Responsible Drilling Alliance

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29
Aug

Inflection’s Repeated “Nonconformity With Requirements”

By Ralph Kisberg

 

In order to try and understand the repeated violations Inflection Energy has been piling up, I requested a sampling of files on wells on different pads. I found 4 types of violations:

– Improper Surface Casing Depths

– Failure to Submit a Well Record within 30 calendar days of cessation of drilling or altering a well

– Exceeding Permitted Anticipated True Vertical Depth (TVD)

– Failure to Plug an Abandoned Well

If there are other violations Inflection has racked up, they weren’t found at the wells I looked at, so this may not be a complete report, just a look into some seemingly recurring issues.  

Improper Surface Casing Depths

On 12/28/15 DEP sent Notice of Violation to Inflection for Improper Surface Casing Depths on a total of 10 wells on 6 different well pads in Eldred and Upper Fairfield Townships. The DEP found the violations while reviewing Inflection’s Well Records. The well pads are:  

TLC – 3 wells cited

Nature Boy Costello – 1 cited

ARW Hillegas – 2

Hamilton- 2

Eichenlaub- 1

Biddle Eichenlaub – 1

“During our review, the Department noted that casing was installed below or above the depth allowed by regulation, according to the depth entered for the Deepest Fresh Groundwater (DFGW)…. Based on the information provided, the surface casing strings were either installed to a depth greater than 200’ below the depth of DFGW or less than 50 feet below the DFGW or at least 50’ into consolidated rock, whichever is deeper.

…. The primary objective of the regulations citied above is to prevent the migration of gas or other fluids into sources of fresh groundwater… (In 2011) the Department established a limit for surface casing installation depths of 200 feet below DFGW in an effort to prevent the occurrence of shallow gas intrusion causing defective cement… (In the case of the first 9 wells listed above) it does not appear that the wellbore was extended beyond 200 feet below the depth of DFGW in order to seat the surface casing in solid rock… (In the case of the well on the Biddle Eichenlaub pad, it does not appear that a gas show or related justification was encountered to terminate the freshwater protective casing shallower than 50 feet below the DFGW or at least 50 feet into consolidated rock, whichever is deeper.

Please provide a written response within 30 days of receipt of this letter

which includes: 

  • A written explanation of why the surface casing installation depth was extended greater than 200 feet below DFWG or shallower than 50 feet below the DFWG or at least 50 feet into consolidated rock, whichever is deeper; and
  • The steps being taken to prevent the recurrence of the violations listed above.
 

Accompanying the Notice is a table of the DFGW depths (varying from 120 – 700 feet) the case depths (varying from 661- 947 feet) and finally an excess/shortage table that runs from 38 – 441 feet on the excess side and to -26 feet on the one that was short.

Inflection responded on January 27, 2016:  

Inflection assures the Department that the surface casing depths were             determined and constructed correctly pursuant to the statutory and             regulatory requirements and that those casings ensure protection of the             Waters of the Commonwealth…Inflection acknowledges that certain             information provided to PADEP in well records for the wells in question is             Incorrect and that it is that incorrect information on the well records which             is the cause of the apparent nonconformity with requirements. Inflection             has corrected the well records (attached) and recognizes that a violation for             incorrect reporting could ensue.  

Inflection went on to explain “ the manner in which Inflection determines the length of surface casing”, and say they present a “complete description of its well construction methods with a specific objective of confirming that all our wells are not only in compliance with applicable design and construction regulations and statutory requirements, but are constructed in a manner which is more protective of the Waters of the Commonwealth than is required by PADEP.    

…All Inflection wells are constructed with a fully cemented intermediate casing string which ensures that any and all fresh groundwater at elevations below that actually measured/observed/determined is protected pursuant to the requirements… Going forward, Inflection will continue to design and construct its wells in the same manner described herein, but will be implementing a more rigorous Quality Control procedure for the completion and submittal of the well records. Specifically, in addition to annotating the well records with the prescribed number to denote the method of determination, the well records will be prepared with an attachment which will describe the methods used for each well to determine the elevation of the deepest groundwater. Because that will comprise an interpretation of the occurrence and movement of groundwater, the methods described above are consistent with the statutory definition of the Practice of Geology… and the licensed professional geologist in responsible charge of geologic interpretation will sign and seal each well record pursuant to requirements…  

…Inflection can only note that the erroneous information was submitted mistakenly and with no intent to mislead the Department or the public. Accordingly, Inflection is prepared to agree to a violation pertaining to reporting insufficiencies or errors.  

It may be wonderful news that Inflection simply submitted false information instead of deliberate deception or a crucial error, but how does the public have confidence in any of their reporting? They certainly seem to have a problem with reporting requirements as evidenced below. Did the DEP accept their explanation? I found nothing more in the files I looked at. Was there ever a fine assessed? Is the matter still under investigation?  

One red flag for the public may be that as far we know, the same person who signs the Inflection correspondence with the DEP, Thomas D. Gillespie, P. G., Director, Regulatory, Health, Safety and Environment, the same person who has a track record of screwing up reporting requirements, is possibly the licensed professional geologist who determines the elevation of the deepest groundwater. It does seem that at the very least, Mr. Gillespie, with all his varying responsibilities, may be a bit overworked. Perhaps Inflection uses a professional geologist with a more up to date and confidence inspiring degree than Mr. Gillespie’s decade’s old Master’s degree to make such important determinations.  

  Failure to Submit a Well Record within 30 calendar days of cessation of drilling or altering a well  

A letter submitted to the attention of Mr. Gillespie on April 1, 2015, re: Settlement of Oil and Gas Violations Inflection Energy (PA) LLC, enclosed a copy of a Consent Assessment of Civil Penalty of $19,000. The Assessment was “entered into’ on May 15th, 2015 between the Commonwealth, the DEP and Inflection.  

Inflection agreed that in the case of 19 wells in 3 townships, Upper Fairfield, Gamble, and Eldred, they did not submit a well record within 30 calendar days of cessation of drilling or altering. A list of the drilling completion date, well record (WR) due date and WR received date is included in the Assessment. A look at the latter 2 dates reveals a long-term negligence of reporting requirements:

 

WR DUE      WR RECEIVED

1/24/14        1/6/15

5/2/14           1/6/15

4/8/14           1/6/15

10/14/14      1/6/15

11/21/13      12/10/14

11/12/13      12/10/14

12/5/13        12/10/14

2/20/13        12/10/14

12/28/13      12/10/14

12/18/13      12/10/14

2/26/14        1/6/15

7/13/14        1/6/15

5/28/14        1/6/15

6/13/14        1/6/15

11/18/14      1/6/15

11/2/14        1/6/14

8/30/14        1/6/15

8/16/14        1/6/15  

After full and complete negotiation of all matters set forth in this CACP and upon mutual exchange of the covenants herein, the parties desiring to avoid litigation and intending to be legally bound, it is hereby ASSESSED: …The Department hereby assess a civil penalty of Nineteen Thousand Dollars

($19,000) which Inflection hereby agrees to pay…. The parties do not authorize any other persons to use the findings in this CACP in any matter or proceeding.  

I don’t know if this report is a matter or not, but it certainly is a revelation of public records evidencing that Inflection seems to have little regard for the Commonwealth’s deadlines and required reporting.  

Exceeding Permitted Anticipated True Vertical Depth (TVD)  

On June 20, 2917 a Notice of Violation was send to the Director, Regulatory, HS &E of Inflection Energy (PA) LLC, re: TCL Well Pad- Well Permit Violations.

              The Department has reviewed its records for the Inflection Energy (PA) LLC             TLC Well Pad in Eldred Township, Lycoming County and found that two of

the wells on the pad exceed the permitted anticipated True Vertical Depth (“TVD”). These wells along with the deviations from the permitted TVD’s and status of the wells, area as follows:

 

  1. TLC 2H ( 081-21470) – the TVD reported on the well record ( 8,718 feet) exceeds the permitted anticipated TVD ( 8,150 feet) by 568 feet. This well is in production.
  2. TLC 4H (081-21472) – the TVD reported on the well record
(8,888 feet) exceeds the permitted anticipated TVD (8,178) by 719 feet. This well is in production.  

            The information presented to the Department indicates that the 2H and 4H

Wellbores were intentionally drilled contrary to the approved well permits for some reason not related to any condition that would render drilling of the bore holes impossible or more hazardous than usual. Furthermore, the Department has no record of any notification, verbal or electronic, from Inflection of the desire or intent to change the TVD’s for these wells.  

The Department goes on to remind Inflection, “ A person may not drill, alter, or operate an oil or gas well except in accordance with a permit or registration issued … and in compliance with the terms and conditions of the permit….”.  

Gillespie responded on July 14, 2017:  

Inflection is in the process of reviewing the well logs and survey data to determine whether the well record submitted to the DEP accurately reflects as-built conditions. This letter serves to satisfy the response requirements in the June 22 NOV, and notifies the Department that, owing to the length of time since the wells in question were drilled, it will take longer than the originally specified 30 days to locate and analyze the necessary information.  

Inflection not only has the gall to tell the Department what satisfies its response requirement, it whines about the result of its own disorganization – its apparent inability to access its own files in a timely manner. They go on to run for help:  

Inflection understands that the Commissioner of the Oil & Gas Division of the PADEP has requested input from the Marcellus Coalition on regarding deviations. Inflection is working with the Coalition and will incorporate results of those discussions with the Department into our final responses to the NOV’S.    

Failure to Plug an Abandoned Well

According to a letter from Inflection’s esteemed Director, Regulatory, H, S, and E, on March 17th, 2017 Inflection “…received notices of violation (NOV) from the Pennsylvania Department of Environmental Protection (PADEP) for “Failure to Plug and Abandon” nineteen natural gas wells at eight Inflection natural gas sites in Lycoming County. “ Once again Inflection was asked for a “detailed explanation as to when the above violations has been or will be corrected for each well. And what steps are being taken to prevent its recurrence.”  

Inflection responded quickly this time. On March 31st, 2017, Mr. Gillespie provided ‘specific well-by-well responses to the notifications”:

             

Hannan Well Site (4 wells cited): “At the time Inflection received the NOV,             re-permitting of those wells was already being planned…applications will be             submitted…in May of 2017.              

Reitz Well Site (4 cited): Same response              

Smith (30, TLC (1), Hamilton (1), Eichenlaube (1), Bennett (2): “ There are no             current or immediate plans to utilize the conductors at these five well sites,

but Inflection does have long range plans to use those conductors. Accordingly, Inflection will prepare applications for inactive status for those wells…” (Dates were given of either April 30th, 2017, or May 15th 2017 for inactive status filing).  

Shaheen Well Site (3): Inflection noted that “ the site has been tied up in the Pennsylvania Court system since December 2013, which was shortly after the wells were spud and conductors emplaced…Inflection has no ability to determine whether these wells can be drilled, which would require re-permitting, or whether the entire site must be abandoned, in which case the wells will be plugged.”  

Even though the lawsuit against Inflection didn’t just come out of the blue in December 2017 and Inflection went ahead on their own free will and spud the wells, perhaps they can be given some leniency in the case of the Shaheen site. As to the other well sites Inflection seems to argue that, though “by definition…of the Oil and Gas Act of 2012, the conductors installed at its well sites can be considered abandoned wells. Inflection neither plugged those conductors, nor applied for inactive status because it was our interpretation of the requirements that such would not be necessary for permitted wells for which only the conductors have been installed.”  

Inflection is trying to say that because the wells weren’t drilled, but merely had “conductors which were installed to a maximum depth of 100 feet below grade…were neither grouted into place nor filled with cement or grout…do not have boreholes which penetrate into gas-bearing formations, do not have surface casings, cemented or otherwise, and have not been drilled to permitted depth nor fitted with production casing…” there is nothing to be concerned about.  

It will be interesting to see how the DEP responds to Inflection’s response these violations. Even if they decide Inflection’s points are well taken and perhaps some revisions to the plugging requirements could be considered, Inflection still once again ignored or missed required deadlines. Could not Inflection have come to the DEP ahead of the deadlines to discuss the situations instead of just going with “ our interpretation of the requirements”? Isn’t this just another instance of Inflections arrogance, or ignorance or laziness or sloppiness we have seen far too much of around here? How is the public supposed to have any confidence in Inflection’s judgment and commitment to our health, safety, and welfare when they can’t follow the rules? When will the Commonwealth stand up and say ENOUGH and hit them back hard?  

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