Environment & Safety

Well Construction

Whenever you penetrate the earth’s surface and create a well bore, there is some risk to the process. However, proper regulations and oversight by the Division of Oil and Gas Resources Management (DOGRM) helps to mitigate these risks.

Ohio is blessed with one of the strongest sets of oil and gas regulations in the nation. This is highlighted by the passage of Senate Bill 165 in 2010. Ohio law now states that wells must be properly constructed by an oil and natural gas operator. Proper construction includes several strings of steel conductor casing, each properly cemented into place to protect groundwater resources. Proper steel casing and cement also ensures that oil and natural gas being produced stays within the well bore and does not migrate elsewhere.

If a well’s operator does not properly construct their well, they are placed in “Material and Substantial Violation”. When an operator is placed in material and substantial violation by DOGRM, the Chief of DOGRM has the ability to shut down the well and require the well to be repaired or plugged to address the problem.

Regulation of Water Related to Oil and Gas Exploration and Production Under Federal and State Law

Where the federal government has the regulatory authority related to oil and natural gas production, it relies on the state regulators to conduct the daily regulation efforts. Federal environmental laws apply to oil and natural gas production activities when waste is generated. Most specifically with regard to the development of emerging shale gas and shale oil formations, the applicable federal laws address the disposal of produced water (including hydraulic fracturing flowback water) – the Safe Drinking Water Act (SDWA) and the Clean Water Act (CWA).

The applicability of the law depends on the disposition of the produced water. Produced water injected underground is regulated under the SDWA; produced water discharged to the surface is regulated under the CWA. The SDWA and the CWA operate similarly. The federal government creates a national framework but the laws rely on state regulators to bear the larger permitting burden through the delegation of that role from the Environmental Protection Agency (EPA).

With respect to the SDWA, regulation of underground injection is defined by the Underground

Injection Control (UIC). The UIC program creates a series of Classes for different types of injection wells; Class II applies to oil and natural gas production. In 1980, Congress modified the SDWA to allow for primacy under the law to be granted to states for Class II programs based on equivalent effectiveness rather than adoption of the specific EPA regulations. Most oil and natural gas producing states with active underground injection operations have primacy based on equivalency with the federal program. Class II wells can either be used for disposition of water or for reinjection into formations as a type of secondary recovery to increase production. There over 140,000 Class II UIC wells in the United States. Clearly, without the delegation of this program to the state regulatory bodies, the federal law would be virtually incapable of implementation.

The CWA operates somewhat differently. Every point source – discrete discharge outlets for waste water – must have a permit under the CWA. Permit writing is typically delegated to state regulators. Waste water discharge permits are generated based on federal Effluent Limitations Guidelines (ELG). ELGs are developed by EPA for industrial and other categories of sources that discharge waste water. ELGs are based on the Best Available Technology Economically Achievable (BATEA). ELGs are written using extensive analysis of the category and frequently contain subcategories that reflect distinctions within the category such as size or complexity of its components. If a category has an ELG, the state permit writer uses it to determine the amount of a contaminant that the operation can discharge on a daily basis. If there is no ELG, the permit writer uses Best Professional Judgment (BPJ) to determine what requirements would be equivalent to BATEA for that permit. This federal-state balance has been in place since the 1970s and works well. However, as in the case of the SDWA, it relies on the capabilities of the state regulators. Without delegation, EPA would be overwhelmed and incapable of managing the permit writing process.

Oil and natural gas producers cannot directly discharge produced water under the CWA because the ELG for onshore oil and natural gas production is a zero discharge limitation. Historically, more than 90 percent of oil and natural gas produced water is managed by Class II UIC wells.

As a result of the current ELG, producers in areas without UIC capability have to either send water to places where UIC is available or arrange for their water to be managed at a commercial waste treatment facility. Pennsylvania is an example. Its geology prevents widespread use of UIC and therefore producers either export water out of state – to Ohio in large measure – or send water to commercial operations.

Underground Injection Control (UIC) Program

When you hydraulically fracture a well, you use water, sand and a small portion of chemical additives. The average horizontally-drilled shale well can take up to 4 million gallons of water to hydraulically fracture. While that may seem like a large amount, keep in mind that the average golf course uses 4-5 million gallons of water per week to water their grounds.

However, some of that water returns to the surface. This water, called flowback, must be disposed of safely. Brine (or salt water) and hydraulic fracturing fluids must also be disposed of safely.

Deep underground injection is the safest way to dispose of these fluids. Underground injection for oil and natural gas produced waters is regulated under the federal Safe Drinking Water Act (SDWA). This system is regulated by the ODNR-DOGRM (via their Underground Injection Control program) and the U.S. Environmental Protection Agency (U.S. EPA).

A Class II well injection well may either be a formerly producing oil or natural gas well, an exploratory well used to test a rock formation to see if it holds oil or natural gas, or a well drilled specifically for the purpose of underground injection. The average depth of a Class II injection well is 4,000 below the surface.

The disposal of flowback water down a Class II injection well is the safest, most environmentally friendly method of disposal and has been used in Ohio since the 1960’s. According to the U.S. EPA, it is the best way to ensure that underground sources of drinking water are not contaminated by fluids produced from the drilling, stimulation, and production of oil and gas.

Just like an oil or natural gas well, several layers of steel conductor casing and cement are placed into the injection well to ensure that groundwater is protected. The injection zone where the fluids are disposed of are always below an impermeable layer of rock or clay ensuring that these fluids stay within the injected zone.

Spill Prevention, Control and Countermeasure (SPCC)

With the enactment of the Clean Water Act in 1972, Congress required the Director of U.S. EPA to issue regulations mandating Spill Prevention Control and Countermeasure (“SPCC”) plans.  The purpose of these plans is to require certain oil-handling facilities to prepare for accidental discharges of oil and, in the event such a discharge occurs, to prevent that oil from reaching navigable waters of the United States.

Clean Water Act Section 311(o) provides:  “Nothing in this section shall be construed as preempting any State or political subdivision thereof from imposing any requirement or liability with respect to the discharge of oil or hazardous substance into any waters 15 within such State.”  33 U.S.C. § 1321(o).  Accordingly, producers must comply with both state and federal SPCC Plan requirements.

In 1988, the Ohio General Assembly passed the Right to Know Bill, which, among other things, authorized Ohio EPA to adopt rules for a state-enforced SPCC Program.  In 1994, that statute and Ohio Revised Chapter 1509 were amended to transfer to the Ohio Division of Oil and Gas, now the Division of Oil and Gas Resources Management (DOGRM), the Ohio EPA’s SPCC authority over oil production facilities and oil drilling and workover facilities.

To date, no such rules have been promulgated, due in large part to the delay at U.S. EPA with respect to SPCC Rule amendments.  However, the U.S. EPA has finalized rules effective November, 2011. With this action now complete, state SPCC rules are in the process of being crafted.

Air Emissions

Emissions from oil and gas operations are regulated under the federal Clean Air Act (CAA). Most Ohio operators have traditionally fallen below the general de minimis thresholds contained in the CAA. With the expected increase in shale activity in Ohio, the Ohio EPA is working on a draft general air permit for shale operations within the state.

The Ohio EPA published its Draft General Permit for Oil and Gas Well-Site Production (the “Draft GP”) on October 20, 2011.  The Draft GP provides proposed terms and conditions for operating a variety of air emission sources that are commonly found at most shale well production sites.  These emission sources include:  glycol dehydrators, natural gas and diesel engines, natural gas micro turbines, storage tanks and truck loading, combustors or flares, equipment/pipeline leaks and unpaved roadways.