Vol. 6, No. 9

Topics discussed in this week’s Report include:

  • FERC issued guidance manual, which directed developers of natural gas pipelines on how to consider climate change in NEPA reports.
  • Oklahoma limited growth in future wastewater injection rates in Arbuckle formation.
  • Report concluded that spills at hydraulic fracturing sites are common.
  • Large surplus of global LNG is likely in the near future.

Federal

FERC issued guidance manual, which directed developers of natural gas pipelines on how to consider climate change in NEPA reports. The Federal Energy Regulatory Commission (FERC) issued its Guidance Manual for Environmental Report Preparation for Applications Filed Under the Natural Gas Act, a revised policy manual intended to provide guidance to developers of natural gas pipelines on drafting environmental reports under the National Environmental Policy Act. Although it covers a much broader set of issues than simply climate change, the guidance manual does include a recommendation that natural gas pipeline developers calculate greenhouse gas emissions associated with the construction of their projects for the purpose of comparing them to relevant local, state and regional climate goals. The manual also states that project developers should include emission categories and/or methodologies from the Council on Environmental Quality’s guidance on greenhouse gas emissions “as applicable.” Finally, the manual suggests that developers should evaluate how climate change could affect a project, such as the effect of rising sea levels on a proposed pipeline.

States

Oklahoma limited growth in future wastewater injection rates in Arbuckle formation. The Oklahoma Corporation Commission issued a directive intended to restrict future rates of underground wastewater disposal in the Arbuckle formation as part of the state’s approach toward increased seismicity in recent years. The new directive will cover 654 Arbuckle disposal wells. While many of these wells have been operating pursuant to disposal volume restrictions the Commission has imposed, a subset is not limited by current disposal restrictions. These wells, which are operating at disposal volumes well below their permitted caps, will now be subject to lower disposal caps based on the most recent 30-day average disposal volumes. Disposal rates will be allowed to increase at other wells, subject to limitations in how fast the increase can occur.

Studies

Report concluded that spills at hydraulic fracturing sites are common. An article recently published in Environmental Science & Technology asserts that approximately 6,600 spills have occurred at over 31,000 unconventional oil and gas wells in four states (Colorado, New Mexico, North Dakota and Pennsylvania) from 2005 to 2014, with anywhere from 2 to 16 percent of the wells reporting a spill any given year. The report alleged that over two-thirds of those spills happened in North Dakota. The researchers looked at spills over a well’s entire lifetime, concluding that approximately half of those spills occurred during movement of fluids in flowlines.

Business

Large surplus of global LNG is likely in the near future. Moody’s Investors Service has released an analysis that concludes that the production of liquefied natural gas (LNG) is likely to continue to expand globally, with a worldwide oversupply likely to peak in 2019. By 2020, Moody’s anticipates that global LNG supply will have increased by 44 percent over 2015 levels, due to new LNG projects in the United States, Australia and Russia becoming operational. During this same time period, Moody’s projects that demand for imported LNG is expected to decrease, especially in Japan and South Korea, two of the largest importers.