State senators hold Sidney hearing

Several state senators were in Sidney on Tuesday to listen to testimony from experts and members of the public about the state's oil and gas industry and regulations.

The Natural Resources Committee interim hearing was held as part of two studies prompted by legislation passed last session.

Sen. Ken Haar drafted a resolution to examine a process for shuttering the Sidney-based Nebraska Oil and Gas Conservation Commission and transferring its duties to other state agencies. Sen. John Stinner, in a separate resolution, called for a study into the oil and gas commission's authority over wastewater wells.

Both resolutions followed the oil and gas commission's approval of a commercial wastewater well in Sioux County in April.

Residents near the wastewater well site, along with environmental advocacy groups and several state senators, raised questions about the well and the possibility of spills or contamination of aquifers used for drinking water.

Terex Energy Corporation, a Colo.-based company, sought the permit to dispose of wastewater, some produced through the hydraulic fracturing process, into a well 14 miles north of Mitchell.

The commission approved the application, setting a 5,000 barrel-per-day maximum. However, the permit has been appealed to the Cheyenne County District Court.

This week's hearing, which was scheduled to conclude at 1 p.m., ran about an hour over as senators allowed anyone wishing to make a comment the opportunity.

The two lawmakers who had introduced the resolutions spoke briefly at the start of the meeting.

"Water is Nebraska's gold," Haar said. "It's the lifeblood of our most important industry – agriculture."

He said the wastewater well approved by the oil and gas commission will be used to dispose of fracking fluid from other states despite a recent poll indicating a majority of Nebraskans are opposed to that.

"And the public is rightly concerned," he said. "We're talking about the disposal of this wastewater over the life of the earth."

Haar said he questions the performance of the commission.

"I introduced LR 247 because I think the oil and gas commission has dropped the ball," he said.

Stinner said his concerns were prompted by the Sioux County wastewater well, but have since expanded to include numerous questions – like if fracking can trigger earthquakes and how long-term monitoring of wastewater wells would be funded.

"The focus of this hearing should be on commercial wastewater disposal wells," he said. "My understanding is the state has four. My hope is this is the start of a process – to accumulate data and information to make informed decisions."

Matt Joeckel, the state geologist, addressed concerns regarding human-caused earthquakes near fracking sites.

"Merely because you're injecting water into the ground with some chemical component means in no way you will automatically have induced seismicity," he said.

Induced seismicity in cases of injection wells depends on a special set of circumstances, he explained. And even then, increased seismic activity near fracking sites is only a correlation, Joeckel said.

"We're presuming extra earthquakes due to human activity," he said, adding it hasn't been proven.

Mike Nickolaus, special projects director at the Groundwater Protection Council – a nonprofit group whose members consist of state ground water regulatory agencies – testified the oil and gas commission's underground injection control program meets or exceeds federal regulations.

"Public concern is not something that should be taken lightly," he said, "However, investing authority in a body like the [Nebraska Oil and Gas Conservation Commission], that understands oil fields and has staff to regulate it, is the best way to ensure the public is well served."

The oil and gas commission's director, Bill Sydow, attended the hearing to answer senators' questions.

Stinner began by asking about the wastewater well that was approved in April.

"Our permitting process is rigorous," Sydow responded.

Multiple samples of the fluids to be injected into the well were chemically analyzed he said, and a baseline of the quality of drinking water near the well was established.

Haar characterized an oil and gas commission public hearing in March regarding the Sioux County well as "kind of a nightmare," and asked Sydow if any changes had been subsequently implemented.

The director said he disagreed.

"It was very well organized," Sydow said, adding that anyone who wished to make a comment was accommodated.

Following the expert testimony at the legislative hearing, the public was invited to address the committee. While comments were supposed to be kept to three minutes, many exceeded the limit.

Numerous landowners, industry engineers and residents challenged the resolutions and asked the lawmakers to keep the oil and gas commission as it is.

As a metaphor, Phil Kriz, a petroleum engineer, asked if a new landfill was constructed and complaints raised, would the senators attempt to eliminate the Department of Environmental Quality.

"This system works," he said of the oil and gas commission. "It doesn't need to be scrapped."

Others, however, asked for reform.

Jane Kleeb, of Bold Nebraska, an environmental advocacy group, called for a hearing where experts on both sides of the issue were invited to offer testimony.

She also said it's a contradiction that the oil and gas commission promotes the industry with one hand and regulates it with the other.

At the conclusion of the public comments, Sen. Ken Schilz, chairman of the natural resources committee, said there will be one more hearing, in December, on the issues.