House Agriculture, Forestry & Economic Development Committee
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Transcript
Bills discussed (2)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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SB125
· 3 mentions in chapter, transcript
Matched: “SB125”
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Pre-2017 bill | ||
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HB1229
· 1 mention in transcript
Matched: “…Thank you, Representative Jean. Next bill on our agenda is House Bill 1229, Representative Love. Sick today. Not here. Okay. That's al…”
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Pre-2017 bill |
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Let's get Tim's attention. Tim, thank you for being here. We have, looks like we've got two bills. The first is Senate Bill 125. I understand Representative Jean is going to present that bill.
Representative Greg Leding
Unverified
0:30
Thank you. Representative Gene, you're recognized. Thank you, Mr. Chairman. This is Senate Bill 125 that was run by Senator Pierce in the Senate. It passed the Senate 34 to 1. What it does, if some of the colleagues here last year remember, we did this on school buses and it allows back then school buses if we had grants for federal dollars or state
grants to convert diesel and gas powered engines into compressed natural gas or propane and there was if there's grants available right now there are no grants available but this expands it on to other government entities and companies and it's also have introducing an amendment which has four different, if you look at your amendment sheet, four different weights that the grant amount caps off at. And I have Kelly Robbins here to answer any questions about the amendments, and at this
Speaker 9
1:36
time we'll just open it up for questions.
Are there any questions on the amendment? Is there a motion on the amendment? Okay. Motion to amend. All those in favor? Any opposed? Okay. Representative Gene, you're free to
Bill Declerk
Unverified
2:01
move forward and present the bill as amended. All right. Once again, I've kind of explained the bill.
Representative Greg Leding
Unverified
2:09
It's try to get a dependency off of oil and gas. I mean, oil, it's compressed natural gas. If there are any available funds in the future for conversion of companies or business or government entities, this was allowed as the vehicle to allow it to apply for grants and change vehicles from diesel to gas to compressed natural gas or propane.
any any questions i'll take this time are
Speaker 12
2:43
there any represent linderman thank you mr chair uh... this is a question personal information how many
Larry Snodgrass
Unverified
2:49
natural gas filling stations do we have at this time and and is their plans that you know of to uh... larry develop those i've worked out the guys got all the
Speaker 15
3:03
answers larry feel identify yourself My name is Larry Snodgrass.
Speaker 16
3:10
I'm the executive director of the Arkansas Propane Gas Association. As far as natural gas refueling stations, there aren't that many in the state. They're concentrated in areas where the natural gas vehicles would be used. North Little Rock has one. Fort Smith has one. And there may be one more in the state. But propane has one at every propane dealer and every love travel stop and every RV dealer and every RV parked across the state.
I just drove from Houston yesterday and filled up my truck twice and had no problem finding propane at all. And as a matter of fact, paid $2 a gallon for it. So if that helps anybody. Thank you. Thank you. Thank you, Mr. Chair. Any other questions?
Representative Jeremy Gillam
Unverified
4:01
Representative Gillum. Thank you, Mr. Chair. Representative Gene, and this may be just a technical issue on our end of things with the tablets. I don't know. But
when you mentioned it on the amendment earlier, you said something about weights were on the amendment.
Representative Greg Leding
Unverified
4:14
Is that correct? Yes. If you tap on your screen, there's on the side, you'll see amendment for Senate bill. Let me get my glasses on. All right. The 125. All
Representative Jeremy Gillam
Unverified
4:26
right. The amendment that we have on our tablet, all it does is add co-sponsors.
Representative Greg Leding
Unverified
4:34
Y'all, okay. We don't have that. I ain't tapped on it. I got it. I got it. See, that's why I don't like about this tablet. And I'm also a paper mill advocate. I like more paper.
That's the problem with technology. Hold on. Not trying to trip yet.
Representative Jeremy Gillam
Unverified
4:53
I just want to make sure we're all on the same page and know what we're getting into.
Representative Greg Leding
Unverified
5:07
there's the amendment all it does is it sponsors well we will if we need to pass over it I have one copy of it and I thought it was going to be added into this
and the amendment was over but this is the only copy I have but it also what it does is put 75% of your total cost that you can apply for a rebate. And it gives us weight divisions. It breaks up into four weight divisions. $5,000 will be the maximum that you can apply for on anything under 8,500 pounds. $8,000 will be the maximum you can apply for on vehicles weighing between 8,500 and 14,000.
and $20,000 is the maximum you can apply for on vehicles from $14,000 to $26,000, and then $32,000 is the maximum from anything over 26,000 pounds. That's what the amendment does, and I don't like these tablets. Like I said, I just wanted to make sure that we were all
Representative Jeremy Gillam
Unverified
6:10
on the same page, and so thank you. Appreciate it. Thank you, Mr. Chairman. We're going to
pass out paper copies of the amendment for everybody at this time.
Thank you. Representative Dan Douglas, and then we'll come back to Representative Charlotte Douglas. Thank you, Mr.
Representative Dan M. Douglas
Unverified
6:28
Chair. Representative Jean, I just want to clarify, and I know you said this, but this is only for grant money if it's available. There is no general fund money or other monies that are going to be used for this. It's just if grant money comes available, that's what will be used to fund this. Is that correct? Ernest is nodding, and that's my
Speaker 27
6:47
understanding. Okay. All right. Thank you very much.
Speaker 45
6:53
Representative Charlotte Douglas. That was basically my question. The rebates will be set. Are they set in the bill? I didn't see that. It's in the amendment. Okay. Yes, ma'am.
Thank you, Mr. Chair. Any other questions? Representative Letting. Motion at the proper time. Any other questions? Representative McCrary.
Representative Walls McCrary
Unverified
7:26
Representative, mine is more of a comment than a question. But it looks like in looking at the bill, you've covered all bases. If funding becomes available through grants, it
Speaker 49
7:41
covers all entities, all type of vehicles, biofuel, everything. Is that not
Speaker 16
7:50
Yes, sir. Mr. McCrary, the bill would be the vehicle for the
Speaker 20
7:55
funding of rebates if money becomes available.
That's all that this bill does. There's no money out there right now. Two years ago, there was a federal grant, and the bill added, as an alternative fuel propane, does this time adds propane to that original bill and then changes a word from school bus to motor vehicle, which brings into play police cars, trash trucks, any other municipal-type vehicle that they would want to use, which is handy. The bill two years ago was only limited to natural gas and school buses.
Well, that didn't work out so well, so we're trying to expand it to cover all bases. And you're
Representative Walls McCrary
Unverified
8:40
correct. It covers all bases. I think it's a great bill. Thank you all for bringing it,
and it will certainly help in Arkansas. Thank you, Mr. Chairman. Any other questions? We do have several people signed up to speak on the bill. Trent, and I'm not sure, IELTS, okay, Mr. IELTS, Mr. IELTS signed up to speak for the bill.
Speaker 56
9:17
recognized. Thank you, Mr. Chairman. Thank you, committee. I would just, first of all, like to say I'm your average person. I'm not here on any interest of anybody else. I would consider myself as the average person, wife, two kids, with one exception. I'm probably one of the few people in the room that can say I spent less on gas last year than I had the two previous years.
I was able to use the stimulus money before January 31st to purchase a C&G vehicle, a dedicated vehicle. So it did allow me that the bill was my decision maker. It allowed me to spend about 30% less for my family, which turned into about $1,500 I saved, and then basically $2,500 a year that did not go out of the state.
I would encourage you guys to understand the potential of this bill. It does go beyond vehicles. In agriculture, you could take, well, people's pumping stations. You drop that 58 percent, it would drop that cost approximately 58 percent, and then you can increase yields that way. I will also say another point is on page 5, line 32,
there's there's three environment it looks like they wanted to do an environmental study operational costs and maintenance costs just from my own own perspective the EPA rating on on the CNG vehicle is a 10 out of 10 the the emissions from the vehicle or they've actually been said to be cleaner than than the air going in because of the air filter going in.
Operational cost, again, for my personal vehicle, I drove a 96 Accord, which is by no means a gas guzzler, and then moved to a 2013 Civic that on average gets about 35 to 40 miles to a gallon, pays $1.44 a gallon. lot of times people ask me how many miles I get to the gallon and and I jokingly say a hundred and that's that's about right when you go dollar for dollar for the vehicle maintenance cost I've got 30,000 miles on the car in the last
year I drive quite a bit but the oil changes on it run about 10,000 there they're rated at 10,000 miles I almost brought in a I kept a bottle of oil after my first oil change and it was it was brown it wasn't even black it's there's it's such a clean burning operating C&G stations are are an issue that it's there's no there's no way around that the reason I was I work for
Union Pacific so I work two blocks from the station that's that's what made it so much easier now what this bill doesn't do and I would encourage you guys completely to look at is the the station in North Little Rock says that they they run about 35 vehicles through a day average in about 10 10 gallons per vehicle and that breaks them even if you wanted to turn this on statewide I look at approximately like 15 10 to 15 school buses in an area would justify a station that would
it would let it maintain itself once you it would take care of operating cost so realize it's not a huge issue to maintain the stations maintenance is a concern on the stations but it's I would just, again, ask you to take a look at the economic impact, that it's a positive for the state. You have money that's staying in the state instead of going out.
And I'm welcome to answer any questions on a personal
note, and I thank you
Speaker 45
13:55
for your time. Any questions? Representative Douglas. Yes. Did you just say that the station
Speaker 45
14:04
just barely breaking even or? Yes. They maintained. Right. Yes. What is the incentive for
Speaker 56
14:13
expanding statewide? What I would say the incentive is, it still allows, North Little Rock works for me because
I work beside it there are people that when I talk to them their first question is where do you get gas that's their first question and that's where if you do strategically place you know stations in different areas then then you've you've answered that question for them the other thing that this bill does I I run 100% dedicated, which means I don't have the option to do gasoline.
With the biofuel and the conversion where you can go one or the other, then that doesn't limit everybody to the same station. I would say there's a lot of people that don't realize they drive two blocks from a station almost every day. Thank you, Mr.
Chair. Any other questions? Thank you, Mr. Ielts. Let's see.
Mr. Snodgrass had signed up, but I know he's already given the statement. Do you wish
Speaker 16
15:31
to make a further statement? I'd like to add to his previous testimony about the refueling stations. Okay,
Speaker 20
15:39
Mr. Snodgrass, you're recognized. Thank you, sir. The propane industry has a propane dealer in practically every town, and they're a refueling station. I have a 1,000-gallon tank in my backyard. That's my refueling station, and the cost of that 1,000-gallon tank that I own is about $1,500, and the cost of the pump to put the fuel in my truck is about $250, and the cost
of the electricity to run it is about like a 100-watt light bulb. So that's my refueling station, and any municipality or county or other state government organization could have the same. And they wouldn't be limited, you know, propane systems are either straight propane or they're a dual fuel. My truck runs on gasoline also, you know, I can fill up with gasoline, 25 gallons, I can fill up with propane, I have an 80 gallon tank in my bed and I get the same mileage
on those fuels as I do on straight gasoline so I can go a long way. And you know, I can go virtually the entire width of the country and not hurt for fuel. That's one major difference between propane and natural gas. And the cost of the infrastructure is already out there. You know, it's already
Speaker 67
17:01
in place. Any questions? Representative Douglas.
Representative Dan M. Douglas
Unverified
17:06
Thank you, Mr. Chair. I've heard the argument used before that we need to use GoToCNG, and because it's an American product, we've got a lot of natural gas here, and that it's good for our national security. And somebody argued with me when I mentioned propane one time that, well, gosh, that's an oil derivative. Could you explain to us where the propane comes from? And is this also helping our national security in those same ways that the CNG would?
Speaker 16
17:40
Yes, sir, Mr. Douglas. You know, the fuel propane is a
Speaker 20
17:43
byproduct or you might call it a waste product that's made from natural gas and made from crude oil. And if you ever drive by a refinery down towards Galveston, Texas, you'll see several flames going up in the air. And usually that's propane that they flare it off because all their storage is full. The United States of America is a net exporter of propane. We can't use it all.
We package it and we send it overseas. Propane is a homegrown product. It's made right here, and it can all be made from natural gas. On top of everything else, when you refine natural gas and distill out propane, you still have some natural gas left. So that's not too shabby. It's made from crude oil that is not made for anything else, actually, and it's refined out. It's called a refined fuel, and then it's captured as a C4H8 product under pressure and shipped all over the country.
So we don't import propane because we have to. We import propane simply because we can buy it overseas cheap because it's cheap to make. Thank you. That
Speaker 71
18:58
sounds like a win-win situation. Yes, it
Speaker 11
19:07
certainly is. Representative Thompson. Thank you, Mr. Chair. Is there a cap on the amount of dollars any grant can be for any one entity?
Speaker 16
19:21
It's $50,000 for an organization. And an organization would, you know, I don't know how we could loosely define that.
Speaker 20
19:27
It could be a municipality. It could be a company. It could be an individual. And that's in the bill. So, you know, it's not like one company or one city or whatever can come in and take all the money if there ever is any money. And, you know, keep in mind that, you know, you can do a lot with $50,000 if you convert to propane.
Speaker 78
19:52
That's probably 10 trucks. And you said an individual. Is that included in that? An individual is – if
Speaker 16
20:00
an individual was a company, that's what I'm getting at. Okay. You'd have to be
Speaker 6
20:07
incorporated. Yes. Your farm or something like that or had a business. But just an individual cannot apply for this. That's
Speaker 20
20:17
correct. Just a straight person can't do it. But an individual here is what I was talking about.
It would be like a farming corporation in eastern Arkansas. Thank you.
Thank you, Mr. Chair. Any other questions? Thank you, Mr. Snodgrass. Yes, sir. We have one other that has signed up, Mr. Bill DeClerk. My name is
Bill Declerk
Unverified
20:35
Bill DeClerk, and I represent him in the division. I very well
answered all the questions. Okay. Thank you. All right, Representative Letting, you're recognized for a motion.
Do pass as amended. Any discussion? The motion is do pass as amended. All those in favor say aye. Aye. Any opposed? It's passed. Thank you, Mr. Chairman. Thank the committee. If I could
Representative Greg Leding
Unverified
21:12
have a personal point of privilege, I have a school with me, the Pleasant Hill Mennonite School in the big town of Gin City, Arkansas. If you all would stand and have some teachers and parents with them and raise your hand and the students would stand, I'd like them to be recognized today.
Speaker 12
21:28
Thank you all for coming. Mr. Chairman, thank you. Thank you, Representative Jean. Next bill on our agenda is House Bill 1229, Representative Love. Sick today. Not here. Okay. That's all the business on our regular agenda.
And we have asked representatives of the Arkansas Oil and Gas Commission to come make a presentation.
At this time, I will recognize the director of the Oil and Gas Commission, Mr. Bingle. Thank you. Good
Speaker 85
22:12
morning, Mr. Chairman, members of the committee. Any oil and gas legislation that would be proposed would come before this commission, So it was felt that an overview of what the All-Gas Commission does and what regulatory authority we have, given some of that legislation may affect the commission, would be appropriate to give before the committee.
What I'm going to do is a 10, 15-minute presentation of what we do as a commission, and then we can go over some questions. The purpose of the oil and gas commission is to prevent waste and current conservation, protect the correlative rights of ownership of the minerals, primarily oil and gas minerals here in Arkansas. We do regulate the brine industry down in South Arkansas, which produces bromine, which is used in the chemical industry.
The commission is composed of nine commissioners that are appointed by the governor, six-year terms, those are staggered terms. There's a director, myself, and a staff. I serve at the pleasure of the governor. I'm hired by the commission, but then I serve at the pleasure of the governor. I administer the regulatory program. I currently have a staff of 40 individuals. located in four offices around the state, our El Dorado regional office, Fort Smith
regional office, Little Rock office, and we have a satellite field office in Conway. Some of the things we do when I go through these fairly quickly, you'll have to read this slide, but we basically regulate an oil and gas well from cradle to grave. We issue the permit to drill. We issue the permit then to operate that well. We issue the permit to plug that well. In the meantime, we conduct compliance inspections during the entire lifespan of that well.
We also issue permits to conduct seismic operations around the state. We issue permits to regulate two types of underground injection control wells, which are UIC wells. These are wells that dispose waste through underground injection. It's a program administered by the U.S. EPA that we implement for them here in the state of Arkansas. Class II wells dispose of oil and gas waste, and Class V wells dispose of the brine waste down in South Arkansas.
We also issue permits to regulate gathering, handling and transportation, exploration, production fluids, basically tank trucks. All the tank trucks that you may see hauling fluids in various parts of the oil and gas producing regions, we license those trucks and ensure that they're being operated in a manner that would maintain the fluids in their trucks without any leaks. We also issue permits, and we regulate natural gas pipelines, and we share this regulation
with the Public Service Commission. The difference is we regulate basically the gathering systems from the well to the transportation lines, then PSC would regulate the major transportation lines. We also classify wells for severance tax purposes. We don't collect the severance taxes. We simply designate the category of the well to determine what the percentage severance tax it would pay is.
We process royalty and working interest owner's complaints. We investigate landowners' complaints for water well contamination issues, so things like that. We provide information to the general public, obviously the legislature, state and federal government agencies, and any other stakeholders. During the Fayetteville Shale, for example, we held approximately 30 town hall-type meetings throughout the Fayetteville Shale area. We also administer abandoned well-plugging program.
If a company were to go bankrupt, we have industry funded program that would go in and plug those abandoned wells so that they're not sitting out there as an environmental issue. And we have monthly hearings to approve regulations, hear integration applications, and then go through our enforcement process, which may include issuance of civil penalties. Some of the things we do not do, and we get a lot of calls from various mineral owners.
We don't interpret a mineral lease. Someone has a mineral lease they want interpretation. We help with some general lease clause explanations, and we have a pamphlet on our webpage that will do that, but that person would need to hire an attorney to get an exact interpretation of their particular mineral lease. We will not interpret the land or operator agreements that they may have with an operator. Again, that's the role of an attorney that they need to hire. We don't adjudicate the validity of mineral leases.
We don't maintain records of mineral lease ownership. Those are maintained in the county courthouses. Let's say we have office locations in Little Rock, El Dorado, and Fort Smith. Basically the Little Rock office is my office and our administrative office is legal staff. El Dorado is South Arkansas, and Fort Smith is North Arkansas. Most of our records for wells are located in those regional offices. Our inspectors work out of those regional offices, and then we have a satellite office
in Conway for the Fayetteville Shale. If you were to look at the distribution of the wells in our office areas, you can see the El Dorado office. About 48,000 wells have been drilled in Arkansas since 1925. In El Dorado, there's about 7,200 wells that we regulate, operated by 200 operators, mostly small companies. Fort Smith, 4,100 gas wells, operated by 100 operators, and you can see the difference
in the Fayetteville shale. There's 4,400 wells, but primarily only three operators, so it's a different scale of regulatory issues when you look between the three areas. the biggest issue in Arkansas has been the Fayetteville Shale, but just to get a feel for the scope of that, the red box shows the Fayetteville Shale development to the west and Fort Smith is the old Arcoma Basin development that's been ongoing for the last 60, 70 years.
The Fayetteville Shale development has drilled as many wells, has as many wells in production in the last seven years as the Arcoma Basin just east of there. scale of development in that period of time is just amazing. As an example in 2006, there were very few Fayetteville Shell Wells. Just five years later, each one of those dots represents at least a $2 to $4 million investment, so the amount of money invested in Arkansas just in drilling of wells is truly amazing
in that short period of time. Also during that period of time, the industry has laid over 2,800 miles of gathering pipeline. All of this infrastructure didn't exist prior to 2005. So the amount of work that went into this in a short period of time is truly a paradigm shift in the on-gas industry here in Arkansas. What it's done for the state production-wise, you can see our gas production historically
from 1970 on I have plotted here, but after the Fayetteville shell came online and came online fast, it took the state's gas production from about 180 BCF a year to over a trillion cubic feet a year. I mean, it's a five-fold increase in the space of six years. So it's truly an amazing event that occurred here in the state. And right now it's about 4,400 able to show gas wells producing of the 8,500 gas wells in the state.
As an example, I'd have at the top there that Arkansas consumes about 250 B.C.F. a year as their internal gas usage, and we're producing a trillion cubic feet. So we're sort of a net exporter of gas. There's been some concern about whether the lower gas prices and what it's done to the Fayetteville shale production. This shows, you know, month over month gas production chart. As you can see, month over month Fayetteville shale has increased.
During 2012, as you can see in the very end there, the red line, the depressed gas price certainly did have an impact on the production, but the production didn't drop. production continues to slowly climb, certainly at the same pace, but it's still increasing on a month-over-month basis. With that rapid expansion in such a very short period of time, clearly there was issues that had to be resolved from a regulatory standpoint, and ADEQ and the oil and gas commission have
been working on that over that period of time. For example, in our particular case, since 2006, the On-Gas Commission, we added 12 staff positions during that particular time. We're requesting for additional here in FY14. We opened up our Fayetteville Shale office in Conway, and we modified our rules 107 times in the last five years, amended our statute three times. Some of those modifications dealt with just Fayetteville shale because of the unique nature
of hydraulic fracturing on a large scale in the horizontal wells. We repealed some rules because they were our CAC, but the point is we did a lot of work from a regulatory standpoint during that period of time. Some of the things that just pertain primarily to Fayetteville shale, some of these issues were actually a leader in the country, but we adopted basically five rules dealing with pits and hydraulic fracturing disclosure, how to deal with the horizontal wells, noise,
which were the only state that actually has a statewide rule on that, and then we had to deal with our earthquake issue here in Arkansas. Again, we're the only state that's actually adopted some rules relative to that. We adopted a general rule, it's a joint rule with AO, with ADEQ. We both regulate pits using the exact same rule, which allows cooperation between the agencies. We have a memorandum of understanding between the two agencies on how we'll do that.
Our inspectors deal with each other in the field, and, in fact, we are picking up the financial burden for ADQ for their inspectors in the Fayetteville Shale in the next two fiscal years that Game and Fish used to do. There's a lot of cooperation between two agencies on this particular rule. It's also streamlined for the industry. They only have one rule even though there's two agencies.
Speaker 88
34:03
We adopted public disclosure of our hydraulic fracturing chemicals.
Speaker 85
34:06
We're the second state in the country to do that. All that is listed on our webpage. Then somebody can click on a button. They can go see all the companies that are fracking here in Arkansas and get a list of their chemicals that they're using, the additives that they're using, see what it's each used for. They can see exact chemicals and CAS numbers for each of those chemicals. And then a particular landowner can go to the website, put in the name of the well on
his particular land site or his particular land and then get a complete listing of what chemicals were used in the well on his land. The other thing we did, and we were the first state to do this, I think Oklahoma now has followed suit, is we had to address the long lateral length of horizontal wells. We allowed, even though the spacing for wells is 640 acres, we allowed wells to cross over to the next section, which allowed some sections to be drilled that had faults and that may
not have been drilled normally. The red lines represent the old way of drilling wells, one well per pad, short laterals. The blue lines represent actual drilling now. The green dots represent the actual drill pads so that what you see here is there's There's five drill pads now that can develop over three square miles, greatly reduce the footprint of the industry activity in the area.
We're the first state to adopt a compressor noise mitigation on a statewide basis. There's 130 compressor sites in Fayetteville Shale. This rule went into effect this year. All the compressor sites are in compliance. And the other thing we had to deal with, which was fairly controversial, was earthquake activity area. The green area represents a moratorium that we created to keep any more disposal wells from being drilled in a certain area that was affected by seismic activity.
We then adopted some rules to deal with disposal wells outside the moratorium area. I think we're the only state to have done that. And lastly, our program was reviewed earlier last year from the standpoint of how it met from peer review standpoint, how it stood up against regulatory frameworks that this stronger organization had put together. We basically had two – the program was well-regulated or well-managed.
They said it was professionally run, and they had two recommendations, both of which we've implemented. One is our request, but that we may conduct inspections of hydraulic fracturing operations, which we're now doing, and we increase our staffing, which we requested. That's a quick overview.
Speaker 84
37:13
Chairman, I want to do it in ten minutes. Did I meet 10 minutes? Pretty close. I have
a couple questions, then open it up to additional questions.
Do you have any comments with regard to the brown dents in South Arkansas and what the prospects may be at
Speaker 85
37:36
this point in time that you can report? No, there were two wells that were sputted and drilled and completed. They were production tested. At this particular time, there's no production from those wells. The data did not indicate that it would be successful at those particular locations. Whether that play will develop further beyond those two wells, we don't know at this time.
And then an additional question. You've touched on the fact that you worked with AEDQ on the new regulation with regard to drilling pits. Yes. I mean, it's my understanding there are numerous agencies that regulate oil drilling and production. Could you talk a little bit about all the different agencies that are involved in regulating and what you're doing to try and cooperate with those organizations to minimize any confusion
or inconsistency between what maybe oil and gas and EPA or ADEQ requires of a driller or operator. MR. Okay. Excluding federal lands, which would
Speaker 85
38:47
be lands owned by the federal government where you'd have to deal with federal agencies, but dealing with private lands where state agencies are involved, there are basically three state agencies that are really involved in a major way. ADQ, an all-and-gas commission, we basically handle the drilling and the operation environmental impacts together.
The basic jurisdictional, I guess, bright line between our two agencies, we've resolved in a memorandum, we basically handle issues on the drill pad, on the drill site itself, that pad created for the drilling operation, which may be five, six, seven acres in size. ADQ then handles issues, environmental issues, off the drill pad. So, for example, if there's a spill, it occurs on the drill pad, it's AOGC. If it occurs, if it runs off the drill pad down into the waters of the state, it would
be an ADEQ. The industry is fairly well, and we've written our rules to specify that, and the industry is very aware of that dividing line, and it's worked very well for the last several years that we've been doing that. The other state agency that deals with Fayetteville Shale in particular is Natural Resources Commission, and they deal with water permitting, building the impoundments for the frack fluids using the fresh water. Those are the primarily three state agencies.
There are some local entities, local agencies, but from a state standpoint, those three agencies primarily involved with Fayetteville Shale issues, and we try to work together closely to make sure there's no overlap and when there are resolve of those issues. Representative Linderman, do you have
Speaker 83
40:32
a question? Thank you, Mr. Chair. Last session,
Larry Snodgrass
Unverified
40:37
I got to meet with you a whole lot about a lot of these issues, and this session I have had very little contact from people in the shell with concerns.
Have you all seen a great decrease in complaints within the shell? And if so, is that just attributed to what would you attribute that to if there is? Well, over the course
Speaker 85
41:06
many actual complaints of on-the-ground issues. There were a lot of concerns. A lot of concerns were expressed through various, I guess, public forums.
But when you get down to the actual, was a water well contaminated, was there a problem, those number of complaints that we actually had to go out and investigate weren't really high even during those periods when there was a lot of public concern. I think to date we have less than 75 total actual water well complaints throughout the Fayetteville Shale. Those have dropped way off in the last year or so. The USGS, as you know, did a study which was published here recently, and after their study
of testing 100-some water wells in two counties with the most heavily drilled, they found no evidence of contamination in any one of those water wells. So you're correct. The amount of concern that we've experienced coming from the public has greatly reduced. The number of actual complaints has reduced, but we still get those. Okay. Thank you. Thank you, Mr.
Speaker 98
42:20
Chair. Representative Branscombe. Thank you, Mr. Chair.
Representative David L. Branscum
Unverified
42:26
Since you instituted your moratorium on injection wells, mainly in, I guess, in Faulkner County would be the main point, the inventors, have you seen a decrease in seismic activity? Yes. So you do think it has been a successful regulation? If
Speaker 85
42:46
you look on the map, that blue area right here is where all the seismic activity was near Guy, Arkansas. There were four disposal wells located right there in that area.
Shortly after those wells were all shut down during our enforcement process, the seismic activity began to decrease. Those four wells have all now been plugged, and the
Speaker 84
43:10
seismic activity is minimal. Back to background. What have the companies, since they weren't able to
Representative David L. Branscum
Unverified
43:17
use these injection wells, where have they taken the waste? Where does it go to
Speaker 84
43:24
now? What happened about the simultaneous time as that became an issue, they began to recycle.
Speaker 85
43:32
We amended one of our rules, a B-17 rule, our pit rule, to allow pits to be used for recycling purposes, storing the water, recycling it, reusing it on the next well. I think right now there may be 80 percent or more of all the frack
Speaker 88
43:46
flow back, instead of going to disposal, is being reused for future frack jobs. Is that done in pretty
Representative David L. Branscum
Unverified
43:52
much standard practice now with all the companies drilling here in the shell area? Yes.
Speaker 84
43:56
And that would be the preference because if you, for disposal purposes, you have to truck it long distance, you have to
Speaker 85
44:02
go to those places where the wells are.
Most of the disposal wells are now over in Polk County that are being put in depleted gas fields, which is a safe place to dispose of
Representative David L. Branscum
Unverified
44:15
that fluid. Good deal. Thank you
very much. Thank you, Mr. Chair. Director Bingle, that raises a question. I know that as I travel back and forth to South Arkansas, oftentimes, although not as much as in the past, you get behind tanker trucks, and there's – you see an AOGC sticker on it. What does AOGC do with regard to those tanker trucks, and is there still a significant amount
of fracking fluid that's disposed of in South Arkansas? MR. There
Speaker 85
44:46
is still some going to South Arkansas. I was just down there the other day and followed a truck down there. What we do is we track the trucks from the standpoint of they have to manifest all their waste where they picked it up, where they're taking it to. Then the disposal well on the other end has to record where that waste came from, whether it came from Fayetteville Shale or South Arkansas or wherever. So we basically tracked the life cycle of that waste from where it was generated to
where it goes. I think the amount going down South Arkansas has greatly reduced. We could actually look up the numbers and see how many barrels that is. But I think with the recycling and reuse, the trucking amount has obviously been reduced, and it is the
Speaker 84
45:32
benefit to do that because it costs a fair amount to haul water around it. Representative Meeks. Thank you,
Representative Stephen Meeks
Unverified
45:39
Mr. Chairman. There's a representative who lives almost dead center on that map and got to feel a lot
of the earthquakes, I can report to Mr. Branscombe that I've only felt one earthquake since all that was shut down. So that's pretty much a non-issue now. The three questions I have for you, I'm going to try to go through these pretty quick. The first one, I know there was a lot of fuss made about getting these chemical disclosures on the website. Do y'all have any tracking from the website to indicate how many people have actually looked at all that now that we've gone through all that effort and put it on there?
Speaker 88
46:17
I'm sure we could do that. I don't know what – I don't – we have received no inquiries to date since we –
we put on the website two years ago, I believe, in January, this January. We received no inquiries from anyone relative to that information. Okay. I'd just be curious to see how often
Representative Stephen Meeks
Unverified
46:33
that's actually being utilized now that we're going through. We could tell how many hits
Speaker 85
46:37
on our webpage, but we couldn't tell where they went on our webpage. Right, right. I'd just be curious about that.
Representative Stephen Meeks
Unverified
46:42
The next one I have relates to the Fayetteville show. Do you know how many rigs we currently have active up there? I know it's probably a changing
Speaker 85
46:51
number. It changes all the time. There's maybe a dozen.
I'm not a dozen or so. I'd have to
Representative Stephen Meeks
Unverified
47:00
check on that. Okay. And the last question. Thirteen. The last question, this may be more of an AEDQ, but I know one of the biggest environmental concerns that was kind of still hanging out there was
Speaker 84
47:12
air quality issues. Do you know where we're at on that? That's still an issue, and I know ADQ is dealing with
Speaker 85
47:19
that, we're working with that to some extent. The federal regulation that went into effect requiring that that be an issue that was looked
at, that federal requirement required the industry to report to EPA or ADQ in this case since they have primacy for air in Arkansas when they were going to do a frack job. The industry also had to report to us when they were going to do a frack job so we could do our inspections. What we were able to do is work with the U.S. EPA and ADEQ to tie that together. And now we have one reporting system on our web page. So when the industry reports that, it goes to ADEQ and us and satisfies that issue.
What ADEQ is going to do with that from the standpoint of inspecting the air quality, I don't know yet. Okay.
Any other questions? If not, Director, thank you for your presentation today and for your Commission's service to the State of Arkansas. Thank you. You have a
Speaker 84
48:29
copy. The Committee has a copy of this presentation, so it will be available for whoever wants
wraps up our business for today. Members, I believe each of us received the printout with subcommittee assignments. If you have not received that printout, let me know, and I'll be glad to get you a copy of that. And right now the plan is that we will meet Friday. We would meet at 9 a.m. Friday. Shouldn't be a long meeting, but that's the plan right now. Okay? Without objection, Representative Meeks.
Representative Stephen Meeks
Unverified
49:05
I just want to make a quick announcement we've got in the rotunda of the capital today science and math students and engineering students from across the state and our universities they've actually got a book about some of the research they're doing so I just encourage members to get by and talk to some of Arkansas's best and brightest and see what they're doing here
Bill Declerk
Unverified
49:29
in our state thank you representative without objection we're adjourned
Agenda
SB125
Oil and Gas Presentation
Documents
No documents posted.
Speakers
Representative Matthew J. Shepherd Chair
Unverified
Representative Greg Leding
Unverified
Speaker 9
Bill Declerk
Unverified
Speaker 12
Larry Snodgrass
Unverified
Speaker 15
Speaker 16
Representative Jeremy Gillam
Unverified
Representative Dan M. Douglas
Unverified
Speaker 27
Speaker 45
Representative Walls McCrary
Unverified
Speaker 49
Speaker 50
Speaker 20
Speaker 54
Speaker 56
Speaker 59
Speaker 67
Speaker 71
Speaker 11
Speaker 78
Speaker 6
Speaker 85
Speaker 88
Speaker 84
Speaker 83
Speaker 94
Speaker 98
Representative David L. Branscum
Unverified
Representative Stephen Meeks
Unverified
Speaker 105