Sunset review of the Arizona Oil and Gas Conservation Commission

              Tallli Stowe
Legislative Research Analyst
(602) 542-4962
Arizona House of Representatives
House Majority Research
REPORT
1700 W. Washington
Phoenix, AZ 85007-2848
F)u((602) 542-4511
To:
Date:
Subject:
JOINT LEGISLATIVE AUDIT COMMITTEE
Senator Blendu, Chairman
Representative Knaperek, Vice Chairman
December 16, 2005
Sunset Review of the Arizona Oil and Gas Conservation Commission
Attached is the final report ofthe sunset review ofthe Arizona Oil and Gas Conservation
Commission, which was conducted by the Senate Natural Resources and Rural Affairs and the House of
Representatives Environment Committee ofReference.
This report has been distributed to the following individuals and agencies:
Governor ofthe State ofArizona
The Honorable Janet Napolitano
President ofthe Senate
Senator Ken Bennett
Senate Members
Senator Marilyn Jarrett, Cochair
Senator Marsh Arzberger
Senator Timothy S. Bee
Senator Robert Blendu
Senator Robert Cannell
Arizona Oil and Gas Conservation Commission
Arizona State Library, Archives & Public Records
Office ofthe Auditor General
Senate Majority Staff
Senate Research Staff
Senate Minority Staff
Senate Resource Center
Speaker ofthe House
Representative Jim Weiers
House Members
Representative Michele Reagan, Cochair
Representative Ray Barnes
Representative Steve Huffman
Representative Leah Landrum Taylor
Representative Kyrsten Sinema
House Majority Staff
House Research Staff
House Minority Staff
ChiefClerk
December 16, 2005
COMMITTEE OF REFERENCE REPORT
Senate Natural Resources and Rural Affairs and House of Representatives Environment
Committee of Reference
ARIZONA OIL AND GAS CONSERVATION COMMISSION
Background
,In an
ed the
The Office of Oil and Gas Conservation, before 1959, was an office
Department. The OGCC became a stand-alone agency in July 1959. In July
effort to reduce General Fund expenditures, the Legislature eliminated the OG
Commission and one FTE to the Arizona Geological Survey (AZGS). The AZG provides
administrative taff support needed to fulfill the mission and regulatory responsibilities ofthe
OGCe.
Pursuant to A.R.S. §'fl-l 953, the Joir1tkegislativeAuditCommitte(j(JLAC) assigned the
sunset review ofthe Ari:z:oriaOfland GasCol1~7ryatiQlJ.Golll1Ilissioll(OGCc;) the Senate Natural
Resources and Rural fairs and Housy ofRepresentatives EnvirQnment G0llllllte(jofReference for
reVIew.
5, the Arizona Oil Conservation Commisso
e conservation of oi , s and geothermal resources. The CC
gas and geothermal wells; monitoring and inspe ng
maintaining rules; compiling and maintainin .Iling,
; and preparing and publishing geologic studi to
development ofArizona's oil, gas and geothermal
Pursuant to A.R.S. § 27
and enforces state laws relating
fulfills its mission by issuing perm'
wells and facilities for compHanc h
production, and subsurface data for publ
encourage and·· sist t exploration for an
resources.
Committee ofReferenceSfll"setReview Prqcedllres
The Committee ofRefere eld one pulJ1ic h¢aril}gon \\T(jcln ay, November 16, 2005 to
review the Agency responses, as reqU1reetb}1;~t~,§t~~!;7~9?4,subsectionsD and F, and to hear and
accept public testimony. Testimony was received from 1. Dale Nations, Chairman, Arizona Oil and
Gas Conservation Commission and Paul Buff, Bureau ofLand Management.
2
December 16, 2005
Committee ofReference Recommendations
The Committee of Reference recommended that the Arizona Oil and Gas Conservation
Commission be continued for ten years.
Attachments
1) Meeting Notice
2) Minutes ofthe Committee ofRefereM}~;+~~~,f1
3) Agency Factors pursuanttgA.RS.§
4) Arizona Geologic~Sl.l1-vey2004AnnualReport
5) Arizona Fuels duction Docunienf for the Record
6) Committee eference Foll()w"71UpKe:spcmsc~s
3
Interim agendas can be obtained via the Internet at http://www.azleg.state.az.us/lnterimCommittees.asp
ARIZONA STATE LEGISLATURE
INTERIM MEETING NOTICE
OPEN TO THE PUBLIC
SENATE NATURAL RESOURCES AND RURAL AFFAIRS AND HOUSE OF
REPRESENTATIVES ENVIRONMENT COMMITTEE OF REFERENCE
FOR THE SUNSET HEARING OF THE
ARIZONA OIL AND GAS CONSERVATION COMMISSION
Date:
Time:
Place:
Wednesday, November 16, 2005
10:00 a.m.
House Hearing Room 5
AGENDA
1. Call to Order - Opening Remarks
2. Presentation of the Sunset Review on the Arizona Oil and Gas
Conservation Commission
3. Public Testimony
4. Discussion and Recommendations by Committee of Reference
5. Adjourn
Members:
Senator Marilyn Jarrett, Co-Chair
Senator Marsha Arzberger
Senator Tim Bee
Senator Robert Blendu
Senator Robert Cannell
11/2/05
11/2/05
jmb
Representative Michele Reagan, Co-Chair
Representative Ray Barnes
Representative Steve Huffman
Representative Leah Landrum Taylor
Representative Kyrsten Sinema
People with disabilities may request reasonable accommodations such as interpreters,
alternative formats, or assistance with physical accessibility. If you require accommodations,
please contact the Chief Clerk's Office at (602) 926-3032, TOO (602) 926-3241.
ARIZONA STATE LEGISLATURE
Forty-seventh Legislature - First Regular Session
SENATE NATURAL RESOURCES AND RURAL AFFAIRS AND
HOUSE OF REPRESENTATIVES ENVIRONMENT
COMMITTEE OF REFERENCE FOR THE SUNSET HEARING OF THE
ARIZONA OIL AND GAS CONSERVATION COMMISSION
Minutes of Meeting
Wednesday, November 16, 2005
House Hearing Room 5 -- 10:00 a.m.
Chairman Reagan called the meeting to order at 10:18 a.m. and the Members present were
recognized by the CoChairs.
Members Present
Senator Arzberger
Senator Bee
Senator Blendu
Senator Cannell
SenatorJarrett,Cochmr
Members Absent
Speakers Present
Representative Barnes
Representative Landrum Taylor
Representative Sinema
Representative Reagan, Cochair
Representative Huffman
Dale Nations, Chairman, Arizona Oil and Gas Conservation Commission
Paul Buff, Bureau of Land Management
PRESENTATION
Dale Nations, Chairman, Arizona Oil and Gas Conservation Commission (aGCC), gave a slide
presentation relating that the aGCC administers and enforces state laws relating to the
conservation of oil, gas and geothermal resources. The aGCC consists of six members, five of
which are appointed from the general public by the Governor, and the State Land Commissioner
serves as the sixth ex-officio member. The Arizona Geological Survey (AGS) provides
administrative and staff support. Even though Arizona is not a major oil-producing state, the
revenue generated by oil and gas production greatly exceeds the cost of regulation by the aGCc.
Compared to an annual General Fund budget for the OGCC of approximately $60,000, the
SENATE NATURAL RESOURCES AND RURAL
AFFAIRS AND HOUSE OF REPRESENTATIVES
ENVIRONMENT COMMITTEE OF REFERENCE
FOR THE SUNSET HEARING OF THE AZ
OIL AND GAS CONSERVATION COMMISSION
November 16, 2005
revenue from lease rentals recently averaged $441,000 per year (which goes to the General
Fund), and taxes recently averaged $53,000 per year.
Mr. Barnes asked how compensation is provided for educational seminars. Mr. Nations
responded that there is no budget for seminars. The commissioners meet four times per year and
are compensated $30 per day. There is only one employee, an oil and gas specialist who goes
out and inspects wells that are drilled and makes sure safety precautions are followed. He does
not have a travel budget and the AGS has a very limited travel budget. It would be better to have
a travel budget for the employee to attend a few professional meetings per year.
Chairman Reagan noted that the aGCC was eliminated in 1991 and made into a division of the
AGS, which has been a perfect fit and saves about $130,000 per year. Mr. Nations assured
Mr. Barnes that the aGCC is perfectly satisfied staying with AGS.
Mr. Nations advised Senator Jarrett that active oil wells are located on the Navajo reservation in
the extreme northeastern part of Arizona in Apache County. Portions of Arizona with oil and
gas potential are in the northeastern corner, the southeastern corner, the northwestern corner and
possibly the Gulf of California region near Yuma.
Senator Jarrett said she understands there has been some study and experimentation in
converting coal into oil in the Four Corners area and wondered if that would be under the
OGCC's purview. Mr. Nations responded that coal is found on Navajo and Hopi reservation
land, so that would be under federal purview, in addition to the Native American governments,
but natural gas could possibly be produced from those coal beds. The gas is generally within the
coal, although that has not been proven for Arizona coal. There is currently a tremendous
amount of production of natural gas from coal beds in the Powder River Basin in Wyoming and
the San Juan Basin in New Mexico.
Senator Jarrett recalled that when she was a child her father talked about the possibility of natural
gas above the Rim. Mr. Nations said that would be in the extreme northeastern part of the state,
probably the Holbrook area, where lots of wells have been drilled in the Holbrook Basin.
Nothing has been developed commercially, but there is still an interest. He added that another
type of gas, carbon dioxide, is being tested and produced in the St. John's area. Very few wells
have been drilled over a very large area, so additional drilling will be necessary. How much
would actually be productive has not yet been determined, and whether or not it is good enough
to justify building a pipeline to the West Coast to deliver the carbon dioxide is currently in
question.
Senator Cannell asked if there is any use for the carbon dioxide in dry ice. Mr. Nations replied
that the main use is enhanced recovery in oil fields where it is pumped down into the reservoir.
For example, it is being used in the Permian Basin in West Texas. Carbon dioxide is produced in
Colorado and New Mexico and piped down to the oil fields in the Permian Basin. A real interest
for the Arizona potential would be the West Coast where the oil fields in the Los Angeles area
are being depleted. If they had a large supply of carbon dioxide, it could be pumped into the
reservoirs, which would selectively move more of the oil out of the reservoir.
SENATE NATURAL RESOURCES AND RURAL
2 AFFAIRS AND HOUSE OF REPRESENTATIVES
ENVIRONMENT COMMITTEES OF REFERENCE
FOR THE SUNSET HEARING OF THE AZ
OIL AND GAS CONSERVATION COMMISSION
November 16,2005
Mr. Nations advised Senator Cannell that geothermal is being tested in the White Mountains
volcanic region and the San Francisco Peak.
Senator Cannell asked if aGCC was involved in the proposal to store gas near Luke Air Force
Base, which was very controversial. Mr. Nations answered that the aGee regulates the
maintenance of the wells, which have to be drilled to create caverns in the salt to store the gas,
either liquefied or natural. The aGee is responsible for determining that the wells are done
safely, maintained properly, and monitoring production. He indicated that storage would be safe
in the area as long as the wells are maintained, but he understands the public concern. There are
other salt basins in Arizona where it could be done farther away from urban areas.
Senator Blendu asked why some storage facilities have blown up if they are so safe, such as in
Kansas, New Mexico and Arkansas. Mr. Nations said he does not know, but the aGee is
concerned about making sure projects are done in a safe manner.
Senator Blendu remarked that he is concerned when these plans are proposed and people from
the aGee testify before a Committee that it is completely safe when the reality is it is only as
safe as it is maintained and the aGCC checks it. Mr. Nations pointed out that checking involves
conducting pressure tests to determine ifthere is any leakage, which is done regularly.
Senator Blendu noted that the storage facility that blew up in New Mexico killed 14 people
including people as far away as one-quarter mile, so he believes it is unacceptable to put these
storage facilities in neighborhoods. Mr. Nations reiterated the fact that there are other basins
with thick sequences of salt that could be used for that kind of development without conflict with
an urban area.
Senator Blendu replied that was his argument and he hopes that in the future aGCe will point
that out and say there is a danger, and according to inspections, specification, and testing that
danger may be minimized, but it is up to the aGeC to quantify how it affects other things when
it could be done somewhere else. Mr. Nations answered that it is flammable matter and these
considerations should be taken into account. Luke Air Force Base already exists and all that can
be done is to monitor and make sure storage facilities are done properly, which is done by people
who know what they are doing.
Senator Blendu wondered why Mr. Nations did not know about the storage facilities that blew
up, noting that it would be good to find out why and factor that into aGCC's work. Mr. Nations
said he will pursue the matter and prepare a review for the Members.
Chairman Reagan asked if aGee would be involved in pursuing an oil refinery in Arizona.
Mr. Nations answered that aGCe would not have anything to do with that and assumed that it
would fall under the Arizona Corporation Commission.
Mr. Nations advised that Arizona is not a major oil or gas producing region, but does have a
history of production since about 1957. He reviewed a chart showing the annual production
SENATE NATURAL RESOURCES AND RURAL
3 AFFAIRS AND HOUSE OF REPRESENTATIVES
ENVIRONMENT COMMITTEES OF REFERENCE
FOR THE SUNSET HEARING OF THE AZ
OIL AND GAS CONSERVATION COMMISSION
November 16,2005
from 1954 to 1996 (Attachment 1). He said Arizona currently has 29 active oil wells in the
extreme northeastern part of the state, 14 active gas wells and 14 hydrocarbon storage wells. The
hydrocarbon storage wells are south of Interstate 40 near Sanders and the Luke AFB. Other
companies are interested in other basins, such as the Picacho Peak area where there is not a lot of
population, and Red Lake in the extreme northwestern part of the state near Kingman.
Mr. Nations concluded the presentation by stating that with the increase in oil and gas prices, it is
likely there will be more interest and investment in development of oil and gas resources in
Arizona. The OGCC is prepared to encourage and regulate Arizona's oil, gas and geothermal
development in the future.
He advised Senator Bee that some test drilling has been done in the Picacho Peak area to
determine if the salt reservoir is adequate. Senator Bee asked if that type of project is done in
conjunction with county supervisors and land planners. He is aware that Diamond Ventures is
going to be putting in a huge project near Picacho Peak, so there will probably be more and more
development in Pinal County.
Mr. Nations said there was some communication relative to Luke AFB with the county
government, but he does not know about Picacho Peak. Senator Bee encouraged communication
with the county board of supervisors.
Chairman Reagan asked Mr. Nations to send the results of the research on Senator Blendu's
concerns to Tami Stowe, House Majority Research Analyst, for distribution to the Members.
PUBLIC TESTIMONY
Paul Buff, Bureau of Land Management, in favor of continuation of OGCC, testified that he
works closely with the OGCC on leasing and drilling issues on federal lands.
RECOMMENDATION
Senator Jarrett moved that the Committee of Reference recommend to the
Legislature that the Arizona Oil and Gas Conservation Commission be
continued for 10 years. The motion carried by a roll call vote of 9-0-0-1
(Attachment 2).
Without objection, the meeting adjourned at 10:48 a.m.
(Original minutes, attachments, and tape are on file in the Office of the Chief Clerk.)
SENATE NATURAL RESOURCES AND RURAL
4 AFFAIRS AND HOUSE OF REPRESENTATIVES
ENVIRONMENT COMMITTEES OF REFERENCE
FOR THE SUNSET HEARING OF THE AZ
OIL AND GAS CONSERVATION COMMISSION
November 16,2005
REPORT TO THE COMMITTEE OF REFERENCE
On the
2006 SUNSET REVIEW
Ofthe
ARIZONA OIL AND GAS CONSERVATION COMMISSION
Submitted by
J. Dale nations
Chairman Arizona Oil and Gas Conservation Commission
And
Steven L. Rauzi
Oil and Gas Program Administrator
August 19, 2005
EXECUTIVE SUMMARY
The Oil and Gas Conservation Commission (OGCC), pursuant to A.R.S. § 27-515,
administers and enforces state laws relating to the conservation ofoil, gas, and geothennal
resources. The statutory definition of gas, A.R.S. § 27-501(9), includes helium and carbon
dioxide.
Before 1959, the Office ofOil and Gas Conservation at the State Land Department
administered state laws relating to oil and gas. The OGCC became a stand-alone agency in July
1959. In July 1991, in order to reduce General Fund expenditures, the Legislature eliminated the
agency and attached the OGCC (governing board) and one FTE to the Arizona Geological Survey
(AZGS).The OGCC retained statutory authority to set policy, promulgate rules, and issue orders
on matters within its jurisdiction. Under this arrangement, the AZGS provides administrative and
staff support needed to fulfill the mission ofthe OGCC. This has reduced expenditure of General
Revenue funds on behalf ofthe OGCC from about $190,000/year to about $60,000/year, a savings
of $130,000/year.
The aGCC fulfills its mission by issuing permits for oil, gas, and geothennal wells;
monitoring and inspecting wells and facilities for compliance with rules; maintaining rules in Title
12, Chapter 7 ofthe Arizona Administrative Code; collecting, compiling, and maintaining drilling,
production, and subsurface data for public use; coordinating enforcement with the Attorney
General; and preparing and publishing geologic studies to encourage and assist the exploration for
and development of Arizona's oil, gas, and geothennal resources.
Arizona currently has 29 active oil wells, 14 active gas wells, and 14 hydrocarbon-storage
wells. During the Sunset Review period (July 1996 through June 2005) the OGCC pennitted 36 ­wells.
All drilling, producing, and storage wells were inspected and monitored. All safety,
environmental, or communication problems were resolved.
CONCLUSION
It is important that a commission of public members should set oil and gas regulatory
policy and promulgate and maintain rules that govern the drilling and production of oil, gas, and
geothennal resources in Arizona The regulated community has access to the OGCC if disputes or
special needs require resolution. The OGCC, the only governmental unit with appropriate
statutory authority and technical expertise to perform these functions, should be continued.
Affiliation with the AZGS facilitates sharing of geologic data, maintaining subsurface and
well infonnation, and accessing expertise relative to the overall geologic character ofArizona's
subsurface and potential for oil and gas resources.
Sunset Review Report, 2006: Arizona Oil and Gas Conservation Commission
REPORT TO THE COMMITTEE OF REFERENCE
The following information about the Arizona Oil and Gas Conservation Commission
(OGCC) was compiled in response to a request from representative Michele Reagan, Co-Chair of
the Committee ofReference. The sunset review period is from July 1, 1996 to June 30,2006.
1. The objective and purpose in establishing the agency.
The OGCC was established to administer and enforce state laws relating to the
conservation ofoil, gas, and geothermal resources. The Arizona Geological Survey (AZGS)
provides administrative and staff support needed to carry out this charge.
The OGCC conserves and prevents waste ofoil, gas, and geothermal resources; provides
for protection ofowners ofland wherein these resources lie; encourages responsible exploration
and development ofthese resources; and safeguards the health, property, environment, and public
welfare ofthe citizens ofthe State.
The above objectives are accomplished by issuing permits for oil, gas, and geothermal
wells; monitoring and inspecting wells and facilities for compliance with rules; maintaining
effective rules in Title 12, Chapter 7 ofthe Arizona Administrative Code; collecting, compiling,
and maintaining drilling, production, and subsurface data for public use; coordinating enforcement
with the Attorney General; and completing geologic studies to encourage exploration for and
development ofArizona's oil, gas, and geothermal resources.
2. The effectiveness with which the agency has met its objective and purpose and the
efficiency with which it has operated.
During the Sunset Review period (July 1996 to June 2005) 36 drilling permits were issued,
29 wells were drilled, and all OGCC rules were reviewed in conjunction with the Governor's
Regulatory Review Council and amended as necessary. ln addition, there are currently 29 active
oil wells, 14 active gas wells, and 14 hydrocarbon-storage wells in Arizona. All drilling,
producing, and hydrocarbon-storage wells were inspected and monitored. All safety,
environmental, or communication problems were resolved.
The OGCC has effectively met its objective and purpose through close interaction with the
regulated community and the Departments of Water Resources and Environmental Quality; timely
inspections during drilling; periodic inspections of hydrocarbon-storage wells, and by keeping its
rules consistent with current technology and environmental practices. This regulatory activity is
carried out with expenditure ofabout $60,000 of General Revenue funds. Examples of major
activities completed are:
a. Enforced abandonment oftwo non-productive exploratory wells near Meteor Crater and
Concho.
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Sunset Review Report, 2006: Arizona Oil and Gas Conservation Commission
b. Completed two 5-year reviews of oil and gas rules in Title 12, Chapter 7,Arizona
Administrative Code in cooperation with the Governor's Regulatory Review Council
(GRRC).
c. Amended 7 rules in Title 12, Chapter 7, Arizona Administrative Code. The GRRC
approved all amended rules.
d. Completed an assessment ofpotential geologic carbon sequestration sites in Arizona for
the U.S. Department ofEnergy.
e. Microfilmed all oil and gas files to provide for disaster recovery.
f. Prepared and published 12 geologic studies related to subsurface geology for the purpose
of encouraging and assisting exploration for and developmentofArizona's oil, gas, and
geothennal resources.
g. Digitized oil and gas well infonnation on a CD that is available to the public.
3. The extent to which the agency has operated within the public interest.
The OGCC's rules, orders, and substantive policy statements are adopted to conserve oil,
gas, and geothennal resources, and safeguard the health, property, environment, and public
welfare ofthe citizens ofthe State. Ensuring proper drilling, completion, and production practices
conserves resources and prevents pollution of ground water.
All meetings and hearings ofthe OGCC are open to the public. An agenda is posted two
weeks before the meeting or hearing to advise the public on all matters to be considered. This
ensures input and participation by all interested parties in any matter being considered.
The composition of the OGCC further ensures its operation in the public interest. The
OGCC consists of six members, five ofwhich are appointed from the general public by the
Governor. The State Land Commissioner serves as the sixth, ex-officio member. Only the
appointed, public members have voting rights, and no more than three members may be ofthe
same political party.
4. The extent to which roles and regulations promulgated by the agency are consistent
with the legislative mandate.
A.R.S. § 41-1054 requires an agency to conduct a review of its rules in cooperation with
the GRRC every five years. This ensures that rules are up-to-date with respect to current
technology in the regulated industry and the latest environmental protection practices. The review
process ensures that each rule is:
a. Authorized by existing statutes;
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Sunset Review Report, 2006: Arizona Oil and Gas Conservation Commission
b. Effective in meeting its intended objective;
c. Consistent with legislative mandate, other rules, and current enforcement policy; and
d. Clear, concise, and understandable by the regulated industry and general public.
The aGCC cooperated with the GRRC in these reviews ofits rules. Four rules were
amended, and all were shown to be consistent with legislative mandate.
5. The extent to which the agency has encouraged input from the public before
promulgating its rules and regulations and the extent to which it has informed the public as
to its actions and their expected impact on the public.
All rulemaking activities ofthe aGCC are carried out in full compliance with the Arizona
Administrative Procedures Ac~ reviewed by the GRRC, and adopted subject to certification by the
Attorney General. GRRC meetings are open to the public and all rules sent to the GRRC must be
accompanied by an economic, small business, and consumer impact statement.
All aGCC rulemaking activity is initiated in public meetings, published in the Arizona
Administrative Register, and adopted after a public hearing on the proposed rulemaking. This
process facilitates input and participation from the regulated industry and general public in the
promulgation of all aGCC rules.
6. The extent to which the agency has been able to investigate and resolve complaints
that are within its jurisdiction.
Few complaints have been received, and they have been resolved with input from the
public. This is due to the right of any interested person to appear at any aGCC meeting and be
heard on any matter within the jurisdiction ofthe aGCc. The aGCC encourages and welcomes
public input, which is carefully considered before regulatory and policy decisions are made.
7. The extent to which the attorney general or any other applicable agency of state
government has the authority to prosecute actions under the enabling legislation.
Pursuant to A.R.S. § 27-521, the Attorney General shall be attorney for the aGCC, and has
full authority to prosecute actions under the enabling legislation. Enforcement options include
prohibitory or mandatory injunctions, temporary restraining orders, and prelimin~ injunctions in
addition to civil penalties of not more than one thousand dollars for each violation and for each
day the violation continues.
Within the sunset review period, the aGCC successfully resolved two ongoing cases of
noncompliance by closely coordinating enforcement with the Attorney General. Forfeiture of
bond money and threat ofprosecution by the Attorney General resulted in compliance before the
cases were brought to suit.
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Sunset Review Report, 2006: Arizona Oil and Gas Conservation Commission
8. The extent to which agencies have addressed deficiencies in their enabling statutes
which prevent them from fuliIlling their statutory mandate.
In late 1998 discussions with the state land department, regulated community, legislators,
and the Attorney General resulted in HB 2332, which amended A.R.S. §§ 27-501,27-516,27-522,
27-653, and 27-661 in the 1999 legislative session. This bill clarified the definition ofa gas well
and extended the time frame for holding well information confidential from six months to one year
from the completion ofdrilling.
In late 1999 an independent operator had some concern with the existing time frame for
holding well information confidential. Discussions with the operator, legislators, and the Attorney
General resulted in HB 2492, which amended A.R.S. §§ 27-501,27-515, and 27-522 in the 2000
legislative session. This bill clarified the definition ofa completed well and extended the time
frame for holding well information confidential from one year to not more than two years from the
completion of drilling upon a showing ofcause by an operator.
9. The extent to which changes are necessary in the laws of the agency to adequately
comply with the factors listed in this subsection.
No changes are necessary at this time.
10. The extent to which the termination of the agency would significantly harm the public
health, safety, or welfare.
The aGee safeguards the health, property, environment, and public welfare ofthe citizens
of the State as it relates to oil, gas and geothermal drilling and production activities. Termination
ofthe aGee would result in a vacuum because no other agency has statutory authority to address
these needs. Not only is statutory authority required, the agency must also have properly qualified
staff. Persons with such qualifications are not employed by any other agency.
Errors in judgement concerning blow-out-control equipment and tests; depth and integrity
of casing strings; and construction, maintenance, and operation of hydrocarbon storage wells could
result in pollution ofgroundwater or blowouts and major fire resulting in possible injuries or
fatalities. Termination of the aGee would clearly result in a serious risk to the health, property,
safety, and public welfare ofthe citizens ofthe State.
11. The extent to which the level of regulation exercised by the agency is appropriate and
whether less or more stringent levels of regulation would be appropriate.
The aGee recently strengthened its performance bonding requirements. The current level
of regulation exercised by the AZGS on behalf ofthe aGee is appropriate with the current level
ofindustry exploration and drilling activity.
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Sunset Review Report, 2006: Arizona Oil and Gas Conservation Commission
12. The extent to which the agency has used private contractors in the performance of its
duties and how effective use of private contractors could be accomplished.
The aGee does not use private contractors in the performance ofits regulatory duties. It
would not be cost effective or efficient to use private contractors to handle the day-to-day
collection and filing of production, drilling, and injection records maintained by this office. A
full-time employee ofthe State most efficiently provides collection and filing of records, public
relations, correspondence, and assistance to the regulated industry. All well data, samples, and
files are available to the public. We encourage the use ofthese data in developing exploration
programs.
ADDITIONAL WRITTEN RESPONSES
1. An identification of the problem or the needs that the agency is intended to address.
The aGee was established to administer and enforce state laws relating to the
conservation ofoil, gas, and geothermal resources
2. A statement, to the extent practicable, in quantitative and qualitative terms, of the
objectives of such agency and its anticipated accomplishments.
The objectives ofthe aGee are to conserve and prevent the waste ofoil, gas, and
geothermal resources; provide for the protection ofowners of land wherein these resources lie; and
safeguard the health, property, environment and public welfare ofthe citizens of the state by
encouraging responsible exploration for and development ofoil, gas, and geothermal resources.
The aGee plans to continue close interaction with the regulated community and the Departments
of Water Resources and Environmental Quality, the Arizona State Land Department and
appropriate federal agencies. It will perform timely inspections during drilling, periodic
inspections ofhydrocarbon-storage wells, and maintain rules that are consistent with current
. technology and environmental practices.
3. An identification of any other agencies having similar, conflicting or duplicate
objectives, and an explanation of the manner in which the agency avoids duplication or
conflict with other such agencies.
The responsibilities of the aGee do not overlap with any other agency or commission.
4. An assessment of the consequences of eliminating the agency or consolidating it with
another agency.
Elimination ofthe oGCe would result in a void because no other agency has the statutory
authority to administer and enforce laws relating to the conservation ofoil, gas, and geothermal
resources. The consequences ofeliminating the aGee would be a lack of regulation and
supervision of drilling activities including: blowout control equipment and tests, depth and
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Sunset Review Report, 2006: Arizona Oil and Gas Conservation Commission
integrity of casing strings, and construction, maintenance and operation of hydrocarbon storage
wells that could result in pollution of groundwater, blowouts, or fires. Tennination ofthe OGCC
may also result in serious injuries or fatalities.
ADDITIONAL RESPONSES AND MOST RECENT ANNUAL REPORT
1. Describe any major activities/projects, accomplishments, or obstacles to success.
The major activities ofthe OGCC, pursuant to A.R.S. § 27-515, are administering and
enforcing state laws relating to the conservation of oil, gas, and geothennal resources. These
activities include issuing pennits to drill oil, gas, and geothennal wells; monitoring and inspecting
wells and facilities for compliance with rules; maintaining effective rules in Title 12, Chapter 7, of
the Arizona Administrative Code; collecting, compiling, and maintaining drilling, production, and
subsurface data for public use; coordinating enforcement with the Attorney General; and
completing studies encouraging exploration for and development of Arizona's oil, gas, and
geothennal resources.
TheAZGS provides staff support. Affiliation with the AZGS facilitates sharing of geologic
data and library, maintaining subsurface and well infonnation, and accessing expertise relative to
the overall geologic character ofArizona's subsurface and potential oil and gas resources.
Recent accomplishments of the OGCC include:
a. Enforced abandonment of two non-productive exploratory wells. One well was near
Meteor Crater, and the other was near Concho.
b. Amended 7 rules in Title 12, Chapter 7, Arizona Administrative Code, which were
approved by the Governor's Regulatory Review Council.
c. Issued pennits for 36 wells during the review period (July 1996 through June 2005). (34
wells were pennitted in the previous review period from July 1984 through June 1994)
d. Provided expertise on subsurface salt in Arizona as related to natural gas storage in a
meeting with Speaker Flake, Representatives Nelson and Gray, and constituents.
e. Provided expertise on subsurface salt in Arizona as related to natural gas storage in a
meeting with Senator Binder and constituents.
£ Completed an assessment ofpotential geologic carbon sequestration sites in Arizona for
the U.S. Department of Energy.
g. Microfilmed all oil and gas files to provide for disaster recovery.
h. Digitized oil and gas well infonnation on a CD that is available to the public.
7
Sunset Review Report, 2006: Arizona Oil and Gas Consenration Commission
1. Prepared and published 12 geologic studies related to subsurface geology for the purpose
of encouraging and assisting exploration for and development of Arizona's oil, gas, and
geothermal resources.
2. Provide the committee of reference with the most recent annual report (attached),
including financial data that outlines the fee structure, expenditures and revenues, and
number of FTEs.
a The OGCC was attached administratively to the AZGS in July 1991 to reduce expenditure
of General Revenue funds. One FTE at the AZGS, the Oil and Gas Program Administrator,
handles day-to-day oil and gas functions and conducts regulatory activities on behalfofthe
OGeC.
b. Expenditures on behalf of the OGeC were reduced from about $190,000 a year as a stand­alone
agency to about $60,000 a year after the OGCC was attached to the AZGS. The
current funding level reflects the current level of drilling and storage-well activity.
c. There are no direct revenues to the OGCC. Related, non-direct revenues, which currently
go to the General and State Reclamation Funds, include application fees, oil and gas lease
rentals, and severance and property taxes on oil and gas production and equipment.
Application fees are a function ofthe number ofdrilling permits issued and have recently
averaged $130 a year. Lease rentals are a function ofthe amount of acreage under lease
and have recently averaged $441,000 a year. Taxes are a function ofproduction levels and
have recently averaged $53,000 a year. The Arizona State Land Department administers
leasing on State Trust Land. The U.S. Bureau of Land Management administers leasing on
Federal and Indian Lands.
d. Application fees are structured to balance the need to cover the cost ofprocessing drilling
applications and encouraging exploration in Arizona, which, in turn, increases the
probability for a discovery. A discovery of oil or gas will create jobs and increase general
fund revenue for the state.
e. The OGCC collects a $10,000 to $20,000 performance bond, depending on depth ofhole,
for each well permitted. These funds include surety, certificates ofdeposit, or cash; are
custodial in nature and are owed to individuals. They are returned upon completion ofa
drilling project or may be forfeited by the OGCC for noncompliance with rules.
3. The composition and manner of appointment of the commission including number of
members, number of public members and method of appointment.
a. The aGCC consists of six members. The Governor appoints five members from the
general public. The State Land Commissioner serves as the sixth, ex-officio member. Only
8
Sunset Review Report, 2006: Arizona Oil and Gas Conservation Commission
the appointed, public members have voting rights, and no more than three members may
be of the same political party.
b. Current appointed members from the general public include Mr. Robert Jones, a retired
petroleum geologist in Sun City West; Mr. Joseph Lane, a retired legislator in Phoenix; Dr.
Dale Nations, a retired geology professor at Northern Arizona University in Flagstaffnow
living in Tucson; Ms. Michele Negley, a business management consultant in Phoenix; and
Mr. Robert Wagner, a retired city manager in Yuma now living in Mesa. The sixth, ex­officio
member is Mr. Mark Winkleman, State Land Commissioner.
Respectfully submitted by:
~~
Oil and Gas Conservation Commission
S/f~L.I2~
Steven L. Rauzi
Oil and Gas Program Administrator
Arizona Geological Survey
9
Date
Date
Janet N~"'101L:mG
( (11:1'\":'f r~l'hf
The Honorable Janet Napolitano
Governor
1700 W. Washington
Phoenix. AZ 85007
Dear Governor Napolitano:
State ofArizona
Arizona Geological Survey
416 'V. Congress, Suite 100
Tucson. Arizona 85701
{520} 770-3500
27 August 2004
L4.-r~' D, FdlA'JM,"
Dtrc>:tOf MId 5~a~c Gtokjf;if<1
The Annual Report of the Arizona Geological Survey (AZGS) for FY 2004 describes how staff carried out the AZGS mission by
informing and assisting the public about the character of rock formations, geologic hazards, and mineral and energy resources.The
report also summarizes geologic maps and studies that AZGS staff completed, including those that focused on the following topics:
o Distribution and character of rocks and sediment between Benson and Sierra Vista in Cochise County and near Green Valley
in Pima County o Alluvial-fan flooding on desert piedmonts in western Maricopa County o Potential helium resources in the Holbrook basin in Navajo and Apache Counties
o Polygonal ground cracks in southern Arizona caused by prolonged drought
The report also describes special projects that were done under contract to provide information other agencies needed to carry out their
missions. Funding for these projects supplemented the AZGS General Fund appropriation and expanded agency productivity.
The purpose of AZGS projects and activities is to produce and disseminate information that is used to make informed decisions and
prudently manage Arizona's land, water, energy, and mineral resources.
I'll gladly answer any questions you or your staff might have about the report, the Arizona Geological Survey, or the geology of
Arizona,
Respectfully submitted,
Larry D. Fellows
Director and State Geologist
Arizona Geological Survey (AZGS) employees informed and assisted the
public during Fiscal Year 2004 as follows:
o Responded to thousands of requests for infonnation and assistance.
o Sold 9,076 reports and maps. an increase of 8.9 percent from last year. Revenue from sale of publications
totaled $70.567, an increase of 11.8 percent from last year. Almost 97 percent of mail orders were filled
and mailed not more than one day after they were received.
o Released 24 new reports and maps on Arizona geology. including:
• Four digital geologic quadrangle maps in the Santa Cruz River Valley south of Tucson in Pima
County, and three in Cochise County along the San Pedro River Valley between Benson and Sierra
Vista., including Kartchner Caverns State Park. (TIlese maps are available in both paper and digital
form.)
• Three down-to-earth (non-technical) books (Wupatki and Sunset Crater Volcano National
Monuments, White Mountains and the Springerville Volcanic Field. and Sabino Canyon and
the Catalina Highway) done in cooperation with the National Park Service and the U.S. Forest
Service
• Two open-file reports that characterized rock units
• Five open-file reports on applied geology subjects such as helium, asbestos, desiccation cracks, and
alluvial-fan flooding
• Seven articles published outside of the AZGS
o Participated in eleven cooperative projects under contract with governmental agencies including Arizona
State Land Department, Flood Control District of Maricopa County, National Park Service. U.S.
Department of Energy. U.S. Forest Service, and U.S. Geological Survey. Project expenditures totaled
$437.265. AZGS staff supervised the work of 15 temporary and part-time employees who were paid
with contract funds to work on the projects.
o Gave 12 talks and led 18 field trips as requested by representatives of governmental agencies. professional
societies. universities, and citizen groups.
o Updated five Digital Geologic Maps and three oil and gas maps.
o Submitted three manuscripts for publication outside of the AZGS.
o Published four 6-page issues of Arizona Geology, the AZGS newsletter.
MISSION AND DESCRIPTION .
GOAlS .
ACTIVITIES ' .
GEOLOGY FOR SOCIETAL NEEDS ...............................•...........
INFORMATION AND SERVICE ...................................•..........
OIL AND GAS CONSERVATION COMMISSION .
PERSONNEL .
EXPENDITURES .
CONTRACTED PROJECTS .
APPENDICES
I. Service to Constituents
II. Maps and Reports Completed .
PAGE
2
3
4
4
6
7
9
11
12
13
14
2. MISSION
To inform and advise the public about the geologic character of Arizona to help meet societal needs
for water, energy, and mineral resources and assist in prudently managing the State's land and nat­ural
resources.
DESCRIPTION
AZGS staff, who prepare geologic maps, complete field studies, compile dat<t, and disseminate information.
perform the following functions:
o Geology for Societal Needs. Map and characterize rock formations and their weathering prod­ucts;
investigate geologic hazards and land-use limitations such as earthquakes. land subsidence. flood­ing.
and rock solution that may affect the health and welfare of the public or impact land and resource
management: describe the origin, distribution, and character of metallic, non-metallic, and energy
resources; and identify areas that may have potential for discovery of mineral and energy discoveries.
o Information and Service. Inform and assist the public by answering inquiries. preparing and
selling maps and reports. giving talks. leading field trips. and maintaining a library, databases. and a
website.
o Oil and Gas. Provide administrative and staff support to the Arizona Oil and Gas Conservation
Commission. The Commission regulates the drilling for and production of oil. natural gas, geother­mal,
helium, and carbon dioxide. to ensure that sound engineering. environmental, and conservation
practices are followed.
o Geologic Data Users
Citizens and citizen groups; elected officials and their staff. land- and resource-management agencies
(e.g. State Land Department, Department of Water Resources. Department of Environmental
Quality, Department of Transportation, State Parks, Office of Tourism. Attorney General), environ­mental
and engineering geology companies. hydrologists. energy- and mineral-exploration companies.
consultants. planners. attorneys, realtors, insurance companies, teachers. students, libraries. book deal­ers,
and others.
GEOLOGY FOR SOCIETAL NEEDS J
GOAL 1. To characterize rocks, surficial materials, mineral and energy resources, and geologic hazards,
with emphasis on areas that have potential for urban and resource development, and provide this
information to the public.
Objective 1. Increase the distribution of technical maps/reports by 2 percent.Result: Did not
meet objective - sale of technical maps/reports increased 0.5 percent.
INFORMATION AND SERVICE
GOAL 2. To inform those not trained in geology about geologie processes and resources in Arizona.
Objective 1. Increase the distribution of non-technical reports by 15 percent.Result: Exceeded
objective - sale of non-technical reports increased 39 percent.
Objective 2. Inform the public by giving 20 talks or field trips Result: Exceeded objective - gave
30 talks and field trips
GOAL 3. To disseminate more information while maintaining efficient service and high customer sat­isfaction.
OIL AND GAS CONSERVATION COMMISSION
GOAL 4. To effectively assist the Arizona Oil and Gas Conservation Commission
Objective 1. Respond to requests for drilling permits within 5 working days.
Result: Exceeded objective - issued 6 permits to drill with an average turn-around
time of 4 business days from when the completed application was received
Objective 2. Inspect gas-storage wells twice and other wells as drilling takes place.
Result: Met objective - conducted safety inspections of 14 wells in November and
April and two wells during drilling.
.4 GEOLOGY FOR SOCIETAL NEEDS
National Cooperative Geologic Mapping Program. Arizona Geological Survey (AZGS) geologists have par­ticipated
in this cooperative program since its inception in 1993. They have completed mapping in most of the
Phoenix-Tucson corridor and are expanding into other population-growth areas. During FY 2004 the AZGS
released maps of four 7.S-minute quadrangles along and west of the upper Santa Cruz River valley south of
Tucson in Pima County (Digital Geologic Maps 30-33). Citations for these and other publications released in
FY 2004 are listed on pages 15-18. The agency also released maps of three 7.S-minute quadrangles along the
upper San Pedro River between Benson and Sierra Vista in Cochise County (Digital Geologic Maps 34-36).
Mapping is in progress on the southeast margin of Tucson, west of the White Tank Mountains in western
Maricopa County, and in the Bullhead City area along the Colorado River.
The follOWing AZGS geologists served on the mapping team: Jon E. Spencer, Stephen M. Richard,
Charles A. Ferguson, and Bradford j. Johnson. bedrock geology; Philip A. Pearthree, Ann M. Youberg, and
Todd C. Shipman, surficial geology; and Erin M. Moore and Stephen M. Richard, digital map preparation.
In addition to mapping the distribution of rock and surficial material units, AZGS geologists charac­terize
the map units. In one project, released as Open-File Report 03-08, ages of 23 igneous rock samples
from central and southeastern Arizona were determined. Geologists also described the mineralogy of
granitic rocks that underlie much of northeasern Maricopa and northern Gila counties and released the
results as Open-File Report 03-09.
The Statemap component of the National Cooperative Geologic Mapping Program, administered by
the U.S. Geological Survey, provided half of the funding for geologic mapping in FY 2004. In accordance
with the mapping act, the AZGS matched the federal funds received with an equal amount of state support.
AZGS geologists proVided in-kind service by doing geologic mapping and related activities. Requests for
funding were judged competitively with proposals from the other state geological surveys. The AZGS was
awarded $217,439 for FY 2004; the total value of the mapping project, including the AZGS match, was
$434,878.
Priority of areas to be mapped was determined by the Arizona Geologic Mapping Advisory Committee,
which is composed of representatives of state land- and resource-management agencies and the private sec­tor.
Committee members are:
Al Burch (U.S. Bureau of Land Management)
Charles D. Graf (Arizona Department of Environmental Quality)
William M. Greenslade (Southwest Ground-water Consultants, Inc.)
Barbara H. Murphy, Chair (Clear Creek Associates)
Nicholas M. Priznar (Arizona Department of Transportation)·
Frank Putman (Arizona Department of Water Resources)
Michael j. Rice (Arizona State Land Department)
Ralph E. Weeks (AMEC Earth & Environmental).
National Geologic Map Database project. Stephen M. Richard is a member of the North American Data
Model Steering Committee. The purpose of the committee is to coordinate and review efforts to develop a
data model, science language, and interchange mechanisms for exchange of geologic map data between state
and federal geological survey data proViders and data consumers in the public and private sector.
Richard is also a member of the workgroup established to develop a standard digital geologic map data
model. Version 1.0 of the model was published on the world wide web (http://geology.usgs.gov/dm/steer­ing/
teams/design/NADM-C1.0/NADMC1_0.pdf). The workgroup took the lead in final editing and doc­ument
preparation. The document was submitted for a joint USGS-GSC open-file report.
Richard adapted and expanded the science language terms that were developed by working groups of
North American Data Model Steering Committee. The terms will be used as the science vocabulary in the
National Geologic Map database. He also developed the relational database implementation ofNADM-CI
model for the National Geologic Map database. These activities support ongOing development of a 1:24.000­scale
geologic map database for the Phoenix metropolitan area.
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Richard was the author of one article and co-author of another that described geologic databases and ~
terminology. These articles were included in US. Geological Survey Open-File Report 03-471.
Piedmont flood hazards in Maricopa County. The AZGS has cooperated with floodplain management
agencies to use geologic mapping to help define flood-prone areas on desert piedmonts for the past 15 years.
Active alluvial fans, where runoff spreads widely and may form new channels during floods, are areas of pri­mary
concern. AZGS geologists Philip A. Pearthree, Ann M. Youberg, and Todd C. Shipman mapped the
surficial geology of the Waterman Wash watershed and are working with the Flood Control District of
Maricopa County to delineate piedmont flood hazards there. They also released a report (Open-File Report
04-02) on alluVial-fan flooding along Tiger Wash in western Maricopa and eastern La Paz counties.
Giant desiccation cracks. The prolonged drought has caused the soil and subsoil to dry out and form giant
polygonal cracks similar to mud cracks, but on a much larger scale. AZGS geologist Raymond C. Harris
studied the cracks near Wintersburg in Maricopa County and released a report that describes them (Open­File
Report 03-07). He also completed a study of the distribution of these cracks throughout Arizona. The
results of that study were summarized in Open-File Report 04-01. Ray found that the distribution of these
giant cracks is much more extensive than was originally known.
Ashestos in Arizona. The AZGS learned that a resident of the Sun City area had publicly alleged that a
sand and gravel operator was releasing dust that contained asbestos fibers into the atmosphere. Because
AZGS staff were unaware of any asbestos deposits in that drainage basin, Raymond C. Harris did a litera­ture
search to determine whether any asbestos minerals had been described there. He also reviewed publica­tions
that dealt with asbestos deposits and occun'ences throughout the state. Han'is found no scientific
reports of asbestos minerals in the Agua Fria drainage and no geologic indicators of asbestos (Open-File
Report 03-06). Asbestos was produced commercially for many years in the Globe area in the Salt River
drainage. Minor occurrences are known in several other areas as well.
Miscellaneous basin studies. AZGS staff began compiling information on the geologic character of select­ed
deep alluvial basins, including structural history, stratigraphy, geologic controls on ground-waterquality,
and potential geologic hazards. Raymond C. Harris is the principal investigator of this project, which will
continue if funding. is available. William R. Drake, Stevan Gyetvai, Lizbeth C. Green, and Kevin C.
Horstman also worked on the project.
Advanced volcanology field course. During the past decade, AZGS geologist Charles Ferguson has
mapped and described many of Arizona's complex volcanic fields as part of the National Cooperative
Geologic Mapping Program. Based on experience gained from this work, he developed a field course
("Whole Lava Love") that is focused on teaching practical aspects of field volcanology. The course, which
has been associated with formal courses taught at the University of Arizona and Arizona State University,
has been offered during the Christmas holiday season. Participants representing industry, academia, and, gov­ernment
have come from every inhabited continent. Because of Charles' experience and expertise in field vol­canology,
spectacular exposures of varied volcanic rocks, and Arizona's mild climate, the course has been
highly successful.
Relationships among fires, soil geochemistry, and geomorphology in Cochise County. The AZGS has
cooperated with the U.S. Forest Service on several projects to provide geologic mapping and other data to sup­port
sustainable range management practices in southeastern Arizona. During the past year, Thomas H. Biggs,
a faculty member at the University of Virginia, and Philip A. Pearthree mapped the surficial geology of por­tions
of Fort Huachuca that include burned and unbumed areas. Geochemical analyses of soil samples from the
burned and unburned areas were made. Results of .this research were presented as a poster at a professional
meeting in Tucson. The final report will be submitted to the U.S. Forest Service and Fort Huachuca staff early
in fiscal year 2005. The report will be released by the AZGS after the Forest Service has reviewed it.
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Q INFORMATION AND SERVICE
Geology Information Center. Staff, primarily Thomas G, McGarvin and Richard A Trapp, answered
requests for information about Arizona geology, Rachel A Aragon and Maricella M. Moreno, who sold
reports and maps, filled and mailed ninety-four percent of mail orders the same day the orders were received.
The Arizona Geological Survey (AZGS) has formal cooperative agreements to distribute publications of the
Arizona Geological Society and U.S. Geological Survey.
Publication sales totaled $70,567, an increase of $7,442 (11.8 percent) from FY 2003. The increase in
sales is attributed to the improved economy and the release of new non-technical reports. Revenue from pub­lication
sales is used to purchase books and maps for resale and to print and distribute publications.
Geology library and databases. The AZGS maintains a non-circulating library that is open to the public.
The library, managed by Thomas G. McGarvin, contains all AZGS publications, as well as the following
items: theses and dissertations on Arizona geology; reports by Arizona state agencies; publications of state
geological surveys in adjacent states; U.S. Geological Survey publications, maps, and open-file reports; and
numerous publications by other governmental agencies and professional societies.
AZGEOBIB is a database that contains more than 13,200 bibliographic citations on Arizona geology.
The database IS key-worded by subject and geographic area. AZGS staff members provide lists of citations
for specific requests. This is a popular service for those who are starting new projects and need to know what
geologic maps and reports are available in the project area. Richard A Trapp, Information Technology
Manager, maintains the databases.
Website. The AZGS web site (www.azgs.az.gov) includes information about the agency, geology of
Arizona, and publications for sale. Links to other geology-related agencies and groups are proVided. Rose
Ellen McDonnell is the webmaster.
Arizolla Geology. The AZGS published four six-page issues of ArizOJ1<7 Ceologyto describe geologic process­es,
resources, and features that impact land management and the economy of Arizona, publicize new geo­logic
maps and reports, and highlight other activities that pertain to the geology of Arizona. Feature articles
described potential helium resources, distribution of asbestos minerals in Arizona, giant desiccation polygons
caused by drying of the soil, and geology of the Sedona area. The latter was written because USA WEEK��END,
the magazine that comes in your Sunday newspaper, named the Sedona area ("Red Rock Country")
as "the most beautiful place in America."
Down-to-Earth (DTE) publications. These publications are written for those who have had no formal
education or training in geology, but have a strong interest in and curiosity about geologic processes and fea­tures.
Many state and national parks were created to preserve spectacular geologic features. The AZGS
released three books in this series:
DTE IS, Roadsidegeology: ltVupatki andSunset Crater f-6Jcano NationallVfonwnent. This book includes descrip­tions
and color photographs of 14 geologic features formed by volcanic action, including cinder cones, lava
domes. aa flows, squeeze-ups, hornitos, and xenoliths. Sara L. Hanson, Professor of Geology at Adrian College
in Adrian. Michigan, wrote the book. She was assisted by staff at Sunset Crater and Wupatki National
Monuments. Sarah was a participant in the Geologist-in-the Park Program sponsored by the Geological Society
of America (GSA) and the National Park Service (NPS). She was also supported by the GeoCorps America
Program sponsored by the GSA and the NPS.
DTE 16, A guMe to dIe geologyoftlle White Mountains and dIe .5prillgerville volcanic field, AJizona. This book
includes descriptions of 26 geologic features that were formed by volcanic eruptions or glaciers. Several rock
formations that were present before volcanic activity began are also described. This project was done coop­eratively
with John V. Bezy, a retired geologist. Staff at the Apache-Sitgreaves National Forest provided assis­tance.
DTE 17, A guide to the geology ofSabino Canyon and the Catalina Ilig!Jvvay. John V. Bezy, author, described
11 geologic features in Sabino Canyon and 14 that can be observed along the Catalina Highway, which ends
on top of Mt. Lemmon. Eileen j. Hill. Store Manager of the Sabino Canyon and Palisades Visitor Centers,
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Public Lands Interpretive Association, provided assistance and support. Staff of the Coronado National 1
Forest also assisted.
Earth science education. Thomas G. McGarvin, the AZGS' primary contact with science and earth science
teachers, assisted teacher groups in incorporating local geology into their courses. He conducted a workshop
at the Fall 2003 Conference of the Arizona Science Teachers Association in which he described publications
available from the AZGS, primarily the Down-to-Earth series, which could be applied to the classroom by
earth-science educators. Tom also led several field trips tailored for educators to see basic geologic features
and discuss them in context within their geologic setting.
Service to community and professional groups. AZGS geologists are asked occasionally to prOVide special
assistance to governmental agencies, professional societies, universities, and public groups. This assistance
included giving talks, leading field trips and workshops, serving on panels, reviewing technical aspects of
applications or proposals for funding, revieWing the geologic content of manuscripts submitted for publica­tion,
and other assistance.
AZGS staff gave 12 talks and led 18 field trips during the year. A list of the talks given, field trips led,
and other assistance provided is attached as AppendiX 1, page 13 (A paper copy of the text and map is avail­able
for $15.00 plus shipping and handling.).
OIL AND GAS CONSERVATION COMMISSION
The Commission. The Arizona Oil and Gas Conservation Commission (OGCC), which regulates the
drilling for and production of oil, gas, helium, carbon dioxide. and geothermal resources, is attached to the
Arizona Geological Survey (AZGS). The AZGS provides administrative and staff support. The Governor
appoints five members of the commission; the sixth, the State Land Commissioner, is ex officio.
Commissioners are j. Dale Nations. Tucson, chairman; Robert L. jones. Sun City West, vice chairman;
joseph j. Lane. Phoenix; Michele P. Negley, Phoenix; Robert L. Wagner, Yuma; and Mark Winkleman, State
Land Commissioner.
Steven L. Rauzi, the Oil and Gas Administrator, issues permits to drill, monitors drilling, inspects com­pleted
wells, compiles drilling and production data, maintains well files. and does other duties on behalf of
the OGCC. The Commission met three times.
Production, rerming, and storage. Oil production in calendar year (CY) 2003 totaled 47,289 barrels from
16 producing wells, down from 63,417 barrels from 20 wells in 2002. Gas production in CY 2003 increased
to 443 million cubic feet from nine producing wells. CY 2002 production was 304 million cubic feet from
seven wells. CO2 production totaled 159 million cubic feet from one producing well in 2003, down from 217
million cubic feet in 2002. Commercial production of CO2 started in July 2002.
Both of Arizona's refineries remained closed. The refineries, near Fredonia and Coolidge, have been shut
down since january 1997 and August 1993, respectively. The refinery near Fredonia is used as a storage and
transfer site for asphalt products
Liquefied petroleum gas (LPG) transferred through storage wells west of Phoenix and at Adamana in
CY 2003 included 85 million gallons in receipts and 80 million gallons in deliveries. In CY 2002, 90 million
gallons were received and 122 million gallons were delivered. About 35 million gallons of LPG were in stor­age
at yearend, up from the 29 million gallons the year before. Fourteen storage wells in subsurface salt are
in use.
Leasing. In CY 2003, 481,000 acres were under lease for oil and gas exploration, up from 438,000 acres in 2002.
State Trust Land under lease in December 2003 totaled 376,000 acres, up from 324,000 acres in
December 2002. Public land under lease in December 2003 totaled 105,000 acres, down from 114,000 acres
in December 2002. The State Land Department administers leasing on State Trust Land. The U.S. Bureau
of Land Management administers leasing on public lands.
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Drilling. Six permits to drill were issued and two holes were drilled in FY 2004. Clayton Williams Energy
drilled a hole in search of gas north of Flagstaff. No gas was discovered and the well was transferred to the
landowner for use as a water well.
Ridgeway Arizona Oil Corporation drilled in search of carbon dioxide between St. Johns and
Springerville. The company was evaluating the hole as ofjuly 1,2004.
Inspection and enforcement. Staff made semiannual inspections of 14 hydrocarbon-storage wells west of
Phoenix and at Adamana and witnessed the cementing of surface casing on the wells drilled by Clayton
Williams and Ridgeway. Inspections are conducted to ensure that wellhead valves, safety alarms, and emer­gency
shutdown systems are working properly and that cement is circulated back to the surface.
Subsurface data. The OGCC requires drilling operators to submit subsurface data, including rock samples,
logs, and all test results, to the AZGS to be filed and archived. These drilling data add to the general under­standing
of Arizona's geologic framework and subsurface mineral and energy resources. The AZGS main­tains
a series of maps that show the location of oil, gas, and geothermal wells and the types of subsurface data
that are available for examination. Subsurface samples from the Clayton Williams well north of Flagstaff
were added to the AZGS sample repository.
Carbon dioxide update. Ridgeway Arizona Oil Corporation announced discovery of carbon dioxide (C02)
in a well in the St. Johns and Springerville areas in southern Apache County in August 1994. The company
drilled 15 wells before the end of May 1997. At a meeting of the House of Representatives Natural Resources
Committee in Springerville in August 1999. Ridgeway representatives estimated that initial development to
supply CO2 for enhanced oil recovery would require two to three years and about 200 wells. The company
informed meeting attendees that as many as 1,195 wells would eventually be drilled over the 25-40 year life
of the project.
Ridgeway produced CO2 from one well in 2002-03. Production was piped to a liquids plant near Tucson
Electric Power Company's Springerville Generating Station. At the end of FY 2004 (June 30, 2004) a total
of 16 wells had been drilled. Three were completed as gas wells and are shut in, four were temporarily aban­doned,
and eight were plugged and abandoned. The most recently drilled well is being evaluated.
Southwest Regional Partnership on Carbon Sequestration. The AZGS was awarded $87,797 by the U.S.
Department of Energy to investigate potential sites in Arizona where carbon dioxide could be safely
sequestered or stored in subsurface rock formations. The New Mexico Bureau of Geology and Mineral
Resources, the state geological survey, is the project coordinator. The state geological surveys of Colorado,
Oklahoma, Utah, and Arizona, as well as other organizations, are also participants.
Subsurface investigations. S.L. Rauzi prepared a report on helium production and potential in Arizona,
which was released as AZGS Open-File Report 03-05. The report was summarized in the Winter 2003 issue
of Arizona Geology, the AZGS newsletter. Similar reports on oil and gas potential and salt were completed
in previous years.
· .,
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Office of the Director
Larry D. Fellows, Director and State Geologist
B.S., Iowa State University; M.A., University of Michigan;
Ph.D., University of Wisconsin
Rose Ellen McDonnell, Assistant Director of Administration
B.S., University of Arizona
Geologists
Jon E. Spencer, Senior Geologist
B.S., University of California, Santa Cruz;
Ph.D., Massachusetts Institute of Technology
Thomas G. McGarvin, Geologist II
B.A., California Lutheran College
Erin M. Moore(2) • Geologist I
B.S., University of Arizona
M.S., University of California at Davis
Philip A. Pearthree, Research Geologist
B.A., Oberlin College; M.S., University of Arizona;
Ph.D., University of Arizona
Steven L. Rauzi, Oil and Gas Administrator
B.S. and M.S., Utah State University
Richard A. Trapp. Information Technology Manager
B.S., University of Nebraska, Omaha; M.S., University of Arizona
Support Staff
Mary E. Redmon(3), Administrative Assistant III
Mary N. Andrade(4), Administrative Assistant III
Rachel A. Aragon(5) , Administrative Assistant I
Maricella M. Moreno(6) , Secretary
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10 Contracted Geologists and Student Assistants(7)
Monisha]. Banerjee. Laboratory Technician
Thomas H. Biggs. Research Geologist
Stephen B. DeLong. Project Geologist
William R. Drake. Project Geologist
Charles A. Ferguson. Research Geologist
Lizbeth C. Greene. Project Geologist
Stevan Gyetvai. Project Geologist
Raymond C. Harris. Research Geologist
Kevin C. Horstman. Research Geologist
Bradford J. Johnson. Research Geologist
Michael K. Mahan. Project Geologist
Erin M. Moore. Geologist II
Stephen M. Richard. Research Geologist
Todd C. Shipman. Geologist II
Ann M. Youberg. Geologist II
(1) Geologists and support staff who were paid from the General Fund appropriation and were on the pay­roll
on June 30. 2004. except as otherwise noted. The Arizona Geological Survey is authorized to
employ 12.25 full-time-equivalent staff members from the General Fund appropriation.
(2) Promoted to Geologist II October 13. 2003 (State funded half time and contract funded half time)
(3) Resigned September 12. 2003
(4) Promoted to Administrative Assistant III, July I. 2003
(5) Promoted to Administrative Assistant I, July 1. 2003
(6) Hired August 4. 2003
(7) Paid from contracted projects funded by other agencies or groups during Fiscal Year 2004 to complete a
specific product or service within a specified period of time.
GENERAL FUND EXPENDITURES 11
Category
TOTAL
1?l.JBLICAIIONS
FY 2003
Expended
FY 2004
Expended
FY 2005
Budgeted
431,800
104,700
219,600
40,600
796,700
752
16.686
117,778
207.019
5,538 437,265
4,381
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Operations
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1,260
2,250
2,250
Professional
Services
4,103
457
71.821
12,492 1,260 1,157 24,580
27,870 36.697
3,621 4,596
493 544
23,314 28,613
280,749
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Service to Constituents
American Geophysical Union: Reviewed a manuscript submitted for publication in Tectonirs
American Institute of Professional Geologists, Arizona Section: Co-leader of a field trip to observe the
influence of the Luke salt on urban development
__: Co-leader of a field trip along the Catalina Highway to Mt. Lemmon. Santa Catalina Mountains.
to observe structural geology and related features
Arizona Department of Environmental Quality: Reviewed a report on ambient water quality in Detrital
Valley. northwest Arizona
Arizona Department ofTransportation: Co-leader of a field trip that was given to attendees of the 2003
meeting of the Interstate Technical Group on Abandoned Underground Mines
Arizona Floodplain Management Association: Gave a talk on the geologic development of the lower
Colorado River
Arizona Geological Society: Served as a member of the steering committee to plan a 2007 symposium
___: Gave a talk on the geologic development of the lower Colorado River
Arizona Rock Products Association: Gave a talk on the AZGS geologic mapping program
Arizona Science Teachers Association: Gave a talk at the annual meeting of the Association on informa­tion
available from the AZGS
Arizona State Parks: Led a field trip to review the newly released geologic map of the Kartchner Caverns area
___: Prepared an inventory of digital geologic data available for State Parks
Computers and Geosciences: Reviewed a manuscript that was submitted for publication in this journal.
Geological Society ofAmerica: Reviewed a manuscript being prepared for publication in Geology
___: Reviewed three manuscripts being prepared for publication in a Special Paper
Graham County Engineer, Safford: Reviewed reports and participated in a field review of a project that was
done in cooperation with Graham County
Melbourne University, Victoria, Australia: Led a field trip for a professor and graduate student who were
collecting Arizona rock samples for analysis.
National Aeronautics and Space Administration: Led a field trip for personnel to observe earth fissures
and giant desiccation cracks near Wintersburg and in the Harquahala basin.
National Science Foundation: Reviewed three project proposals that were submitted for funding
Pima County Flood Control District: Served as vice-chair of the advisory committee
Pueblo Optimists Club, Tucson: Gave a talk on the purpose and activities of the Arizona Geological Survey
Structural Engineers Association ofArizona: Gave a talk on seismic hazard in Arizona
_ ~ - '~+ - ,- c. ~c<,,~<~.~~:-~;~.~~~-~~;~!
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14 Sun City Rockhounds Club, Sun City: Gave a talk on the geology of Arizona
Sunsites Gem and Mineral Club, Sunsites: Gave a talk on the geologic history
of Cochise County
Tohono Chul Park, Tucson: Gave a talk about the geology of the Tucson area to docents-in-training
Tucson Gem and Mineral Society: Served on the show committee for the 2004 Gem and Mineral Show
__: Gave a talk on geologic information for rock and mineral collectors
Tucson Unified School District, D.T. Smith Science Center: Led a field trip for a group of teachers to
observe the geology of the Tucson area
u.S. Department ofEnergy: Reviewed two manuscripts being prepared for publication
u.S. Forest Service: Provided information about post-fire flood damage in Romero Canyon in the Santa
Catalina Mountains
University of Arizona, Department of Geosciences: Led a field trip at the 2004 GEODAZE event to
observe the Pirate fault and debris-flow deposits in the Santa Catalina Mountains
__: Led 3 field trips for a volcanology class
__: Served on Ph.D. and M.S. advisory committees
University ofTexas at Austin: Led a field trip to the Santa Catalina and Rincon Mountains for a graduate
student who was starting a M.S. thesis project.
U.s. Geological Survey: Served on the advisory panel for the Earth Surface Processes Research Institute
__: Served as a review panel member for the Earthquake Hazards Reduction Program
Western National Parks Association, Tucson: Gave two talks on the geology of Catalina State Park
Wings Over Willcox, Willcox: Led field trips (three) to Fort Bowie, Chiricahua Mountains, and the
Willcox Playa
Verde River Day, Cottonwood: Led two field trips to observe the geology of the Verde River as viewed from
Dead Horse Ranch State Park
MAPS AND REPORTS COMPLETED
ARIZONA GEOLOGICAL SURVEY (AZGS) - FY 2004
ARIZONA GEOLOGY
What makes "Red Rock Country" beautiful?: L.D. Fellows, v. 33, n. 3, p. 1-4.
Arizona has helium: S.L. Rauzi and L.D. Fellows, v. 33, n. 4, p. 1-4
Asbestos in Arizona: R.C. Harris, v. 34, n. I, p. 1-4
Giant desiccation cracks in Arizona: R.c. HaITis, v. 34, n. 2, p. 1-4.
DIGITAL GEOLOGIC MAPS
DGM30. Geologic map of the Samaniego Peak 7.5' Quadrangle, Pima County, Arizona: johnson, BJ,
Ferguson, C.A., Pearthree, PA, and Stavast, W.A, 2002, AZGS Digital Geologic Map 30, CD-ROM
that includes one 1: 24,000-scaie geologic map and 2I-p. text.
DGM31. Geologic map of the Twin Buttes 7.5' Quadrangle, Pima County, Arizona: Richard. S.M.,
Spencer, lE., Youberg, Ann, and johnson, B.j., 2003, AZGS Digital Geologic Map 31, CD-ROM that
includes one I:24,OOO-scale geologic map.
DGM 32. Geologic map of the Batamote Hills 7.5' Quadrangle, Pima County, Arizona: Ferguson, C.A,
johnson, B.l., and Shipman, TC., 2003, AZGS Digital Geologic Map 32, CD-ROM that includes one
I:24,000-scale geologic map and 3I-p. text.
DGM 33. Geologic map of the Esperanza Mill 7.5' Quadrangle. Pima County, Arizona: Spencer, lE.,
Ferguson, C.A, Richard, S.M., and Youberg, Ann, 2003, AZGS Digital Geologic Map 33, CD-ROM
that includes one I:24,OOO-scale geologic map and IO-p. text.
DGM 34. Geologic map of the Benson 7.5' Quadrangle, Cochise County, Arizona: Youberg, Ann,
Skotnicki, S,J., Shipman, TC., and Ferguson, C.A., 2004, AZGS Digital Geologic Map 34, CD-ROM
that includes one I:24.000-scale geologic map.
DGM35. Geologic map of the McGrew Spring 7.5' Quadrangle, Cochise County. Arizona: Shipman.
TC. and Ferguson, C.A, 2003, AZGS Digital Geologic Map 35, CD-ROM that includes one 1:24,000­scale
geologic map.
DGM 36, Geologic map of the Huachuca City 7.5' Quadrangle, Cochise County, Arizona: Pearthree,
PA.. 2003, AZGS Digital Geologic Map 36, CD-ROM that includes one I:24,OOO-scale geologic map.
DOWN-TO-EARTH
DTE 15. Roadside geology: Wupatki and Sunset Crater Volcano National Monuments: Hanson, S.L.,
2003, AZGS Down-tq-Earth 15,32 p..
DTE 16. A guide to the geology of the White Mountains and the Springerville Volcanic Field, Arizona:
Bezy, l.v. and Trevena, AS., 2003, AZGS Down-to-Earth 16,56 p.
DTE 17. A guide to the geology of Sabino Canyon and the Catalina Highway: Bezy, j.v., 2004, AZGS
Down-to-Earth 17,45 p.
16 OPEN-FILE REPORTS
OFR 03-05. Review of helium production and potential in Arizona: Rauzi. S.L.. 2003. AZGS Open-File
Report 03-05. 29 p.
OFR03-06. Is asbestos present in Agua Fria River sand and gravel?: Harris. RC., 2003, AZGS Open-File
Report 03~06. 15 p.
OFR 03-07. Additional· desiccation cracks near Wintersburg. Maricopa County. Arizona: Harris. RC..
2003, AZGS Open-File Report 03-07, 17 p.
OFR 03-08. V-Pb isotope geochronologic data from 23 igneous rock units in central and southeastem
Arizona: Spencer, lE.. Isachsen, C.E., Ferguson, c.A.. Richard. S.M.. Skotnicki. S.]., Wooden, ]., and
Riggs, N.R, 2003. AZGS Open-File Report 03-08, 40 p.
OFR03-09. Modal mineralogy of some granitic rocks from eastem Maricopa and northem Gila counties,
Arizona: Spencer, ].E.• Skotnicki. S.]. and Richard, S.M., 2003, AZGS Open-File Report 03-09, 18 p.
OFR04-01. Giant desiccation cracks in Arizona: Harris, RC., 2004, AZGS Open-File Report 04-01, 93 p.
OFR 04-02. Geomorphology and hydrology of an alluvial fan flood on Tiger Wash, Maricopa and La paz
Counties, west-central Arizona: Pearthree, EA., Klawon, lE., and Lehman, T.W., 2004, AZGS Open-File
Report 04-02. 40 p.
CONTRIBUTED MAPS AND REPORTS.
(These maps and reports, prepared by geologists not employed by the AZGS, were released by the AZGS.)
CONTRIBUTED MAPS
CM 04-C. Geologic map of the northern Hualapai Mountains, Mohave County, Arizona: Siwiec, B.R,
2004, AZGS Contributed Map 04-C, scale 1:24,000.
CM04-D. Geologic maps and cross sections of selected areas in the Rawhide and Buckskin Mountains. La
Paz and Mohave Counties, Arizona: Scott, R]., 2004, AZGS Contributed Map 04-D, several map scales.
CONTRIBUTED REPORTS
CR 03-C. The geology, leasing, and production history of the uranium-vanadium mines on Eurida Mesa,
Apache County, Arizona: Chenoweth, W.L, 2003, AZGS Contributed Report 03-C, 24 p.
CR 03-D. The geology, leasing, and production history of the Rattlesnake No. l/Shorty No.1 uranium-vana­dium
mine, Apache County, Arizona: Chenoweth, W.L., 2003, AZGS Contributed Report 03-0, 14 p.
CR 03-E. Geology and production history of the Moonlight uranium-vanadium mine, Navajo County,
Arizona: Chenoweth, W.L., 2003, AZGS Contributed Report 03-E, 18 p. (This report supersedes CR 95-D.)
PUBLISHED OUTSIDE OF THE AZGS
Damon, EE, and Spencer, ].E., 2001, K-Ar geochronologic survey of the Hopi Buttes volcanic field, ill
Young, RA. and Spanler, E.E, eds., Colorado River origin and evolution: Grand Canyon, AZ, Grand
Canyon Association, p. 53-56.*
Fenton, C.R, Webb. R.H., Pearthree, EA., Ceding, T.E., Poreda, R]., Nash, RE. 2001, Cosmogenic 3He
dating of western Grand Canyon basalts: Implications for Quaternary incision of the Colorado River, ill
4' ,-,- c _ ; .' • •• : '_
~ ~ -: :",-
~ - • • - J 10; r::. '
c'~ ~ ~
" I 'r _ '
, '_ " Appendix 11-,continue,c! .. ' "'" ~,:
Young, R.A. and Spamer, E.E, eds., Colorado River origin and evolution: Grand Canyon, AZ, Grand 1I
Canyon Association, p. 147-152.*
Patchett, P]., and Spencer,].E., 2001, Application of Sr isotopes to the hydrology of the Colorado River sys­tem
waters and potentially related Neogene sedimentary formations, in Young, RA. and Spamer, E.E, eds.,
Colorado River origin and evolution: Grand Canyon, AZ, Grand Canyon Association, p. 167-171.*
Richard, S. M., 2003, Geologic Map Database Implementation in the ESRI Geodatabase EnVironment, in
Soller, D.R, ed., Digital mapping techniques - 2003 Workshop proceedings: U.S. Geological Survey Open­File
Report 03-471.
Richard, S. M., Matti, J,C.. and Soller, D.R, 2003, Geoscience terminology development for the National
Geologic Map Database, in Soller, D.R, ed., Digital mapping techniques - 2003 Workshop proceedings:
U.S. Geological Survey Open-File Report 03-471.
Spencer, J.E.. and Pearthree, PA., 2001, Headward erosion vs. closed-basin spiIlover as alternative causes for
the integration of the lower Colorado River, in Young, RA. and Spamer, E.E, eds., Colorado River origin
and evolution: Grand Canyon, AZ, Grand Canyon Association, p. 215-219.*
Spencer, J,E., Peters, Lisa, McIntosh, W.C., and Patchett, P]., 2001, 40Ar/39Ar geochronology of the
Hualapai Limestone and Bouse Formation and implications for the age of the Lower Colorado River, in
Young, RA. and Spamer, E.E, eds., Colorado River origin and evolution: Grand Canyon, AZ, Grand
Canyon Association, p. 89-91.*
*This book, which carries a 2001 copyright date, was released in June 2004.
TALKS AND POSTERS PRESENTED AT MEETINGS
Biggs, TH., Pearthree, P.A., Florkowski, L.N., and Lee, P,J., 2004, The effects of fire events on soil geo­chemistry
in semi-arid grasslands, ill Connecting mountain islands and desert seas: Biodiversity and man­agement
of the Madrean Archipelago II, p. 20.
Boisvert, Eric, Brodaric, Boyan, Hastings, ].T,Johnson, Bruce, McDonald, James, Richard, S.M., presenter,
Schweitzer, Peter, and Weisenfluh, G.A., 2003, NORTON: A proposed North American Geologic Map
data conceptual model: Geological Society of America Abstracts with PlVgrams, v. 35, no. 6, p.368. This paper
was presented at the annual meeting of the Geological Society of America in Seattle, November 2003.
Harris, RC., 2004, Desiccation polygons in southern Arizona. This was a poster presentation at the
Shlemon Specialty Conference on Earth Fissures, EI Paso, Texas, April 2004. The Engineering Geology
Foundation and the Association of Engineering Geologists sponsored the conference. Conference materials
were published on a CD.
Richard, S.M., presenter, Spencer, J,E., Orr, T, Ferguson, e.A., and Dickinson, W.R, 2003, Evidence for
35-50 km displacement on the Cloudburst-Suizodetachment fault system north of Tucson, Arizona, and
restoration of a Mesozoic high-angle fault system: Geological Society of America Abstracts witll Programs, v.
35, no. 6, p. 27. This was a poster presentation at the annual meeting of the Geological Society of America
in Seattle, November 2003.
Richard, S.M., presenter, Soller, D.R, Matti, J,e., 2003, Geoscience terminology development for the National
Geologic Map Database: Geological Society of America Abstracts ~ith Pwgrams, v. 35, no. 6, p. 278. This was a
poster presentation at the annual meeting of the Geological Society of America in Seattle, November 2003.
Richard, S.M., presenter, Soller, D.R., Craigue, Jon, and Hastings, J,T, 2003, Data entry tool for the
National Geologic Map Database. This paper was presented at the Digital Mapping Techniques Conference
hosted by the Oregon Department of Geology and Mineral Industries in Portland in May 2004.
18 MAPS UPDATED
DIGITAL GEOLOGIC MAPS
Geologists occasionally add detail to parts of the map, re-configure formation contacts, or reinterpret rock
relationships. Whenever a map is modified the version number is changed correspondingly. The following
changes were made to digital geologic maps:
DGM18. Fortified Peak Quadrangle, version 2.0: a cross section and new geochronologic information were
added; the area covered by the inset map (1:12,000 scale) was extended.
DGM19. Durham Hills Quadrangle, version 1.1: a cross section was added and minor changes were made:
no new mapping.
DGM 21. Oro Valley Quadrangle, version 2.0: a~ditional new mapping at Pusch Peak and Pima Canyon.
one cross section, and 3 radiometric age dates were added; one age for biotite granite of Alamo Canyon was
revised.
DGM22. Chief Butte Quadrangle, version 1.1: a cross section and new geochronological information were
added; no new mapping.
DGM 23. North of Oracle Quadrangle, version 2.0: additional mapping of the porphyritic granite near the
town of Oracle was added.
OIL AND GAS MAPS
OG 02. Annual oil, gas. and helium production in Arizona 1954-2003: Rauzi, SoL., 2004, Arizona
Geological Survey Oil and Gas Publication 02, 18 p.
OG15. Dineh-Bi-Keyah oil field, Apache County, Arizona: Rauzi, S.L., 2004, Arizona Geological Survey
Oil and Gas Publication OG 15, scale 1:63,360. (OGCC Pool Series Map P 2)
OG 35. Oil and natural gas occurrence in Arizona: Rauzi, SoL., 2004, Arizona Geological Survey On and
Gas Publication OG 35, chart. (OGCC Chart C 1) [published annually]
MANUSCRIPTS SUBMITTED FOR EXTERNAL PUBLICATION
Moore, J., Adams, M., Allis, R., Lutz, So, and Rauzi, S., Mineralogical and geochemical consequences of the
long-term presence ofCO2 in natural reservoirs: An example from the Springerville-St. Johns field, Arizona
and New Mexico, U.S.A.: submitted for publication by the U.S. Department of Energy.
Pelletier, J.D., Mayer, Larry, Pearthree, P.A., House, P.K, Demsey, KA., Klawon, J.E.,
and Vincent, KR., An integrated approach to allUvial-fan flood-hazard assessment with
numerical modeling, field mapping, and remote senSing: Application to the southern
Tortolita and Harquahala piedmonts, Arizona: Geological Society of America Bulletin.
White, Sop., Allis, R.G., Bergfeld, Do, Moore, JoN., Chidsey, T.C., Morgan, C., McClure, K, and Rauzi,
S.L., Evaluating the seal integrity of natural CO2 reservoirs of the Colorado Plateau: submitted for publi­cation
by the U.S. Department of Energy.
ANNUAL PRODUCTION IN ARIZONA 1954 ~ 1996
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Arizona Oil and Gas Conservation Commission
416 West Congress, Suite 100
Tucson, Arizona 85701
(520) 770-3500
December 13, 2005
Committee ofReference for
Sunset Review ofthe Arizona
Oil and Gas Conservation Commission
1700 W Washington Ste H
Phoenix AZ 85007-2844
Re: Follow-up to Hearing ofNovember 16,2005
Dear Chairman Reagan:
I have enclosed five pages of information about the storage safety track record of
underground natural gas storage facilities. The information describes nine storage
incidents including two serious accidents and seven minor storage failures or mishaps.
I could find no record of an explosion at a storage facility in New Mexico. There was an
explosion in New Mexico from a gas pipeline. I have enclosed a web page from the
Federal Office of Pipeline Safety that describes that explosion.
The Commission established a policy in 1994 to provide a copy of an approved
application for permit to drill to the County Manager in which the well will be drilled.
The Commission continues to follow this policy in order to keep county government
informed about proposed exploration and drilling activity. Applications for storage wells
require a public hearing and all affected parties and governmental agencies would be
notified and have an opportunity to appear and be heard in accordance with statute.
Sincerely,
~~
J Dale Nations
Chairman
Arizona Oil and Gas Conservation Commission
Enclosures
Safety
A major concern for a community in discussing the siting ofa natural gas storage field is
the safety track record. There are measures that can be taken to mitigate the risks
associated with natural gas storage facilities.
Storage Safety Track Record
Underground natural gas storage facilities are designed and constructed to meet stringent
industIy and regulatory specifications and codes. These facilities have one ofthe best
safety records ofall industries, both with respect to employee safety and to the welfare of
the general public. The FERC noted the impressive safety record ofthe storage industIy
in a recent ruling:
There are more than 200 jurisdictional underground storage fields generally
operating successfully and safely without major operational problems, despite the
variety ofdifficulties inherent in storage operation...Field operators have
achieved broad success through a system ofsound engineering practices using
appropriate monitoring and testing ofstorage field performance throughout the
entire active operating life ofeach storage field. The early detection ofproblems
such practices allow has proven effective in assuring the initiation ofremedies to
minimize adverse effects to the environment and the preservation ofthe stored
natural gas.34
,
There have been relatively few problems associated with the underground storage of
natural gas in the almost 90 year history ofgas storage. During the last thirty years, only
two serious accidents have occurred and seven minor storage failures or mishaps have
been reported in the public record. These nine storage incidents are described below.
Six Lakes, Mecosta County, Michigan
In August 1974, a blowout and fire occurred during a remedial operation on a plugged
storage well at the Six Lakes gas storage facility, located in Mecosta County, Michigan.
After two deviated control wells were drilled and water and mud injected, the well was
34 99 FERC 11" 61,385 (2002). Docket CPOI-427-001, Dominion Transmission, Inc.
brought under control. All surface equipment was destroyed. No third party damage was
recorded.
Eaton Rapids, Eaton County, Michigan
In January 1993, at the Eaton Rapids ~eld, storage gas was found to be migrating from
shut-in production wells. Upon investigation, it was discovered that there was a leak in
the production casing string, but it did not impact the water supply. The only outcome
was that some ofthe gas was produced in neighboring fields. The leak was repaired, and
the facility is still in operation.
McDonald Island, San Joaquin County, California
In October 1993, an explosion and fire occurred at the McDonald Island depleted
reservoir facility, owned by Pacific Gas and Electric. The accident was reportedly caused
by an observation port being left offan in-line heater's firebox which, coupled with an
unexplained trip-out ofthe system's flame, allowed the accumulation ofa combustible
mixture ofgas and air in the box which then ignited. There were no injuries associated
with the explosion and fire, although approximately $2 million ofdamage occurred to the
heater and surrounding equipment.
Aliso Canyon, Los Angeles County, California
Subsidence resulting from the Northridge Earthquake damaged surface piping in January
1994 at the Aliso Canyon facility in Los Angeles County; California. Although neither
fire nor injuries were reported at the storage site, the field was immediately shut-in to
. determine the full extent ofthe damage and to make appropriate repairs.
Egan Storage, Acadia Parish, Louisiana
In March 1994, Saltwaterinjections during debrining operations at the Egan salt cavern
storage facility exceeded the normal pressure gradient, resulting in fluids and gas bubbles
seeping to the surface in several nearby abandoned oil wells. The company was ordered
to drill offdome disposal wells in order to reduce injection pressure and abandon the
shallow salt-water disposal wells on the dome. Some minor third party damage occurred.
South Romeo Storage, Macomb County, Michigan
An explosion and fire blew out two safety walls ofthe compressor station building at the
South Romeo storage facility, the Washington 28 field in Macomb County, Michigan, in
October 1997. The emergency shutdown device (''ESD'') immediately closed the station,
controlled the loss ofgas, and prevented further damage. The failure was determined to
be a design flaw in the compressor engine, which released gas into the compressor
building, which subsequently exploded when a vent fan switched on. The damage was
limited to the compressor building.
Yaggy Salt, Hutchinson, Kansas
The one and only facility failure involving hUman fatality at a natural gas storage field
occurred in January 2001 at the Yaggy salt cavern storage facility, located seven miles
northeast ofHutchinson, Kansas. Originally developed to store liquid hydrocarbons, the
facility was converted to natural gas storage service in 1993 and purchased by a
subsidiary ofKansas Power and Light (KPL).
An explosion and fire occurred at several locations in Hutchinson. One at a mobile home
trailer park criticallyinjured two people and destroyed a mobile home. The two people
later died at a Wichita, Kansas hospital. The other occurrence, several blocks from the
trailer park in the center oftown, demolished a building and started several fires, which
were extinguished. ReliefwellS were drilled at other locations around the city to locate
and vent the gas and relieve the pressure on remaining trapped gas. It appears that the
failure ofthe casing in a storage cavern well allowed storage gas to migrate away from
the storage facility, travel up to seven miles southwest, and rise to the surface through old
improperly plugged salt solution mining wells under and around the town.
The Kansas Department ofHealth and Environment halted injection ofgas into the
storage cavern. This facility is not currently in operation and is unlikely to return to
storage service.
The fundamental issue at Yaggy was the age ofthe casing string employed in a cavern
originally designed for storage ofnatural gas liquids. The construction ofa new cavern
with appropriately designed casing strings is not likely to incur the same problems.
Magnolia Gas Storage, Assumption Parish, Louisiana
A leak developed in the casing ofa storage well at the Magnolia Gas Storage Facility in
December 2003, releasing natural gas to an adjacent aquifer and to the atmosphere.
Although there was no fire or explosion, residents were evacuated and a portion of State
Highway 70 adjacent to the facility was closed. The storage well is owned by Dow
Chemical Company and is leased to and operated by Gulf South Pipeline Company.
Downhole video shows three or four ofthe 13-3/8-inch casing connections have
separated, causing the gas to leak behind the casing and subsequently to the surface.
Several reliefwells were drilled, and all ofthe gas from the shallow aquifer into which
the gas migrated was vented. The Louisiana Department ofNatural Resources requested
sonar tests ofeach cavern; the results ofthese tests show that neither cavern experienced
salt wall damage. Gulf South is in the process ofevaluating whether the wells can be
repaired and the caverns used once again for natural gas storage service.
Moss Bluff Gas Storage, Liberty County, Texas
Shortly after 4 A.M. of the morning ofThursday, August 19,2004, an unscheduled event
occurred with an explosion and resulting fire at the wellhead ofthe #1 cavern at Moss'
Bluff According to the Moss BluffHub Partners Incident Report Cavern #1 Well
Control, published in August 2004, the incident was caused by the separation ofthe 8­5/
8" well string.. Natural gas entered the well string, reached the surface, and flowed into
above-ground piping. The Emergency Shut Down (ESD) system operated properly and
shut in the piping. However, water hammer caused the piping between the wellhead and
the ESD to breach. This breach caught fire, which was extinguished briefly. However,
the wellhead assembly separated from the casing, causing gas to escape, which burned
for five days. All operating procedures were reviewed and found to be adequate.
The one facility operator on site at the time ofthe event escaped unhanned. Local
emergency officials responded quickly and residents within a one-mile radius were asked
to evacuate the area as a safety precaution. This safety corridor was extended to a three­mile
radius on the second day after part ofthe wellhead structure melted from the heat of
the fire and allowed a higher volume gas stream to escape, which resulted in a larger
vented·flame.
Although this incident was visually spectacular and sensationalized by the media, it must
be noted that there were no deaths, or even injuries, associated with this incident. The
only losses associated with this incident are the considerable financial loss due to the
escape ofthe gas from the storage cavern and the temporary disruption for those living in
the close vicinity ofthis facility. Moreover, the quantity ofgas that was released was
about six billion cubic feet, a function ofthe cavern's size. By comparison, caverns built
in bedded salt formations would typically only hold about one billion cubic feet ofnatural
gas.
·Carlsbad Pipeline Rupture Update: Part 1
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Rupture Update
What Happened? Z ()oO
At 5:26 a.m. on August 19, an explosion occurred on one of three
adjacent large natural gas ~ipelines near Carlsbad, N~w Mexico. EI
Paso Natural Gas Company operates the pipeline system. The
pipelines supply consumers and electric utilities in Arizona and
Southern California. Twelve people, including five children, died as a
result of the explosion. The explosion left an 86 feet long crater.
Last Update 09/07/2000
What is the federal government doing about it?
The National Transportation Safety Board (NTSB) has sent
investigators to the site. The NTSB is actively investigating the
accident and is focused on finding its causes. The NTSB is
examining the section of pipe that failed and will conduct laboratory
test to identify flaws or corrosion in the metal walls of the pipe. They
will also examine the company's record and maintenance
procedures, and interview EL Paso employees.
The Office of Pipeline Safety (OPS) sent pipeline safety inspectors to
ensure that no additional safety risk exist and to assist the NTSB.
The OPS has ordered the section of pipeline that failed to be shut
down. On August 23, 2000, OPS also issued an administrative order
which required the two EL Paso Natural Gas pipelines adjacent to
the failed line to be shut down until OPS determines that they can be
operated safely.
The OPS is separately determining whether the Federal pipeline
safety regulations it established were violated and take additional
enforcement actions against the operator if there is probable cause
to believe they were.
The Administrator of PHMSA and the Chairman of the NTSB visited
the accident site August 24 and 25.
Last Update 09/2212000
How long will the investigation take?
1') /51. me;. 1·e;.n Pl\/