Appalachian Basin

SGEIS Confirms Safety of HF, Sets Path Forward for Marcellus

“These recommendations, if adopted in final form, would protect the state’s environmentally sensitive areas while realizing the economic development and energy benefits of the state’s natural gas resources.” -NY DEC Statement
New York unveiled its final version of the SGEIS this week, setting the stage (we hope!) for safe and responsible development of natural gas from the Marcellus in the months and years to come.  We thumbed through the previous draft and provided highlights here and here.   Now we are doing the same for this final iteration of the report.  As you can see below, this most recent version doesn’t pull any punches in identifyig the enormous economic potential that safe natural gas development can deliver to the Empire State — starting with the potential for 54,000 new jobs  to be created and $2.5 billion in economic activity expected annually throughout the state.  Of those jobs approximately 12,400 are expected in Broome, Chemung and Tioga Counties — all this based on hyper-conservative assumptions and estimates. After the jump, we lay out a few more nuggets from the report that really caught our eye.

Bolstering New York’s Economy

  • Broome, Chemung and Tioga Counties would experience annual increases in employee earnings of approximately $254 million to $1.0 billion, or 4.7% to 18.7% of the 2009 total wages and salaries for the region. page 6-229
  • “In total, at peak employment years, state approval of drilling in the Marcellus and Utica Shales is expected to generate between 13,491 and 53,969 direct and indirect jobs, The majority of these indirect jobs would be concentrated in the construction, professional,scientific, and technical services; real estate and rental/leasing; administrative and waste management services; management of companies and enterprises; and manufacturing industries”page 6-215
  • “When well construction reaches its maximum levels (Year 10 through Year 30), total annual construction earnings are projected to range from $298.4 million under the low development scenario to nearly $1.2 billion under the average development scenario. Employee earnings from operational employment are expected to range from $121.2 million under the low development scenario to $484.8 million under the average development scenario in Year 30, the year that the maximum number of operational workers are assumed to be employed.” page 6-216
  • “Indirect employee earnings are anticipated to range from $202.3 million under the low development scenario to $809.2 million under the average development scenario in Year 30. The total direct and indirect impacts on employee earnings are projected to range from $621.9 million to $2.5 billion per year at peak production and construction levels in Year 30.” Executive Summary, p. 17

Protecting Water Resources

  • hydraulic fracturing does not present a reasonably foreseeable risk of significant adverse environmental impacts to potential freshwater aquifers. 34 Specific conditions or analytical results supporting this conclusion include:The developable shale formations are vertically separated from potential freshwater aquifers by at least 1,000 feet of sandstones and shales of moderate to low permeability;The amount of time that fluids are pumped under pressure into the target formation is orders of magnitude less than the time that would be required for fluids to travel through 1,000 feet of low-permeability rock;” -page 6-53
  • No significant adverse impacts are identified with regard to the disposal of liquid wastes. Drilling and fracturing fluids, mud-drilled cuttings, pit liners, flowback water and produced brine, although classified as non-hazardous industrial waste, must be hauled under a New York State Part 364 waste transporter permit issued by the Department.” Executive Summary, p. 12
  • Although current practices and requirements have proven effective at countless wells throughout New York State, the Department has responded to the public’s heightened concerns regarding well control and emergency response issues by including three significant revisions in the revised draft SGEIS:
    • Submission, for review in the permit application, of the operator’s proposed blowout preventer use and test plan for drilling and completion;
    • Description of the required elements of an emergency response plan (ERP); and
    • Submission and on-site availability of an ERP consistent with the SGEIS, including a list of emergency contact numbers for the community surrounding the well pad.” page 1-11
  • “The revised draft SGEIS proposes to require, pursuant to permit conditions and/or regulation, that a closed-loop tank system be used instead of a reserve pit to manage drilling fluids and cuttings”-page 1-13
  • “Prior to drilling, operators would be required to test private wells within 1,000 feet of the drill site to provide baseline information and allow for ongoing monitoring. If there are no wells within 1,000 feet, the survey area would extend to 2,000 feet.” page 1-10
  • “The Department will not issue permits for proposed high-volume hydraulic fracturing at any well pad in 100-year floodplains”- page 1-17
  • “Detailed well pad containment requirements and setbacks proposed for high-volume hydraulic fracturing are likely to effectively contain most surface spills at and in the vicinity of well pads.”-page 6-39
  • “More recently, regulatory officials from 15 states have testified that groundwater contamination as a result of hydraulic fracturing, which includes this pumping process, has not occurred” page 6-40

Protecting Against Methane Migration

  • “As noted in the 1992 GEIS and in Section 4. 7 of this document, methane is naturally present in water wells in many locations in New York, for many reasons unrelated to gas well drilling.This is a fact which must be evaluated and considered when a gas drilling impact is suspected as a source of methane in water wells.” page 10-2
  • “Proposed well construction enhancements for high-volume hydraulic fracturing included:
    • Requirement for fully cemented production casing or intermediate casing (if used),with the cement bond evaluated by use of a cement bond logging tool; and
    • Required certification prior to hydraulic fracturing of the sufficiency of as-built wellbore construction” – page 1-11
  • “Additional well construction enhancements for high-volume hydraulic fracturing that the Department proposes to require pursuant to permit condition and/or regulation:
    • Specific American Petroleum Institute (API) standards, specifications and practices would be incorporated into permit conditions related to well construction. Among these would be requirements to adhere to specifications for centralizer type and forcasing and cement quality;
    • Fully cemented intermediate casing would be required unless supporting site-specific documentation to waive the requirement is presented. This directly addresses gas migration concerns by providing additional barriers (i.e., steel casing, cement) between aquifers and shallow gas-bearing zones;
    • Additional measures to ensure cement strength and sufficiency would be incorporated into permit conditions, also directly addressing gas migration concerns. Compliance would continue to be tracked through site inspections and required well completion reports, and any other documentation the Department deems necessary for the operator to submit or make available for review; and
    • Minimum compressive strength requirements.”page 1-12

Promoting Disclosure

  • “The Department’s hydraulic fracturing chemical disclosure requirements and public disclosure, combined with the chemical disclosures required from industry for the SGEIS analysis, make the Department’s disclosure regime among the most stringent in the country.” page 1-9
  • The Department’s regime exceeds the requirements of 22 of the 27 oil and gas producing states reviewed and is on par with the five states currently leading the country on chemical disclosure. Additionally, the enhanced disclosure requirements are equivalent to the proposed requirements of the federal Fracturing Awareness and Responsibility (FRAC) Act of
    2011.” page 1-9

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