States Prevent Cities From Banning Fracking:
Texas Law:
In Denton, Texas, natural gas drilling has started again after an eight month old ban on hydraulic fracturing. Denton, outside Dallas, became the first Texas city to ban fracking followed by other cities that have restricted the method of fossil fuel extraction. Vantage Energy resumed operations at its Denton well just weeks after Gov. Greg Abbott signed a bill prohibiting cities from banning fracking on their home turf. When drilling resumed, activists were arrested at the drill site after attempting to block an access road.
The Texas ban is part of a broader movement in oil and gas rich states to restrict decisions about fracking, drilling, wastewater disposal and pipelines to state regulators and commissioners. The new Texas law, House Bill 40, largely strips cities and towns of the power to impose limits. The measure passed the Texas House of Representatives in April by a 122-18 margin. The law prohibits cities from passing an ordinance that “bans, limits or otherwise regulates an oil and gas operation.” Republican Governor Greg Abbott said it was necessary to protect the oil and gas industry from, “the heavy hand of local regulation.” “This is an effort to make sure we do have consistent laws across the state,” he said.
The bill does permit municipalities or counties to implement “reasonable” regulations concerning traffic, road use, noise and odors related to oil and gas operations. It also puts into play the establishment of requirements for fencing around oil and gas drilling locations and how far away from businesses or homes a well site can be situated.
The bill received the backing of the Texas Municipal League after it included language allowing cities to set “commercially reasonable” setbacks.
Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association, said in a news release that this law protects the ability of municipalities to reasonably regulate surface activity related to oil-and-gas development, while offering the industry the regulatory certainty it needs to conduct its operations.
Oklahoma Law:
Oklahoma followed suit when Republican Governor Mary Fallin signed a bill last month that prohibits Oklahoma cities and counties from banning hydraulic fracturing or other oil and gas operations within their boundaries. The bill also prohibits local bans on wastewater disposal. The Oklahoma Senate approved the bill in a 33-13 vote on May 21.
Governor Fallin said the legislation reaffirms the Oklahoma Corporation Commission as the regulator of the state’s oil and gas industry and enacts consistent and uniform regulations across the state. “Corporation commissioners are elected by the people of Oklahoma to regulate the oil and gas industry. They are best equipped to make decisions about drilling and its effect on seismic activity, the environment and other sensitive issues,” Fallin said in a statement. “The alternative is to pursue a patchwork of regulations that, in some cases, could arbitrarily ban energy exploration and damage the state’s largest industry, largest employers and largest taxpayers.”
Fishbones Develops New Technology:
Saudi Arabia:
According to CNN, Saudi Arabia could be next to use new technology to get at currently trapped gigantic reserves of oil and gas. A small pilot project about to get under way is the energy market equivalent of a moonshot, but it could allow a Saudi fracking boom to move one step closer to reality. All over the world, there are naturally fractured oil and gas reservoirs called carbonate formations, and no region has as much oil and gas trapped in such formations as the Middle East.
Carbonate formations are estimated to hold 60 percent of the world’s oil and 40 percent of the world’s gas reserves. In the Middle East, , according to Schlumberger, roughly 70 percent of oil and 90 percent of gas reserves are trapped in the carbonate.
Fishbones:
Fishbones, a Norway-based oil services start-up founded by Rune Freyer, a former Schlumberger executive who is considered a technical wizard in the oil business, has announced plans to complete installations of its technology in Saudi Arabia for an undisclosed client.
Oil services company Baker Hughes estimates Saudi Arabia is fifth in the world when it comes to recoverable gas reserves mostly in carbonate formation. What Saudi Arabia doesn’t have is a lot of water, which is needed in fracking. Fishbones technology uses 95 percent less fluids than current fracking methods.
The traditional problem with gas recovery in Saudi Arabia has mirrored some of the shale-fracking problems of the U.S., i.e. production costs are high, while sales prices are low. So gaining access to a technology like Fishbones potentially means higher recovery rates and boosted production at a lower cost.
Texas and Norway Pilots:
Fishbones is at work on additional projects in Norway and Texas. “These are reservoirs that are found all over the world,” said Kevin Rice, the Houston-based North America region manager for Fishbones. In Norway, it is working directly for Norway oil and gas giant Statoil, which is an investor in Fishbones. The Joint Chalk Research group based in Denmark backed a 2014 pilot project in Texas installed in the Austin Chalk Formation. The members of this group are BP, ConocoPhillips, the Danish North Sea Fund, Danish state-owned oil company Dong, Hess, Maersk, Royal Dutch Shell, Statoil and Total.
The Fishbones Technology:
In a Fishbones system, pipes containing needles are connected together as they’re installed in horizontal or vertical well bores. When the solution of water and acid is pumped through this piping system, the pressure of the solution pushes the needles out into the rock formation underground. Those needles, which extend 40 feet in four directions from the main well bore, create tiny tunnels in the rock known as laterals. It’s for this reason the company is named Fishbones, since the end result of what it creates resembles the skeletal structure of a skinned fish, with the main well bore representing the spine and the lateral tunnels representing the fish’s ribs. “Creating the laterals is something very new that we’ve introduced,” Rice said. “It’s a simpler process to get access into the formation. It’s more accurate because you’re controlling where it goes.”
The company is only now beginning to commercialize its technology, having installed two pilot systems in 2013 (in Indonesia) and 2014 (the Austin Chalk project mentioned above). But some who study the fracking industry think Fishbones’ approach shows promise. “We’re not saying forget hydraulic fracturing,” Rice said. “But we have a specific niche in the market where we fit well, and we have a unique way to tap into that market.”
