Monday, August 3, 2009

A Discussion with Congressman Fleming on the Haynesville Shale

Congressman Fleming in the Cloak Room on the Hill

My Interview with Congressman Fleming

by Keith Mauck

I arrived at Congressman John Fleming’s office, which is located in the Longworth Building, around 3:30 and took a seat. Soon thereafter, Fleming came out of a meeting. Of course, as the way things go at Congressional offices, Fleming had to run down to the floor to cast a vote. So after a brief intro and a handshake, he was gone as quickly as he appeared. So I sat there a little longer. Amy Jones, the Communications Director who scheduled the interview, came out and introduced herself. Nice gal.

A map of a proposed Haynesville Shale boundary hung prominently on the wall above a staffer. I recognized the map from a presentation Fleming had made on the floor. I decided I had to get a picture of it, so you all have something else to debate. Here's the map.

Fleming did come back. I was ushered into his office and we took seats across from each other. A couple of staffers filed in and took seats to my left; Matt Ross, a Legislative Correspondent on Energy Issues and former landman, and Jamie Hennigan, the Congressman’s Energy Policy Advisor.

During the interview, it became obvious to me that Rep. Fleming has taken the time to understand the shale issue. Some of you may remember that candidate Dr. John Fleming took part in an online chat on this site during the campaign. It was obvious then that he knew little about the industry, but probably for good reason; one, he was busy with a medical practice and two, he lives in Minden, LA which is beyond the Haynesville Shale zone. However today, it is clear that Rep. Fleming has embraced this issue and has opted to run with it. For that, the 4th District is sure to benefit.

GHS: So how has DC been treating you since your arrival? What’s been the biggest adjustment for you?

Fleming: We’ve adapted to urban living here on the Hill. My wife is up here with me because our kids are grown. I don’t have to go home to see my wife – thank goodness, but I do go home every 2 weeks or so and we do stay busy in the district with quite a few events, such as a recent tour of a drilling rig. So yeah, I try to get to the district often and touch every part of the 4th district at every level.

GHS: What do you miss about everyday living in Minden, LA?

Fleming: I do miss the freedom that allows one to just hop in the car and go. We live on Capitol Hill, so we walk to most places. We do have a car here, but often it’s just not practical to use it.

GHS: Do you miss the medical practice?

Fleming: I certainly have enjoyed my practice, but I didn’t leave practice to go into a boring field. I find this to be very challenging. Every day here is very interesting and very exciting.

GHS: What is your legislative philosophy and how did you develop it?

Fleming: My background is in business, medicine, and the military so these experiences have shaped my philosophy. My mission, as I see it, is to move America back to the values of our Founders; including freedom of the individual, capitalism and the right to bear arms. The piling of debt by this federal government through fiscal irresponsibility and government over reaching via central planning is setting us up for failure. Though I was concerned before, once I got to DC, I found it to be much worse (i.e. the attack on shale drilling) than I thought. Our decline is occurring more rapidly than I had anticipated.

GHS: As John Fleming the candidate, you participated in a live online chat on GHS. Since then I imagine there has been quite a bit of learning taking place on natural gas and shale. What’s the biggest complexity regarding the Haynesville shale in your opinion?

Fleming: I find the technology of shale drilling ingenious. It’s not overly complex. Sometimes simple things are a thing of beauty and this is the case with the production of natural gas from shale. As you well know, at one point, we didn’t even know that gas was packed into the shale or if we knew it, we didn’t know how to get to it. I think it’s a great process. Natural gas has ½ the carbon footprint as coal and there isn’t a renewable form of energy that can come close to competing with its low cost. We (the U.S.) are the Saudi Arabia of natural gas.

Now, I think the creation of infrastructure to take advantage of this natural gas is the next hurdle we have to clear. We need to get to the place where you can fill up your car with natural gas as we do now with gasoline. We’re the Saudi Arabia of natural gas, so why should we be buying oil from them when we have an abundance of natural gas.

GHS: So what do you see out there in the 4th District? Any observations from your point of view on the development of the play?

Fleming: People who call in to the office are primarily concerned with Federal Energy process and recognize the potential of natural gas in helping wean the U.S. off of foreign oil. The office stays in constant contact with the LA Office of Conversation.

GHS: What issues and questions are raised by your constituents regarding the Haynesville Shale?

Fleming: I hear concerns regarding infrastructure maintenance. People want to make sure our parish roads and highways are well maintained and that the tax payer isn’t left holding a large bill at the conclusion of production. Production companies have told me that they want to do their part in maintaining the infrastructure of local communities; making sure that the roads are left in good condition after production slows. One way or another, we have to work as a community. Residents want the exploration companies to be there and the E&Ps want to be there, so it’s a win-win. But still, we don’t want these companies to leave in 20 years and leave destroyed infrastructure without the tax base needed to repair the roads.

GHS: What about groundwater contamination? In your mind, are there any legitimate concerns regarding how hydraulic fracturing is being conducted?

Fleming: My only concern is that it may get hyper-regulated.

Hydro Fracking has a target on its back. Representatives on the Natural Resources Committee, one of the committees I sit on, are attempting to place hydro fracking under EPA oversight. I think the process of hydro fracking is sound because we’ve been unable to find any examples of ground water contamination resulting from fracking. Additionally, states are already regulating this process so why place it under more regulation? Also disconcerting is the possibility that involving the EPA could tack on an extra 18 months to the permitting process. This seems like an attempt to: 1) Increase revenues into the federal budget for social engineering and central planning and 2) Push a green agenda that is unable to compete on the open marketplace.

GHS: Do you work with Louisiana’s Department of Conservation on any of these Haynesville Shale issues? Is there any coordination with state departments?

Fleming: With the emergence of legislation to regulate the process of hydraulic fracturing, we’ve been in close communication with staff and the District Engineer of LA Department of Conservation to discuss:
- The effectiveness and efficiency of State regulation.
- Possible adverse effects of increased federal regulation.
- Who plays a roll in the regulation of this process at the State level.
- We inquire about the number of cases of water contamination (the department has assured us that there have been no confirmed examples)

GHS: You took a tour of a Chesapeake Energy drilling rig recently; what rig was it and what did you come away with from that tour?

Fleming: We toured the NOMAC 48, which is drilling the Indigo Materials 31H-1 Well in the southwestern part of Caddo Parish. The well location was off the Woolworth Road. I had never been to a rig before, but I was impressed with the improved technology being implemented in the drilling process. The control panel looks like the cockpit of an aircraft with all these computer screens displaying metrics. There’s a guy with a joy stick directing the drilling. There is very little guess work in the process. Every action is backed with scientific/seismic data.

GHS: We seem to hear mixed messages coming out of DC. We hear that natural gas is “abundant and ours,” but yet when legislation is passed, natural gas is conspicuously missing from the mix. Congress is now considering federal oversight on hydraulic fracturing. A while back, President Obama proposed removing standing tax exemptions for independent oil & gas producers and we also see Salazar, Secretary of the Department of Interior going back and modifying previous leases on federal land.

What’s up? Do policy makers inside the beltway view natural gas as a viable alternative to oil or not? If so, they sure do have a funny way of showing it.

Fleming: I want to warn people that DC is not thinking logically on these energy issues. Basically, you’ve got liberal politicians, unions and environmentalists and the last thing they want is for the U.S. to become energy independent. Though the rhetoric is about lowering cost and becoming energy independent, the actions of many here in DC push for the exact opposite. Many have the goal of lowering this nation’s energy use. The only way to accomplish this is to raise the cost of energy which will suppress energy consumption, but this also suppresses our manufacturing capabilities (i.e. jobs). As a result, these people aren’t interested in technologies that are going to make this nation more independent or lower the cost of energy. This runs counter to their stated goals. I experienced this first hand during a hearing in which a “green energy” academic admitted that the goal was to keep energy prices elevated in order to make solar and wind competitive with natural gas and oil based energy.

GHS: Do you anticipate that natural gas will be a centerpiece to our energy policy? Will T. Boone’s PR push for CNG succeed?

Fleming: I think it should. It’s a wonderful transition fuel that could assist us in moving over to the next major energy source and who knows what that will be. I think T. Boone is right CNG is a great transition fuel - perhaps a 100 year transition fuel. But, there are a lot of forces at work in here in DC that want us to go back into the “stone age.” They are not interested in using any fossil fuels at all. They don’t want us using nuclear which has zero carbon footprint. So we do have many of the technological advances we need in place – even technology removing the Co2 from natural gas. We potentially have everything we need to have our cake and eat it too - we have the capability of being energy independent, having low energy costs and fueling this nation’s vast manufacturing engine – but like I say, we have many here in DC who don’t want to see any fossil fuel source succeed.

GHS: HR 1835 (modifying alternative fuel credits to include CNG and LNG) includes credits for producing vehicles fueled by CNG or LNG or vehicles converted to operate on CNG, increases natural gas vehicle requirements for the federal fleet and provides grants for natural gas vehicles research and development. Are you supportive?

Fleming: It remains to be seen whether this bill will gain any traction, but yeah, I am a co-sponsor of this legislation. Boren is one of the few Democrat exceptions on the Hill – he gets it. I am extremely supportive of HR 1835.

Once again that pesky voting buzzer began piping up, but the Congressman who had already been generous with his time, invited me to tag along down to the cloak room where he could answer more questions in between floor votes. So of course, I took him up on it. We hiked from the Longworth Building over to the Cloak Room via the house basement tunnel. Matt Ross, the LC tagged along too. We chatted while walking.

GHS: In typical beltway fashion the Waxman-Markey climate bill is over 1,000 pages. Have you gotten a handle on what this bill means for the average American?

Fleming: Well, this is just an attempt to collect more tax revenues. Even Green Peace has stated that this is nothing more than a political move and that it’s going to do nothing for the environment and climate change. They know that, we know that. It’s nothing more than a Trojan horse for more taxation. If this is implemented, we’ll feel this when we pay elevated utility bills or when we see jobs go good bye. Manufacturers here in the U.S. can’t compete with overseas competitors who abide by these same policies. We are in a world-wide economy now and we are already losing manufacturing jobs overseas; cap n trade, or cap n tax will only exacerbate these losses. I look to Spain as the potential disaster cap n trade could be – 18% unemployment rate and skyrocketing utility bills.

GHS: How will the cap n trade program be administered and how will these allowances be auctioned off?

Fleming: My understanding is that this becomes a function of Wall Street and creates a whole new industry – similar to the derivatives industry. The level of sophistication involved makes Wall Street the default suitor for such a feat and essentially a government contractor. The idea on its face is folly. However if we accept, for the sake of argument, this erroneous idea, why should we put the authors of the mortgage meltdown in charge of auctioning off these carbon allowances? Oddly enough, Italy is one of few countries also moving towards a cap n trade system. According to a recent hearing witness, the mafia sees these carbon-allowance transactions as a potential source of large revenue. Bottom line, somebody is going to make money off this thing and it’s not going to be the consumer.

GHS: In your mind, how do we move off of foreign oil into a new energy era? How would you lay out a plan to achieve this?

Fleming: I have signed on to several plans. Essentially, I believe we should open up ANWAR, permanently open up off-shore drilling, build 100 new nuclear plants, push forward on natural gas and certainly continue research on renewable energy sources. Personally, I am not for subsidies for solar or wind until the technologies have been proven. At this point wind and solar energy, on a mass level, are not cost effective. For example, when the wind isn’t blowing, we still have the infrastructure sitting around not being used, so further infrastructure is needed to kick in energy sources when the wind isn’t blowing. So, nobody is using wind and solar to any large degree except in nations that subsidize it. I never quite understood why T. Boone Pickens pushed wind energy so hard. The technology just isn’t where it needs to be yet. Perhaps, one needs to talk about renewables in order to get a seat at the table?

GHS: Lastly, are you ready to declare your intent to seek reelection in 2010?

Fleming: (chuckle) Well, this probably isn’t the venue to do that, but let’s just say that I have no interest in resigning.

Tuesday, July 28, 2009

An Interview with Jim Welsh, Commissioner for the Louisiana Office of Conservation on the Haynesville Shale

An Interview with Jim Welsh, Commissioner for the Louisiana Office of Conservation

July 28th, 2009

By Keith Mauck


Jim Welsh has seen the tenures of 9 former Louisiana Office of Conservation Commissioners come and go since he began his civil service career with the Office back in 1965. Today Jim is serving as the 23rd Commissioner and getting to oversee the Office during this historic Haynesville Shale drilling frenzy. Jim took time away from a honey-do list to speak with me by phone on a host of topics.

GHS ( So let’s get a quick run down on the duties of the Louisiana Office of Conservation (LOC).

WELSH: We’ve been around since 1912. We have a lot of responsibility related to the oil and gas industry. We regulate pipeline, natural gas storage, lignite mining and injection well disposal. We also have a very active ground water aquifer program.
[Editors Note: The website states that the LOC’s mission is “to conserve oil, gas, and lignite resources; to regulate the exploration and production of oil, gas and other hydrocarbons and lignite; to control and allocate energy supplies and distribution; and to protect public safety and the State's environment from oilfield waste, including regulation of underground injection and disposal practices.”]
GHS: What’s your background?

WELSH: Well, I’m a geologist by trade. I’ve been with the office in some capacity since 1965. I was appointed the 23rd commissioner by Governor Foster in 2002 and reappointed by Governor Blanco and then kept on by Governor Jindal. I’ll soon be starting my 8th year as Commissioner. I’ve had the privilege of being the first career civil servant to be appointed the Commissioner.

GHS: What is the relationship or hierarchy between local and parish governments and the LOC?

WELSH: They have their responsibilities. Local governments are, of course, free to pass ordinances except when it comes to oil and gas regulations. My opinion is that this governance falls under the authority of the LOC. The state statutes placed this responsibilities under my office in order to prevent Parishes from doing something 64 different ways. It’s been that way, it’s in the statutes. We always work with the local government, such as the recent regulations. We had representatives from Caddo and Bossier Parishes as members of the ad hoc committee which drafted our new ordinance rules. We had public hearings. We got a lot of comments and we came out with a good piece of legislation dealing with the situation in NW LA.

GHS: What are you hoping to achieve with the ordinance dealing with Haynesville Zone E&P Operations in Urban Areas? (

WELSH: As in any rule, it is designed to protect the environment and public health and safety. It has many provisions in it dealing with drilling in urban areas. People need to remember that these are in addition to our state-wide rules under 29b. Our ordinance is tacked onto these existing regulations to be enforced within city limits in the 8 parishes affected by Haynesville Shale drilling.

GHS: What was the thorniest issue that the committee has to hammer out in working out this ordinance?

WELSH: We seem to be getting more attention to noise levels. The local authorities wanted to accept the same decibel levels as the levels used in Fort Worth for the drilling of the Barnett Shale. After we saw some studies, we didn’t see a reason to go that low; when we pass a regulation we like to have a reason for doing it. The E&P companies, on their own, hired a Shreveport lab, All-Tech, to test the noise levels coming off local drilling rigs. The eventual decibel levels approved are close to the Fort Worth levels and within the levels mandated by all OSHA safety rules for noise. Some might dispute exploration and production companies (E&Ps) going out and hiring their own firm, but the lab is certified by DEQ. The study was done this year, in Louisiana and in the Haynesville drilling zone. So this study hits the bull’s eye & was a very credible source for adopting the decibel range we did.

GHS: Can our local authorities pass laws/ordinances regarding exploration or issues surrounding exploration?

WELSH: One issue that the ordinance does not cover is road use. The closest we come to addressing road use is that we do mandate that the drilling companies certify, to the LOC, that they are in contact with local authorities regarding their level of road use. This approach allows the local government to handle it the way they so choose. After all, they are the best entity to handle this. Roads aren’t our cup of tea.

GHS: I had heard that the District had been somewhat surprised by the upswing in activity in 2008. What measures did the district take to deal with the surge in drilling activity in the Shreveport District? How are these measures working? Has the district 'caught up' in this regard, in his opinion?

GHS: What has been the LOC’s response to the need for increased manpower to handle the increased activity in NW Louisiana?

WELSH: It’s been a real fight and I understand the Governor just came out with another hiring freeze. However, I think we are ok now. I think we are able to enforce the rules in the Haynesville. We have 12 inspectors currently in the Haynesville Shale area and we have a pool of 45 inspectors, state-wide, that do other things (i.e. lignite inspections), but we can draw on any of these guys if we have to. So we are absolutely able to enforce state laws in the field.

GHS: Are you guys self funded or do you all take from state taxes?

Welsh: We have a little bit of general fund dollars. We self generate more than 50% of our budget. We generate this through a host of permitting fees. Any activity we regulate comes with an associated fee (i.e. production fee per Mcf of gas). We get some money from the federal government that we have to match with state money. Examples of this include our underground injection program, which receives funding from the EPA, our lignite mining program, which is partially the Department of the Interior, our pipeline safety program, which is partially funded by the U.S. Office of Pipeline Safety. We have an overall budget of 17 million and we have roughly 190 employees. Most of our employees are either geologist or petroleum engineers so we have a high tech office overall.

Well Permitting

GHS: Let’s do an ABC rundown of the permitting process?

WELSH: The permitting process if pretty straight forward, spelled out by approved legislation. Basically, the E&Ps have to provide a certified location plat. They have to provide unitization information if there’s a unit involved. They have to document that the units are spaced correctly according to the field order.

The company is going to show us how they plan on constructing the well. They must identify the zone they are drilling down to. They have to show that they are fully in compliance with all the rules and regulations on the front end. We have a standard inspection form with a fairly long list of things that our inspectors check off (blow-out preventers, spill containment).

This information is then provided to the district office in Shreveport. The Shreveport office does a basic completeness determination making sure everything is addressed and then they forward it to the Baton Rouge office where the permit is actually issued from; we have streamlined this over the years.

GHS: So how long does it take to get a permit for a well?

Welsh: It is several months assuming no problems pop up; a couple of months probably.

GHS: Have you seen a slow down in the number of wells being permitted since the slowdown?

WELSH: I’ll tell you, we are not seeing any slowdown in the Haynesville. It’s amazing that 98 of the 116 rigs working in the state, and off shore, are in the Haynesville Shale. Statistically, South Louisiana has traditionally been the oil & gas exploration leader. Not so anymore.

Reporting Well Results

GHS: One of the issues that keep bubbling to the surface on GHS is the prospect of stiffening some of the penalties on operators for noncompliance with the reporting requirements. What is your stance on this issue?

WELSH: I think this is really a misunderstood thing. Reporting requirements are being met by the companies. Basically, the company is required to report within 20 days after the well starts producing. Producing means that the well is online and plugged into the pipeline; they are marketing the gas. Right now there are 130 producing wells in the Haynesville, but there are 495 active wells so a lot of them aren’t completed by the definition we use (i.e. selling gas to a pipeline).

Every number you see on SONRIS, production numbers, the company has filed a certified production report with our office. We don’t report company PR; we go by official filings to the LOC. It’s important that people have a place to go to see this production info. By filing this form, the company is signing under penalty of law that their production is x. This filing then becomes part of the well file. It would not be wise for a company to falsify a production report.

GHS: What are the penalties for a falsified production report?

WELSH: Generally, we have authority to fine up to $5,000 per day. We don’t have a strict fine schedule we follow. With oil and gas, it’s done on a case by case basis depending on the facts of the situation. We look at whether it was a foul up or done purposively. Also, we’ll take into account the compliance history of the company.

GHS: Do you think the process is efficient enough and the penalties sizable enough to prevent abuse of the reporting system?

Welsh: Yeah, the fines aren’t the biggest stick we have. Our main deterrent is really the ability to shut the well in. To a company, this is the jugular vein; they do not want to get shut in. In this scenario we cancel their authority to produce. This means that it is illegal for them to produce it. Illegal for a pipeline’s to take their gas from such a well, or a transporter to haul any oil from the lease, it is a very effective big stick.

GHS: How do you track the abusers down?

WELSH: We have a tracking system in place via our production audit section. When the company starts producing they’ll file a production report. Pipelines also have to report what they are receiving and transmitting. All these numbers have to jive. If not, then there is something wrong. We have auditors checking this every day. We are tied in to the Department of Revenue; we have a pretty good cross referencing system. I don’t think people are being “cheated,” so to speak. The state gets severance tax, so the administration and legislature want to be sure all the funds due them are getting into the state treasury.

GHS: When is the last time you shut a well in and what were the circumstances surrounding it?

WELSH: It’s been awhile, I believe it dealt with injection wells. Regarding to issues, we issue them all the time, but I don’t recall anything really serious. As of late, most penalties have been fines in the neighborhood of $1,000.

GHS: So, if a landowner has an issue with a driller, perhaps they feel they aren’t getting adequate royalties, is there a way in which the landowner can file a grievance?

WELSH: Not with the LOC. This is solved in Louisiana courts which interpret Louisiana’s mineral code. Mistakenly, some who think they got the short-end of the stick on their lease give us flack. However, the LOC is not involved in this. This is for a judge in a court of law to decide.

SONRIS Generally

GHS: Any plans to bring some SONRIS classes to NW Louisiana?

WELSH: Yes, we want to do that. We will be participating in the Gulf Coat Expo in October of this year. We will have a booth there. Our people will be there to show what can be done on SONRIS. We have had these classes all around the state and even Texas. In fact, we have one coming up in New Orleans in September. The classes are popular. It’s important to us that we have these so people know how to do reports correctly. For our system to work, companies have to cooperate.

GHS: Any plans to create some custom reporting on SONRIS so we can track Haynesville Shale monthly production (both total and by parish) or the possibility of giving the SONRIS user the possibility of differentiating between Haynesville Shale and non-Haynesville Shale production? Any plans such as this in the works?

WELSH: Staff has compiled such information in the past on request but it will take additional programming by our IT Division for this service to be available via SONRIS.

Groundwater Protection

GHS: Have you ever seen water contamination issues in your tenure as a civil employee?

Welsh: Yes, in the early days, there was some contamination. Early on, before the underground injection control program matured and we didn’t have our current rules, it was pretty lax. The underground injection program had to grow and become more stringent. Once the EPA started enforcing laws that the state(s) had to certify that it had a sound set of laws and rules and the people to enforce them, it improved. As far a Louisiana goes during that early time, I believe we were ahead of most states. We’ve had a general prohibition against aquifer contamination since the 20’s. We are very competent in what we do in protecting underground water supplies.

GHS: What about hydraulic fracturing; do you have any concerns that fracturing may contaminate our ground water supply?

Welsh: Hydro-Fracking is fairly new. Fracking is not considered an underground injection; it’s exempted under current law. Regarding contamination by fracking, in my opinion, we have never witness any problems causing any aquifer contamination. We have done exhaustive research of our records and haven’t found anything. Most other states will tell you the same thing. A deeper issue is how flow-back water will be classified under the Underground Injection Control program. Frack fluid is 99.5% water and sand. It does have chemicals that could be toxic in a concentrated form; this is what happened to the cows. But some of these chemical we use in every day living. An example of this is chlorine; we use chlorine everyday in our drinking water and our pools. Overall, frack fluid is pretty inert, but it does have some bad stuff in it. Just in diluted amounts. It’s not the horrible thing that some people believe it is.

GHS: I’m sure you are keeping up with the idea of the EPA playing a role in the regulation of Hydraulic Fracturing; I shouldn’t assume, but I think it’s safe to say that you probably think the DOC has it covered?

Welsh: Yes, I’d rather the EPA stay in their regional Dallas office and leave it to our state to regulate.

GHS: What steps have been, or will be taken to ensure our water system is not consumed beyond fair use?

Welsh: We have some ideas to prevent overuse of our aquifers. We have some new proposed rules that will allow for the recycling of flow-back water & salt water. The rules would allow us to clean it up for reuse in frack water. To me this is a good move to minimize the use of underground aquifers for fracking.

We saw on the front end that the aquifer that serves Desoto Parish and South Caddo, the Wilcox is not suitable for withdrawing the millions of gallons needed for fracking. It would have been a matter of time before the aquifer would have really been damaged. From day one, we encouraged companies to get out of that aquifer and utilize other sources of water for fracking that being the Red River, Toledo Bend, and the Red River Alluvial aquifer. This high yield aquifer runs right along the Red River; the water isn’t suitable for drinking due to its mineral content, but it’s perfect for fracking and it’s an unlimited supply. It makes no sense to me not to use it.

We’ve identified, at the lignite mines, in Red River and Desoto Parishes, sources of water. In order to reach the lignite, the mines have to dewater the Red River Alluvial aquifer. The lignite is found just below the aquifer. Well, the mines send millions of gallons of water per day up the Red River. It makes no sense to me why we aren’t using this for fracking; picking up on these types of things make up good conservation practices.

GHS: Do you, as the current Commissioner, have the ability to issue an emergency injunction should it be found that our water sources are in jeopardy?

Welsh: Yes we do. We can issue an order that would restrict withdrawal. An order would be given if an aquifer is unable to show its sustainability which essentially means an inability to produce water at its previous normal levels. So yes, I do have the authority to issue such an order. We recognize priorities for water use and of course, the number one purpose is for our drinking supply. We are finding ways with the use of science and common sense to manage our water supply. It takes awhile to bring industry in line with our goals, but as long as they want to work with us, we’ll work with them. We feel very strongly than industry and nature can co-exist but it does have to be managed very wisely.

GHS: What is protocol for handling a reported environmental concern?

WELSH: Any time there is a complaint or issue, such as a blowout, we have a very formal process that we go through that informs all first responders. It’s guided by the State Police who have the ability to quickly to notify the DOC and the DEQ. The State Police send their HAZMAT team out to the site. The local Sherriff’s office is notified as quickly as everyone else. I know that Sherriff Prator was concerned about his notification. The exploration companies know the process and it’s carried out state wide.

GHS: Let’s use a hypothetical situation, or let’s look at the recent spill in Caddo Parish where 20 cows dropped dead – what role does the LOC play once a possible issue has been reported?

Welsh: We coordinated this effort with the DEQ. They played a big role in the investigation of this spillage. Although all our people [state department] determined that there was no E&P waste involved in this episode, what we did see was some spilled chemicals that had not been mixed into frack fluid. The DEQ took the lead by sampling all the chemicals, the drill site, the water and soil in the pasture.

GHS: So there is a hotline one can call to report hazardous waste or activity?

Welsh: Absolutely. We have a hotline that citizens can use to report. It’s in bold red letters on our website. You can’t miss it. Someone is there 24-7, it’ll be answered. We got the procedure to get the report to the proper authorities.

Unit Size

GHS: What is the LOC’s stance on units larger than 640 acres? Do you believe the standard has been set at 640 acres?

WELSH: Generally, we try to go with 640, that’s what the equities have determined. However, as production declines, which it will do, it is important to have the flexibility for companies to down-hole combine production. As these gas sands get marginal economically, it extends the life of the operations if companies can combine, or co-mingle, production from all the zones (i.e. the Haynesville and the Cotton Valley). This is the most economical way of getting any remaining gas. Otherwise, it’s going to be a nightmare trying to figure out what’s coming out of each zone.

GHS: What determines the reason(s) for granting larger units?

WELSH: The sections aren’t exactly 640, but close, and then you have some are that come up against the state line. We don’t like to leave gaps between units. We’d rather add that on then leave a landowner out of a unit; otherwise some landowners would never see production. Also, you’ll notice with Toledo Bend, we have some larger units that extend all the way to the Texas line. No company wants to put an off-shore rig in Toledo Bend. You just have to come to the hearing to understand why the units are given the size they are. Reasons will vary as to why the unit is size assigned.

GHS: But you don’t see a larger unit as becoming the standard?

Welsh: No, larger units will only be allowed for very specific reasons. Such as urban areas. As you get into urban areas, drilling locations are scarce and you just can’t drill anywhere because of existing ordinances. So, the companies have to carefully plan the configuration of the unit(s) and if they can’t get in there, the company won’t be able to drill and landowners won’t get a well(s) on their property.

You can read more at the LOC’s website