LITTLE ROCK — The Arkansas agencies that regulate the oil and gas industry said Tuesday that they need more inspectors and improved online records to better oversee the industry.
The acknowledgment came during an independent review of the state’s regulation of hydraulic fracturing.
The State Review of Oil & Gas Environmental Regulations Inc., an Oklahoma-based nonprofit that reviews state oil and gas regulation, conducted the review Tuesday in Little Rock at the Oil and Gas Commission offices.
Lawrence Bengal, director of the commission, acknowledged that “since we adopted [new regulations] we could use more inspectors. But that decision is not up to the agency, it’s budgeted from the legislators.”
The Arkansas Public Policy Panel, an environmental advocacy group, issued two reports this year saying that the state’s online record-keeping of the oil and gas industry was lacking, making it difficult to follow enforcement. It also called for more inspectors.
Though hydraulic fracturing, or fracking, has been around for decades, it has recently increased as oil and gas companies learned to drill horizontally.
Bengal added that the department has had to play catch-up in the five or six years since fracking took off in the Fayetteville Shale in north-central Arkansas. Fracking is the process of injecting millions of gallons of water, mixed with sand and chemicals, into a well to break up a rock formation and release oil and gas.
Before 2004, only about 190 wells had been drilled since the 1960s in the Fayetteville Shale, and most were unprofitable, Bengal said. Today there are approximately 4,100 wells in the area.
Kenneth Brazil, an engineer supervisor with the state Natural Resources Commission, which oversees water rights, said that if the commission had a better online data system it could spend more time overseeing the industry rather than fielding calls from the public seeking information.
“Once a system is built, it will be much easier,” Brazil said. “We won’t have to pull a file every time someone calls asking the most common questions. We can focus on oversight.”
He said the Natural Resources Commission has a goal to complete a better online system, saying, “We’re on the road to getting there.”
Brazil also said that his office could use more people.
“Three and a half years ago we thought we might get 20 permits [related to the Fayetteville Shale],” Brazil said. “It has been a big evolution. We’ve reassigned staff, added some new people, but we’re not to adequate levels. We can always use more help.”
Brazil said the Natural Resources Commission has issued about 900 permits since 2005 in the Fayetteville Shale.
Steve Drown, the chief of the water division of Department of Environmental Quality, said his office has experienced similar issues since the Fayetteville Shale took off. The department regulates water and air pollution.
“At first we were overwhelmed,” Drown said. “We have caught up over the past four of five years, but we could use more staff. ... We are holding our own, but it is becoming more difficult.”
Those difficulties could be exacerbated should hydraulic fracturing for oil in the Lower Smackover Brown Dense Formation in south Arkansas and north Louisiana be profitable, Bengal said.
Bengal said his agency provides all of the information it collects on its website, aogc. state.ar.us. He noted, however, that not all the information the public seeks is collected as part of the regulatory process and, therefore, isn’t available.
Tuesday’s review team was composed of representatives of the oil and gas industry, the Oklahoma Corporation Commission Oil and Gas Division, and an environmentalist.
The review had been called for earlier this year by state Sen. Jason Rapert, R-Bigelow, chairman of the Fayetteville Shale Caucus, a group of 16 legislators formed during the 2011 legislative session with the goal of protecting the naturalgas industry from proposed legislation.
On Tuesday, Rapert said he called for the review to show that Arkansas regulators “are doing a good job.”
The review team and official observers asked questions of the agencies about risks associated with fracking, such as groundwater contamination.
After a question-and-answer session, the team went into an executive session to discuss what was said.
An official report from the review team is expected in two to three months.
Business, Pages 27 on 11/09/2011