* From an anti-fracking op-ed by William Rau…
Last year, I emailed Illinois legislators showing how the definition of high-volume horizontal fracturing in the Illinois Hydraulic Fracturing Act created a loophole exempting oil producers from the law. Legislators dismissed the warning and passed the Frack Act last May. Now, Denver-based Strata-X is preparing to frack a horizontal well next month with a permit filed under the old Illinois Oil & Gas Act.
The consequences? First, permit fees drop from $13,500 per well to $15 per well when Strata-X drills its 100-plus planned wells. Second, production taxes, which are 11 percent in North Dakota, drop from about 3 percent to one-tenth of 1 percent in Illinois with all revenue going to an oil promotion board. Counties can forget about receiving state funds for highway repairs.
Third, blanket bond moneys for plugging defunct wells and cleaning up well sites drop from $500,000 — already inadequate for preventing bond forfeiture — to $25,000. For 100 wells, that’s $250 per well, about 1/100th of actual plugging and cleanup costs.
Guess who will be stuck with the cleanup costs?
Finally, public notice requirements, baseline water testing, insurance provisions, modest environmental protections and setbacks, earthquake mitigation, bans on open pit storage of frack waste water, etc., are all gone.
* There’s also another claimed loophole. SJ-R…
Environmental groups dismissed draft rules released in November as riddled with loopholes favoring the oil and gas industry.
Opponents of the practice of using high-pressure water and chemicals to free oil and gas from rock formations also are pushing for a fracking moratorium in the spring legislative session.
“The big issue with us is the fact that we are pretty convinced the industry is already dry fracking,” said Annette McMichael, spokeswoman for Southern Illinoisans Against Fracturing Our Environment.
McMichael said dry fracking relies on nitrogen and propane to circumvent limits on the volume of water and chemicals permitted.
* I asked Mark Denzler of the IMA to respond…
Thank you for the opportunity to comment on Mr. Rau’s continued forays against energy development in Illinois. Mr. Rau and IPA are publicly on record as opposing any form of hydraulic fracturing in Illinois so his latest op ed is simply more of the same on this topic.
For the record, there are no loopholes in the Illinois law. The General Assembly, working in concert with industry, environmental community and the Attorney General’s office, crafted a strong law regulating the new generation technology known as high volume hydraulic fracturing. It’s interesting to note that a few days ago, the Bakken Shale in North Dakota and Montana reached a milestone of producing its 1 billionth barrel of oil while we continue to wait for the Department of Natural Resources to promulgate final rules.
The definition of a high volume hydraulic fracturing operation is 300,000 gallons of fluid (not simply water) or 80,000 gallons per stage. The total gallonage standard was a last second request by the environmental community during negotiations and inclusion of a conversion factor is being discussed as part of the rulemaking process. Generally speaking, HVHF operations use millions of gallons of water so in reality Illinois set a very low threshold in order to ensure that the new regulations captured a wide range of operations. these operations must comply with the new law. Illinois policymakers clearly wanted to delineate the difference between conventional wells and new HVHF wells and they took the time to do their homework to craft a law that recognizes the differences.
Secondly, Illinois set a very stringent standard by defining a horizontal well as one that deviates more than 100 feet from surface to bottom hole location. Nearly every well has deviation and Illinois’ definition is very strong.
The legislature was diligent in making sure the law was tailored to address precisely the types of unconventional operations that have been the subject of media and policy discussion in other states.
So, actually, there is sort of a loophole for “dry fracking” in the legislation, but the conversion factor between nitrogen or propane and water is currently under discussion.
Also, I’m told it’s very likely that Strata-X’s project can’t circumvent the current law. We’ll see, but the standards are pretty darned tough.
In other words, the sky most likely isn’t falling.