Guidance on the Extraction of Gas & Oil on Federally Obligated Airport Property Advisory Circular
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Guidance on the Extraction of Gas & Oil on Federally Obligated Airport Property Advisory Circular FAA Eastern Region 35 th Airport Conference Hershey, PA April 3, 2012. Background. Technological advances combined horizontal drilling & hydraulic fracturing in early 2000s

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Guidance on the Extraction of Gas & Oil on Federally Obligated Airport Property Advisory CircularFAA Eastern Region35th Airport ConferenceHershey, PAApril 3, 2012


Background
Background Obligated Airport Property Advisory Circular

  • Technological advances combined horizontal drilling & hydraulic fracturing in early 2000s

    • Deposits previously not tapped are now accessible

    • Current “gas and oil” boom

  • Natural gas extraction is the principal focus of hydraulic fracturing.


What is hydraulic fracturing
What is Hydraulic Fracturing? Obligated Airport Property Advisory Circular

http://www.propublica.org/special/hydraulic-fracturing-national


Mineral shale d eposits in the us
Mineral Shale Obligated Airport Property Advisory CircularDeposits in the US


Current regulatory environment
Current Regulatory Environment Obligated Airport Property Advisory Circular

  • Mineral extraction activities are permitted by state agencies or local municipalities.

  • Statutory exemptions for gas and oil extraction activities from Federal Law*

    • Clean Water Act - oil and gas operations exempt except treatment of flowback or produced water returning to surface if they violate water quality standards.

    • Clean Air Act – exemption for aggregation of emissions from oil and gas exploration and production operations

    • Safe Drinking Water Act – hydraulic fracturing exempted unless the fluids contain diesel fuel

      *These may be regulated by individual states.


Public concerns
Public Concerns Obligated Airport Property Advisory Circular

  • Public is concerned with potential impacts

    • Water quality and Emissions are primary concerns

Scranton, PA


Changes to the regulatory environment
Changes to the Regulatory Environment Obligated Airport Property Advisory Circular

  • Congress and EPA are currently considering or reviewing changes to aspects of the statutory and regulatory framework.


Changes to the regulatory environment1
Changes to the Regulatory Environment Obligated Airport Property Advisory Circular

  • DOE created a Natural Gas Subcommittee to make recommendations to improve the safety and environmental performance of natural gas hydraulic fracturing from shale formations as part of the President’s “Blueprint for a Secure Energy Future.”

    • Committee issued final report on November 18, 2011.

  • In February 2012, BLM has issued draft rules on hydraulic fracturing on federal lands requiring:

    • disclosure of chemicals used;

    • the amount and source of fracking water;

    • the plan of disposal and reporting actual disposal materials; and

    • tests to ensure well bores maintain their integrity.


  • Faa guidance on gas and oil leases
    FAA guidance on gas and oil leases Obligated Airport Property Advisory Circular

    • Gas and oil operators, as well as airport sponsors, are interested in extracting oil and gas resources located under airport land.

    • Airport sponsors must maintain safe airport operations and adhere to grant obligations and assurances.

      • Preserve Rights and Powers / Good Title

      • Fair Market Value Revenue

      • Prevention of Hazards and Obstructions

    • The guidance does not encourage gas and oil leasing on-airport property.


    Gas and oil operation on airport
    Gas and Oil Operation on-Airport Obligated Airport Property Advisory Circular

    • Current Oil and Gas Operations on-Airport

      • FAA Airports Regions who have or are currently reviewing gas and oil leases for on-airport

        • AEA – New York, Pennsylvania, and West Virginia

        • AGL - North Dakota, Ohio and Michigan

        • DFW and surrounding areas

          • DFW is a large scale on-airport shale gas development

      • DEN is conducting its own gas and oil operations

    • It is anticipated that more airports will be approached by developers as areas are tapped.

      • Most active shale formations currently

        • Marcellus Shale in the North East

        • Barnett Shale in Texas

        • Haynesville/Bossier Shale in Louisiana

        • Bakken Shale in North Dakota


    Background on guidance
    Background on Guidance Obligated Airport Property Advisory Circular

    • AEA Region prepared mineral extraction Guidance in October 2010

    • New York delegation visited in January and May 2011

    • FAA committed to establishing National Guidance to facilitate consistent application of FAA requirements for gas and oil leasing and on-airport development.


    Background on guidance1
    Background on Guidance Obligated Airport Property Advisory Circular

    • Established a working group to draft guidance (January 2011).

      • APP 400

      • ACO 100

      • AAS 300

      • AGC

    • Region and ADO representatives

      • AEA,

      • ASW,

      • AGL and

      • ANM


    Advisory circular goals objectives
    Advisory Circular – Goals / Objectives Obligated Airport Property Advisory Circular

    • Provide consistent guidance for airport sponsors to develop gas and oil leases and development proposals in compliance with their Federal obligations;

    • Incorporating existing FAA requirements for:

      • Airspace/Aeronautical Studies and Notifications;

      • On-airport Construction and Development;

      • Airport Planning;

      • Environmental Documentation; and

      • FAA revenue use policies.

    • Provide FAA field offices on what is needed for gas and oil project review


    It s an airport not a gas oil field
    Obligated Airport Property Advisory CircularIt’s an Airport not a Gas/oil Field”

    • Any exploration or development on Airport Surface Land must be subordinated to FAA Safety and Operations Standards and Requirements.

    • Gas and oil leases must restrict access and use of airport operational and aeronautical development land. (No drill zones defined)

    • Airport Design and Construction Rules must be applied. (airspace, hazard elimination/prevention, environmental compliance, etc).

    • FAA must Approve Changes to the Airport Layout Plan (ALP).

      • Lease is Contingent on ALP approval

      • NEPA Review for FAA Approval

    • Gas and Oil leases terms and provisions must be at Fair Market Value (Signing bonus, royalty, surface land rents, terms and expiration provisions.)


    Outline of guidance
    Outline of Guidance Obligated Airport Property Advisory Circular

    • Chapter 1provides a brief overview of gas and oil production in the United States.

    • Chapter 2provides the airport sponsor with FAA requirements and recommendations on how to develop acceptable on-airport gas and oil development plans and proposals.

    • Chapter 3provides an overview of the FAA review process and submittal documentation requirements

    • Addendums:

      • Listing of Recommended and Required Gas and Oil Lease Terms and Restrictions

      • Listing of Government Agency References and Authorities Associated with Shale Gas and Oil Development (i.e., EPA, DOE, BLM, state gas and oil development agencies, etc.)


    Next steps
    Next Steps Obligated Airport Property Advisory Circular

    • Finalize a Draft Advisory Circular “Guidance on the Extraction of Gas and Oil on Federally Obligated Airport Property”

    • Meet with Resource Agencies

    • Circulate for internal FAA review (ARP, Regions, other FAA Offices)

    • Federal Register notice for public review and comment


    Thank You! Obligated Airport Property Advisory Circular


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