Companies that drill for oil and natural gas on federal lands will be required to disclose publicly the chemicals used in hydraulic fracturing operations, the Obama administration said. The new “fracking” rule replaces a draft proposed last year that was withdrawn amid industry complaints that federal regulation could hinder an ongoing boom in natural gas production …

But environmental groups said the proposal was weaker than last year’s plan and represents a nearly complete capitulation to industry … MORE ...

Mead’s report outlines four priorities: Economic competitiveness, efficient regulation, natural resource conservation and developing new technologies.

According to the Governor, lack of a national energy policy inspired him to develop the state version. At least a dozen agencies play a role in federal energy development oversight, the 63-page report pointed out.

“Before we started throwing stones about that, I started thinking we in Wyoming needed to have an energy strategy,” Mead said. “We hope they can take a cue from us.”

Wyoming ranks second behind Texas for total energy production. In this least-populated state,  Coal, oil, natural gas, wind and uranium production continue to make this least populated state the leader in energy exports.

Below is the full release from the Governor’s Office spotlighting Wyoming’s new energy policy:

Governor’s Energy Strategy Provides Leadership from Wyoming – the Number One Energy Exporting State in America

CHEYENNE, Wyo. –  Wyoming leads the nation in energy exports to the rest of the country and takes pride in its high standards for environmental stewardship. Today, Governor Matt Mead unveiled his Energy Strategy: “Leading the Charge: Wyoming’s Action Plan for Energy, Environment and Economy.” According to Governor Mead, Wyoming’s leadership role requires our state to continue to set the standard and, in the absence of a federal energy plan, Wyoming needs a strategy to address energy, the environment and the economy. The state’s strategy recognizes the interrelationship and importance of all three now and in the future.

“We produce 10.5 quadrillion BTUs of energy each year in Wyoming. These resources are vitally needed to fuel America’s economy. At the same time our treasures of nature are so important to all who live, work and find inspiration here,” Governor Mead said. “We cannot sit back and hope for the best. We need a strategy to strike the balance between energy development and environmental stewardship.”

“Leading the Charge” is intended to be continually updated and establishes a framework to address issues in a forward looking way with the capability of adjusting to changing circumstances. Each of the strategy’s 47 initiatives are action items to be instigated this year. State agencies will carry out the initiatives and will make progress reports available to the public throughout the year.

“This strategy is the beginning of a continuum. It is meant to be regularly revised, updated and integrated into budgeting and planning,” Governor Mead said. “This strategy was put together with the hard work of people from across the state and from diverse backgrounds, including industry, environmental groups and agriculture. I thank them all and look forward to working together on future initiatives.”

“Leading the Charge” is divided into four main themes:

1. Economic Competitiveness, Expansion and Diversification
2. Efficient, Effective Regulation Theme
3. Natural Resource Conservation, Reclamation and Mitigation
4. Education, Innovation and New Technologies

Each theme contains initiatives and each initiative requires concrete actions and results. Here are some examples:

Economic Competitiveness, Expansion and Diversification

      -New and Expanded Marketing Opportunities for Wyoming Businesses and Industry.

Efficient, Effective Regulation

       -Baseline Pre-Development Water Quality Testing.

Natural Resource Conservation, Reclamation and Mitigation

       -Develop a Policy Framework for Off-Site Mitigation.

Education, Innovation and New Technologies

       -Hybrid Energy Systems – combining inputs to produce a variety of outputs. This could be coal, natural gas and wind in a large energy campus to produce fuels, chemicals and power.

“I look forward to working with legislators, local officials and the public on executing this year’s initiatives, refining our process and making this an even more useful tool next year,” Governor Mead said. “Leading the Charge” is available online at www.energy.wyo.gov and Governor Mead will provide updates to the public throughout the year.

By Larson Hampton, CEO, Principle Energy Services

Introduction

The coming of the industrial age ushered in an insidious threat—noise pollution. Whether the noise emanates from a nearby railway or superhighway, a manufacturing company or a construction operation, it impinges upon the population and does damage. The insidiousness of the damage can be appreciated when one considers the marvelous entity that is the human body, or more specifically, the human brain.

Almost without exception the human brain is able to adapt to considerable noise by “tuning it out.” The ability to tune out noise is what allows us to sleep on a plane or a train, a naval ship or even a drilling rig. It allows many long-suffering wives to tune out the sonorous tones of their husbands’ snoring.

So if we can tune out objectionable noise, where’s the damage? Like the old riddle says, “If a tree falls in the forest and no one is around, does it make a sound?” Of course it does, and like any sound, our ears detect it and send a message to our brains, causing them to work even if we have tuned out the sound from our consciousness. People who are exposed to levels of background sound called “white noise” suffer heightened stress even while sleeping and, in time, can suffer physiological damage.

Such damage can manifest in many ways, including fatigue, shortness of temper or inability to concentrate. If you doubt this, try staying in your home or office when a fire drill is conducted. The alarm sounds, steadily gaining intensity until you are literally driven from your office to get away from the sound, which can become quite painful. In extreme cases, focused, high-intensity sound can be used as a weapon, driving undesirable people, such as criminals or an enemy, away without having to take more drastic measures. One company offers sound cannons to ships to fend off the boarding attempts of pirate gangs.

Even suppressed sounds that never reach the levels of a fire alarm can cause mental stress. Companies have recognized this, and many require their employees to wear ear protection while they are at work, even though the sound levels may seem quite tolerable. Because individuals are different, the point at which a sound becomes annoying varies from person to person. But long before a sound reaches annoying levels, it is heard and processed by our auditory senses. The constant presence of this white noise can cause stress.

While many workers have become accustomed to wearing ear protection in obvious situations, what about the rest of us? School children in class or at play are affected. People doing their everyday activities, such as going to the store or the cleaners or other usual locations can encounter noise pollution. Parents may jokingly apply the term “noise pollution” to the music enjoyed by their teenagers.

The threat of noise pollution has energized society to act. Everywhere you go you see noise-absorbing media or sound-reflecting walls. Cities erect walls along freeway rights-of-way to shield homes and apartment complexes from the hum of traffic. Landscapers plant rows of sound-absorbing trees or hedges to act as sound barriers while adding to the natural beauty of the area. The mitigation of noise pollution has become a significant business.

Oil and gas companies are walking away from non-productive or marginally-commercial wells
at an increasing rate here in Wyoming.

By Dustin Bleizeffer/Wyofile.com

There are some 1,200 “orphaned” wells in Wyoming that have not been properly plugged and reclaimed, creating potential risks to the environment and human health, according to Wyoming Oil and Gas Conservation Commission data. One case involving California-based USA Exploration & Production involves nearly 150 coal-bed methane gas wells for the state to clean up at an estimated cost of $1.4 million.

The state collected only $154,000 in forfeited bonds posted by the company, and it will go to the orphaned well fund to cover the rest of the plugging and reclamation cost.

Contacted by WyoFile this week, state officials were not able to provide full details about the health of the orphaned well fund, or about the full liability related to the total 1,200 orphaned oil and gas wells across the state.

Wyoming’s orphaned wells are a topic before the Joint Minerals, Business and Economic Development Interim Committee when it begins its two-day hearing Tuesday in Gillette.

The orphan well fund comes from a “conservation tax” mill levy imposed on all oil and gas producers in the state. This time last year, the fund’s balance was $1 million. The commission’s board can vote to increase the mill levy if it appears in danger of being tapped dry.

With the exception of approximately 50 wells, most all of the orphaned wells are part of the Powder River Basin coal-bed methane district in northeast Wyoming, where operators had enjoyed marginal commercial success until the price of natural gas took a dive in 2008. Until then, the Powder River Basin was Wyoming’s single largest producer of natural gas, with approximately 1 billion cubic feet (bcf) of gas produced each day.

While much of the Powder River Basin coal-bed methane facilities remain in the hands of financially-stable operators, such as Anadarko Petroleum, many wells were passed on to smaller operators hoping to cash in when natural gas prices bounce back into the range of $5-plus per thousand cubic feet (mcf) of gas. That hasn’t happened, and a handful of small operators have gone bankrupt while others still flirt with bankruptcy.

This is a common cycle in the oil and gas industry; small operators prove up a field, then bigger companies buy up small pieces to consolidate a large field for primary production. When the play becomes marginal, tracts are sold off to smaller companies that may not have the wherewithal to fulfill maintenance and reclamation liabilities.

Landowner and environmental advocacy groups point to cases such as the Powder River Basin coal-bed methane play as evidence that state and federal regulators ought to increase bonding requirements well beyond so-called blanket-bond levels. Blanket bonds almost never cover the full liability of a company’s operations. While Wyoming’s individual coal-bed methane gas wells of 500- to 700 feet in depth might be relatively cheap to plug and abandon, today’s deep (9,000 feet and deeper) shale gas and shale oil wells pose a greater risk.

In the case of coal-bed methane, Wyoming officials are left with a large number of small wells at risk of being orphaned. Whereas Wyoming typically deals with about 100 orphaned wells in a year, there are now 1,200 orphaned wells. One official noted that not all of those wells pose an immediate environmental and human health risk, so plugging efforts will be prioritized according to risk.

Also on the docket in oil and gas business next week in Wyoming, the Wyoming Oil and Gas Conservation Commission is scheduled to hear two cases regarding potential rules violations related to flaring — or burning — natural gas.

The commission will consider fines and penalties for EOG Resources Inc. for allegedly exceeding flaring limits, and it will consider fines and penalties for Chesapeake Operating Inc. for allegedly exceeding flaring limits, according to state documents.

The commission hearing is schedule to begin at 9 a.m. Tuesday at the commission’s headquarters, located at 2211 King Blvd, in Casper.

— Dustin Bleizeffer is WyoFile editor-in-chief. He has written about Wyoming’s energy industries for 15 years. You can reach him at (307) 577-6069 or email dustin@wyofile.com. Follow Dustin on Twitter at @DBleizeffer

66 parcels totaling about 85,000 acres were offered at the auction earlier this week, with the highest bid per acre at $3,500 for a parcel that leased for $1.4 million.

As most of the readers of Wyoming Energy News know, roughly half of the bid and rental receipt money generated by BLM auctions goes to the state. The next lease sale is scheduled for Aug. 6 in Cheyenne.

Tripower Resources LLC filed suit in Campbell County District Court in late March after Campbell, Crook and Converse counties each listed the company as tax delinquent in late August. According to each county’s treasurer, the company is on the hook for about $885,000 in production taxes from about 12 wells.

But Tripower says many of the taxes owed aren’t its responsibility. The company — which produces oil and gas in Oklahoma and has no other operations in Wyoming — says it owns the properties because a past debtor defaulted on a company-to-company loan. MORE …

In an assessment of oil-and-gas drilling in or near national parks, the National Parks Conservation Association found that Teton is suffering effects from well fields as far away as the Upper Green River Basin, a major natural gas development area.

The park is about 50 miles north of the northern edge of oil-and-gas activity in the area. There is no drilling or production in Grand Teton National Park.

Among the Grand Teton impacts cited in the study were blocked antelope migration corridors and reduced air quality. The results were enough to concern the association.

A spokeswoman for Sen. John Barrasso, R-Wyo., indicated support for and confidence in the industry Thursday. MORE ..

By Ryan Lance and Tom Drean, Wyoming Oil and Gas Conservation Commissioners
WyoFile.com

The Commission’s approval was based on the U.S. Environmental Protection Agency (EPA) approved rule, which says that produced water can be injected into an otherwise clean water formation if that clean water “is situated at a depth or location which makes recovery of fresh and potable water economically or technologically impractical.”

The Commission heard extensive testimony ranging from the cost to drill a water well to a depth of 15,000 feet to the modeling that showed how the injected water might spread from the point of injection. The Commission collected comments from the Wyoming Department of Environmental Quality (DEQ), pursuant to its rules. The Commission also recently received comments from the EPA, again, consistent with its rules. MORE …

The reason for the huge loss of water is that states have failed to place adequate protections on the use and contamination of fresh water in hydraulic fracturing, or “fracking,” the technology that has allowed the oil and gas industry to extract oil and gas from shale formations, such as the Bakken field in North Dakota and Montana.

“Fracking’s growing demand for water can threaten availability of water for agriculture and Western rural communities,” said Bob LeResche, Clearmont, Wyoming, of WORC’s Board of Directors and the Powder River Basin Resource Council.

The Bakken pulled North Dakota from ninth to second in oil production in just a few years, but one of the costs of fracking is at least four billion gallons of water removed from the hydrological cycle in the past year.

“We need to conserve water for the next generation, and the one after that,” said Theodora Bird Bear, a Board member of Dakota Resource Council, who is a Three Affiliated Tribes member and a resident of Fort Berthold Reservation. “That means reducing the amount of water used for oil drilling, or finding ways to purify and recycle it.”

The report analyzes water withdrawals and state oversight of water use for fracking in four states where member groups of WORC are active: North Dakota (Dakota Resource Council); Montana (Northern Plains Resource Council); Wyoming (Powder River Basin Resource Council); and Colorado (Western Colorado Congress).

LeResche said coalbed methane (CBM) production has already compromised Wyoming’s groundwater quantity. “A study by the Wyoming State Engineer found that the Fort Union aquifer has dropped as much as 625 feet since 1997 due, in large part, to extraction and disposal of groundwater used for CBM production,” LeResche said. “It would take 50,000 years to replenish the aquifer.”

In the absence of federal laws, states play the key role in regulating and monitoring oil and gas drilling, including water use.

“There’s been a lot of debate over fracking and pollution, but little notice of what in the long term may be an even more serious threat,” LeResche said.

The WORC report found that fracking, and its thirst for water, has become standard operating procedure for almost all new oil and gas drilling in the nation.

“Colorado already has competition for water. We can’t create more water. Removing water from the hydrological system is unwise,” said Bob Arrington, a retired engineer from Mesa Battlement, Colo., and member of the Western Colorado Congress.

The report also notes that the states studied, except Wyoming, have largely delegated key record-keeping duties to the industry-sponsored website, FracFocus, making it a “de facto arm of government.”

WORC’s report urges states to take back responsibility for both planning and record-keeping, and also that it conduct a “thorough, impartial study of the water resources available, and of how much fracking can be conducted without endangering those resources.”

Compiled by the American Wind Energy Association, the report shows a year-over-year growth in capacity of 28% coming from 6,700 new wind turbines, bringing the country’s total to about 45,100.

One of the more interesting records from last year: ”Xcel Energy’s Colorado system has obtained more than 50 percent of its electricity from wind on multiple occasions. All these have been achieved reliably for electric customers, as utilities become increasingly familiar with integrating more wind power into their operations.”

“We had an incredibly productive year in 2012,” said Rob Gramlich, Interim CEO of the American Wind Energy Association (AWEA).

“It really showed what this industry can do and the impact we can have with a continued national commitment to renewable energy. We’re doing what Americans overwhelmingly say they want: making more clean, renewable energy, and creating good jobs in U.S. factories.”

AWEA’s report found that over 550 factories across the country provide parts and services for the wind energy industry, which provided 80,000 American jobs in 2012.

Going forward, however, the wind energy industry’s future remains uncertain. A report from the Government Accountability Office acknowledges that the Production Tax Credit remains the primary policy driver for American wind power, and that all the incentives for the industry remains in a single program.

“In particular, a tax expenditure and a grant initiative, both administered by Treasury, accounted for nearly all federal financial support for wind energy,” the report says, referring to the Production Tax Credit and another program that has now expired.

“Wind energy is a good deal for Americans, and that’s why they want more of it. Nothing in this report changes that,” said Gramlich.