American Oil and Gas Reporter - March 2016 - 16

IndustryDigest
OCC Orders Areawide
Disposal Well Reduction
OKLAHOMA CITY-In its most
encompassing response yet to
earthquake activity, the Oklahoma
Corporation Commission on Feb. 16
announced a volume reduction plan for
oil and gas disposal wells in western
Oklahoma that covers 5,281 square
miles and 245 wells injecting
wastewater into the Arbuckle formation.
"We have taken a number of actions
in the Medford, Fairview and Cherokee,
Ok., areas. However, there is agreement
among researchers, including our
partners at the Oklahoma Geological
Survey, that the data clearly underscore
the need for a larger, regional response,"
remarked Oil & Gas Conservation
Division Director Tim Baker in
announcing the plan. "This plan is
aimed not only at taking further action
in response to past activity, but also to
get ahead of it and hopefully prevent
new areas from being involved."
Baker points out that the action,
which affects nearly all of Woods,
Alfalfa, Grant and Major counties, as
well as significant portions of
Woodward and Garfield counties,
includes areas that have not yet
experienced major earthquakes.
Although the OCC's announcement
came three days after a 5.1-magnitude
earthquake was recorded near Fairview,
Ok., Kim Hatfield, president of
Oklahoma City-based Crawley
Petroleum and chairman of the
Oklahoma Independent Petroleum
Association's induced seismicity work
group, says the order is not a direct
response to that event. "That absolutely
is not the case," he clarifies. "The OCC
has been working on this for a couple
months. The announcement was
planned before (the Fairview) seismic
event happened."
Baker notes that on Jan. 20, the OCC
instituted a 191,000 barrel-a-day
reduction in disposal volumes in the
Fairview area. He says that and the Feb.
16 action bring the total areawide
volume cutback to more than 500,000
bbl/d, or 40 percent.
Importantly, Hatfield mentions, while
earlier OCC orders specified how much
each injection well was to cut back, the
Feb. 16 order specifies only the total
volume and leaves it to operators to
decide how to accomplish the goal.
16 THE AMERICAN OIL & GAS REPORTER

"An operator may want to shut in
one well entirely and use its volumes
somewhere else where production is
better," he illustrates. "The good news is
the OCC has given us a little flexibility
to help minimize the economic impact."
Baker says the volume reductions are
to be implemented in four stages over
two months as recommended by
researchers, whom he says caution
against sudden pressure changes.
In a somewhat related development,
The Sierra Club and Public Justice filed
a lawsuit Feb. 17 in U.S. district court in
Oklahoma City against three
companies, contending that "waste from
(fracturing) and oil production have
contributed to an alarming increase in
earthquake activity," according to a
Sierra Club announcement.
The lawsuit demands that the
companies "reduce, immediately and
substantially, the amounts of production
waste they are injecting into the
ground." It also asks the court to require
the defendants to reinforce structures
that can be impacted by largemagnitude earthquakes, and to order an
independent earthquake monitoring and
prediction center be established, the
Sierra Club says. ❒

Wyoming's Regulators
Release Flaring Rules
CHEYENNE, WY.-The Wyoming
Oil & Gas Conservation Commission
approved new rules governing venting
and flaring of natural gas on Feb. 9.
According to WOGCC, during initial
or recompletion evaluation tests,
operators are allowed to vent or flare for
15 days, unless the commission
authorizes a longer test period.
WOGCC is allowed to authorize flaring
for as long as 180 days for volumes as
high at 250 Mcf a day, on a monthly
average, not to exceed a total release of
45 million cubic feet.
The Petroleum Association of
Wyoming's review of WOGCC data
points out that actual statewide field
reporting of gas flared from Wyoming
wells shows that 0.26 percent of the
state's total natural gas production in
2014 was flared or vented, reports John
Robitaille, PAW's vice president.
"For the public, regulators and the
operators, this was a key question to
answer with real data. What the data
prove is that Wyoming does not have a

flaring problem," he says. "When the
industry is being forced to lay off
people, no one takes charges of 'waste'
lightly. Responsibility is the bottom
line, and fortunately, Wyoming can be
assured by the data that we do not have
a flaring problem."
In addition to production tests, the
new rules authorize venting or flaring:
* During emergencies such as compressor or other equipment failures, or
for safety purposes during necessary
maintenance or upgrades;
* During well purging and evaluation tests; and
* During unloading or cleaning of a
well during routine purging, drill stem
or evaluation tests.
An operator flaring or venting a well
must submit a compositional analysis of
the gas, including hydrogen sulfide,
within six months and every five years
thereafter for existing and new wells
vented or flared.
Unless the commission determines
that waste is occurring, the rules
authorize individual oil wells to flare as
much as 60 Mcf/d. Venting of
casinghead gas can occur when the rate
is below 20 Mcf/d. Venting or flaring is
authorized either at the well or at a lease
facility that serves several wells.
Venting at the facility cannot exceed 20
Mcf/d, WOGCC states.
After authorized flaring ends, well
operators must submit final reports to
WOGCC detailing total volumes, duration
and average daily gas volumes flared. ❒

North Dakota Delays
Plugging Requirements
For Marginal Wells
BISMARCK, N.D.-In recognition of
the hardship caused by low oil prices, the
North Dakota Petroleum Council reports
the North Dakota Industrial Commission
has clarified the state Department of
Mineral Resources' ability to delay
plugging and abandoning marginal wells
for an additional year.
NDPC says Section 3 of 43-02-03-55
of the North Dakota Administrative
Code "allows DMR to waive the duty to
plug and reclaim a marginal well for up
to one year, allowing a producer to wait
for better economics to produce a well."
At their Feb. 16 meeting, NDPC says,
commissioners affirmed that economic
hardship constituted "good cause" for
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