FEMA LIMITS THE SUBSURFACE USES (INCLUDING FRACKING) OF HAZARD MITIGATION ASSISTANCE ACQUIRED LANDS

FEMA LIMITS THE SUBSURFACE USES (INCLUDING FRACKING) OF HAZARD MITIGATION ASSISTANCE ACQUIRED LANDS

On May 5, 2014, FEMA issued the mitigation policy entitled “Limits on Subsurface Uses of Hazard Mitigation Assistance Acquired Lands”. This policy provides guidance on whether oil, gas or other mineral extraction by hydraulic fracturing, horizontal directional drilling (HDD) is an allowable use of open space. The new policy clarifies existing language in the Code of Federal Regulations (44 C.F.R. Part 80) and applies to all Hazard Mitigation Assistance (HMA) funded projects including; the Hazard Mitigation Grant Program (HMGP), Pre-Disaster Mitigation (PDM) program, and the Flood Mitigation Assistance (FMA) program. The main reason that the oil & gas industry wants floodplain access is the ready availability of fracking water because it needs several million gallons of water per production well.

This blog addresses some of the flooding damage issues associated with the placement of the hydraulic fracturing activities into floodplains, especially in high risk areas.

The policy deals with an emerging issue in New York, Pennsylvania, Colorado and across the country—FEMA’s prohibition on using Hazard Mitigation Grant Program (HMGP) dollars to buy out repetitively-damaged properties where there are separate underground mineral rights leases or separate owners, particularly where hydraulic fracturing or “fracking” or “fracing” may occur. FEMA stated that property acquisitions under the HMA programs permanently remove structures from risk of damage and seek to conserve natural floodplain functions. Properties generally must be acquired under the HMA programs with clear title (44 C.F.R. § 80.17(b)). Any incompatible easements or other encumbrances to the property must be extinguished before acquisition.

In the May 2014 policy, FEMA stated that hydraulic fracturing/HDD is a practice with currently unresolved environmental impacts and unknown open space compatibility. Based on available scientific information, FEMA is unable to make a determination of compatibility with open space requirements. FEMA noted that other Federal agencies with environmental and land use authorities are currently evaluating the practice of hydraulic fracturing/HDD. FEMA will review data on the environmental impacts of hydraulic fracturing/HDD developed in the future by these other federal agencies and will determine whether hydraulic fracturing/HDD is an activity that is compatible with open space and that conserves the natural function of the floodplain.

Hazard mitigation entails changes at both the individual and community level. It means incentivizing individual preparation with risk-based insurance rates and financial support for storm-proofing, home elevation and other proven methods to protect people and property from damage. It also encourages communities to strengthen building codes and restoration of marshes and wetlands to provide a natural buffer to flood-prone areas from rising waters. The HMGP can be used to fund projects like acquiring and relocating structures from hazard-prone areas, retrofitting structures to protect them from floods, high winds, earthquakes, or other natural hazards, constructing certain types of minor and localized flood control projects, and constructing safe rooms inside schools or other buildings in tornado-prone areas. When properties are acquired under this program, they are required to be maintained as open space indefinitely. Clearly, by placing the 4-5 acre fracking pads or other storage activities (such as water impoundments or wastewater tanks) in floodplains or repetitively-damaged properties changes the wetland values and is in conflict with the restoration of marshlands and wetlands, creates erosion and sedimentation issues and overall, has increased the flooding damage to downgradient properties.

Lessons from the 2013 Colorado Floods

The disastrous floods in eastern Colorado in early September, 2013 caused significant damage to many of the oil and gas facilities that lay in the path of flood waters. Inspections and observations by the Colorado Oil and Gas Conservation Commission (COGCC) show that certain construction and location techniques within the flood impact zone fared better under the influence of flood waters, with significantly less damage, than other methods of construction and location. The COGCC, through inspections and operator reports, immediately began to compile and assess spill data. As of November 8, the COGCC reported total spills of 1,149 barrels (48,250 gallons) of oil and condensate and 1,035 barrels (43,479 gallons) of produced water originating from storage tanks and leaking pipelines. These totals came from forty-nine total spills, fourteen of which were in excess of twenty barrels. Twenty spills only comprised produced water, and the single largest spill amounted to 323 barrels.

Lessons from the 2011 Flooding caused by Tropical Storm Lee

Intense flooding in Pennsylvania and New York caused by Hurricane Lee in September 2011 reignited the debate over how best to manage and store fracking fluids and flowback water and, further, whether pits can adequately prevent overflow or stormwater runoff. In the southern tier of New York, along the Pennsylvania border, the area was inundated by record-high floodwaters, forcing the closure of major highways and washing out roads, bridges, and entire neighborhoods.

The Susquehanna River broke a flood record and began flowing over retaining walls in parts of New York, and on September 8, 2011, more than 120,000 residents in Pennsylvania and New York were ordered to flee the rising Susquehanna River.

In addition to flooding of fracking pads and adjacent areas along the Susquehanna River and its numerous tributaries, Pennsylvania has experienced overflow from fracking pits, even when there was no relation to extreme weather. In Pennsylvania and some other states, natural gas wells are being permitted and drilled in floodplains. While current regulations do not allow well pads to be located within 100 feet of streams or within the floodway without an encroachment permit, neither the Pennsylvania Oil and Gas Act nor its regulations prohibit siting wells in floodplains. Two such wells, one operated by Stone Energy along Wyalusing Creek in Rush Township, Susquehanna County, and one operated by XTO along Muncy Creek in Shrewsbury Township, Lycoming County have already experienced flooding events. See image below from a flooding in 2010 along the Wyalusing Creek in Rush Township, Susquehanna County.

The oil & gas companies prefer the floodplain locations because they provide ready and immediate access to the several millions gallons of water they need for the well fracking operations (and of course they easily discharge the waste into a stream without anybody taking notice of it). There have been several illegal dumping incidents of fracking waste reported throughout the United States.

Surface Water and Soil Contamination

Spills of fracturing chemicals and wastes during transportation, fracturing operations and waste disposal have contaminated soil and surface waters. In 2013, 41 spills impacted surface water in Colorado alone. This section provides a few examples of spills related to hydraulic fracturing that have led to environmental impacts.

o Two spills kill fish: In September 2009, Cabot Oil and Gas spilled hydraulic fracturing fluid gel LGC-35 twice at the company’s Heitsman gas well. The two incidents released a total of 8,000 gallons of the fracturing fluid, polluting Stevens Creek and resulting in a fish kill. LGC-35, a well lubricant used during the fracturing process. A third spill of LGC-35 occurred a week later, but did not enter the creek.

o Fracturing fluid taints a high quality watershed: In December 2009, a wastewater pit overflowed at Atlas Resources’ Cowden 17 gas well, and an unknown quantity of hydraulic fracturing fluid wastes entered Dunkle Run, a “high quality watershed”. The company failed to report the spill. In August 2010 the Pennsylvania Department of Environmental Protection (DEP) levied a $97,350 fine against Atlas Resources

o Another fracturing fluid spill impacts a high quality waterway: In May 2010, Range Resources was fined was fined $141,175 for failing to immediately notify the Pennsylvania Department of Environmental Protection when the company spilled, in October 2009, 250 barrels of diluted fracturing fluids due to a broken joint in a transmission line. The fluids flowed into an unnamed tributary of Brush Run, killing at least 168 fish, salamanders and frogs. The watercourse is designated as a warm-water fishery under Pennsylvania’s special protection waters program.

o In June 2010, one oil and gas company drilling in the Marcellus Shale region of Pennsylvania failed to report a hydraulic oil spill and a wastewater pit liner violation. Chief Oil & Gas Pays $180K Fine for Spilling Oil and Overfilling a Wastewater Pit, MARCELLUSDRILLINGNEWS, Jun. 29, 2011. A surprise PADEP inspection found evidence that, among other things, a waste pit was close to overflowing. In this case, the drilling and fracturing had been completed, and the well had been capped months earlier. The operator was charged with violations of the state Oil and Gas Act, the Clean Streams Law, and the Solid Waste Management Act and was assessed a $180,000 fine.

o Fracturing fluids affect soil and pond: In May 2011, a mechanical problem at a Pennsylvania natural gas well caused thousands of gallons of briny water and fracking fluid of unknown composition to spew out of the well, overwhelm containment facilities and flow across a field and into a pond. The local emergency management agency told seven families to evacuate their homes. It took a response team -- Houston-based Boots and Coots -- 13 hours to reach the site. Six days went by before workers were able to seal the leak, replace the wellhead and get the well "under control."

• On August 26, 2014, The Department of Environmental Protection announced a Consent Order and Agreement with William C. Henderson, Titusville Oil & Gas Associates Inc., Eagle Line Corporation, and Olympia Oil Services Inc., which includes $250,000 in civil penalties. The civil penalties stem from various violations of the Clean Stream Law, Solid Waste Management Act, and Oil and Gas Act, including failure to obtain Erosion and Sediment Control general permits during earthmoving, unauthorized discharge of production fluids, failure to report such unauthorized discharges, failure to plug abandoned wells, and other violations. The violations were discovered during inspections of various properties owned and operated by Henderson and his companies between March 2010 and June 2014. Further investigations by DEP also concluded that Henderson and Titusville Oil had disturbed more than five acres and disturbed wetlands without permits, along with several other on-going issues. In addition to the penalties, Henderson and his three companies must take all actions necessary to attain compliance with the state’s laws and regulations, including the cease and desist of all unauthorized well activity, restoration of all illegally disturbed areas, and submission of outstanding reports, among other requirements. Henderson is the president and operator of the three companies, and is subject to the requirements of the Consent Order and Agreement. Henderson and his companies are required to pay the civil penalty in payments, with an immediate $25,000 payment and equal payments of $56,250 over the next 12 months. In 2011 William Henderson was charged by the Office of Attorney General for criminal violations of dumping gas well production brine into abandoned wells.

Although these incidents do not appear to have involved extreme weather, it is not difficult to imagine the complications that could be magnified by the combination of flowback in wastewater pits and extreme weather conditions.

On Sept. 20, 2013, STRONGER published the results of its most recent independent peer review of DEP’s oil and gas regulatory program at www.strongerinc.org and found it to be proficient and ready to address the increase in oil and gas operations in Pennsylvania. This represents the fifth review of Pennsylvania's oil and gas program since 1990.

STRONGER recognized the following actions taken by Pennsylvania’s Oil and Gas program to strengthen the following key areas:

· ·Increased staff levels to address additional permitting, inspection and enforcement activities related to increased unconventional gas well development;

· ·Expanded the program’s public participation activities associated with the abandoned well sites program;

· ·Initiated a comprehensive evaluation of radiation levels specifically associated with unconventional gas development, the first of its kind in the nation;

· ·Mandated that operators performing earth disturbance activities associated with oil and gas activities develop and implement erosion and sedimentation control best management practices to minimize the potential for erosion and sedimentation; and

· ·Advanced its hydraulic fracturing program and required that well operators conducting well casing and cementing to maintain control and prevent migration of gas or other fluids into sources of fresh groundwater.

New York State is doing a better Job with Hydraulic Fracking Regulation

The New York State Department of Environmental Conservation released its revised recommendations on mitigating the environmental and socio-economic impacts of high-volume hydraulic fracturing (high-volume fracturing) on September 7, 2011. In developing the permitting process for high-volume hydraulic fracturing, DEC's number one priority is to protect drinking water for all New Yorkers.

Specific measures to protect the state's drinking water include prohibiting surface drilling:

· within 2,000 feet of public drinking water supplies;

· on the state's 18 primary aquifers and within 500 feet of their boundaries;

· within 500 feet of private wells, unless waived by landowner;

· in floodplains;

· on principal aquifers without site-specific reviews; and

· within the Syracuse and New York City watersheds.

No permits will be issued for well pads sited within a 100-year floodplain.

These recommendations, if adopted in final form, would protect the state's environmentally sensitive areas while realizing the economic development and energy benefits of the state's natural gas resources. More than 80 percent of the Marcellus Shale where gas extraction is viable would still be accessible under these recommendations.

Recommended Practices for Flood Impact Zone Reconstruction

The disastrous floods in eastern Colorado in early September, 2013 caused significant damage to many of the oil and gas facilities that lay in the path of flood waters. Inspections and observations show that certain construction and location techniques within the flood impact zone fared better under the influence of flood waters, with significantly less damage, than other methods of construction and location.

Operators in the flood impact zone are reengineering, reconstructing and relocating facilities and equipment damaged in the floods. The purpose of this Recommended Practice is to encourage operators to adopt the following practices both during reconstruction and relocation as they undertake repair work in the flood impact zone, and for constructing new wells and production facilities located in any flood plain.

Metropolitan experts note that armored secondary containment, structural tank restraints, upstream structural fencing, remote shut-in controls, and equipment alignment that locates tanks along streamlines, are best practices that can reduce damage in future floods.

Metropolitan recommends:

1. Secondary containment should be constructed with steel berms and lined with synthetic liner material bolted to the top of the steel berm

2. Tanks should be constructed on compacted structure fill to reduce sub-grade failure.

3. Tanks should be ground-anchored, with engineered anchors and cabling routed through welded eyelets.

4. Buried and partially buried vessels should be ground anchored.

5. Structural fencing and barriers should be located at the upstream end of facilities and wellheads to deflect flood debris and heavy flood waters to reduce site damage.

6. Remote automated controls should be installed and used to monitor and shut-in wells to reduce the potential for fluid releases and prevent overflow situations where tanks are not accessible for extended periods.

7. Production facilities should be aligned parallel to the general drainage or flow path and construction perpendicular to the drainage or flow path should be avoided.

In summary, no form of energy production is without risk, and it is important that oil and gas operations are well prepared to prevent spills, even in the face of the most violent natural disasters. While all spills of toxic materials are significant and serious, quick actions by the oil and gas industry and immediate emergency response to the flooding by the insureds should keep the lands free from any major threat to the environment or public health.

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