ROGERS — Drilling in the Fayetteville Shale formation in the northern part of the state has been a game changer for state regulatory agencies. With 2,300 wells drilled and 2,000 miles of pipeline laid since drilling began in the formation in 2004, agencies have had to adapt quickly.
“When you take an area where there’s no development, and over four years do the massive infrastructure necessary, there are going to be growing pains,” Arkansas Oil and Gas Commission Director Lawrence Bengal told members of the state Senate and House Joint Performance Review Committee on Tuesday.
The growing pains are evident. The number of wells that have started producing so far this year is comparable to last year during the same period, about 400.
However, the Arkansas Department of Environmental Quality reported a spike in the number of complaints. The department had 78 complaints about water issues and completed 171 inspections this year through the first half of June, compared with 108 complaints and 216 inspections in all of 2009.
Teresa Marks, director of the Environmental Quality Department, attributed the increase to growing infrastructure around shale development, such as pipelines and “land farms” used to dispose of some drilling fluids.
But agencies said they are making headway in dealing with the challenges of accelerated natural gas operations.
Bengal said Tuesday that he plans to propose a rule requiring gas drilling companies to disclose the exact chemicals they use in each well, making the data more transparent and readily available to the public.
Bengal told the legislative committee at the Embassy Suites that the rule will be proposed this summer, in time for the commission’s Rules Committee meeting this fall.
“It will basically say what type of acid [for example], what quantity of acid, what strength of acid is being used in a particular well on that particular frack job,” Bengal said. The commission alreadyoffers a list of the 13 categories of chemicals used in hydraulic fracturing, or “frack” fluid on its website, aogc.state.ar.us/ Fay_Shale_Data.htm.
Agencies have moved to address many of these issues, their directors told the committee. The Oil and Gas Commission, for instance, has opened a Little Rock office in addition to its El Dorado headquarters so that it can be better positioned to address issues in the shale formation, in addition to making more data available on its website.
Marks said in an interview after the meeting: “We have learned to spot those issues more quickly, and the industry has learned the real problem issues we have, and at least most of the industry has attempted to address those issues.”
Marks said the department has stepped up its inspection of land farms and toughened standards for its permits. Last year, the Environmental Quality Department cited all 12 ofthe state’s land farms for violations, and only four remain open and have revised permits.
Marks said the department also recently received $640,000 from the state Game and Fish Commission to hire more inspectors to do random checks of gas-drilling sites.
Representatives from Southwestern Energy Co. and Chesapeake Energy, the two largest operators in the shale, stressed environmental stewardship measures in place.
Randy Maxey, manager of regulatory affairs for Chesapeake’s Northern Division, said the company is now able to reuse up to 400,000 gallons of water at a new well, or about 10 percent of the water needed to fracture another well. Danny Ferguson, Southwestern Energy’s vice president for government and community relations, said the company recycles all the water that initially flows back from drilling wells. Water that comes through the well later, known as “produced water,” has to be disposed of in injection wells.
Worries about the safety of drinking-water wells took center stage at Tuesday’s meeting.
Ferguson showed microseismic images of a Fayetteville Shale well being fractured to show that material in the well did not travel into other layers of rock to groundwater supplies.
There have been no complaints of contamination in any public drinking-water supplies, Marks said, but some owners of private wells have reported problems with their water. Marks said though the Department of Environmental Quality does not regulate public drinking water or privately owned wells, it has tested several wells and found no conclusive evidence that hydraulic fracturing chemicals have infiltrated the water.
But more study needs to be done, she said.
“We need to make sure it’s not infiltrating into the groundwater or into the water wells. ... I think we’re going to have to do some testing or some research, which [the Environmental Protection Agency] is doing now, so we can know definitely how it’s affecting our water.”
Rep. Uvalde Lindsey of Fayetteville said the meeting left him with more questions about whether there are enough field inspectors to keep up with the pace of new wells. Bengal said the commission has three inspectors for the 40 to 50 wells that are being drilled at any given time.
“If we’re relying on the industry to self-police ... is that right or wrong? I don’t know. I don’t know if that’s right or wrong, but it leaves me concerned about the integrity of the well itself, the structure,” he said.
Business, Pages 25 on 06/30/2010