LOGA Industry Report - Winter 2009 - (Page 13) COMMISSIONER’S COMMENTS hard to believe 2008 has come and gone; I wish each of you the best in 2009. Although the economy tanked during the fall of 2008 and the price of oil and gas dropped considerably, you wouldn’t know it at the Office of Conservation. For the sixth year in a row, we continue to set new records in the number of drilling permits issued and the numJames H. “Jim” Welsh ber of Unitization Hearings held. Commissioner of The Office of Conservation issued Conservation 2,103 oil and gas drilling permits for the period January 2008 through October 2008, which is a 15.8 percent increase over the same period in 2007 (1,815). Permitting activity through October 2008 (2,103) is almost equivalent to the total permits issued for all of 2007 (2,147). There were 1,796 oil and gas hearing dockets during the period January 2008 through October 2008, which is an increase of 32.2 percent over the same period in 2007 (1,358). The 1,796 oil and gas hearing dockets through October 2008 exceeds the total (1,592) oil and gas hearing dockets for the entire 2007 calendar year. Additional high levels of permitting for both salt water disposal wells and construction of caverns in salt domes for natural gas storage are also very obvious. And what a year 2008 was! It seems unbelievable that at this time last year not too many of us realized just what a dominating and profound impact the new Haynesville Shale development would have on our state. The leasing of public lands has set all time revenue records for both the state and several North Louisiana parishes and municipalities. Several hundred million dollars were received in bonus monies, with unbelievable royalties to look forward to in the future. About a quarter million acres are under lease for this gigantic gas play. Haynesville Shale well permitting and establishment of Conservation Units continues at a healthy pace. With the end of the year reduction in leasing activity, now it’s time to focus on Phase 2 of Haynesville Shale development, lower the bit and turn to the right! During the recent weeks and months as our staff has been gearing up for the upcoming Haynesville onslaught, we made a conference call with our associate regulators at the Railroad Commission of Texas. My RRC friend for the past couple of decades, Leslie Savage, was kind enough to group her staff for the call and provide answers to our many regulatory questions. The Railroad Commission is well into the regulation of the Barnett Shale activities near Ft. Worth, and provided some great information from a regula- It’s tory standpoint that has rapidly put us far up the learning curve. Leslie’s most profound comment to our group was, “If your agency doesn’t adequately prepare for this activity in advance, you will be completely overwhelmed.” The Office of Conservation strives to keep up with changes in technology through continued development and enhancement of its Information Technology Systems. A SONRIS GIS layering (map) was created to track active wells requiring inspection and the number of distinct well inspections performed over a three year period. Additionally, three inspection reports — the Orphan, the Reserve pit and the Production pit reports — were added to the Engineering Division on-line inspection system. In March 2008, the Pipeline Division rolled out its new on-line inspection system. The system enables agents/inspectors in the field to complete and upload Construction, Specific, Drug and Alcohol, Failure Investigation, Re-inspection, Onsite-Citation, Operator Training, Breakout Tanks, Operator Qualifications, Integrity Management, Master Meter, Comprehensive and Specialized inspection reports from their computers on location directly into the SONRIS system. On July 1, 2008, the Louisiana Supreme Court upheld the constitutionality of Act 312 of 2006. This determination assures that the Office of Conservation, Environmental Division, will play an important role in determining the proper remediation plans for legacy oil and gas fields. A court order was issued on September 10 directing the party found to be responsible for environmental contamination in an Act 312 suit, Tensas Poppadoc, Inc. v. Chevon U.S.A., Inc. et al., 7th JDC, Parish of Concordia, State of Louisiana, No. 40,769, Division “B”, to develop and submit a plan for the evaluation or remediation of the subject property to the Office of Conservation by October 10, 2008. This court order marks the first court referral for conservation review pursuant to Act 312. The Ground Water Resources Commission met during October to inform the newly appointed members on current ground water management issues and to begin the dialog for addressing those issues. In an effort to fulfill its objective to protect the people and environment of Louisiana, the Ground Water Management Section continues oversite of the water well damage assessment for areas affected by hurricanes Katrina and Rita; developed and implemented a database to track ground water and surface water use complaints; continues to enforce ground water rules and regulations through the issuances of Notice of Violations and Compliance Orders; developed and implemented a SONRIS database for tracking ground water use in the three areas of ground water concern; and participated in the development of a water conservation education video. ● www.loga.la | 13 http://www.loga.la
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