Wednesday, July 26, 2017

Shale Law in the Spotlight: Endangered Species Act - Issues Related to Shale Gas Development


Written by Torin Miller, Research Assistant

            A few weeks ago, we took a look at the impacts of shale gas drilling on both forest songbirds and bats, with a focus on habitat fragmentation, greenhouse gas emissions, water consumption and contamination, and noise pollution. This week, we’ll take a closer look at the legal implications of shale gas development with regard to wildlife and wildlife habitat. Specifically, this article will focus on the Endangered Species Act of 1973 (ESA) as it relates to northern long-eared bats (Myotis septentrionalis) and the impacts the act has on modern shale gas development.
            The purposes of the Endangered Species Act of 1973 “are to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, to provide a program for the conservation of such endangered species and threatened species, and to take such steps as may be appropriate to achieve the purposes of the treaties and conventions set forth in . . . this section.” There are five factors to be considered when determining if a species is endangered or threatened:
            (A) the present or threatened destruction, modification, or curtailment of
its habitat or range;
(B) overutilization for commercial, recreational, scientific, or educational
purposes;
(C) disease or predation;
(D) the inadequacy of existing regulatory mechanisms; or
(E) other natural or manmade factors affecting its continued existence.
Further, the decision to list a species as endangered or threatened must be made “solely on the basis of the best scientific and commercial data available.”
Section 9 of the act makes it “unlawful for any person subject to the jurisdiction of the United States to . . .  take any such species within the United States or the territorial sea of the United States,” where the term ‘person’ includes individuals, corporations, or other private entities and ‘take’ “means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.”
The term ‘take’ includes ‘incidental take,’ which is take that results from, but is not the primary purpose of, the activity being conducted. Incidental take may be authorized by the United States Department of the Interior (DOI), so long as conditions are in place to minimize the impact the incidental take will have on a species. With respect to shale gas development, incidental take is a primary focus. From endangered reptiles like the eastern massasauga rattlesnake and bog turtle, to a host of endangered mussels, shale gas developers in Pennsylvania and throughout the Marcellus Shale region must be aware of take limitations and authorization requirements before altering or destroying habitat of listed species.
Bats might provide the most wildlife-related legal obstacles for shale gas developers. The Marcellus Shale region is home to two species of bats with ESA protection: the endangered Indiana bat (Myotis sodalis) and the threatened northern long-eared bat. The listing status is important to note. Incidental take permits are generally required for any ESA listed species, but the threatened status of the northern long-eared bat results in some unique legal quirks.
Under Section 4(d) of the ESA, “[w]henever any species is listed as a threatened species . . .  the Secretary [of the Interior] shall issue such regulations as he deems necessary and advisable to provide for the conservation of such species.” As a result, the DOI and the United States Fish and Wildlife Service (FWS) have some flexibility for managing and regulating species listed as threatened.
The northern long-eared bat, which was listed as threatened in April 2015 by the FWS, is a medium-sized bat that ranges throughout the eastern and north central United States, covering most of the country’s prominent shale gas regions, according to the FWS. These bats hibernate in caves and mines and spend summers “underneath bark, in cavities or in crevices of both live trees and snags (dead trees),” the FWS notes. The ESA listing of the northern long-eared bat was “primarily due to the threat posed by white-nose syndrome, a fungal disease that has devastated many bat populations,” according to a FWS press release.
After listing the northern long-eared bat as threatened under the ESA, the FWS announced final protections that utilized the flexibilities of section 4(d); “The final 4(d) rule for the northern long-eared bat removes prohibitions that would otherwise be in place on ‘incidental take’ of the bat in areas of the country not affected by white-nose syndrome.” The announcement notes, “Incidental take includes harm, harassment or mortality that occurs incidental to an otherwise lawful activity, such as clearing trees for a construction project.”
Under the final 4(d) rule, in areas where white-nose syndrome is present, incidental take is prohibited if it:
(A) Occurs within a hibernation site for the northern long-eared bat
(B)  Results from tree removal activities within a quarter-mile of a hibernaculum or from activities that cut down or destroy known occupied maternity roost trees, or any other trees within 150 feet of that maternity roost tree
(C)  Occurs during the pup-rearing season (June 1 through July 31)
Some exceptions do apply. Namely, “[o]ccupied roost trees may be removed when necessary to address a direct threat to human life and property. In other cases, a permit for incidental take may be needed,” according to the announcement. Additionally, “intentionally harming, harassing or killing the northern long-eared bat is prohibited throughout the species’ range, except for removal of northern long-eared bats from human structures, and when necessary to protect human health and safety.”
            The 4(d) provisions are beneficial to shale gas developers in the Marcellus Shale region where white-nose syndrome is present. Rather than the ESA blanketing the species’ entire range, or the impact zone of white-nosed syndrome, with take regulations requiring permitting, the 4(d) rule “is designed to protect the bat while minimizing regulatory requirements for landowners, land managers, government agencies and others within the species’ range,” according to the FWS announcement. Shale gas development can continue throughout the white-nose syndrome impact range without take permits so long as the activities meet the 4(d) provisions.
            However, white-nose syndrome is a serious threat to bats across the Marcellus Shale region. Northern long-eared bats are not out of the woods yet; “As white-nose syndrome continues to affect this species, the bat’s status may decline to the point that it becomes endangered.” If that happens, the 4(d) rule would no longer apply, and “all regulatory prohibitions under the ESA would take effect,” the announcement noted. In that instance, “most intentional and incidental take throughout the range of the northern long-eared bat would be prohibited unless permitted.”

Monday, July 24, 2017

Shale Law Weekly Review - July 24, 2017

Written by Richard Neal- Research Assistant


The following information is an update of recent local, state, national, and international legal developments relevant to shale gas.


Invasive Species: Environmental Study Reviews Impact of Shale Development on Invasive Species
On July 20, 2017, the Journal for Environmental Management published a study by researchers at Penn State University on the effects of unconventional gas developments on Pennsylvania vegetation. The study found that increases in natural resource development can increase vulnerability to invasive species. Researchers found in the study that, “Invasive plant presence on well pads was positively correlated with local propagule pressure on access roads and indirectly with road density pre-development, the number of wells, and age of the well pad.” Researchers concluded that a greater understanding of the effects of natural resource development is needed, but should be incorporated in invasive plant management strategies to help mitigate risks to the native ecosystem.


Production Reporting: Pennsylvania is the Second Largest Natural Gas Producer in the United States
On July 20, 2017, the Energy Information Agency (EIA) released energy profiles for each state in the U.S., including Pennsylvania. In the report, the EIA found that gross natural gas production in Pennsylvania, primarily in the Marcellus shale, exceeded 5 trillion cubic feet in 2016, making Pennsylvania the second largest producer of natural gas in the U.S. for the fourth consecutive year. Pennsylvania is second only to Texas which accounted for 27% of the U.S. marketed natural gas production in 2015. Pennsylvania also was the third largest coal producing state and ranked second in the nation in electricity generation from nuclear power.


Wastewater: Study Reviews Soil Sediment to Determine Impacts of Hydraulic Fracturing
On July 12, 2017, Researchers from Penn State University, Dartmouth College, and Colorado State University published a study on the effects of treated hydraulic fracturing fluid on the Conemaugh River Lake in Western Pennsylvania. The study found that sediment layers over years of maximum oil and gas wastewater disposal contained higher levels of salts, radium, earth metals, and organic chemicals. The researchers concluded that the isotopic ratios and organic signatures of the contaminates lead back to Marcellus Shale wastewater. The study states that the risks of the contamination cannot be determined as of yet and will require further regulation and study.


Pipelines: FERC Issues Notice to Energy Transfer Partners, L.P. and Rover Pipeline, LLC
On July 13, 2017, the Federal Energy Regulatory Commission (FERC) issued a notice of alleged violations to both Rover Pipeline, LLC and their parent company Energy Transfer Partners, L.P. (ETP). The notice states that the companies have been preliminarily determined to be in violation of Section 7 of the Natural Gas Act and Section 157.5 of the Commission’s Regulations. FERC staff determined that between  February 2015 and September 2016, Rover Pipeline, LLC, “did
not fully and forthrightly disclose all relevant information to the Commission in its application for a Certificate of Public Convenience and Necessity and attendant filings in Docket No. CP15-93.” Specifically, FERC staff believes that Rover Pipeline, LLC made several misstatements in their docketed response to Commission questions on the purchase and demolition of certain resources.


Climate Change: Coastal Communities in California File a Complaint Against Oil and Gas Companies in Climate Change Litigation
On July 17, 2017, the California counties of San Mateo, Marin, and and the City of Imperial Beach filed suit in the Superior Court of California against more than 35 oil and gas companies. The plaintiffs filed complaints that said the corporations of the fossil fuel industry have known about the dangers of climate change caused by production of oil and gas for years. The counties’ claims include Strict Liability for Failure to Warn, Strict Liability for Design Defect, Private Nuisance, Negligence, Negligent Failure to Warn, and Trespass. The counties further added that the greenhouse emissions allegedly caused by these companies have caused sea level change and more volatile weather that has cost the city millions in the study and mitigation of climate change. The counties said that this rise in sea level and weather volatility puts the counties’ civil infrastructure, sewer systems, and roads at risk.


Pipelines: U.S. House of Representatives Approves Bill To Streamline Pipeline Process
On July 19, 2017, the U.S. House of Representatives passed bill H.R. 2910, introduced by Representative Bill Flores (TX).  H.R. 2910, also known as The Promoting Interagency Coordination for Review of Natural Gas Pipelines Act, passed the House with a 248- 179 vote. The bill addresses the pipeline approval process, and makes FERC the lead agency in NEPA Reviews, which are for projects, programs, and activities related to environment and natural resources. FERC also would be responsible for coordinating with other agencies as needed to complete reviews and would decide what agencies will participate in reviews. H.R. 2910 was referred to the Senate Committee on Commerce, Science, and Transportation for approval on July 20, 2017.


Pipelines: Nuns File Lawsuit against FERC over the Atlantic Sunrise Pipeline Project
On July 14, 2017, the Adorers of the Blood of Christ (Adorers) filed suit against FERC in U.S. District Court for the Eastern District of Pennsylvania. The Adorers claimed that the February approval of the Atlantic Sunrise Pipeline project infringes on their religious beliefs. The Adorers are seeking a declaration that FERC violated the Religious Freedom Restoration Act,  42 U.S.C. § 2000bb-1, and are seeking injunctive relief to prevent the pipeline from running across the Adorers’ land.


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Friday, July 21, 2017

Global Shale Law Compendium: Shale Governance in Canada (British Columbia, Northwest Territories, Yukon, and Nunavut)

Written by Chloe Marie – Research Fellow

The Global Shale Law Compendium series addresses legal development and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will highlight governance actions taken by the Province of British Columbia as well as the Territories of Yukon, Nunavut, and the Northwest Territories to develop policies specific to shale gas development. In our three previous articles, we respectively addressed shale gas development in the Provinces of Alberta, Manitoba, and Saskatchewan, shale gas development in the Provinces of Newfoundland and Labrador, Ontario, and Prince Edward Island as well as shale gas development in the Provinces of New Brunswick, Québec, and Nova Scotia.

British Columbia

The Canadian province of British Columbia (BC), located on the western side of the country, is home to vast quantities of shale gas resources with an estimated 1,238 Tcf of potential resources of which approximately 336 Tcf are deemed technically recoverable, according to the BC Ministry of Energy and Mines. The shale gas resources in BC primarily are located in the Montney Formation, the Horn River Basin, the Cordova Embayment, and the Liard Basin.

According to government resources, the Montney Formation and the Horn River Basin are considered among the most promising shale gas plays in North America. The Montney Formation extends from northeastern BC to the province of Alberta while the Horn River Basin stretches from northern BC to the Yukon and Northwest territories. As for the Liard Basin and the Cordova Embayment, there is believed to be a potential for shale gas exploitation. The Liard Basin is located in northeast BC and extends across the Yukon province and southern Northwest Territories, just as does the Cordova Embayment, which extends from the northeastern corner of BC.

In British Columbia, shale gas exploration using hydraulic fracturing started in 2005 within the Montney formation while shale gas development activities in the Horn River Basin began in 2010. With regard to current activities, however, the provincial government indicates on its website that “as a result of current economic conditions, there has not been any significant new development drilling programs initiated in the past few years.” Even with this reduced activity, the provincial government has declared that “by 2011, the contribution of unconventional sourced gas surpassed gas production from conventional reservoirs … by year-end 2015, BC’s unconventional gas production accounted for about 80 percent of total gas production.”

The BC Ministry of Natural Gas Development has the authority to regulate oil and gas exploration rights, including shale gas exploration, under the provincial Petroleum and Natural Gas Act. Additionally, other regulations such as the Geophysical Exploration Regulation B.C. Reg 280/2010, the Fee, Levy and Security Regulation B.C. Reg 8/2014, and the Consultation and Notification Regulation B.C. Reg 279/2010 also apply to oil and gas operators prior to issuing permits.   

Regulating conventional and unconventional oil and gas production activities is the responsibility of the BC Oil and Gas Commission (OGC) under the provincial Oil and Gas Activities Act. More precisely, OGC is in charge of the permitting process under B.C. Reg 147/2010 and B.C. 274/2010 as well as setting out the environmental protection and management requirements necessary to obtain oil and gas permits pursuant to B.C. Reg 200/2010. In addition, OGC is responsible to provide emergency response management practices under B.C. Reg 204/2013. It also relies on Directive 2011-03, entitled First Nations Consultation on Short Term Use of Water Applications under the Water Sustainability Act, to ensure that all applications for short-term water use related to oil and gas activities potentially affecting Aboriginal rights will be reviewed along with the applicable First Nations authorities. Furthermore, OGC follows Information Letter #OGC 09-07 addressing a set of requirements for the containment, storage and disposal of returned fracture fluids to enhance protection of the environment, wildlife, and groundwater.

Yukon Territory

In a study dated 2012 on unconventional oil and gas potential in the province of Yukon, the Yukon Geological Survey (YGS) identified some shale plays with prospective resources in the Yukon Liard Basin, the Eagle Plain Basin, the Horn River Group in Peel Plain and Plateau, and the Whitehorse Trough. YGS declared, however, that “little is known about the unconventional hydrocarbon potential of Yukon, as there has been a limited amount of petroleum industry activity, and more of a focus on conventional exploration.”

Up until now, there has not been any activity relating to shale gas exploration; though various reports indicate that EFLO Energy Co., a US-based company, has showed an interest in conducting operations for shale gas exploration in the Yukon Liard Basin.

Northwest Territories

According to government reports, there are some prospects for shale gas development in the Canadian Northwest Territories, mainly due to the fact that shale gas resources have already been found in the Liard Basin and the Horn River Basin. The Northwest Territories Geological Survey also has identified the central Mackenzie region as having some potential for shale oil development within the Bluefish Shale and the Canol Shale formations. Exploration activities already have occurred in the Central Mackenzie region and the Liard Basin, but no production has been reported.

Nunavut

The potential for shale gas development in the territory of Nunavut is uncertain and not yet well documented. Territorial authorities have identified the Hudson Bay Platform, Artic Platform, Sverdrup Basin and Baffin Shelf as shale formations.

References:

Yukon’s Shale and Tight Resources, Natural Resources Canada
Nunavut’s Shale and Tight Resources, Natural Resources Canada