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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

  • 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?

current regulatory environment
Current Regulatory Environment
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
“It’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
  • 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
  • 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