Natural Gas and Oil

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Natural Gas: Regional Developments

In 2018, the Kentucky legislature passed a resolution, SR224 (Smith) which urged the U.S. Congress to support federal legislation in advancement of the Appalachian Storage Hub, a proposed $10 billion dollar infrastructure project to house natural gas liquids and related petrochemicals. The U.S. Department of Energy has granted the first part of a two application loan of $1.9 billion for the project, which is expected to include a piping system into the Ohio and Kanawha river valleys. Other infrastructure, such as ethane crackers, could use the natural gas to produce ethylene, which is widely used in plastics and other chemical industries. While commerce interests in the borders of West Virginia, Ohio, Pennsylvania and Kentucky cite the potential for job creation in the four-state region, conservation groups have raised concerns that this facility would create a proliferation of petrochemical industries that would bring public health dangers and contribute to climate change. The resolution was adopted by voice vote. KCC will continue to monitor the progress of this project.

More on the Appalachian Storage Hub:

“Appalachian Underground Natural Gas Storage Hub Clears a Hurdle,” West Virginia Public Broadcasting, Jan. 2018
Ohio Valley Environmental Coalition page on the Appalachian Storage Hub

Oil and Gas Development in Kentucky
The first commercial gas wells were drilled in Kentucky in the mid-1800s in Meade County. The majority of oil and gas production in the western coalfield areas of the state and south-central regions. The Eastern coalfield region produces natural gas.

While Kentucky still gets the majority of its energy from coal, natural gas is ramping up as many coal plants are either retiring or converting to natural gas.

Our laws on the books for regulating natural gas in Kentucky are outdated on the whole, and as a result there have been several bills in the state legislature in the past few years that have attempted to address some of the more urgent issues. In the 2015 legislative session, there were bills such as SB 186, signed into law, that attempted to introduce much needed oil and gas production and reclamation protections.

In February, 2015, Kentucky considered its first permit for a deep horizontal natural gas well. Story HERE.

In addition to production issues for natural gas, there has been controversy over the by-products from gas production, particularly Natural Gas Liquids (NGL) which are commonly used in the commercial production of plastics.

Environmental Concerns:

Wells that are no longer in production are required to be properly plugged and abandoned, however many are improperly plugged, illegally abandoned or orphaned.

Drilling, production, and abandonment of wells and leases generate a variety of oil field wastes, in particular, low-level radioactive wastes known as technically enhanced naturally occurring radioactive materials (TENORM or NORM).

No national standard

Oil and gas companies dredge up radioactive materials when they drill and when they collect wastewater from their wells. No federal regulations exist for such TENORM materials, and oil and gas states have struggled to keep pace with the needs of the industry.

Legislative and Administrative Issues, Oil and Gas Workgroup:

Energy and Environment Cabinet Secretary Charles Snavely convened the Oil and Gas Workgroup in March 2016 to address issues raised in the that year’s legislative session surrounding the illegal importation of wastes with enhanced concentrations of radioactive materials into Kentucky, to review current issues impacting the oil and gas industry and to suggest revisions to statutes and regulations as appropriate.

Oil And Gas Workgroup Report on Technologically Enhanced Naturally Occurring Radioactive Materials (TENORM) Associated with Oil and Gas Activities (2016RS HB563) November 30, 2016.
Report on the Safe Production, Handling and Disposal of Oil and Gas Waste, Dec. 2016

Resources:

Kentucky-Specific Natural Gas Resources

Kentucky Oil and gas threat map
Kentucky Division of Oil and Gas, link HERE.
Kentucky Geological Survey on Oil and Gas development HERE.
Oil and Gas Data, Kentucky Geological Survey at the University of Kentucky. Link HERE.
Resource for Kentucky maps can be found at the following website HERE.
Kentucky Laws and Incentives for Natural Gas, from US Dept. of Energy (Fuels and Vehicles) HERE.
Kentucky Natural Gas Prices from US Dept. of Energy HERE.
Study of the “Reasonably Forseeable Development of Fluid Mineral Exploration on Bureau of Land Management Lands in Kentucky,” 2008 study link HERE.

Advocacy Initiatives: Pipeline and Fracking Summit

KCC has been involved with many organizational allies, through an annual summit designed to engage the public on current issues involving natural gas and oil infrastructure, including pipelines. You may fund resource information from those meetings through the Pipelines and Fracking Summit/Kentucky Beyond Fossil Fuels initiative. Link HERE.

Other Resources, Reports and Factsheets