and my children had bloody noses for 29 days. That’s what I want to know first off,” said Mogen, referring to Chesapeake’s April well blowout.
The Wyoming Oil and Gas Conservation Commission’s inventory of flaring is incomplete. Wyoming DEQ does not track flaring emissions from the oil and gas industry, but it does track other “controlled” emissions from specific facilities. Wyoming DEQ requires best available control technology (BACT) for those facilities, and Wyoming’s emissions program tends to exceed federal requirements.
“So for a unit like storage tanks, if a flare is required by permit, then what operators report to the AQD (Wyoming DEQ Air Quality Division) for an emissions inventory is ‘controlled’ emissions from the storage tanks,” Wyoming DEQ emissions inventory and regional haze supervisor Brian Bohlmann told WyoFile. “But since these are on individual wells, if someone wanted to know the volume of gas sent to a flare then that person would need to look at several hundred (600 to 700) separate excel workbooks, and multiple tabs/worksheets within each workbook.”
So, if trying to quantify emissions in a specific drilling area is daunting for regulatory officials, imagine what it must be like for your average homeowner who knows little about the oil and gas industry and the state’s regulatory regime.
State and industry officials say they’re working hard to answer citizens’ questions about flaring and other emissions. Wyoming DEQ has 38 air quality monitoring stations statewide, and three mobile monitoring units. One of those mobile units will be placed in Converse County later in 2013, according to officials. State officials, and some operators, are working to gather the air quality information that residents like Mogen are demanding. Wind socks will soon be installed to indicate wind direction, and Mogen is asking Chesapeake to install barriers around some well sites to block noise and possibly some emissions, too.
The drilling for shale oil in eastern Wyoming has only just begun, so these types of conflicts — drilling near rural homes and neighborhoods — may increase, which means the state is already playing catch-up in its ability to answer questions.
“Predominantly, in the area here close to Douglas, not only are we encountering better wells at higher rates, but we’re also closer to communities and people that have concerns. So we’re trying very very hard to minimize the flaring,” said Sandy Andrew, Chesapeake Energy’s operations manager in Wyoming.
— Dustin Bleizeffer is WyoFile editor-in-chief. He has reported on the energy industry in Wyoming for 14 years. Contact him at 307-577-6069 or email@example.com. Follow Dustin on Twitter @DBleizeffer.