Helis Oil & Gas Co., which received a permit from the state last week to drill a vertical well as a first step toward fracking in St. Tammany Parish, is now working to clear another regulatory hurdle: getting a wetlands permit that it needs to place a drilling pad on a 3.2-acre site that is 91 percent wetlands.
Earlier this month, the Army Corps of Engineers, which would grant the wetlands permit, sent two letters to the company asking it to address concerns about the project.
Greg Beuerman, a spokesman for Helis, said the project manager told him the response is undergoing a final review and will be sent to the agency very soon.
The Corps’ first letter, dated Dec. 2, asked Helis to respond to several concerns about the controversial project that were brought up in public comments on the wetlands permit application. The second letter, dated Dec. 4, restated concerns that had been raised by the U.S. Environmental Protection Agency and also raised a new issue: whether Helis has adequate contingency plans in place for a major storm that causes flooding in the area, such as Hurricane Isaac in 2012.
The EPA has urged the Corps to withhold the wetlands permit until the company can prove that drilling a well at the site, near the southeast corner of a wooded 960-acre tract northeast of Mandeville, will have the smallest environmental impact possible.
Opponents of fracking, who have packed public meetings in St. Tammany Parish over recent months, are hopeful that acquiring the wetlands permit will prove an insurmountable obstacle to the project.
The state Office of Conservation put a number of conditions on the permit that it granted to drill the 13,000-foot vertical well, but Beuerman said none of them came as a surprise to Helis. The company already had indicated it was willing to take the steps the state is requiring, he said.
“The department felt that they wanted to memorialize that in the permit, and we get it,” he said.
Those conditions include using only surface water in privately owned ponds for the hydraulic fracturing, or fracking, process, which involves injecting water, sand and other chemicals at high pressure into a horizontal shaft to create fissures in rocks, through which oil or gas can be pulled to the surface.
Other conditions spelled out in the permit include extensive air, water and noise monitoring. Disclosing the chemicals used in the fracking process, which also is spelled out in the permit, is already required, Beuerman said.
Patrick Courreges, a spokesman for the Office of Conservation, said the number of conditions attached to the permit was unusual and that the detailed list stemmed from a public hearing held in November at Lakeshore High School.
But that hasn’t stopped fracking opponents, such as the group Concerned Citizens of St. Tammany, from calling the Office of Conservation a rubber-stamp agency.
Helis does not view the permit conditions or the cost of implementing them as a deterrent to the project, Beuerman said. Nor, he said, is Helis concerned about the rapidly dropping price of oil: The company is taking the long view, he said, and is not looking at the price of oil today or tomorrow.
But falling oil prices have led at least two other oil companies to stop drilling in the Tuscaloosa Marine Shale, the geologic formation that underlies St. Tammany Parish, and that Helis will be tapping.
The Associated Press reported that Comstock Resources, of Frisco, Texas, announced last week that it would stop drilling in the Tuscaloosa formation until prices rise. That followed action by Halcó n Resources, which said last month that it was leaving the Tuscaloosa Marine Shale.
Wells into the Tuscaloosa shale thus far have tended to be more expensive than those drilled into other shale formations, though energy firms expect the costs will fall as the geology of the Tuscaloosa is better understood.
But Helis isn’t the only company sticking to its plans to drill into the Tuscaloosa. Beuerman noted that another energy firm active in the shale, Goodrich Petroleum, is expanding its drilling in the formation.
Follow Sara Pagones on Twitter, @spagonesadvocat.