Wednesday, March 16, 2011

Report says Arkansas needs tougher gas regs

Posted By on Wed, Mar 16, 2011 at 3:00 PM

The Arkansas Public Policy Panel held a press conference at the Capitol today to announce the findings of their latest report, "Model Oil and Gas Laws, Regulations and Ordinances." The report examined how other states with active shale plays regulate the natural gas industry and found - no big surprise here - that most of them have better protections in place than the Natural State. APPP also offered up some recommendations for state legislators and regulators.

This is the second in a series of reports (check here for a link to the first one). Bill Kopsky, executive director of APPP, said other states have longer histories with gas exploration and have had time to build up relationships with gas companies and a sensible regulatory structure. "The industry moved into Arkansas so fast," he says, "that Arkansas regulators haven't really had time to figure it out." Kopsy was flanked by state representatives that have filed bills in the state legislature aimed at creating regulations for the industry that protect citizens' health and the environment including Rep. Kathy Webb. "I'm a small business owner," Webb said. "I own a business that's very highly regulated. I serve the public every single day. And it's my responsibility as a business owner to make sure I do no harm to the customers who come into my place of business. So I think it is quite logical to think that if you have a business that impacts the citizens of Arkansas, then there's going to need to be a fair amount of regulation."

Good luck. In a legislature that seems more concerned with big business than the small landowner, meaningful regulation might be hard to come by. Every time a bill dealing with the natural gas industry comes up in a committee the room is packed with industry reps and "ordinary citizens" recruited by the companies to sing their praises. Read the full press release on the jump. See comments from Kopsky and Webb in the video above.

Public Policy Panel Releases Report that Recommends
New Standards for Natural Gas Development in Arkansas

Arkansas legislators Rep. Kathy Webb, Rep. Greg Leding, Rep. Homer Lenderman,
Rep. Bobby Joe Pierce and Sen. Mary Anne Salmon Endorse Policy Changes

Little Rock, ARK (March 16, 2011) — Arkansas Public Policy Panel today released a report “Model Oil and Gas Laws, Regulations and Ordinances” that examines how other states with gas developments protect their residents and resources from the threats of gas drilling. The report finds that many other states have better protections than Arkansas and concludes with recommended new standards for Arkansas to strengthen protections for air, land, water and public health.

Arkansas legislators Rep. Kathy Webb, Rep. Greg Leding, Rep. Homer Lenderman, Rep. Bobby Joe Pierce and Sen. Mary Anne Salmon echoed the need for policy changes at a media conference at 12:45 p.m. today at the Capitol Rotunda. “Natural gas development must be balanced in a responsible approach that takes advantage of the economic opportunities but also protects Arkansans’ individual property rights and the air, land and water which we all depend upon for survival,” said Rep. Webb.

“Arkansans deserve the strongest protections possible and this report shows how other states with healthy gas industries do a better job protecting their residents from the potential threats of natural gas development,” said Bill Kopsky, Arkansas Public Policy Panel Executive Director. “Arkansas can do better at protecting the health and environment of our state while also reaping the benefits of this tremendous energy resource.”

Sara Kendall, Washington D.C. Office Director of the Western Organization of Resource Councils, is the author of the report. The report is available electronically at www.arpanel.org.

The Arkansas Public Policy Panel is a statewide organization dedicated to achieving social and economic justice by organizing citizen groups around the state, educating and supporting them to be more effective and powerful, and linking them with one another in coalitions and networks. The Panel seeks to bring balance to the public policy process in Arkansas.

Following are major recommendations from the report:

1. Surface Owner Rights: In order to ensure that surface owners are fairly consulted with about the course of development and how to minimize negative effects, and compensated for damages to their property, we recommend that oil and gas operators be required to:
a. Notify surface owners in writing at least 30 days before disturbance of the surface, and compensate surface owners for lost income and expenses incurred as a result of inability to use or access land; the value of damaged crops, water supplies or personal property; and the diminution of value.

2. Water Quality: In order to protect Arkansas’ clean water resources, we recommend that:
a. The legislature clarify that the Arkansas Pollution Control and Ecology Commission has the authority and duty to make rules that prevent oil and gas operations from polluting the waters of the State, and that the Arkansas Department of Environmental Quality has the authority and duty to enforce such rules, and
b. Oil and gas operators be required to conduct water quality and quantity tests before well construction begins, and at least annually while the well is in production, and that the results of all water monitoring tests be made available to the public.

3. Hydraulic Fracturing: In order to protect groundwater resources from contamination with chemicals used in drilling and fracturing, we recommend that:
a. Intermediate casing be required to protect freshwater, particularly for wells that pass through freshwater that is being used for drinking water, or could be, and
b. Specific, strong standards for casing and cementing be adopted.

4. Air Quality: In order to protect oil and gas field residents from the serious health effects of air pollution, we recommend that Arkansas update its standards for oil and gas exploration and production operations to:
a. Require oil and gas developers to implement technology and practices that have been proven cost effective to reduce or eliminate air emissions during the oil and gas exploration and production process, such as requiring green completions for all wells unless not technically or economically feasible, and requiring low- or no-bleed valves on all new, replaced or repaired pneumatic devices.
b. Include the entire production system, including separators, compressors, dehydration units and other equipment currently defined as “insignificant” sources of pollution in emissions calculations and the permitting program.
c. Lower regulatory thresholds that trigger permit and emission control requirements.

5. Noise: To protect against the serious health effects of noise from oil and gas operations, we recommend that Arkansas implement a noise standard of 55 decibels during the day and 45 decibels at night.

6. Inspections: In order to ensure that Arkansas laws and regulations to protect clean air, land, water and public health are being implemented, we recommend that:
a. Every well should be inspected as often as necessary to ensure compliance with laws and regulations, but at least once per year, with an emphasis on: 1) New wells prior to being put into production (with an emphasis on ensuring proper cementing and casing), 2) wells while hydraulic fracturing is occurring, 3) wells that have been put into production within the prior year; and 4) wells going into final reclamation, and
b. Agencies identify the staff required to meet their inspection goals, and communicate these needs to legislators in budget requests.

7. Waste Sites: To protect against contamination from oil and gas waste sites, we recommend adoption of comprehensive oil and gas site standards similar to those passed in New Mexico, including requiring:
a. Use of double liners with leak detection systems in storage and disposal pits,
b. Temporary pits to close within six months of completion of drilling, and
c. Signs, fencing and netting around all pits.

8. Disclosure: In order to provide residents with information needed to test their water, and to understand the impacts of oil and gas development and any contamination that does occur, we recommend that the new Arkansas disclosure requirements be updated to require disclosure of:
a. Chemical Abstract Service (CAS) numbers, as well as the volume of each substance used,
b. Drilling chemicals, as well as those used in the hydraulic fracturing process,
c. Initial reports with sufficient time in advance of drilling or stimulation to all local residents to test their wells for contaminants to establish a baseline, in addition to final reports after drilling or stimulation, with chemicals actually used,
d. The volume and source of water used in the operation, as well as the total amount of fluid used and the amount returned to the surface,
e. The location of all surface and underground water sources within one mile of the drill site, as well as the location of all fault lines and fissures within one mile of the drill site or injection site, and
f. Protections for proprietary information must be minimized, as established in the federal Emergency Planning and Community Right to Know Act and its implementing regulations.

9. Financial Assurance: In order to ensure that oil and gas sites are reclaimed in a timely manner, and that reclamation is paid for by operators and not taxpayers, we recommend that Arkansas’ bonding requirements be updated to:
a. Increase single well bond amounts to $10,000 per well and blanket bond amounts to $250,000 statewide, and institute a single well bond equal to the cost of plugging and reclamation for idle wells.

10. Best Management Practices: In order to ensure that oil and gas operators use equipment and practices that will prevent and minimize impacts to the environment, we recommend that:
a. Oil and gas developers be required to use the Best Management Practices described in the U.S. Bureau of Land Management’s Gold Book, as well as the American Exploration and Production Council’s Reasonable and Prudent Practices for Stabilization.

11. Setbacks: Because proximity to oil and gas operations often contributes to negative impacts, we recommend that oil and gas wells be set back at least 1,000 feet from habitable dwellings, schools, places of worship, hospitals, water sources and water bodies.

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