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Home My WebLink AboutWS Item 01 - Oil and Gas Well Drilling Regulations W S ITE..."M 0 MEMO TO: HONORABLE MAYOR, CITY COUNCIL MEMBERS FROM: BRUNO RUMBELOW, CITY MANAGER SCOTT WILLIAMS, DEVELOPMENT SERVICES DIRECTOR '(�K ' ' MEETING DATE: MARCH 20, 2012 SUBJECT: WORKSHOP - POSSIBLE AMENDMENTS TO CITY OF GRAPEVINE CODE OF ORDINANCES, CHAPTER 12, HEALTH AND SANITATION, ARTICLE VII. - OIL AND GAS WELL DRILLING REGULATIONS RECOMMENDATION: City Council to consider possible amendments to Grapevine Code of Ordinances, Chapter 12, Health and Sanitation,Article VII Oil and Gas Well Drilling Regulations relative to hydraulic fracturing ponds and take any necessary action. BACKGROUND INFORMATION: Because of a cutback in production due to economic conditions, Chesapeake Energy is requesting that Council again consider an ordinance change relative to fresh water ponds associated with gas well sites. The request is to allow a fresh water pond to remain on site for up to two years of site inactivity, with the possibility of an administrative review for extensions of six months (either by staff or Site Plan Review Committee) thereafter. The original oil and gas drilling ordinance required the fresh water pond to be removed within 60 days of fracturing the first well. At the request of Chesapeake,the ordinance was amended by City Council on March 16, 2010 to allow the fresh water pond to remain in place for nine months following fracturing operations. Should Council wish to amend the ordinance, staff will bring draft amendments to a meeting in the near future. Current ordinance reads as follows: Section 12-145(c)(22)e. "Fracturing fluid pit shall be backfilled and provided with suitable groundcover or turf within nine months of completion of fracturing the first well. Where subsequent well drilling is initiated within nine months of completion of fracturing the first well, the removal of the fracture fluid pond may be delayed for continuous drilling of additional wells, provided that all drilling of wells be initiated within nine months of completion of fracturing of the previous well." 0AZCUTAM12-02.4.doc 3/12/2012 12:13:54 PM 1 ARTICLE VII. -OIL AND GAS WELL DRILLING REGULATIONS Page 7 of 13 (17) The contents of any pit shall always be maintained at least two feet below the top of the pit. (18) Fencing shall be installed to restrict access to open water reservoirs utilized in oil or gas well drilling operation at a drill site within the corporate limits of the city. (19) After the well has been completed,or plugged and abandoned,the operator shall clean and repair all damage to public property caused by such operations within 30 days. (20) After any spill, leak or malfunction,the operator shall remove or cause to be removed all waste materials from any public or private property affected by such spill, leak or malfunction. Cleanup operations shall begin immediately. (21) The drill site shall at all times be kept free of debris, pools of water or other liquids,contaminated soil,weeds, brush,trash or other waste material outside the drill site within a radius of 100 feet around any separators,tanks and producing wells within the leased property. (22) Drilling mud pits shall adhere to the following requirements: a. Only freshwater-based mud systems shall be permitted.Saltwater-based mud systems and oil-based mud systems are prohibited. b. No metal additives may be added to any drilling fluids. C. All fluid produced from the well during completion of production shall be held in enclosed containers while stored on the property. d. The pit and its contents shall be removed from the premises within 90 days after completion of the well; provided,however,that the permittee may apply for a 90-day extension from such requirements based on showing of good cause, necessity to maintain said pit, inclement weather,or other factors.The city may designate a period of time shorter than the 90-day extension set out herein. e. Fracturing fluid pit shall be backfilled and provided with suitable groundcover or turf within nine months of completion of fracturing the first well.Where subsequent well drilling is initiated within nine months of completion of fracturing the first well,the removal of the fracture fluid pond may be delayed for continuous drilling of additional wells, provided that all drilling of wells be initiated within nine months of completion of fracturing of the previous well. (23) A copy of the hazardous materials management plan as required by the city's fire marshal's office. In addition to the hazardous materials management plan,all material safety data sheets (MSDSs)for all hazardous materials that will be located, stored,transported,and/or temporarily used on the drilling site shall be provided to the oil and gas inspector and fire marshal. (24) A copy of the emergency response plan as required by the city's fire marshal's office. (25) A copy of the determination by the state commission on environmental quality of the depth of useable quality ground water. (d) Setback distances. (1) Wells setbacks for gas or oil well permits: It shall be unlawful to drill, redrill,deepen, re-enter, activate or convert any well,the center of which,at the surface of the ground, is located: a. Within 1,000 feet from any public park; b. Within 1,000 feet from any residence, religious institution,public building, hospital building or school for which a building permit has been issued on the date of the application for a drilling permit is filed with the fire marshal; C. Except for buildings addressed by subsection(d)(1)b.immediately hereinabove,within 300 feet from any building; d. Within 500 feet from any lease line as indicated on state railroad commission form W-1,or recorded property, lot or tract line; e. Within 500 feet from any existing storage tank,or source of potential ignition; f. Within 200 feet of any public street, road, highway, or right-of-way line; g. Within 100 feet of any building accessory to, but not necessary to the operation of the well;or h. Within 1,000 feet to any fresh water well. The measurement of all distances shall be calculated from the proposed well bore, in a straight line,without regard to intervening structures or objects,to the closest exterior point of the any object listed in a.through h.above. For purposes of this section, a"building used,or designed and intended to be used,for human occupancy"means an enclosed space,other than a residence, in which individuals congregate for amusement or similar purposes or in which occupants are engaged at labor,and which is equipped with means of egress,light, and ventilation facilities. (2) The distances set out in this may be reduced at the discretion of the city council. (3) Tank batteries,well facilities and equipment shall be located at least 300 feet from any public park, or from any residence, religious institution,public building,hospital building or school,or any other building used, of designed and intended to be used,for human occupancy,for which a building permit has been issued on the date of the application for a drilling permit is filed.The distance shall be calculated from the closest tank batteries,well facilities and/or equipment, in a http://library.municode.com/HTML/10855/level3/PTIICOOR_CH12HESA ARTVIIOIGA... 3/8/2012 � yN f „ � L Hal g Chesa,F,"��e&' e Coordina t or—Public Affairs February 9, 2012 The Honorable William D. Tate City of Grapevine 200 South Main Street Grapevine, TX 7$051 Re: Fresh-Water Pond Ordinance Dear Mayor Tate: As it currently stands, the City of Grapevine's ordinance relating to fresh-water ponds (sometimes referred to as "frac ponds"), requires that a fresh-water pond be reclaimed following nine months of drilling inactivity. Unfortunately, with a present-day depressed price of natural gas, lower rig count and strategic plans to produce future wells with the highest rate of return, it is not feasible to drill on a timeline that would allow us to maintain our Grapevine Mills fresh-water pond under the present ordinance. Although Chesapeake Energy is resolved to reclaim the pond if absolutely necessary, this would require that we complete the remaining hydraulic fracturing operations utilizing frac tanks. Over the past several weeks, we have met with members of City Staff and Council to discuss the fresh-water pond and its alternatives. The fresh water pond is attractive, has received no complaints and would be costly and disruptive to remove, which would include additional traffic, heavy machinery and noise. To date we have received feedback that reflects a desire on the part of the City to preserve the fresh-water pond as that could possibly be of greater benefit to the City of Grapevine and its residents adjacent to this site. To that end, we would like to respectfully ask that the fresh-water pond ordinance allow for two years operations inactivity (operations includes drilling, completion, work-over) prior to reclamation, with an option for an administrative review every six months thereafter. This will afford the Grapevine Mills site the opportunity to retain the fresh-water pond while economic conditions do not allow for its drilling, without having to rely on a less favorable water source when drilling commences. We believe this measure will also allow the City to remain nimble enough to take action when necessary, while assisting Chesapeake to act responsively to market conditions. Chesapeake Energy Corporation 100 Energy Way-Fort Worth,TX 76102 main 817-502-5000-direct 817-502-5816-Loretta.Haidenwang @chk.com The Honorable William Tate Page 2 February 9, 2012 Included are two fact sheets comparing the present fresh-water pond and the characteristics of frac tank jobs to assist in your consideration. Thank you for your time and review of this proposed change. Chesapeake has truly enjoyed our involvement in the City of Grapevine, and it is our hope to come up with the best possible options to continue striving to be the best neighbor we can be. Should you have any questions, am available to discuss this matter further at your convenience. With kind regards, Loretta Haldenw cc: The Honorable Shane Wilbanks, Mayor Pro Tom The Honorable Sharron Spencer, Councilmember The Honorable Mike Lease, Councilmember The Honorable Darlene Freed,Councilmember The Honorable Chris Coy, Councilmember The Honorable Roy Stewart, Councilmember Mr. Bruno Rumbelow, City Manager Mr.Scott Williams, Development Services Director Mr. Ron Stombaugh, Planning and Development Manager GRAPEVINE kw FRESH-WATER POND Che FEBRUARY g, 2012 Current Grapevine Mills Fresh-Water Pond • Constructed in December 2010 on Chesapeake-owned property • Has been utilized to complete seven wells on the site • Will serve as the location for up to ten more wells drilled • Has received no complaints to date • Fresh-water pond is fenced, well-maintained and features a berm that is designed to blend into its surroundings in order to make the pond virtually invisible to passersby • Pond supplies a constant and reliable source of water to completion operations • Aesthetically far less industrial looking than frac tank operations, this being of special importance at the highly visible Grapevine Mills site and Learning Center • The removal of this pond only to rebuild would be costly and disruptive • Serves as an attractive water feature for neighboring apartments that look down over it • Attracts local wildlife, as ducks can often be spotted visiting the fresh water pond • Pond is never used to store produced water; it is, as the name implies, for fresh-water only r r r,ar r 0 rrr r I ail r a v j -...., Chesapeake's Fresh-Water Paid at Grapevine MiAis FRESH-WATER POND ALTERNATIVE Clies FEBRUARY g, 2012 Frac Tank Jobs • Tanks provide a ready source of water when land for a fresh-water pond is not available • Tanks are the size of 18-wheeler containers • Each tank holds 21,000 gallons of water; approximately 16,800 gallons are useable • Number of tanks is dependent on available rate of water that can be supplied to the site o Typical completion job requires approximately 85-100 tanks • Creates more of an industrial appearance than fresh-water ponds • Tanks must come and go for every completion job • Creates more truck traffic; up to 100 tanks are necessary • Number of trucks increased by 4x the number of tanks ■ For example: 100 tanks require 400 truck trips (in and out twice) • Greater impact to roads and surrounding community • Based on small surface area of Grapevine Mills padsite, only enough tanks for one stage of fracturing will fit on site at a time o Resulting in less efficient and prolonged timelines for fracturing operations I J Chesapeake's Fort Worm ISD site with frac tanks