Referee hears appeal in Canadian County disposal well case protested by neighbors

Permits for two commercial disposal wells in eastern Canadian County should be denied because they might fracture the disposal formation, an attorney for homeowners argued Friday at the Oklahoma Corporation Commission.

Appellate Referee Patricia MacGuigan heard the appeal over an earlier recommendation by an administrative law judge to approve two new disposal wells by YDF Inc.

YDF wants to inject up to 20,000 barrels per day into two disposal wells on a 120-acre tract at the northeast corner of NW 10 and Cimarron Road, just inside Oklahoma City limits. The disposal wells would be converted from two older, plugged wells on the property.

Richard Gore, the attorney for nearby residents, said his side’s consulting engineer used YDF data to test whether the disposal wells could fracture the formation under the pressure listed in the application. Fracturing a formation would be a violation of commission rules.

“Once a formation is fractured, you lose control of the water,” Gore said. “You have no idea where it’s going.”

But Richard Grimes, attorney for YDF, said Gore “cherry-picked” data for his arguments. He said YDF already operates two other disposal wells in the area with similar characteristics as the proposed wells.

“Judge, we understand the rule. We’re not going to violate the rule,” Grimes told MacGuigan.

In his February report, Administrative Law Judge Andrew Dunn recommended YDF be given interim approval for the disposal wells. He said the company should come back in a year to make sure its operations hadn’t pressurized the injection zone beyond the rate recommended.

The protested disposal well case is among the first under Senate Bill 809, a 2015 law that limits cities and other local governments from regulating oil and gas activity. The law gives primary regulatory authority to the Corporation Commission, although cities can still have reasonable setbacks, fencing, noise and odor requirements.

Gore said neighbors east and south of the property continue to have concerns about trucks hauling wastewater to the site and the increased use of twolane county roads. He

OIL AND GAS PRICES

said the commission is the only place they can now go for resolution of health, safety and welfare issues.

Grimes said the neighbors, who he characterized as surface owners, were entitled to their opinions on the proposal. But he said no mineral owners protested the application.

“These residents were very emotional and very strident about their contentions that this project would result in harm to their residences,” Grimes said. “None of them professed to own minerals. No mineral owner appeared in objection. No working interest owner appeared in objection.”

YDF’s proposed disposal wells would not be injecting into the deep Arbuckle formation under volume restrictions by the commission for links to induced seismicity.

MacGuigan took the appeal under advisement and will rule at a later date.