PIPELINE
the newsletter of Panhandle Producers & Royalty Owners Association • Vol. XC • No. 5
Let the RRC Do Their Work
The earthquake scare needs careful study. One bad memory looms large as the oil and gas industry copes with emerging studies, including one
from Southern Methodist University last week, showing its activities are the likely cause of induced seismicity in either Texas or Oklahoma.
Range Resources filed a case against Steven Lipsky, a North Texas man, who lit gas fumes from his water hose on fire and accused the company
of contaminating his water well. Lipsky sued Range and Range countersued. As of Friday, the Range defamation case against Lipsky is heading
back to a trial court. The Texas Supreme Court dismissed Lipsky’s wife and consultant from the defamation action, but not Lipsky himself.
“The industry certainly wishes to find a solution to all of this,” said Alex Mills, president of the Texas Alliance of Energy Producers, who raised
questions about the SMU study but welcomed scientific research into seismicity’s relationship to production and injection wells. “We just want to
make certain that we don’t get in the same situation we got into with the Range Resources case in Parker County where there were allegations
made proved to be erroneous. Lawsuits filed, legal action was taken by EPA, and the (Texas) Railroad Commission got involved in it. The Railroad
Commission vindicated Range Resources and the EPA backed down, but Lipsky continued with his complaints”. “There are a lot of uncertainties
involved in these cases and a rush to judgment is not in the best interest of everybody.”
To date Mills has no knowledge of any lawsuit seeking damages for seismic activity related to oil and gas operations. Mills points to statements
made in legislative hearings and at the Railroad Commission from the Azle-Reno area asking who would pay for damages to homes and property if
the state allows oil and gas activities that cause harm. The Railroad Commission subsequently adopted rules allowing it to stop or modify injection
well activities if they are causing earthquakes.
The SMU inquiry found that saltwater extraction and injection near two faults likely caused a rash of small earthquakes in Azle and Reno from late
2013 to spring 2014. That study will be the subject of a hearing next Monday of the House Energy Resources Committee, chaired by Rep. Drew
Darby, R-San Angelo. The Railroad Commission has also scheduled hearings in June at which operators of two disposal wells in the Azle hearings
should show cause for why injection permits for the wells should not be cancelled and the wells shut in. The wells were identified in the SMU study,
which showed an “alleged connection” between their ongoing operations and seismic activity in the area.
“In light of SMU’s study linking disposal well activity to earthquakes in 2013, it is important to assess this new information in relation to the continued
operational safety of the wells,” Commission Chairman Christie Craddick said last week. The Environmental Defense Fund praised the
commission’s decision to hold the hearings. “The commission is taking a proactive approach to the important but complicated problem of
earthquakes linked to oil and gas development,” said Scott Anderson, EDF’s senior policy director. “We couldn’t agree more with Commissioner
Christie Craddick’s statement that it is incumbent on the commission to apply its rules where and when appropriate to protect public health and the
environment.”
Anderson also cautioned that it could be difficult to determine whether a particular earthquake is caused by oil and gas activities. It raises questions
about why Irving has been experiencing earthquakes, and it underlines why each quake must be viewed individually. He noted that Darby and other
House leaders support budgeting $2.5 million for deploying mobile seismometers, and suggested an additional $1 million per year would be ideal for
ongoing research and maintenance.
Mills released detailed statements raising several questions about SMU’s study and noting that seismic activity has occurred in specific sites with
certain geologic characteristics. “Even though the study pointed a finger at water extraction and re-injection, it did not recommend any solutions,” the
statement said. “Further, the study admits that there were six key areas where they had to make estimates, because important scientific facts were
not known to researchers. The uncertainties listed in the report are brine production, bottom-hole pressure, regional structural geology, stress
magnitude and orientation, permeability and modeling.”
Let the RRC do their work before jumping to conclusions and rushing to the courthouse.
Polly Ross Hughes Copyright April 27, 2015, Harvey Kornberg, www.texasenergyreport.com. All rights reserved
Reprinted with permission of Quorum Report.
Let the RRC do their work .......................... 1
From the Wellhead ..................................... 2
From the EVP ............................................. 3
Case note ................................................... 4
Markets ....................................................... 6
Priority Bills ................................................. 8
Cowgirls & cocktails .................................. 10
Bad time to be in renewable energy ......... 12
Locations .................................................. 14
New & renewing members ....................... 14
Permits ..................................................... 15
Monthly stats ............................................ 16