December 1997 Vol. 218 No. 12  Drilling

Thomas R. Wright, Jr.,  Editorial Director

Court case produces strange bedfellows

As surprising as it may seem, the oil and gas industry is on the same side as the U.S. Environmental Protection Agency, at least on the issue of whether hydraulic fracturing should be regulated as an underground injection procedure.

This strange alliance was born of a ruling by the 11th Circuit Court of Appeals, which has jurisdiction over Alabama, Florida and Georgia. And the ruling was a result of a "petition for review" of an EPA order that denied a Legal Environmental Assistance Foundation, Inc. (LEAF) request. LEAF had asked that Alabama's underground injection control (UIC) program be withdrawn unless it was changed to require hydraulic fracturing be regulated as underground injection. The question was whether EPA is required to regulate hydraulic fracturing under the UIC program established as part of the Safe Drinking Water Act (SDWA). EPA had determined that hydraulic fracturing does not fall within the statutory or regulatory definition of "underground injection."

Background. The SDWA established regulations for the protection of underground sources of drinking water. This program requires EPA to promulgate regulations that set minimum requirements for state UIC programs. After obtaining EPA approval, a state may be granted primary regulatory and enforcement responsibility for underground injection activities within that state. Among the minimum requirements for state UIC programs is that the state must prohibit any underground injection unless authorized by permit or rule.

In this case, the hydraulic fracturing of concern was in connection with production of methane gas from coal beds. Several thousand coal bed gas wells have been completed in Alabama since 1980. And unfortunately, EPA had publicly stated that "there is a growing potential for contamination of drinking water aquifers, resulting primarily from the hydraulic fracturing necessary to stimulate production."

In 1994, LEAF petitioned EPA to initiate proceedings to withdraw approval of the Alabama UIC program. LEAF alleged that the Alabama program is deficient because it does not regulate hydraulic fracturing activities associated with methane gas production and such regulation is required under the SDWA. LEAF further asserted that hydraulic fracturing associated with methane gas production had resulted in diminished quality of water drawn from a nearby drinking water well owned and used by two of LEAF's members.

In 1995, EPA denied the petition because it determined that hydraulic fracturing does not fall within the regulatory definition of "underground injection." EPA interprets that definition as encompassing only those wells whose "principal function" is the underground emplacement of fluids. EPA decided that methane gas production wells that are also used for hydraulic fracturing are not required to be regulated under the UIC programs because the principal function of these wells is not the underground emplacement of fluids-their principal function is methane gas production.

Court's ruling. Contrary to EPA's arguments, the court said Congress intended to include hydraulic fracturing as a form of underground injection. "We readily find that the word 'injection' means the act of forcing a fluid into a passage, cavity, or tissue. Sensibly, therefore, 'underground injection' means the subsurface emplacement of fluids by forcing them into cavities and passages in the ground through a well. The process of hydraulic fracturing obviously falls within this definition, as it involves the subsurface emplacement of fluids by forcing them into cracks in the ground through a well."

The court said that the statutory definition didn't allow EPA to exclude from the reach of regulations an activity (hydraulic fracturing) that "unquestionably falls within the plain meaning of the definition, on the basis that the well that is used to achieve that activity is also used-even primarily used-for another activity (methane gas production) that does not constitute underground injection." It said EPA's argument that a methane gas production well is not an 'injection well' because it is used primarily for gas extraction is spurious. "Congress directed EPA to regulate 'underground injection' activities, not 'injection wells.' In view of clear statutory language requiring the regulation of all such activities, they must be regulated, regardless of the other uses of the well in which these activities occur."

While EPA professes that it does not want to regulate fracturing, acidizing and other procedures that might fall into this particular court's definition of 'injection,' it and the various state agencies may be forced to if other Appeals Districts also get involved.

Currently, several industry associations (including the API, IPAMS, IOGCC and IPAA) are monitoring the situation, and if this interpretation spreads, will take the matter up in a higher court.

Horizontal drilling record set in Qatar. Hycalog is claiming a new record after one of its bits continuously drilled more than 3,500 ft in Bul Hanine oil field offshore Qatar. Specifically, the company achieved the longest single run with a 6-in. polycrystalline diamond compact (PDC) drill bit in a horizontal well.

In this particular application, PDC drill bits are faster and stay in the hole longer, which justifies the higher initial outlay for the PDC bit. Average drilling costs in Qatar are currently between $60,000 and $70,000 per day, which underscores the need for better efficiency and higher penetration rates. Longer bit life also pays off since pulling a used bit from a depth of 7,000 to 8,000 ft takes at least 8 to 10 hours.

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Copyright © 1999 Gulf Publishing Company