The Edmond Sun

July 17, 2013

‘EPA manipulating legal system;’ forcing Oklahoma to act fast

James Coburn
The Edmond Sun

OKLA. CITY — The Oklahoma Corporation Commission is challenged to update regulations for the oil and gas industry at an unprecedented speed, said Dana Murphy, corporation commissioner.

Most of the ways that commissioners have dealt with oil and gas drilling were designed for an industry focused on vertical wells, Murphy said.

There have been more than 500,000 wells drilled in Oklahoma — mostly vertical, Murphy said. Horizontal drilling is increasingly being used to access all types of energy reservoirs other than shale, such as limestone and sandstone, Murphy said. Drilling 4,000 to 10,000 feet will include lateral drilling as much as 10,000 feet, she said.

“So, now you’ve got the dynamics of a vertical environment that was put in place for vertical wells,” Murphy said. “Now you have horizontal wells, and how are you going to make sure that you have protections in place as far as protecting correlative rights of various owners, environmental protections and various safety issues?”

Federal regulations fill-in the regulatory backdrop for commissioners to balance with the changing dynamics of the industry, she said.

Beyond water, electricity and drilling regulations, there is the issue of air emissions, Murphy said. It is the State Department of Environmental Equality, not the Corporation Commission, that deals with air emissions.

“So, now you’ve got the feds concerned about air emissions along the gas supply chain, from basically the drill bit to the burner tip,” Murphy said.

Murphy sees a collaborative relationship developing between regulatory agencies which typically had a divided focus, she said.

Cement surface casing has been used to protect shallow-ground water aquifers, a regulatory area of responsibility for the Corporation Commission, Murphy said. The security of these casings is projected to endure the 30-50 years that these wells are projected to be productive, Murphy said.

“We’re still in the newness of some drilling of these wells,” Murphy said. “So it’s hard to know, really, how far they’re going to drain, or what the maturity will be of the well.”

 There are checks and balances put in place with the bonding of the cement surface casings and wells, she said.

“It’s in the company’s best interest to make sure there’s not some problem because you want to maximize the recovery you have from the well,” Murphy said. “If they’re not to set the appropriate amount of surface casing — a lot of times what they have to do — they have to plug-off and they have to start another well.”

Electric infrastructure is another issue, Murphy said. Water is needed for cooling utility purposes. The drilling of long horizontal wells in northern Oklahoma, is an example of an area served by rural electric cooperatives.

“There’s not a lot of residences and there hasn’t been a lot of demand for power,” Murphy said. “And all of the sudden, now, here we have the oil and gas industry coming in one of their most active areas and there hasn’t been this demand of power on these little electric cooperatives.”

Most oil and gas leases run about three years, Murphy said. However, she said the planning and developing process to upgrade the rural electric infrastructure takes several years. Their planning cycles are different, Murphy said. County commissioners in these sparsely populated areas struggle to meet the challenge, she said.

“It is a lot, and I don’t think people have thought about the big picture,” Murphy said.

Meanwhile, the oil and gas industries are doing more outreach to the public. Murphy has been busy creating a series of town meetings focusing on horizontal drilling. One meeting will be in Perry sometime between August and October, she said.

These town hall meetings include local and national associations of mineral owners, the Oklahoma Energy Resources Board, and typically an energy company in the area.

“It’s not just driven by money,” Murphy said of drilling for energy purposes. “We have to drink the water and breathe the air, too. That’s one thing I talk about with local regulation. Would you rather have local people who live in the community that drink the water and breathe the air you do, or would you rather have some federal agency regulating a ‘one-size-fits all’ with people who don’t even live in your area?”

Murphy advocates for the ability of the states to regulate at a local level, she said.

Oklahoma Attorney General Scott Pruitt said today that agreements between the Environmental Protection Agency and environmental groups have led to new rules and regulations for states without allowing attorneys general to enter the process to defend the interest of states, businesses and consumers.

Pruitt and 11 other attorneys general, filed a lawsuit Tuesday in federal court requesting access to documents related to the U.S. Environmental Protection Agency’s “sue and settle” strategy with environmental groups.  

“The EPA is picking winners and losers, exhibiting favoritism, at the expense of due process and transparency,” Pruitt said. “They are manipulating our legal system to achieve what they cannot through our representative democracy. The outcomes of their actions affect every one of us by sticking states with the bill and unnecessarily raising utility rates by as much as 20 percent.” | 341-2121