Fortuna/Talisman backs off Disposal Well Plans

Last week the residents of Van Etten (Chemung County, NY) got some good news: Talisman USA (previously Fortuna Energy) is withdrawing their request to test the Mallula well for potential use as an underground injection well.

Back in October 2008 Talisman obtained a State Pollutant Discharge Elimination System (SPDES) permit from NYS Department of Environmental Conservation (DEC) that would allow them to conduct injectivity testing on the Mallula well. The well, drilled 9300 feet deep into Trenton-Black River (TBR), was no longer producing gas, so Talisman figured they might convert it to a disposal well. 

The permit, good for six months, allowed the company to inject brine from neighboring TBR wells under pressure to determine whether the formation would accept the wastefluid. And if they didn't get around to running the tests, they had the option of renewing the SPDES permit every six months for up to five years. 

And if the tests came out positive - indicating that the rock could accept well waste fluid - then Talisman would be able to apply for a permit to convert the non-producing Mallula well into an Underground Injection (disposal) well. They renewed the permit twice without running tests. Then, last week, decided to discontinue with the testing.

Both DEC and EPA confirmed that Talisman will not be conducting any tests on the well.Company spokesman Mark Scheuerman said, “With our ever expanding operations in Pennsylvania, and so many other development priorities, we simply felt that our focus should be there [in PA] right now.”  Though he claimed public antipathy toward the project had little to do with Talisman’s decision, Scheuerman was quoted earlier this year as mentioning public opposition as a reason for putting their testing on hold.

Talk to people on the town board and you get a different story. They learned of the plans for testing - and potentially converting the well into a disposal well - only after the SPDES permit had been issued. Town board members and residents were outraged that they had no voice in something that would have an impact on their town.

After a few fractious community meetings, Talisman put the testing plans on hold. They promised to notify residents before they commenced with the injection testing, and also promised to test well water for anyone in the drilling unit.

But their promises weren’t enough to mollify residents who were concerned that injection of brine and flowback might contaminate the groundwater supplying their drinking wells. And Talisman did nothing to address the concerns of landowners in the drilling unit who has explicitly deleted storage clauses from their leases. This is important because the Mallula well is horizontal and goes under those parcels with no storage clauses. The landowners firmly believe that while their leases allow for drilling and completion of wells, they do not contemplate the later use of the well for disposal of brine, frack fluid or any other liquid drilling waste. 

But if not Mallula well, then where? According to EPA hydrologist Karen Johnson, underground injection wells offer the safest alternative for disposal of drilling waste fluids. The problem is that NY has only six active injection wells, so drillers have to truck their brine to one of Ohio’s 159 state-regulated injection wells. Johnson predicts that, as the drilling increases, gas companies will “go back to depleted and unproductive wells and try to use them as underground injection wells.”

And she's not the only one thinking this way. "There is renewed interest in the Trenton-Black River (and other deep formations) as a potential site for underground injection wells,” says Tom Murphy, a Penn State extension agent in Lycoming County.

So even though the Mallula well has been checked off the list, there are plenty of other potential disposal wells in the area. Of the 146 TBR wells in NY, 62 are located in Chemung and Tioga Counties. Most of these are horizontal wells, but nine are vertical – the same type of well Chesapeake was interested in converting to a disposal well in Pulteney earlier this year.

Update on Spill as Stoscheck Well in Van Etten, NY

Last Monday, March 8, an operator for Talisman Energy (aka Fortuna) discovered brine dripping from the valve of a storage tank during a routine well inspection at Stoscheck well in Van Etten, NY. He reported the spill to NY Department of Environmental Conservation(DEC). At that time he reported that the valve on the brine tank froze and broke.

This Monday (March 15) someone at DEC kindly e-mailed me a spill report form with comments by the investigator, Chad Kehoe. In case you want to look up the spill on DEC's spills incident database, here's the spill number: 0912761.

On Tuesday, March 9 Kehoe visited the site, meeting both Joe Yarosz (DEC) and Jeff Bower (Fortuna). According to Bower, the valve in the brine tank drain line had frozen, damaging the inner seals. 
The pipe cap was also found to have been damaged - either by ice or possibly by cross threading.



The tank was "supposedly" measured on March 3 and had, since then, lost 18 inches of brine - equivalent to 18 barrels or 756 gallons. Upon finding the leak Fortuna drained the tank below the drain line and replaced the valve.

According to Fortuna, the Stoscheck well (drilled into the Trenton-Black River formation) produces a low volume of brine that is fairly dilute. According to Bower, it is less saline than sea water.

Fortuna agreed to dig a couple of test pits and sample soil and groundwater to determine what impacts have resulted from the spill. The first tests are of soil samples dug near the tank - they were sent to Benchmark Labs for analysis and results haven't been returned yet. The need and scope of additional sampling will be determined once the initial results are back.

Brine Spill at Stoscheck Well, Van Etten NY

added on March 15: The spill number for this incident is #0912761

 On Tuesday, March 9, NY Department of Environmental Conservation (DEC) spill team responded to a brine leak reported at the Stoscheck Well in Van Etten (Chemung County), NY.

Paul Bollard, an operator for Talisman Energy (previously Fortuna Energy) discovered brine dripping from the valve during a routine well inspection late on Monday afternoon. He called in the leak and by Tuesday morning the DEC responded with a spill team.

 The leak was caused by fresh water freezing in the valve fitting, Bollard explained. It froze because the brine produced from the Stoscheck well is less salty than the brine from some of the other Trenton-Black River wells.

 Because the high water table is so high in the area – groundwater is found at six feet – Talisman (Fortuna) collected soil samples from different depths at the spill site. The samples have been sent to a laboratory for analysis, but it will take a few days before results are known.

Joseph Yarosz, a mineral resource specialist for Region 8 DEC’s Division of Mineral Resources, suggested some steps Talisman might take to remedy the situation. “Raise the brine tank and build a secondary containment around it,” Yarosz said. He acknowledged that while secondary containment dikes are recommended in the draft Supplemental Generic Environmental Impact Statement (SGEIS), they are not required by regulations.

NY Attorney General Comes to Defense of Landowners Caught in Lease Extensions

Just one month ago the NY Office of the Attorney General announced that some landowners would be able to renegotiate the terms of their gas lease - or get out of their lease altogether. In an agreement between Fortuna and the OAG, the gas drilling company promised to stop using misleading tactics to unilaterally extend leases on properties. They also agreed to pay $192,500 to the state to help settle the matter.

“Drilling companies will not be permitted to use misleading letters and dubious legal claims to bully landowners,” Attorney General Andrew Cuomo said. “Many of these companies use their size and extensive resources to manipulate individual property owners who often cannot afford to hire a private attorney,” he said, adding that this type of land-grabbing practice must stop.

Back in April, Fortuna sent letters to hundreds of landowners whose natural gas leases with the company were about to expire. These letters falsely stated that Fortuna had the right to extend these leases without the permission of the landowners.

Fortuna claimed (falsely) that the leases contained a provision that allowed them to put the lease on hold until the New York State Department of Environmental Conservation (DEC) got around to issuing permits for horizontal drilling in the Marcellus. But, says the OAG, most landowners’ leases contained no such provisions.

In these letters Fortuna offered landowners 30 days to extend their leases for an additional three years, with a small increase in the royalty. Landowners choosing to not extend their leases would be sent a “Notice of Force Majeure”, and Fortuna would file the notices with county clerks as well. That would prevent landowners from freely negotiating drilling rights with other companies. 

Not only did landowners feel that these letters were corporate bullying, but they also felt that the gas companies who were threatening Force Majeure were giving new meaning to the concept of "we can't drill." You see, no one was preventing gas companies from drilling vertical wells, and there are plenty of other gas-bearing strata in the area. Not only that, other companies were actively drilling.

The letters motivated enough landowners in one county to seek assistance from the OAG. They wrote to the Attorney General, sending along copies of what they felt were misleading leases. Some wrote multiple letters, but eventually the OAG paid attention. 

Give Fortuna credit for sitting down at the table with the OAG, because they certainly aren't the only player in this game. Chesapeake also sent out similar letters this summer, and so far they haven't come to the table with the Attorney General. Not only that, Chesapeake decided to try extending the old 10-year leases they bought up a few years back. Some of these leases were so old that when they were signed the going rental rate was $3 - $5/acre.

So, when the landmen filled out these leases, they left blanks instead of penning in an extension of the lease term. Back in 2008, Chesapeake decided they would not extend the leases beyond the primary term, and sent letters to landowners saying so.

But what a lot of difference a year makes! This July Chesapeake changed their mind and told landowners that they would extend the leases - keeping to the original terms, of course. So while their neighbors were negotiating deals close to $3,000/acre, Chesapeake was threatening to extend leases up to an additional decade at three bucks an acre! 

Then, this fall, Chesapeake began sending out checks to landowners to “continue and extend for another year” their leases. Even if the landowners don’t cash the checks, they were led to believe that their lease would be extended.  

Now with the possibility that DEC will begin permitting wells in a couple months, the land grab has begun in earnest. Landmen are once again going door to door with their notepads full of company leases. And, according to folks they've visited, they're using the same pressure tactics.

Read more about force majeure here.