Andrews Kurth via Mondaq | 20 May 2015

Texas Railroad Commission Heightens Scrutiny of Injection Wells Linked to Seismic Activity

On 8 May, the Railroad Commission of Texas swiftly responded to a recent 4.0 magnitude earthquake in Johnson County by dispatching inspectors to the area and directing four disposal well operators in the area to conduct well and reservoir testing. The operators have agreed to temporarily shut down activities to conduct the testing. The testing will be used to determine what, if any, regulatory action will follow.

This directive comes on the heels of the aggressive response undertaken by the commission in April to initiate show-cause proceedings to address a recent seismic study linking disposal well activity to recent earthquakes in the area of Azle, Texas. These formal show-cause proceedings, to be held in June, will require operators of two disposal wells to demonstrate that the wells should not be cancelled and shut down.

Deseret News | 19 May 2015

Utah Joins Lawsuit Over Federal Fracturing Rule

Gov. Gary Herbert said Utah will join three other states in a legal challenge to a new federal rule that governs hydraulic fracturing, arguing the fledgling regulation duplicates what states are already doing and will be costly and inefficient.

The rule was announced recently the Bureau of Land Management and comes despite a strenuous campaign by energy-rich states that argued the agency should leave hydraulic fracturing oversight to the states.

Herbert announced Utah’s intent to join Wyoming, North Dakota, and Colorado in the lawsuit during his remarks Monday at the annual business meeting of the Interstate Oil and Gas Compact Commission, of which he serves as chairman.

“There is no question the practice of hydraulic fracturing should be regulated in order to ensure protection of the environment,” Herbert said.

“However, adoption of the proposed rule would create an inconsistent, costly, and inefficient regulatory system that provides no additional environmental protection or public safety than is offered by programs already enforced by the state,” he said.

Reuters | 19 May 2015

Texas Governor Signs Law Prohibiting Local Hydraulic Fracturing Bans

Texas Gov. Greg Abbott on 18 May signed a bill into law that prohibits cities and towns from banning hydraulic fracking, giving the state sole authority over oil and gas regulation.

Lawmakers in Texas, a state that is home to the two of the most productive US shale oil fields, have been under pressure to halt an anti-fracturing movement since November, when voters in the town of Denton voted to ban the oil and gas extraction technique.

“This law ensures that Texas avoids a patchwork quilt of regulations that differ from region to region, differ from county to county or city to city,” Abbott, a Republican, said.

CRED | 13 May 2015

The Evolution of Colorado’s Oil and Natural Gas Regulations

Colorado’s natural environment has always been central to the state’s character, economy, and worldwide appeal. From mountain ranges to vast grasslands, Colorado’s environment defines the Centennial State’s collective identity.

And after 60 years of safe, responsible hydraulic fracturing, Colorado’s environment is still the defining character of the state for visitors and residents alike. Oil and natural gas development has thrived alongside farms, ranches, communities, and parks.

And today—supported by steady advancements in scientific research, technology, and a professional workforce—fracturing is being used more efficiently and effectively than ever before.

State regulators have repeatedly enforced tough regulations, which are designed to ensure that the environment remains protected amidst the energy boom.

Offshore Engineer | 13 May 2015

The Demand for Standardization, Part 2

In the second installment of a two-part series, Elaine Maslin takes a look at what all the clamor about standardization is, what the industry is planning to do about it, and what the results have been to date.

Standardization has for some time become a buzz word in the industry—in the North Sea, especially Norway, at least. Last time, we looked at some of the reasons for that—the increasing costs, long lead times, and concern about reliability, as well as the more recent low oil price environment, which has brought added impetus to the push to standardize.

Progress to Date
It’s not all been talk. Norway-based international certification body and classification society DNV GL has been leading a number of standardization projects.

A recently completed Subsea forging joint industry project (JIP) is one of 5 or 6 JIPs being undertaken at DNV GL around subsea standardization. The project aimed to standardize steel forgings—the building blocks of subsea components—which are usually tailored to meet specific requirements, resulting in longer than necessary delivery times. The JIP involved 21 companies, from steel manufacturers to subsea contractors and oil and gas companies. The result was a recommended practice containing requirements for qualification, manufacturing, and testing, all complementing existing industry codes for subsea equipment.

DNV GL is also working on a subsea documentation standardization JIP. Jarl Magnusson, JIP Project Manager, DNV GL, told Offshore Engineer that a typical subsea project can involve more than 10,000 documents (with up to 80,000 in a complex project) over a life cycle of 30 years.

Since Macondo, documentation requirements have increased, he said. The JIP was initiated in 2013, by Norske Olje og Gass, which said: “The preparation and provision of client documentation can be a significant element of overall project cost. The major cost driver is the lack of standardization of the industry approach to documentation.” Giving an example, Magnusson says a supplier has said, on a piping project, 92% of the project cost related to documentation.

Offshore Engineer | 13 May 2015

The Demand for Standardization, Part 1

In the first installment of a two-part series, Elaine Maslin takes a look at what all the clamor is about on standardization, what the industry is planning to do about it, and what the results have been to date.

If I got £1 for every time someone said “standardization,” I’d be a rich woman. The word has become part of the offshore industry common parlance in Europe, not least in Norway and particularly within the subsea industry.

It’s easy to think the push for standardization was created in response to the oil price collapse. But it wasn’t. A need for greater standardization—be it around interfaces, components, documentation, tenders—has been discussed at industry events for some time.

Standardization was debated in 2013 at the Underwater Technology Conference (UTC) in Bergen, where questions were asked about what was standardization, what should be standardized, and was industrialization a better goal.

It was also on the agenda at last year’s UTC, then ONS 2014 in Stavanger and again at Subsea Valley in Oslo earlier this year. Visit Norwegian companies and each has its own spin on standardization.

Slowly, some results are starting to be seen. But, those with experience in other sectors that have gone through the same process, such as shipping, warn that for the full impact to be felt, initiatives will need to be adopted across the industry and will take time.

Why Standardization?
Subsea industry costs offshore Norway have risen to such a level that projects were becoming no longer economic. Costs have been driven by increased specifications, long lead times, duplication and high wages.

Over the years, field-specific-driven challenges have resulted in field-specific specifications, which are layered on top of internal operator specification tool boxes, which, in turn, have been built up based on previous deployments and learnings, Michael Sequiera, principal consultant, deepwater practice lead, OTM Consulting, told the Subsea Valley conference.

Frequently now cited are examples of components, which in any other industry cost a few thousand dollars, cost hundreds of thousands in the subsea sector because of the documentation required, increasing man-hour requirements, costs and lead times.

The Hill | 13 May 2015

Industry Files Suit To Stop New Oil Train Rules

The oil industry is suing to stop a number of provisions in a suite of oil-train transportation rules issued by the Obama administration.

The American Petroleum Institute (API) said that it filed the lawsuit in federal court in an attempt to overturn those requirements it does not believe would improve the safety of crude oil transport by rail.

“Improving on a 99.997% safety record requires data-driven efforts to prevent derailments with enhanced inspections and maintenance, upgrade the tank car fleet, and educate first responders,” API spokesman Brian Straessle said.“Our safety goal is zero incidents, so retrofit timelines, braking systems, and other actions must all be based on facts and science to maximize the safety impact of this rule,” he said.

The Department of Transportation developed the rules to try to stem the tide of high-profile crude-by-rail disasters that have accompanied the domestic oil production renaissance.

While the end result was a suite of rules that were not as strong as environmentalists and safety advocates had hoped for, the oil and freight rail industries said they still went too far.

The API’s lawsuit aims to secure longer timelines to retrofit old tank cars, overturn the mandates for enhanced braking systems, and loosen the operational restrictions on certain trains.

DNV GL | 7 May 2015

Study Projects Regulatory Future, Suggests More Be Done To Reduce Major Accidents

A study conducted by DNV GL analyzes current regulatory regimes and outlines possible future developments and DNV GL’s recommendations to reduce the risk of major accidents.

Frameworks for regulation vary considerably worldwide and may evolve in different directions, requiring oil and gas companies to align their global operating standards toward unique local regulations. They also need clear oversight where requirements are less developed. DNV GL’s study “Regulatory Outlook: The Way Forward for Offshore Regulatory Safety Regimes” outlines what DNV GL believes an effective offshore safety regime should look like, including greater sharing of lessons learned between regulators and operators, larger fines for major accident hazards, and more harmonization of HSE regimes.

“Occupational safety has improved greatly in recent years,” said Graham Bennett, business development manager for UK and Sub-Saharan Africa, DNV GL—Oil and Gas. “However, major accidents and near misses still happen, and new ways to reduce major accident hazards need to be identified.”

Statistical trends on occupational safety, based on DNV GL’s analysis of data extracted from companies’ annual reports and sustainability reports.

Statistical trends on occupational safety, based on DNV GL’s analysis of data extracted from companies’ annual reports and sustainability reports.

“We cannot say with certainty how national or regional regimes will develop, but we have been able to present a range of possible future developments and our views on what an effective offshore safety regime should look like,” Bennett added.

The study includes high-level case studies for the offshore regulatory frameworks in Mexico, Brazil, the EU, Angola, and Australia. It also covers the Arctic from an international regulatory perspective, as well as for Alaska, Canada, Greenland, Norway, and Russia.

“DNV GL’s contribution as a risk-management expert is to assist the industry, which is facing increasingly complex and demanding environments, to understand the risks of major accidents. We would like to see learning from both incidents and major accidents implemented in regulation as well as in business practice,” said Elisabeth Tørstad, chief executive officer for DNV GL—Oil and Gas.

DNV GL’s study discusses possible scenarios for regulatory developments in different jurisdictions. DNV GL mapped these scenarios to its safety model to identify key factors that could help reduce major accident hazards in each region.

Download the study here (PDF).

Rigzone | 5 May 2015

US, Canada Unveil New Crude-By-Rail Rule

With an emphasis on enhanced tank car construction and braking standards, US and Canadian transportation officials have released a new rule to boost the safety of crude by rail in North America.

“Our close collaboration with Canada on new tank car standards is recognition that the trains moving unprecedented amounts of crude by rail are not US or Canadian tank cars—they are part of a North American fleet and a shared safety challenge,” said US Transportation Secretary Anthony Foxx.

The rule is a protracted reaction to an increase in crude oil incidents. Two years ago, an oil train explosion in Quebec killed 47 people and significantly increased the issue’s profile. In 2014, federal US data showed the highest number of crude by rail incidents at 141 unintentional releases, the highest since the agency began gathering data 40 years ago.

The rule applies specifically to “high hazard flammable trains,” or HHFTs, which includes a “continuous block of 20 or more tank cars loaded with a flammable liquid or 35 or more tank cars loaded with a flammable liquid dispersed through a train.”

Among the new guidelines:

  • The speed for all HHFTs is reduced to 50 mph, and those tank cars that don’t meet the enhanced standards are restricted to 40 mph in urban areas
  • New cars stipulate a 9/16-in. shell and top-fitting protection, and a 7/16-in. shell without top-fittings for those currently in circulation
  • Implementation of electronically controlled pneumatic (ECP) brakes

Reuters | 6 April 2015

North Dakota Oil Producers Complying With New Treatment Rules

North Dakota’s oil producers are complying with new safety standards that went into effect on 1 April to remove as many volatile gases from crude as possible, state officials said.

The new rules require the more than 1.2 million bbl of oil extracted each day from the state’s Bakken shale formation be run through machines that remove ethane, propane, and other volatile gases linked to recent crude-by-rail disasters in Quebec, Illinois, and West Virginia.

Producers are now required to operate field equipment at oil wells at specific temperatures and pressures to remove those gases. Well sites are shut down if they are not compliant, according to the standards approved in December.

Late March field checks of equipment operated by all of the state’s producers, ranging from the largest with Whiting Petroleum to one of the smallest with Triangle Petroleum, are compliant, the state’s Department of Mineral Resources said.

Bloomberg | 2 April 2015

Hydraulic Fracturing Operators Ran Up 2.5 Violations a Day, Study Shows

Oil and gas drillers ran afoul of regulators on average 2.5 times a day in three energy-intensive states for mistakes such as wastewater spills, well leaks, or pipeline ruptures during the boom in hydraulic fracturing.

Online records in West Virginia, Pennsylvania, and Colorado showed regulators issued 4,600 citations from 2009 to 2013, the Natural Resources Defense Council said on 2 April in a report. The report excluded violations in 33 other states with drilling because such records aren’t available on the Internet.

“It’s extremely difficult for the public to get this kind of information,” said Amy Mall, an author of the report for the New York-based environmental advocate. “The companies are violating the law too often, and we need policy solutions to increase transparency and to change the consequences for not complying” with the rules, she said.

Rigzone | 23 March 2015

Interior Department Issues Final Rule on Federal Hydraulic Fracturing Standards

The US Department of the Interior released on 20 March its final rule through which the Bureau of Land Management (BLM) would implement new regulations for hydraulic fracturing activity on US and federal and Indian lands.

The new rule, which will take effect in 90 days, would require oil and gas companies to validate the integrity of well construction and require companies to disclose the chemicals used in hydraulic fracturing to BLM through the website FracFocus within 30 days of completing fracturing operations on a well. It also would ban the use of wastewater pits at drilling sites, requiring companies to use above ground tanks instead, to mitigate the impact of recovered waste fluids on air, water, and wildlife.

Additionally, companies would have to submit more detailed information on geology, depth, and location of pre-existing wells to allow BLM to better evaluate and manage the risks of cross-well contamination with chemicals and fluids used in a fracturing operation that could result in a spill or blowout.