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U.S. Democrats Launch Another Attack On Oil & Gas

Water used in oil and gas well drilling may become classified as hazardous waste, complicating the lives of companies that use it if a new bill, sponsored by a New Jersey Congressman, becomes a law.

The Climate Leadership and Environmental Action for our Nation’s Future Act, or the CLEAN Future Act, for short, calls for a variety of unsurprising steps towards a more environmentally sustainable energy system, including everything that’s been hogging the headlines lately, from EVs to heat pumps and building retrofits.

Notably for the oil and gas industry, however, it includes a section dedicated to the water used in oil and drilling and then disposed of in special wells.

This is what Section 625 of the bill says:

“Not later than 1 year after the date of enactment of the CLEAN Future Act, the Administrator shall—


(A) determine whether drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal energy meet the criteria promulgated under this section for the identification or listing of hazardous waste;

“(B) identify or list as hazardous waste any drilling fluids, produced waters, or other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal energy that the Administrator determines, pursuant to subparagraph (A), meet the criteria promulgated under this section for the identification or listing of hazardous waste; and

“(C) promulgate regulations under sections 3002, 3003, and 3004 for wastes identified or listed as hazardous waste pursuant to subparagraph (B), except that the Administrator is authorized to modify the requirements of such sections to take into account the special characteristics of such wastes so long as such modified requirements protect human health and the environment.”

Forbes commentator David Blackmon called the bill “another frontal assault on the nation’s oil and gas industry,” and proceeded to quote a report produced by the Rice University’s Baker Institute that said if the water produced from new oil and gas wells is reclassified as hazardous waste, this would change the requirements for its disposal and make this disposal much more difficult.

The situation is pretty simple, actually. Right now, produced water is disposed of in so-called Class II injection wells. There are some 180,000 of these, according to the Baker Institute, in operation across the States. If this produced water is reclassified as hazardous waste, however, it would need to be disposed of in Class I wells. Of these, there are fewer than 300 in the country, the report notes. To make things even more complicated potentially, not all of these wells accept waste from third parties. Further, most of these hazardous waste wells are along the coast of Louisiana and Texas, far from the major shale plays.

If the bill is passed, then, it could effectively stifle a lot of U.S. oil and gas production by saddling well drillers with the obligation to find a way to transport some 10 million barrels daily of wastewater several hundred miles to the Class I wells. The regulatory load on these companies will also increase, ultimately making production a lot costlier. And there’s an environmental danger, too.

When seismic activity surged in some parts of the U.S. shale patch during the first shale boom, this was linked to fracking. Eventually, research suggested that while the activity of fracturing rock in itself was not conducive to heightened seismic activity, wastewater disposal was.

Wastewater and chemicals—from conventional and fracking wells alike—are stored in underground reservoirs. According to scientific data, cited by the U.S. Geological Survey, this can trigger earthquakes. This is true even with hundreds of thousands of wells.

Just two weeks ago, Rystad Energy reported that the number of earthquakes of above 2.0 on the Richter scale in four oil-producing states had risen from 242 in 2017 to 938 in 2020. The increase was attributed to wastewater wells. Now, the CLEAN Future Act bill proposes that the number of wells available for wastewater disposal be shrunk instead of expanded. This could, in fact, solve the problem with increased seismic activity by discouraging more oil and gas drilling. From the standpoint of the bill’s sponsor and his fellow Democrats, this would probably amount to killing two birds with one stone.

By Irina Slav for Oilprice.com

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2021-06-24 17:00:00

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