The Water issue: Oil industry on Cusp awaiting EPA report

By Sid Pranke

North Dakota is now about seven years into its latest oil boom — about the same length of time since Lynn Helms began his job as director of the Department of Mineral Resources (DMR). The state had just merged its Geological Survey with the Oil and Gas Division to form the new department, so with his new title, Helms now had the authority to put the state’s Geological Survey employees to work publishing reports on the Bakken.

“I think it really helped to bring industry and investment to North Dakota. It was then only one to three years after that the industry cracked the code on how to do the Bakken in North Dakota, and the rest is history,” Helms recently said in an interview at his Bismarck office.

That groundwork has led to the creation of about 7,000 oil wells here, with the state projecting at least 35,000 more wells yet to be drilled. Some say this boom is the biggest story in the state since the Homestead Act, one that cuts across the entire culture. University of North Dakota (UND) geography faculty have begun to study how Bakken-area residents perceive the economic, social and environmental impacts on their communities– the results of a UND survey recently were released, and about 59 percent of respondents said their communities were not able to cope with the social problems that arise from the Oil Boom – some respondents stated they wished the boom would slow down.

(Photo by Sid Pranke)

When the UND survey report came out, the DMR’s Helms mentioned he’d spent part of a weekend reviewing it, but that he wasn’t surprised by the results. Helms thought back to a tour of western North Dakota counties he took with Gov. Jack Dalrymple, shortly after he was elected. “He and I went on a tour of the counties and cities that were being most heavily impacted by the oil industry, and we heard much the same thing from those folks, from the county commissioners and the city commissioners.

“So I wasn’t surprised by the data. However, our message to them – it’s still the same message – is we cannot interfere with these private contracts that lead to the rig count being what it is,” Helms said. “But we are committed to manage it from the standpoint of trying to control where the companies put their surface locations to the extent possible, and also to provide funding to catch up on the infrastructure needs.”

Helm points to the State Constitution and the Century Code (N.D. state statutes) and how one of his three bosses, Attorney General Wayne Stenehjem, makes sure that what the DMR does is consistent with those tenets. “When people said, ‘You have to start slowingdown oil and gas drilling, he’s (the attorney general) the one that says, ‘No, take a look at Article 1, section 18 of the Constitution that says the state shall not interfere with private contracts.’ ” Helms’ two other bosses are the governor and Agriculture Commissioner Doug Goehring, who together with the attorney general make up the state’s Industrial Commission. Helms concedes that policy moves slower in the oil industry. “We got behind the curve, but we’re rapidly catching up,” Helms said.

At the DMR, rule changes for regulating the oil and gas industry took effect April 1, including a mandate for disclosure of chemicals used by oil companies during the hydraulic fracturing (fracking) process. The state uses an online site, FracFocus.org, for oil companies to make its reports.

Helms said there have been violations by oil operators regarding disclosure, but his department has not yet assessed any penalties. “We just ran our first audit and we’ve got some (violations), and I don’t know the number. We’ve got some NOVs out, we call them Notice of Violation, where we sent an email to an operator and said, ‘You haven’t posted your frack job to FracFocus, so we haven’t done any complaints or penalties at this point,” Helms said. “Our approach to regulation in North Dakota kind of follows that. We – generally – initially notify an operator of a violation by phone or email. If that doesn’t result in compliance within a month or so, they get a formal letter … and then we wait another month or so, and then we’ll dive off into the civil penalty business,” Helms said. (Note: since our interview with Helms, he announced on Sept. 20 at the annual meeting of the North Dakota Petroleum Council that 77 percent of companies disclosed chemicals to the website FracFocus, and that eight companies will receive letters that they are in violation of the new rule.)

Right now, the site only allows users to look up one well at a time, for everyday users as well as state regulators, so oversight is painstaking, said Alison Ritter, public relations spokesperson for the DMR. She said plans to synch up the DMR database with FracFocus are underway “to automatically alert us if a well hasn’t been reported,” she wrote via email. The synchronization between FracFocus and theDMR database is scheduled to go live on Oct. 30, Ritter said.

“What we liked about FracFocus was it revealed all the chemicals used but in a way that could not reverse engineer a frack job, and so companies were willing to put their chemicals out there knowing that their exact recipe was protected,” Helms said. “This site was not designed to allow somebodylike the Sierra Club to aggregate every frack job in the United States of America and calculate how much petroleum distillate is being used in any given year.”

Fracking is a controversial topic in much of the country, with some states like Vermont banning it completely. Millions of gallons of water, mixed with chemicals, are needed to complete each frack job.

Increase in oil industry spills

As environmental health section chief with the North Dakota Department of Health, Dave Glatt provides oversight over the oil industry’s spills, releases, cleanup and is a watchdog over the environment, including lakes and streams. His department works with the Environmental Protection Agency (EPA) to implement federal programs in North Dakota, including the Safe Drinking Water Act, the Clean Air Act and the Resource Conservation Recovery Act.

“The challenges with so much (oil) activity going on out there, we’re seeing a lot more spills,” Glatt said.“That takes up a significant amount of staff time. We’re also dealing with a lot more complaints about illegal dumping.”

According to the latest information available from Glatt’s office, there have been 730 reported spills due to all oilfield activity in the state so far in 2012. In all of 2011, 1,386 spills were reported, up from 729 reported spills in 2010. Spill totals can include pipeline breaks, truck accidents and releases at the well pad.

Photo courtesy U.S. Forest Service

State needs more staff

Both the DMR’s Helms and Glatt said they will be requesting more staff in the next legislative session to help meet the demands their offices face. Helms has 19 inspectors to check on both injection wells and oil wells in the state, and said he will ask for 16 more inspectors. Helms said he believes “it’s a producing or water disposal well where you get the environmental violations;” right now, DMR inspectors check the 917 injection wells once a month, and 7,000 oil wells once a quarter, he said.

One of Glatt’s field staffers, Kris Roberts, was attributed in a June ProPublica article as saying he didn’t believe the state had enough manpower to prevent or even respond to illegal dumping. When asked about that, Glatt said: “It’s a challenge for us. We can always use more staff and we are moving towards that direction. Matter of fact, we just got approved for three more staff to be working out in the field and we’ll be going to the next legislative session asking for a few more.” Right now, of the health department’s approximate 150 workers, “30 to 40 percent are just dealing with oilfield issues,” Glatt said.

Drilling near water supply

There’s about 100 oil wells near Lake Sakakawea, and oil companies already are drilling under the lake from New Town to Williston. The Missouri River Fish and Wildlife office also is studying for any possible harmful effects of impending seismic testing slated to be done near Garrison Dam to determine if there are minerals present. The tests are seen as a precursor to drilling near the dam. The current technology of horizontal drilling means drills can be two miles away from the surface of the water and still go under the water.

Glatt’s reaction to drilling near Lake Sakakawea? “Obviously, the farther you’re away from any surface water body, the better. You have more response time if anything were to happen. We’d like to see, in the general case, that they avoid those areas as much as possible. But we also understand that practically that’s not always the case – they can’t do that based on where the minerals or resources are,” Glatt said.

“You’ve got those that want production and promote production and we’re on the environmental end,” he said. “Nobody wants the environment to be degraded, nobody wants a big spill to run into the lake. Obviously, that’s a bad environmental thing to happen, but also gives industry a black eye – they don’t want that. So they’ve been more willing to sit down and talk to us – ‘what can we do better?’… So instead of butting heads, it’s more of trying to work together to make things as good as possible.”

As for the EPA report that is expected by the end of the year, Glatt said he is looking forward to seeing it. “I don’t anticipate anything that would be damning of hydraulic fracturing in the state, but they may identify things that could be done better, so we need to be open to take a look at that,” Glatt said.

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