YOUNGSTOWN, Ohio – D&L Energy Group says a report issued Friday by the Ohio Deptartment of Natural Resources (CLICK to read) linking earthquakes with one of the company's injection wells is based on "limited scientific data," and was released prematurely for political purposes.
"It is unfortunate ODNR pre-empted a thorough search for information, opting instead for a politically expedient preliminary report that sacrifices true understanding for haste," the company said in a prepared statement.
ODNR released a preliminary report this morning that confirmed 12 earthquakes that shook the Mahoning Valley beginning in March 2011 were related to a Class II disposal well -- named Northstar No. 1 -- that D&L operated near the V&M Star project site.
The report said that D&L's drilling operation disturbed a previously unknown fault, causing a seismic reaction.
The well was shut down in January after the state imposed a moratorium pending an investigation as to what caused the tremors.
However, D&L says that the report this morning is based on "limited scientific data available from outside sources," and that ODNR arrived at its conclusions without testing at the Northstar No. 1 site. And, since that well is shuttered, there was no reason to issue such a report, the company said.
"Given this idle status, there is no reason to rush and accept bad or incomplete science," the company said.
At ODNR's request, D&L is in the process of conducting and funding its own investigation, which it says will cost roughly $1 million. This report, D&L says, will "provide scientifically sound data in excess of what is available now."
The company also questions the timing of the report, noting that representatives from D&L and ODNR have a meeting scheduled in Columbus later this month to discuss the D&L study.
Moreover, the ODNR report fails to acknowledge that agency's oversight of the entire D&L operation, the company said. "Everything done at the Northstar No. 1 well site was done with ODNR knowledge and approval," the company said, noting all of its injection wells in the area were in full compliance with ODNR regulations.
Also, D&L takes issue with the agency's new policy of prohibiting injection into the Precambrian formation. "While ODNR repudiates drilling into the Precambrian formation now, the agency permitted D&L to do so in the case of Northstar No. 1 well and then used this site to collect geological information. The current ODNR report does not indicate ODNR accepts any responsibility for its decision."
Still, others active in the oil and gas industry support ODNR's findings.
In a statement issued Friday afternoon, Thomas Stewart, executive vice president of the Ohio Oil and Gas Association, said that the report confirms "our belief that the recent seismic activity in the Youngstown area was associated with a previously unknown geologic factor, in this case, an un-mapped fault near a Class II injection well."
He noted that injection wells have been used in the state for the last 30 years and are mandated by Ohio law. The Youngstown earthquakes, he noted, are a "rare and isolated event."
In the wake of the Youngstown tremors, ODNR is proposing a new set of regulations to govern how injection wells operate in the state. These reforms call for injection wells to plug back with cement before any injection into the Precambrian formation; review existing geological data; and install pressure monitoring systems and an electronic data recording system to track all fluids brought by a brine transporter for injection.
Area lawmakers saw the report as a vindication of their call for tougher regulations in the industry.
"Although we are glad to hear the Kasich administration say they are going to develop more stringent laws for the disposal of toxic drilling waste, it is disappointing that it took so long to address Ohio's lax regulations," said state Rep. Robert Hagan, D-60 Youngstown.
Hagan has called for a moratorium on all injection well activity throughout the state.
"We need real leadership on this issue, not a reactionary approach to industry mishaps," Hagan said. "It's clear now that the Youngstown earthquakes could have been prevented if the governor really did want to work in a bipartisan way."
State Sen. Joe Schiavoni, D-33 Canfield, said he wasn't surprised by the report's conclusions, and noted that new state regulations ignore the larger issue at hand of how to handle waste water from hydraulic fracturing.
"State legislators and the Kasich administration need to work together on a bipartisan basis to find a solution that strikes the proper balance between encouraging economic development, protecting the environment and keeping our citizens safe," Schiavoni said.
CLICK HERE to read complete statement from the Ohio Department of Natural Resources.
Copyright 2012 The Business Journal, Youngstown, Ohio.