Considerations for Modernization of State Oil and Gas Statutes Joint Legislative Commission on Energy Policy Raleigh, NC November 5, 2013 1
About API – Over 500 member companies from all segments of the oil and natural gas industry – Offices in Washington, 22 state capitals (including North Carolina Petroleum Council in Raleigh), Houston, and four international offices – Leading global standards-setting body for oil and gas industry since 1924 2
About API Standards – Accredited by the American National Standards Institute – Consensus-based documents created by industry, manufacturers and service companies, government officials, academics, and other stakeholders – Over 600 technical standards covering all aspects of the industry – 100 API standards are cited over 270 times in federal regulations; 184 API standards over 3,300 times in state regulations; and 225 times by international regulations 3
API Standards and Best Practices for Hydraulic Fracturing – Approximately 65 API standards apply to horizontal drilling, hydraulic fracturing, and related issues – API’s “Hydraulic Fracturing Series,” available for free at http://www.api.org • HF1, Hydraulic Fracturing Operations – Well Construction and Integrity Guidelines (2009) • HF2, Water Management Associated with Hydraulic Fracturing (2010) • HF3, Practices for Mitigating Surface Impacts Associated with Hydraulic Fracturing (2011) • RP 51R, Environmental Protection for Oil Onshore Oil and Gas Production Operations & Leases (2009) • RP 65-2 , Isolating Potential Flow Zones During Well Construction (2010) 4
API Standards and Best Practices for Hydraulic Fracturing – API’s “Hydraulic Fracturing Series” is currently being revised and expanded • HF1 being revised as RP 100-1, Hydraulic Fracturing – Well Integrity and Fracture Containment (expected Q1 2014) • HF2 and HF3 being revised as RP 100-2, Environmental Aspects Associated with E&P Operations including Hydraulic Fracturing (expected Q1 2014) • New HF4, Community Engagement Guidelines (expected end of 2013) • New RP 90-2, Onshore Annular Casing Pressure (expected Q1 2014) – This work follows a series of API regional outreach workshops – To participate, visit http://www.api.org 5
Consideration #1 – Definition of “hydraulic fracturing” – Should be sufficiently narrow to exclude potentially similarly described wellbore operations such as enhanced oil recovery – Verb choice is key – “The subsurface emplacement of fluids or propping agents under pressure for the purpose of initiating or propagating fractures in a target geologic formation pursuant to well stimulation operations related to oil or gas production activities.” 6
Consideration #2 – Fluid Disclosure – API supports and promotes public disclosure of hydraulic fracturing fluid and additive information • Recognition for valid trade secret claims under applicable law – API supports the use of FracFocus • 703 participating operators and 57,556 disclosures as of October 21, 2013 • Required in at least 12 states with others considering • FracFocus 2.0 features enhanced functionality 7
Consideration #3 – State Preemption – Without express preemption, a patchwork of local bans and conflicting regulations could make it difficult or impossible for industry to operate – Local bans and regulations could infringe upon the correlative rights of landowners and lead to waste of oil and gas resources – Local control appropriate for certain matters, such as use of public streets and bridges, provided such control does not discriminate against industry 8
Talking Points – There is no proven case where the fracking process itself has affected water. • Lisa Jackson, former EPA Administrator, May 2011 – Fracking has been an important tool in the toolbox for oil and gas for over 50 years. And some of the new techniques that are being used actually reduce the amount of footprint on the surface acreage in order to recover oil and gas from a much larger area, so this is an important tool. • Sally Jewell, Secretary of the Interior, October 2013 9
Questions? Ben Norris (202) 682-8251 norrisb@api.org 10
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