“DeSoto Parish is now the largest source of energy-related property taxes in the state with over $47.2 million, a figure that is 11 times higher than the pre-Haynesville period in 2005,” economist Loren Scott noted in April. “Almost 61% of this parish’s property taxes come from energy-related industries, a percentage that is the highest in the state.”
According to a report issued yesterday by the U.S. Energy Information Administration, an agency of the Department of Energy, the Haynesville Shale is one of three regions in the nation (the others being the Appalachian Basin in the Northeast and the Permian Basin in western Texas and New Mexico) that now produce nearly half of the nation’s natural gas. In 2007, the three regions accounted for 15% of production.
“After decreasing from its peak in 2012, increasing production in the Haynesville region since 2017 has been driven by improving initial production rates and increasing rig counts,” the report states. “Higher rig counts are likely a result of recovering crude oil prices, which have been generally increasing since early 2016.”
I’ve known Ieyoub professionally for nearly three decades. I lived and worked in Lake Charles when he was Calcasieu Parish District Attorney, before his election to three consecutive terms as state Attorney General. We’ve remained in occasional contact since he left that post in 2004, and I readily agreed to the meeting, which was held the afternoon of Thursday, August 23, in his office. Ieyoub began by introducing his staff: Assistant Commissioner of Conservation, Gary Ross; Director of the Engineering Regulatory Division, Brent Campbell; Supervisory Attorney, John Adams, and Environmental Division Director, Gary Snellgrove. Then, he opened by stating, “These are the facts as we see them.” Ieyoub was at his desk. I sat in a chair to his right, facing the other three in a semi-circle. “Of course, we’ll answer any of your questions as fully as we can,” he said. My first question was, “You have declared this to be an emergency. You’ve notified GOHSEP and DeSoto Parish Emergency Preparedness. You’ve met with the operators. Have you notified or met with all the property owners and residents in the affected area?” “No, we haven’t,” Adams, the attorney, readily admitted. “But the main reason we declared it an official emergency was because the process requires us to do so in order to tap the Oilfield Site Restoration (OSR) program, and get a contractor on it.” [perfectpullquote align=”left” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Like other state programs, in OSR, the government, in order to better safeguard the public’s health, collects a targeted fee from companies that mine or extract natural, non-renewable resources. [/perfectpullquote] Adams and Ieyoub also wanted to emphasize that OSR (the source of the $1.6 million) is “not technically state money,” which is somewhat misleading. The funding for the program (sometimes also referred to as the “Orphan Wells Fund”) does not come directly from individual taxpayers. The talking point also appears on the department’s own website: “No tax-payer (sic) dollars are utilized.” The program, instead, is funded through fees paid quarterly by oil and gas well operators – 1.5 cents for each barrel of oil produced, and three-tenths of a cent for every thousand cubic feet of natural gas produced. All together, the program generates about $4 million a year in revenue. OSR pays for environmental remediation. “The specific focus of the Oilfield Site Restoration Program is to properly plug and abandon orphan wells and to restore sites to approximate pre-wellsite conditions suitable for redevelopment,” the department’s website explains. “Orphan wellsites are prioritized to direct available funding to those sites that pose the greatest threat to public safety and environment.” [aesop_image img=”https://www.bayoubrief.com/wp-content/uploads/2018/08/Haynesville-Shale.jpg” panorama=”off” align=”center” lightbox=”on” caption=”The Haynesville Shale” captionposition=”center” revealfx=”off” overlay_revealfx=”off”]
[dropcap]“[/dropcap][dropcap]W[/dropcap]e have notified certain property owners (about the emergency),” Adams continued, “in order to get permission to access their property.” “I’ve met with owners,” Snellgrove, the environmental director, stated. “And we have a strong field presence in the area. Further, as regards Mr. Cleon Bryant, he was provided with all the data.” Cleon Bryant is the lead plaintiff in C.L. Bryant, et al v. XTO Energy, et al – a state lawsuit filed in DeSoto Parish, June 15, 2018. Last December, DNR had a nearly two-inch thick envelope of documents delivered to Bryant via certified mail. “But did he understand all the reports and documents that you sent him?” I asked, smilingly, and with a laugh. “That’s not the point,” Snellgrove snapped back. “He has all the data.” [perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]”Gary Snellgrove, here, is our point man on this, and he’s on top of it,” Richard Ieyoub said.[/perfectpullquote] The rest of the men in the room seemed startled at Snellgrove’s exhibiting irritation so early in the meeting, and Ieyoub quickly stepped in, trying to soothe any ruffled feathers. “Remember, gentlemen, the governor asked us to meet with the lady on this matter.” Then, turning to me, Ieyoub said, “Gary Snellgrove, here, is our point man on this, and he’s on top of it. As to your previous question, DeSoto Parish officials have been asked to a meeting to discuss the matter, but we’ve had trouble arranging that.” Assistant Commissioner Ross remarked, somewhat ruefully, “In fact, we were supposed to meet with them today, but several of them couldn’t get here, so I think it’s been postponed to next week.” “Yes, we’ve had several delays in arranging the meeting,” Ieyoub agreed. The roundtrip drive from DeSoto Parish and Baton Rouge takes nearly eight hours, I pointed out. “Why don’t a few of you go there, and meet with them at the parish police jury building one afternoon, and then have a public meeting with property owners and area residents that evening? Or, if you want to keep the info contained, hold the public meeting at the church that’s in the heart of the affected area? I think it’s Smyrna Baptist?” Ross and Campbell looked at each other, shrugged, then nodded their heads in agreement. Yet Snellgrove insisted, “The local officials asked for the meeting. We have to wait for them to find the time to do it.” “If asked to put on a public presentation, we will,” Adams added, placatingly. We moved on to my next question: the hydrogen sulfide readings. Why hasn’t DNR asked the Department of Environmental Quality (DEQ) to bring one of its mobile air monitoring labs out to DeSoto Parish and do grid sampling of the affected area? “There’s no reason to call DEQ. That was a one-time surface expression of gas, at the Mason 1 site,” Snellgrove said. “And as you reported, we found buried material and removed it.” [aesop_image img=”https://www.bayoubrief.com/wp-content/uploads/2018/08/H2S-handheld.jpg” panorama=”off” align=”center” lightbox=”on” captionposition=”center” revealfx=”off” overlay_revealfx=”off”]
“Yet one of those readings was ‘off-the scale,’ as your own inspector reported,” I pointed out. “98 parts-per-million of H2S, and the OSHA limit is 1 part per million over 8 hours, with short-term exposure not to exceed 5 ppm over 15 minutes, right?” “Wouldn’t due diligence to protect the citizens suggest that getting an assist from DEQ’s air-monitoring lab might be a good idea?” I asked. “At no time was the breathing of any workers at the site in jeopardy,” Snellgrove was adamant. “The reading you’re referring to was a concentrated sample, collected via bucket sampling. Hydrogen sulfide has never been detected again, and there is no cause for additional sampling.” “Then why is there an orange sign at the entrance to one of the area wellsites, bearing a skull and crossbones and stating ‘Caution H2S: hydrogen sulfide may be present’?” I asked, adding, “I’ve been shown a picture of it.” Campbell and Ross asked if I knew which wellsite it was, and at the time, I could only describe what the picture had shown: the sign on barbed wire next to a gate, a large well pad with plastic fluid tanks at the left edge, and several large box trailers parked in a row behind the wellhead in the center. Adams directed Snellgrove, “Find out from Indigo where this is.” Why – and how – did he zero in on Indigo Materials? [aesop_image img=”https://www.bayoubrief.com/wp-content/uploads/2018/08/IMG_5614.jpg” panorama=”off” align=”center” lightbox=”on” captionposition=”center” revealfx=”off” overlay_revealfx=”off”]
[dropcap]I[/dropcap]t turns out he was correct to look at Indigo. Subsequently, another version of the picture, seen above, was provided to me, showing the Indigo sign on the fence a few feet from the caution sign. And I received an e-mail from Adams the following day, explaining the site contained a “scrubber” which removes H2S from Haynesville Shale gas, so it can be safely piped elsewhere. But I also further pressed the idea bringing in DEQ, by asking them about the EPA rule requiring the use of OGI (optical gas imaging) to detect “fugitive emissions” from oil and gas well sites. Finalized in June 2016, and signed by then-EPA Administrator Scott Pruitt this February, the rule is being challenged by the oil and gas industry. Still, it requires state environmental agencies to conduct the monitoring, and in Louisiana, that agency would be DEQ, except for the fact that DNR has all authority over oil and gas drilling. Adams admitted he was unfamiliar with this EPA regulation, but Snellgrove knew about the technology. “You’re talking about FLIR (a brandname) cameras, right? Early on, the operators suggested we bring them in,” he said. “Commonly, they’re used for pipelines, and DEQ has used them on the Mississippi River, conducting flyovers to check for barges that are emitting stuff. But because the ones we have are mounted to planes, we can’t use them effectively in DeSoto. Too many trees to get good clear images.” My next questions involved the affected water wells, and the overall condition of the Carrizo-Wilcox aquifer. “Since the standard for remediation of any water problems is ‘drinking water safe’, and that is the purview the Health Department’s Office of Public Health, have you asked them to test the public and/or private wells in the affected area?” I asked. “Yes, we advised them and they came and sampled the Keatchi Water System well nearby – within the last two weeks. We expect that report shortly,” Snellgrove said. “We don’t expect it will show any cause for concern, however, since the public supply is closer to the surface than the Hanson rig water supply well that blew out.” He then added, “Rig supply wells need more water than drinking water wells, so they’re drilled deeper. And those deeper levels of the aquifer are where we’re finding the gas – which, as you know, has been matched to gas from the Hosston formation.” That’s not entirely accurate. In November and December of last year, samples were taken from five gas wells of differing depths in order to test gas in a water sample from the Hanson drilling supply rig. The lab report showed the gas in the water was most like gas from the well in the Hosston formation, but far from identical. “Identification of this gas well as the source of the stray gas in the Hanson water well would be circumstantial,” the report from Weatherford Labs stated. “The geochemistry of dissolved and free natural gases would have to be established in several water wells in the study area to ascertain the comparative character of the Wilcox aquifer gases and produced gases in DeSoto Parish.” (And, interestingly, none of the samples taken came from a well drilled into the Haynesville Shale, which is where Indigo has its wells.) The other problem with Snellgrove’s statement is a simple matter of physics. While a rig supply well may be drawing water from a deeper area of the aquifer than drinking water wells do, that does not mean there’s not gas in the drinking water supplies. After all, gas rises. As the meeting wrapped up, Ieyoub made it a point to say, “These are good people. We need more like them. But we’ve had to absorb so much in the way of budget cuts that it makes it difficult to do our job. As I see it, that’s to protect the health and safety of the people of Louisiana.” [aesop_collection title=”Previous Reports in this Series” collection=”510″ limit=”5″ columns=”1″ splash=”off” order=”reverse” loadmore=”off” showexcerpt=”off” revealfx=”off”]