House Committee Takes on Oil and Gas Legislation.

OnThursday afternoon, the House Resources & Conservation Committee took testimony on several bills dealing with oil and gas exploration.  H462 put the Idaho Public Utilities Commission (IPUC) in charge of safety inspections for the gathering pipelines.  Gathering lines are pipelines and other fixtures used to transport, deliver, or distribute natural gas or crude oil from a well-head to ultimately a transmission line or mainline.  IPUC has the program and inspectors because they do safety inspections on main transmission lines.  There was no one to offer testimony and the committee sent it to the House floor with a do-pass recommendation.

H460 amends existing code to increase the permit fee for drill permit applications from $100 to $2,000 to cover the additional costs of permitting since there is no production yet to pay for the program.   There was no testimony and it was also sent to the House floor with a do-pass.

The next two bills (H463, H379) which updated definitions listed in the code governing oil and gas production and proposed updated penalty amounts; and updated the tax code with applies to oil and gas production also passed by voice vote and without any testimony being offered.

Then came H464 which is meant to clarify existing law to:

• Provide uniformity and consistency in regulation of oil and gas production in Idaho;

•Clarify the Oil and Gas Conservation Commission’s authority over oil and gas exploration and production;

•Clarify local governments’ role in oversight of the oil and gas industry;

•Provide for mitigation of negative impacts to existing water rights or usable water resources;

•Align the definition of injection wells with the Federal 2006 Energy Policy Act.

Rep.Andrus opened questioning by the committee referring to hundreds of e-mails against injection wells and fracking which the committee has received and asked about the injection well issues.  Suzanne Budge with the Idaho Petroleum Council pointed out that Idaho has not been delegated by EPA to administer a Class 2 injection well program  These are regulated by the EPA as outlined in the federal Safe Drinking Water Act.    Committee members asked very specific questions about the legislation dealing with waste water disposal,clarifications of the role of the state and local government in the permitting process; protection of drinking water and then opened the floor to public testimony

Mostof the 25 people signed up to testify opposed to the bill.  Testimony against the bill revolved around lack of local control and short public comment periods under county administrative permitting procedures. The bill was seen as an attempt to short circuit a Washington county ordinance that has not been finalized.  Others felt the language of the bill was vague and set precedents that co-opted local control and local land use planning. 

Commissioners Larry Church and Marc Shigeta from Payette County supported the legislation because,they said, counties do not have the expertise to deal with gas and oil production.  They also pointed out that the bill required notification of county government and sharing of all documents concerned with permitting.  Two commissioners from Washington County opposed the bill.

Many of those who testified so passionately against the bill had also testified passionately against the rules that resulted from the negotiated rulemaking during the summer and fall.  Some had participated in the meetings but others objected that the rules were done without enough stakeholder input.

When one gentleman testified about a specific phase in the legislation as sounding like something that came from communist Russia, a legislator pointed out to him that that particular phrase was not new but has been in that section of Idaho Code for a number of years.

The testimony lasted until 5:00 pm at which time the committee voted unanimously with a voice vote to send the bill to the House floor with a “do pass”recommendation.  And industry pledged to bring legislation next year if corrections were needed.

Centra Consulting and Bridge Energy present on oil and gas drilling in Payette County

On Monday, February 14, in a presentation for the Senate Resources & Environment Committee, Steve West of Centra Consulting introduced a geophysicist with Bridge Energy who talked about developing the first natural gas field in Idaho—in Payette County. They hope to get wells into production and also construct a pipeline.

The organization has drilled 11 wells. Four of which are unproductive, three are economically viable as they are and four could be viable with the use of fracturing, commonly known as fracing. Fracing is a process that stimulates a well so that the gas flows and the well can produce economically. In the process of drilling and placing the pipeline structure, the concrete and drilling mud block the pathways that connect the pores in the rock that contain
the natural gas. The process that Bridge is using is known as a mini-frac and is not nearly as extensive as the large shale fracturing process that has been in the press.

A mini-fracing process will clear pathways in those four wells to allow the gas to flow, analogous to a building like the Statehouse. The pores are the rooms which are reached through hallways. Fracing re-opens the doorway to the hallway so people can move between the rooms. The fracing that will be used only goes out about 150 feet from the bore hole and uses 3% of the fluid pressure volumes of the large shale fracs and the actual treatment takes 45 minutes.

The Payette County aquifers are 60 to 300 feet below the surface; the gas sands are between 2000 and 4000 feet and are separated from the aquifers by 1700 feet of impermeable shale.

Officials noted that they were presenting to the committee with the hope that negotiated rulemaking would take place to set up the regulatory program to cover oil and gas drilling. The Idaho Land Board also serves as the Idaho Oil and Gas Conservation Commission. The Commission has not had to meet for at least 18 years. The Commission is made up of Governor Otter and the state’s top elected officials and has has oversight of oil and gas drilling. This same presentation was made to the Commission on Tuesday.