United Mountain Defense

Comments on proposed changes to Oil and Gas regulations

Table of Contents
Introduction: The state of gas drilling in Tennessee................................................................................. 1
Plans to Frack a Well with 2.4 million gallons of water............................................................................2
United Mountain Defense Position Statement...........................................................................................2
Worker and Community Safety..................................................................................................................3
Environmental impacts of gas drilling.......................................................................................................3
Public health impacts of natural gas drilling..............................................................................................6
Hydrofracking............................................................................................................................................6
Proposed rule changes................................................................................................................................7
United Mountain Defense proposes the following changes to the Oil and Gas regulations: ....................7
UMD's comments on the proposed rule changes: .....................................................................................7
In addition to the comments above, United Mountain Defense asks for:.................................................. 9

Introduction: The state of gas drilling in Tennessee

With increased demand for natural gas and recent innovations in unconventional drilling techniques
like horizontal drilling and fracking, many gas companies are looking at Tennessee for future drilling
operations.

Chevron recently purchased mineral rights to 120,000 acres in Tennessee with the stated goal of
exploiting the natural gas potential of the Chattanooga and Utica Shale.

Chevron Corp. to buy Atlas Energy » Knoxville News Sentinel

A company named Nextraction has also tested hydraulic fracturing in Whitley County, Kentucky, just
across the state line.

RIGZONE - Nextraction Wraps Up Ops in Appalachian Basin

Nextraction Commences First Proof of Concept Well in Appalachian Basin
Nextraction Energy Corp.
Nextraction Testing 5-Stage Completion for Appalachian Basin Well - page 3 | Market Wire
Nextraction Energy Corp.

Miller Energy Corporation also mentions hydraulic fracturing as a profitable drilling method in this
area on its website:

Miller Energy Resources :: Oil and Natural Gas Exploration

Kentucky-Tennessee Oil has also reported fracking activity in the Chattanooga shale. They are looking
for existing wells which they plan to deepen and then frack. They have successfully fracked at least
one well so far:
http://www.kytennoil.com/devonian.htm

Horizontal drilling and fracking have been going on in Tennessee since at least 2007. According to an
article in the Knoxville News Sentinel, and a presentation given by Jonathan Burr of TDEC, the type of
fracking commonly done here is not the same as in Pennsylvania or other areas. In Tennessee, nitrogen
gas is commonly used instead of millions of gallons of water. However, nitrogen fracking still requires
the use of up to four truckloads of water (32,000 gallons) according to an Oil and Gas Board official.
The energy corporations are not required to disclose the chemicals used in this process. United
Mountain Defense has documentation of a well in Tennessee that was stimulated with more than
170,000 gallons of water.

Plans to Frack a Well with 2.4 million gallons of water

We have further information from Gas industry representatives that there are plans to frack a well in
Tennessee with a total of 2.4 million gallons of water. This information has not been verified but it was
given by an industry rep as a reason for opposing a proposed ban on high volume hydrofracking in
Tennessee.

Even without the use of chemical additives, pumping such large amounts of water into the ground can
bring brine, Naturally Occurring Radioactive Materials (NORM), and other contaminants to the
surface.

The Main Problem in Tennessee is a lack of Oversight and

Regulation

There is no requirement to tell TDEC if you plan to frack a well, according to Jonathan Burr of
TDEC at a presentation at Ijams, January 19, 2011. Horizontal wells are noted on the permit,
however.

The first horizontal well in Tennessee was drilled in 2007, according to a Bureau of Land Management
document, link here:

http://www.blm.gov/pgdata/etc/medialib/blm/es/jackson_field_office/planning/planning_pdf_tn_rfds.P
ar.60098.File.dat/TN_RFDS_R3.pdf

However, there is increasing interest in new drilling techniques as the price of natural gas increases,
and as natural gas is increasingly touted as a “transition fuel” to cleaner energy sources.

The main problem in Tennessee is the lack of information and regulation surrounding fracking
operations. Water intensive hydraulic fracturing, of the type seen in Pennsylvania, may become a
profitable means to exploit shales in Tennessee other than the Chattanooga shale which is currently
being fracked. TDEC may not even know if high volume slickwater hyrdrofracking is occurring until
the drilling is complete and the well completion reports are turned in. Currently the field staff are
unable to do much more than rubber stamp the activities of the oil and gas industry. There are only two
inspectors for the entire state.
United Mountain Defense Position Statement
United Mountain Defense demands a complete ban on hydrofracking in Tennessee. We also demand
stronger regulation and oversight of other existing drilling methods.

Natural Gas is not a clean fuel and not a suitable transition fuel. Natural gas drilling is destructive to
the air, water, and mountain ecosystems of Tennessee, and it is harmful to human health and
communities. United Mountain Defense does not support hydraulic fracturing in TN and we call for
the abolition of hydrofracking in the United States. We demand further regulation of existing oil and
gas drilling practices in the State of Tennessee, and an eventual phase out of natural gas use.

In this document we list some of the environmental and public health impacts of gas drilling, and
provide some suggestions for rule changes for the Oil and Gas Board to consider.

Worker and Community Safety

An hour's research on Google revealed 15 gas well explosions that resulted in 7 deaths and at least 27
injuries since June of last year. The Bureau of Labor statistics rates mining as one of the most
dangerous occupations in the US. Oil and Gas drilling is categorized as a subset of mining by the BLS
and consistently accounts for around 2/3 of all mining deaths each year.

The rate of deaths in the mining sector, which includes oil and gas extraction, was 12.7 per 100,000
workers – this puts it above transportation and construction as a dangerous occupation. Oil and gas
extraction was by far the biggest contributor to this high fatality rate: in 2006, O&G accounted for 125
out of 192 deaths in the mining sector. In 2007, it was 122 out of 183 total. 2008, 120 out of 176, and
in 2009, nearly 70% of mining related deaths were in the O&G sector.
And this is just direct work related fatalities. It is difficult to know the long term health effects of
exposure to the chemicals in frac fluid.
Natural gas is also a dangerous fuel source for the end user, as we have seen from recent explosions in
residential areas in San Francisco and Minneapolis. In December of 2009, a gas explosion in a home in
Knoxville killed 1 person and injured 2.

Environmental impacts of gas drilling

Ecological footprint:

Gas drilling requires roads and well pads to be built. This causes habitat destruction, forest
fragmentation, erosion, and runoff pollution from the construction which should be monitored.

• A shallow oil and gas well (<2,000 feet deep) typically includes a well pad of 2.0 acres, 0.10
miles of gravel road and 0.55 miles of utility lines for a total construction disturbance area of
approximately 4.8 acres.
• Deeper oil and gas wells (5,000 to 12,000 feet below surface) require a total of 6.7 disturbed
acres during the construction phase.
• the total construction disturbance for a horizontal oil and gas well is estimated to be 6.9
acres.
quoted from the BLM document here:
http://www.blm.gov/pgdata/etc/medialib/blm/es/jackson_field_office/planning/planning_pdf_tn_rfds.P
ar.60098.File.dat/TN_RFDS_R3.pdf )

The Forest Service recently followed a vertical well from origin to completion in a small section of
National Forest in Pennsylvania.

• This well was a vertical well. It was fracked, but with much less fluid than a typical Marcellus
Shale hydrofracking operation.
• A well blowout accidentally sprayed fracking fluid onto surrounding land and trees, browning
leaves and killing ground cover.
• After drilling was complete, Berry Energy, which owns the well, sprayed some 80,000 gallons
of wastewater into the forest. The briney liquid shocked about 150 trees into shedding their
leaves. A year later, half of those trees still had no foliage. This disposal method, called land
application, is a legal and accepted practice in some states.
• The project felled or killed about 1,000 trees. It also damaged roads and eroded the land.
• The report said the drilling didn’t appear to have a substantial effect on groundwater quality.
• The scientists did not monitor the forest’s most sensitive ecosystems, including extensive caves,
and did not evaluate the operation’s impact on wildlife. The authors also did not test for any of
the chemicals added to drilling and hydraulic fracturing fluids.

The article is here:

http://www.propublica.org/article/anatomy-of-a-gas-well-what-happened-when-a-well-was-drilled-in-
a-national-f

and the study is here:

http://www.nrs.fs.fed.us/pubs/gtr/gtr_nrs76.pdf

Horizontal drilling requires higher well density to fully exploit the production potential of the shale.
Take a look at our google map screenshots of well activity at

http://www.flickr.com/photos/60320829@N07/

Current regulations allow up to 32 vertical wells drilled per square mile. The spacing requirements for
horizontal wells only take property lines into account.

Horizontal drilling and fracking require much heavier vehicle traffic to move the needed equipment
into place. This means heavy truck traffic on narrow rural roads and the attendant safety hazards and
damage to roads.

Air impacts:
Natural gas leaks from capped and abandoned wells are a significant contributor to atmospheric
methane, a greenhouse gas 25 times more potent than carbon dioxide.

The EPA’s new analysis doubles its previous estimates for the amount of methane gas that leaks
from loose pipe fittings and is vented from gas wells, drastically changing the picture of the
nation’s emissions that the agency painted as recently as April. Calculations for some gas-field
emissions jumped by several hundred percent. Methane levels from the hydraulic fracturing of
shale gas were 9,000 times higher than previously reported.

from: http://www.propublica.org/article/natural-gas-and-coal-pollution-gap-in-doubt

In addition, storage tanks can leak carcinogens and volatile organic compounds (VOCs). Increased
vehicular traffic and and the energy requirements of the drilling can also lead to huge levels of
pollution. From a study of air pollution in the Barnett Shale drilling play in Texas:

For 2009, emissions of smog-forming compounds from compressor engine exhausts and tanks
[from shale gas operations in the Barnett Shale] were predicted to be approximately 96 tons per
day (tpd) on an annual average, with peak summer emissions of 212 tpd.... For comparison,
2009 emission inventories recently used by state and federal regulators estimated smog forming
emissions from all airports in the Dallas-Fort Worth metropolitan area to be 16 tpd. In
addition, these same inventories had emission estimates for on-road motor vehicles (cars,
trucks, etc.) in the 9-county Dallas-Fort Worth metropolitan area of 273 tpd. The portion of on-
road motor vehicle emissions from the 5-counties in the D-FW metropolitan area with
significant oil and gas production was 121 tpd, indicating that the oil and gas sector likely has
greater emissions than motor vehicles in these counties.

The emission rate of air toxic compounds (like benzene and formaldehyde) from Barnett Shale
activities was predicted to be approximately 6 tpd on an annual average, and 17 tpd during
peak summer days. The largest contributors to air toxic emissions were the condensate tanks,
followed by the engine exhausts.

In addition, predicted 2009 emissions of greenhouse gases like carbon dioxide and methane
were approximately 33,000 tons per day of CO2 equivalent. This is roughly equivalent to the
expected greenhouse gas impact from two 750 MW coal-fired power plants. The largest
contributors to the Barnett Shale greenhouse gas impact were CO2 emissions from compressor
engine exhausts and fugitive CH4 emissions from all source types.

From the report: Emissions from Natural Gas Production in the Barnett Shale Area
and Opportunities for Cost-Effective Improvements by Al Armendariz, available here:

http://www.scribd.com/doc/48254813

The economist Robert Howarth from Cornell University recently concluded that “The [greenhouse gas]
footprint for shale gas is greater than that for conventional gas or oil when viewed on any time frame,
but particularly so over 20 years. Compared to coal, the footprint of shale gas is 1.2- to 2.1-fold greater
on the 20-year time frame and is comparable when compared over 100-years.” Conventionally drilled
gas did not fare much better in his assessment, see here: http://www.eeb.cornell.edu/howarth/GHG
%20update%20for%20web%20--%20Jan%202011%20%282%29.pdf

Other supporting sources:

a climate evaluation completed by the state of New Mexico and a paper published by researchers at
the University of California, Irvine

Public health impacts of natural gas drilling

The chemicals used in natural gas drilling operations can have a variety of health effects.
Unfortunately there is a lack of information available about what chemicals are being used.

After a nurse became critically ill while attending a laborer involved in a fracking accident,
and the attending physicians could not find out what she was exposed to, the real urgency for
full disclosure became apparent. In 2008 Colorado passed a rule (the first of its kind) that upon
request through the Colorado Oil and Gas Conservation Commission, operators must disclose
product ingredients to victims or their physicians in case of an accident. Unfortunately, the
response to such a request could take several days long after it could be of any assistance for
emergency diagnosis and treatment.

Quoted from a report by The Endocrine Disruption Exchange which can be found here:

http://www.scribd.com/full/48278162?access_key=key-2bgl7wskvhso3755pyb3

Findings from that report:

• 47% of the products have the potential to affect the endocrine system, including human and
wildlife development and reproduction
• Over 78% of the chemicals are associated with skin, eye or sensory organ effects, respiratory
effects and gastrointestinal or liver effects.
• The brain and nervous system can be harmed by 55% of the chemicals.
• A total of 210 chemicals (58%) are water soluble while 131 chemicals (36%) are volatile; in
other words, they can become airborne. Of these volatile chemicals in the study, over 93% can
harm the eyes, skin, sensory organs, respiratory tract, gastrointestinal tract or liver.

Hydrofracking
The problems outlined above apply to conventional gas drilling as well as hydraulic fracturing.
Hydraulic fracturing presents a huge set of problems above and beyond those of conventional drilling.
Methane can leak into drinking water supplies.
For more info, see an article here: http://www.propublica.org/article/officials-in-three-states-pin-water-
woes-on-gas-drilling-426.

Here is a list of some cases of water contamination linked to hydraulic fracturing:

http://switchboard.nrdc.org/blogs/amall/incidents_where_hydraulic_frac.html
A major potential problem with fracking gas wells is the integrity of the cement casing that is supposed
to protect drinking water supplies. According to a petroleum engineering professor at Texas A&M
University, up to a quarter of all cement jobs in the oil industry fail at some point – source here:

http://online.wsj.com/article/SB10001424052702304879604575582693951448732.html

A great deal has been written about the hazards of hydrofracking elsewhere so we are only skimming
the surface here.

To put it simply, while the industry claims that hydrofracking is completely safe if done properly,
United Mountain Defense does not believe that any process which poisons thousands or millions of
gallons of water at one time is a wise use of resources.

Hydrofracking is not an acceptable or safe method of gas drilling.

Proposed rule changes

United Mountain Defense proposes the following changes to the Oil and Gas regulations:

United Mountain Defense does not want any hydraulic fracturing in TN. We also demand further
regulation of existing drilling practices, as the increasing demand for natural gas will lead to more and
more drilling.

The proposed rule changes can be seen here:

http://www.tennoil.com/pdf/Oil_and_Gas_public_notice_2011_redline.pdf

UMD's comments on the proposed rule changes:

1040-2-1-.03 Reclamation Bond

Change the text to include "native Species": after plantings have survived two growing seasons with an
established ground cover of native species, at least ninety percent (90%) herbaceous and/or woody
species of which at least eighty percent (80%) are perennial species, the supervisor shall release the
remainder of the reclamation bond.

1040-02-01-.06 Forfeiture

The penalty for noncompliance should include revocation of a drilling company's corporate status

1040-02-02-.01 (6) Notice to surface owner

Property owners should get 30 days from receipt of notice, to discuss the location and drilling
operations
1040-02-02-.02 Drilling Permits.

should include some of the prerequisites that we are asking for below recommended

1040-02-03-.01 Preparing Plats

(j) Changes should read: "The plat shall also show the location of all existing or proposed access
roads, the location of all dwellings, diversions, drilling pits, dikes, tanks, and all other surface
disturbances, and the location of all drinking wells, streams, lakes, or other bodies of water within
one-half (½) mile of the well site or access roads."

The proposed changes want to reduce this distance to 200 feet which is ridiculous.

1040-02-04-.01 Vertical Well Spacing

Conasauga shale is mentioned in this section. Is this a new potential source of shale gas?

There is a complete exemption for four counties in section L:

(l) Any drilling being conducted in Overton, Clay, Pickett or Fentress Counties (this is portions of
Fentress County that are west of Hwy 127 and North and West of State Hwy 154) is based on 400 feet
to another well and 200 feet to the unit or property line down to a depth of 2500 feet. This is an
exception to the current state wide drilling requirements.

This is substantially less than the statewide requirements. Why?

1040-02-06-.01 Drilling Equipment

The proposed changes here are less stringent: they remove a specific set of procedures and replace it
with general language:

It is recommended that each operator require the drilling contractor to comply with the general rules
and safe practices procedure set out in the (stricken)"Accident Prevention Manual" prepared by the SS-
7037 Safety Committee of the American Association of Oilwell Drilling Contractors (217 North Ervay
Building, Suite 505, Dallas, Texas 75201) (replaced with) safety procedures of the industry.

There is no reason to replace specific, measurable requirements with vague ones. This would be a
serious step backwards in terms of safety and environmental protection.

1040-02-06-.03 Casingheads

This is another weakening of the existing regs. The text: "Reconditioning shall be required on any well
showing pressure on the casinghead, or leaking gas or oil between the oil string and the next larger size
casing string, when, in the opinion of the Supervisor, such pressures or leakages assume hazardous
proportions or indicate the existence of underground waste. Mud-laden fluid may be pumped between
any two strings of casing at the top of the hole, but no cement shall be used except by special
permission of the Supervisor" is to be replaced with: "Reconditioning shall be required on any well
leaking gas or oil."
1040-02-06-.04 Environmental Protection

This part actually gets stronger with the addition of section (2) Erosion prevention and sediment
controls. Thank you for the additional protections.

1040-02-07-.02 Surface Casing

Casing should run the entire length of the well.

1040-02-07-.04 Isolation of Oil, Gas and Fresh-Water-Bearing Strata, and Potential Minable Coal
and Other Mineral Deposits.

This section only requires 25 feet above and below the specific strata named in the title. This is
significant because casing failure is speculated to be a cause of groundwater contamination. Casing
should run the entire length of the well.

1040-03-03-.02 Pollution and Safety Controls

(2)(g) All pits or other diversion, transport, or storage facilities shall be constructed so that waste fluids
(stricken)can drain only into pits, and none can escape into the waters of the State, including ground
water (replaced with)do not discharge from them. There shall be no discharge pipe, overflow weir,
trickle tube, or any other device allowing any discharge (stricken) unless the operator holds a valid
NPDES permit from the Department of Environment and Conservation. No pit shall be located so that
any part of it, including a dike or diversion structure, is within a horizontal distance of (stricken)
twenty-five (25) (replaced with) one hundred (100) feet of the normal high-water line of any stream or
lake.

This is an improvement. Thank you.

In addition to the comments above, United Mountain Defense

asks for:

• Revised membership on Oil & Gas Board to include a citizen stakeholder from a state-wide
environmental preservation group.

The new regulations should require:

• Pre & post chemical testing for drilling, fracking, and production fluids in down stream
watershed
• Pre & post chemical testing for drilling, fracking, and production fracking fluids in nearby
drinking wells
• Mandatory community & land owner notification for cited violations by the industry
• Mandatory community & land owner notification for supervisor granted waivers to regulated
 practices
• Mandatory reporting of re-stimulation events, fracking events, refracking events and all
chemicals used in the events
• A complete prohibition of wells, pits, or storage of any type in flood plains.
• Full advance disclosure of chemicals used in drilling and fracturing operations.
• Mandatory reporting of any fracking events.
• New requirements for plastic liner thickness of reclamation ponds.
• Prohibition of diesel fuel as lubricant.
• Expanded and improved casing and cementing requirements, with verification of casing
integrity required before fracking can commence.
• Full public disclosure of all wells, permits, citations, and pre- and post-drilling test results. This
data should be made free and easily accessible online.
• A complete ban on injection of water into gas wells for the purpose of fracturing underground
formations to release natural gas.
• Revocation of corporate status and drilling license for violations.
• A complete ban on land application of produced water.
• Full testing of produced water for heavy metals, benzene and other chemicals that are
associated with natural gas, and naturally occurring radioactive materials.

Prior to drilling, each applicant should submit or obtain the following:

• A Clean Air permit and an NPDES permit.

• Maps of all nearby water tables and sources and identification of source water for cement dust
control, etc. before drilling.
• A waste management plan.
• Wildlife resource identification.
• A reclamation plan.
• Pre- and post-drilling water sample processes.
• Public water system identification.
• Contingency plans for spill prevention and control.

Thank you for your consideration and for your work to prevent the dangerous and irresponsible
practice of hydrofracking in the state of Tennessee.

Sincerely,

William R. Wilson
on behalf of United Mountain Defense.
May 3, 2011