Raising shale 

Can the state handle boom’s water, waste and other woes?

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Natural gas exploration is changing the landscape of Arkansas — literally.

Drilling operations in the Fayetteville Shale (including future operations planned on state Game and Fish lands leased to Chesapeake Energy) are raising environmental concerns. Drilling requires massive amounts of water, and produces a considerable amount of waste. Water law in the state seems unable to protect property owners, and state agencies, like the Arkansas Department of Environmental Quality (ADEQ) seem unable to inspect and regulate the waste sites.

Most wells are drilled in two steps: By drilling a well and then using hydraulic fracturing, or fracing, to crack open the shale so gas can be extracted. The mud produced during the first phase can be disposed of by land application. But the frac fluid — water, lubricants, sand and chemicals — can harm the environment and must be disposed of into sealed, underground wells.

In New Mexico, toxic chemicals from drilling liquid leaked into the water table at almost 800 sites. Spills affecting ground water have also been reported in Colorado.

Greenwood, in North Arkansas, just south of Fort Smith, is home to two surface disposal sites operated by Green Grow Disposal and Comer Mining Corp. Both of these sites have repeatedly violated regulations, ADEQ reports indicate.

In September 2006, ADEQ found Green Grow in violation because the company had not yet filed its 2005 annual report. Annual reports include data on drilling fluids and soil samples taken near the reserve pits in which the fluids are held prior to land application. Since that 2006 inspection, Green Grow has racked up 11 violations in three inspections, including improper land application of fluids, inadequately high walls around the pits and overflowing pits.

Comer Mining's record is similarly poor. Since March 16, 2007, the company has amassed eight violations resulting from three inspections. Violations involve the absence of records confirming dates, locations and volumes of fluids accepted, failure to submit soil samples, improper land application and inadequate walls around the pits.

The owners of both facilities, Foy Brown of Green Grow and Henry Comer of Comer Mining, maintain they try to follow regulations and look out for the environment. The record indicates otherwise.

Jeff Tyler, an ADEQ inspector responsible for the area, says that Brown and Comer have been cooperative. Tyler says there have been rumors that Comer has dumped fluids into a creek near the pit, but he has been unable to confirm those reports. While ADEQ has documented improper dumping of frac fluid at other sites, Tyler said he had not seen evidence of that on either Greenwood site.

“There's a lot of public attention to this and ADEQ is trying to do the best we can to respond to all the complaints and protect the waters of the state,” Tyler says.

ADEQ has the power to revoke permits issued to commercial or surface disposal sites that violate state regulations, but they have yet to do so. The agency's action to date has been limited to fines and enforcement actions.

On Sept. 10, a consent administrative order was issued to Green Grow Disposal by ADEQ, including a fine of $9,100. After a 30-day comment period, Green Grow will have 30 days to pay the fine.

ADEQ, the agency charged with ensuring the safety of state waters, does not have enough inspectors to check procedures at every drilling/disposal site.

“There are so many of these pits going in and so many drilling operations going in that we will not be able to do inspections of every one of those,” Teresa Marks, ADEQ director, said. “It would just be impossible with our resources. But we have what we think are the necessary environmental controls in place.”

“Right now it's a complaint-driven system,” said Glen Hooks, associate regional representative for the Sierra Club in Little Rock. “There has to be some self-policing by the gas companies themselves, and that's obviously not the best way to go about it.”

Loren Hitchcock, deputy director of the Arkansas Game and Fish Commission, says that $350,000 of the nearly $30 million the agency will receive in its lease of 12,000 acres of land in the Petit Jean and Gulf Mountain wildlife management areas will go to ADEQ in order to hire four additional inspectors. The inspectors, Hitchcock says, will concentrate on the Fayetteville Shale area.

Environmental groups in other states where gas is being drilled have been vocal in their concern over the amount and type of chemicals used in the process.

In Arkansas, drilling permits are issued by the Arkansas Oil and Gas Commission. AOGC Director Lawrence Bengal says fracing is a safe process because the wells are drilled far below the water supply and lined with concrete and steel to prevent any leaks.

He also maintains that the chemicals used are not hazardous.

“Each frac job is primarily water, about 98 percent or so,” Bengal said. “The other constituents, other than the water, like gels, are designed specifically for a certain type of formation. Those components are not classified as hazardous substances under federal law.”

However, even if 99 percent of the frac fluid is composed of water and sand, the remaining one percent of two million gallons of water would constitute 20,000 gallons of chemicals.

Arkansas does not require gas companies to divulge the chemicals they use in frac fluids. Requiring them to do so would “infringe upon their competitiveness in the market,” Bengal said. Other states, including New York, have attempted to make gas companies disclose the chemicals they use.

One of the questions environmental groups are asking is whether the state can stand to supply the enormous amount of water that drilling requires. Hydraulic drills use anywhere from 1 million to 5 million gallons of water at a single site.

Kenneth Brazil, engineer supervisor with the Arkansas Natural Resources Commission, describes Arkansas as water-rich and says the state can handle the exploration. The commission acknowledges, however, that long-term effects are unknown. (And the NRC's own website notes that Arkansas's groundwater is being depleted faster than the aquifers are recharging.)

“We're limited in what we can predict,” Brazil said. “The questions that are bantered around, more philosophically, are about the long-term effect of having all of this water usage, and I think the general assumption is that it can't be good. In my view it's really too early to make those kinds of assumptions. There are a lot of variables involved.”

Jack White, a retired oil and natural gas driller himself, says drilling in his hometown of Hartford is causing his well to dry up and hurting the water quality. But property owners who believe drilling operations are using up their water supply have little recourse. Arkansas law states only that landowners can take their “fair share” of water. That vagueness means landowners with limited resources will have a hard time proving their case in court.

“We've tried to go through the courts and it's just out of the question,” White says. “Unless you're a millionaire of some kind, then you're just blowing in the wind.”

Edward Swaim, general counsel for the Natural Resources Commission, agreed. “If you have to go to court over one of these things, it's unlikely you're going to have the money to do it if you're an ordinary landowner, because you've got to hire experts, geologists, engineers if you're going to prove your case.” Lawsuits also take time. “So there's not a good way to adjust rights between water users,” he said.

Aside from its environmental impact, the drilling — and the influx of trucks, pipelines and wealth that comes with it — is likely to change the state in a number of ways. “The full impact of all of this has not been addressed or completely understood,” said Kent Walker, a Little Rock attorney specializing in real estate law, especially as it relates to natural gas issues.

“Economically, you're going to see new millionaires coming out of White, Cleburne, Conway, and Faulkner counties. There will be a lot of people who've never made $30,000 a year starting to cash six-figure checks every single month. And politically we've seen these gas companies attempting to lobby and utilize the legislative system here in the state to their advantage.”

Though the situation requires that companies police themselves, most companies, especially the larger ones like Chesapeake, are following the rules, spokesmen for NRC say. Chesapeake claims it operates above industry and government environmental standards. But without state inspections, there's no way for citizens to know for sure.

Walker is hopeful that community interest and word of mouth will hold the gas exploration industry accountable.

“Small town Arkansas is small town Arkansas,” Walker says. “If something happens to a neighbor, they go to the coffee shop and tell somebody. I guarantee you that within two hours there's going to be 50 people that know what has happened to them. People just want to be treated fairly, and with respect. If gas companies are going to do business in Arkansas, and I believe they will for some time, then they've got to make sure that the property owners are taken care of.”

 

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