LINCOLN, Neb. (AP) — A proposed wastewater dumping site in western Nebraska is prompting lawmakers to take a new look at the state's oil and natural gas regulations, which opponents say are too lax.
The review follows public complaints about a little-known state commission that oversees drilling and disposal sites primarily in western Nebraska.
Two senators have introduced legislative studies to research whether the state is doing enough to protect its groundwater and to prepare for possible reforms in the 2016 session. As part of the review, the Legislature's Natural Resources Committee will hear public comments at a hearing in Sidney on Sept. 22.
The Nebraska Oil and Gas Conservation Commission approved a disposal well in April that would allow a Colorado energy company to discard oil and natural gas wastewater underground in northwest Nebraska. The project faced strong opposition from landowners and environmental groups that worried that leaks could contaminate the region's groundwater. The production water is considered waste because of its high salt content and industrial chemicals.
Under the proposal, Colorado-based Terex Energy Corp. would truck the salty groundwater from oil operations in Wyoming, Colorado and Nebraska to an old oil well on a ranch in southern Sioux County. The water would be pumped more than a mile below the Ogallala Aquifer, into a geologic formation that the company says would keep the water from escaping.
But the project is now mired in a lawsuit filed by two Nebraska landowners, who argue the commission didn't have the authority to approve the well and didn't consider opposition letters from various local officials. Among those opposed were county commissioners in Scotts Bluff and Sioux counties, the village of Harrison, the city of Mitchell, the Mitchell school district, the North Platte Natural Resources District, the Panhandle Public Health District and South Dakota's Oglala Sioux Tribe.
"We just think the commission's rules and regulations are confusing and outdated," said Ken Winston, a lobbyist for the Nebraska Sierra Club. "Most of the time, people don't pay attention to (the Sidney-based commission) because they're off in the corner of the state. Most of what they do isn't in the public eye."
Winston said landowners want assurances that companies have to post enough bond money and carry enough liability insurance to cover the costs of a spill. He also questioned whether the commission should even regulate the industry, given its formal mission to "foster, encourage and promote the development" of oil and gas.
Bill Sydow, the commission's executive director, defended its work as an independent agency and noted that all of its decisions can be overturned by the courts. Sydow said the agency was formed in 1959 to enforce "fair regulations" that promote the industry while serving the public interest, and its decisions are grounded in evidence rather than politics.
"When this is all said and done, I think people are going to be very proud of their Oil and Gas Conservation Commission," Sydow said.
One study by state Sen. John Stinner of Gering will look at the state's current regulations to see if more needs to be done to protect groundwater and preserve roads traveled by large wastewater trucks. Stinner said he'd prefer to see changes without having to introduce legislation, but senators don't yet know whether the state is doing enough.
"These types of things have to be answered," he said. "I think this study will help lay out where we're at, and allow us to compare and contrast what we have with other states."
Another study by Sen. Ken Haar of Malcolm will look at the commission's role and whether some of its duties should be given to other state agencies or local governments. Haar said he introduced the study out of concern that the commission has conflicting goals when overseeing oil and gas production.
"On one hand they're cheerleaders, and on the other hand they're regulating it," Haar said.
Haar's study will also review complaints that the commission initially restricted public testimony for the project to landowners whose property sits within half a mile of the well. Commission members scheduled a second, broader public hearing following a public outcry and threats of legal action.
The Nebraska Attorney General's office launched an investigation into whether the commission violated the state's open-meetings law, but later cleared the commission of wrongdoing.
Stinner and Haar said it's too early to know if they'll propose legislation when lawmakers convene in January, but Haar said states like Colorado appear to have more safeguards than Nebraska. Haar said he would favor rules requiring companies to disclose the chemicals injected into the ground.
"We need to sort it all out," he said. "Fracking itself isn't evil; I don't go along with that viewpoint. But I do think we need appropriate regulations."