Regulating Fracking in Nebraska

A pumping unit in Dundy County. (Photo by Ariana Brocious, NET News).
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March 28, 2013 - 6:30am

Nebraska’s western neighbors have seen big boosts in their oil and gas production in recent years. Along with the drilling boom, several states have passed new regulations related to hydraulic fracturing, or fracking. Some Nebraska legislators are pushing the state oil and gas regulatory agency to do the same to protect groundwater. _____________________________________________________________________________

The last day of February was a long one for Bill Sydow. The director of the state oil and gas commission traveled from Sidney to a hearing room at the capitol in Lincoln, where he and others spent a few hours trying to convince state lawmakers to abandon a bill to regulate fracking—a controversial process companies use to get gas and oil from deep underground.

Sydow said he doesn’t oppose the substance of the bill—it’s similar to regulations his commission has been working on for the past year. But he rankled at the legislature stepping into an area he regulates. Sen. Ken Haar of Malcolm pressed Sydow on how long it’s taken the commission to pass the rules.

“Fracking has been an issue for a long time now, and nothing’s in place in your rules and regulations, so this law would say maybe we have to mandate it,” Sen. Harr said.

“No sir, I absolutely disagree with that, and this is why.  We effectively regulate well stimulations right now in a number of ways,” Sydow responded.

Fracking blasts a mix of water, sand and chemicals underground to break up rock and release oil or gas. Widespread concern over possible groundwater contamination from fracking has helped spur several of Nebraska’s neighbors to pass new rules requiring companies to disclose what chemicals they’re using underground, on a website called FracFocus.

Sen. Haar asked Sydow why Nebraska hasn’t yet followed suit.  “And we haven’t mandated that, because other states, like Texas, North Dakota, Colorado, and Oklahoma all mandate the use of FracFocus. Why haven’t we mandated that?” Harr said.

“We’re in the process. We’re in the process,” Sydow answered.

The commission’s regulations will require that disclosure, as well as measures designed to prevent blowouts or leaks from the well casing. But Sydow objected to two additional disclosure requirements in Sen. Norm Wallman’s bill—the amount and source of water used, and the amount of produced water recovered afterward. Sen. Wallman says those requirements make sense.

“Water, that is Nebraska’s number one resource,” Wallman said.  “And I think it’s prudent we know how much is being used. I don’t know anyone who can argue with this, especially since our state could be facing another drought again this year.”

Oil companies and industry groups also opposed the bill. It hasn’t progressed since the February hearing and appears unlikely to pass this year. Sydow says the commission should finish its rulemaking by mid-summer, though he doesn’t really see the urgency. Last year, only a dozen wells were fracked in the state.

Much of Nebraska’s oil is still produced the old-fashioned way—pumped out of the ground in rural areas like Dundy County. This is where the bulk of the state’s oil and gas production sits—in the west and southwestern parts of Nebraska, on the edge of productive oil and gas fields in Colorado and Wyoming. Last year, those states each produced more than 47 million barrels of oil; Nebraska produced less than 3 million. Still, that was up 11 percent from the year before.

Bill Kaler has been working in southwestern Nebraska since 1975, a decade after his father’s company started in the panhandle.

“It’s marginal production, but at today’s prices it’s very economic to produce it,” he said.  

Today Kaler’s using a sand pump to drill a water disposal well. While his company doesn’t rely on fracking now—the oil formations on this site don’t require it—he’s used it elsewhere, and sees no problem with it.

“Fracking itself is as old as the oil industry. The big brouha about it affecting groundwater is environmental bull. It’s not something that really needs to be worried about,” Kaler said.

But plenty of people disagree. As the renewed use of fracking and horizontal drilling allowed oil and gas production to boom in areas previously thought uneconomical, reports of brackish, flammable groundwater near drilling sites also grew, spurring public outcry that has since made the technique highly controversial. In the February hearing at the capitol, Duane Hovorka of the Nebraska Wildlife Federation cited a 2011 report from the National Academy of Sciences.

“That study reported that fracking has contaminated groundwater wells in some areas. They found harmful levels of methane in wells in Pennsylvania and New Jersey,” Hovorka said.

The issue remains far from settled—while fracking opponents cite examples of spills, problems with well casing and polluted water, proponents maintain a direct link has never been proven between the practice and groundwater contamination.

NOGCC Director Bill Sydow.

Photo by Ariana Brocious, NET News.

 

 

NOGCC director Bill Sydow says fracking is benign, and Nebraskans aren’t concerned by it. Farmers and ranchers in the western parts of the state are long accustomed to oil drilling, he said, and in many cases they profit off of it. But he said his commission wants to be proactive and transparent with the public, which is why they’re moving ahead with new fracking regulations.  

Even with those regulations underway, there are doubts Nebraska will see a fracking boom.

“Nebraska has fewer wells than some fields within states. So it’s not a very large producer of oil and gas,” said Debra Higley, a research geologist with the US Geological Survey.

Despite Nebraska’s low overall oil and gas production, several companies are acquiring substantial leases in the state. And at least two have drilled horizontal wells—which often employ fracking, in the Panhandle. But in spite of continued drilling and exploration—and hopes that the ground might still hold surprises, so far there’s been no indication of a boom on the scale of other nearby states.  

“We would all certainly hope that would be the case, that people would come to Nebraska, and explore and be successful. And at least with this rule, those operating companies will know what’s expected of them,” Sydow said.

Fracking or not, oil drilling operator Bill Kaler says he has no plans to go anywhere.

“As long as the economics work, we intend to keep doing it. I’ve got a drilling rig running right now,” Kaler said.

Want to see more? View maps of oil and gas drilling in Dundy County, Hitchcock County (credit: NOGCC) and the USGS National Oil and Gas Assessment.

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