Shale Gas Weekly Review – June 30, 2016

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

Pennsylvania Shale Gas Impact Fees Decline

On June 15, 2016, the Pennsylvania Public Utility Commission (PUC) posted a press release, which announced that Pennsylvania shale gas producers paid $187.7 million in impact fees during this past year. This amount is the lowest since the state began collecting the fee four years ago and is approximately $35.7 million lower than shale gas producers paid during the previous year. The PUC explained that the reduced amount paid by shale gas producers was driven by a reduction in the price of natural gas, in addition to the increasing age of many wells. More information on disbursement and impact fees is available here.  

BLM Fracking Rule Set Aside by Federal Court, U.S. Department of the Interior Appeals

In an opinion filed June 21, 2016, the United States District Court for the District of Wyoming ruled that the Department of Interior’s Bureau of Land Management did not have the authority to regulate hydraulic fracturing. BLM argued that they were granted authority to regulate hydraulic fracturing by several statutes, but the court ultimately concluded that this was contrary to Congressional intent. On June 24, 2016, the federal government filed an appeal to the Tenth Circuit Court of Appeals.

“Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016’’ Signed into Law

S. 2276 was signed into law on June 22, 2016. The Act addresses, inter alia, the issues of pipeline safety agreements, damage prevention technology, workforce management, underground gas storage facilities, and natural gas leak reporting. Notably, the Act gives the Secretary of Transportation the power to implement “emergency restrictions, prohibitions, and safety measures on owners and operators of gas or hazardous liquid pipeline facilities without prior notice or an opportunity for a hearing, but only to the extent necessary to abate the imminent hazard.” 

OSHA Rule Excludes Oil and Gas from Strict Workplace Amendments

On May 12, 2016, OSHA published amendments to its recordkeeping rule with strict reporting requirements for work-related injury and illness information. The amendments apply only to employers with 250 or more workers or smaller employees in “high-hazard” industries. Because the oil and gas industry remains classified a low-hazard industry and has notoriously small workplaces, it is excluded from OSHA’s workplace amendments.

Report Finds Pavillion, Wyoming Residents are Absorbing High Levels of Toxins Chemicals

In June 2016, Coming Clean published a report that tracked the impact of toxic chemicals from Encana Corp.’s gas field on the nearby residents in Pavillion, Wyoming. The report concluded that emissions from Encana’s hydraulic fracturing site emitted volatile organic compounds (VOCs) into the air, which were absorbed by the nearby residents. VOCs previously have been linked to cancer, respiratory problems, and reproductive problems, among other ailments. Additionally, the report stated that Pavillion’s VOC levels exceeded both federal and state standards.

Complaint Filed to Compel EPA Regulation of Hydraulic Fracturing Waste

On May 4, 2016, environmental advocates from Washington DC, New York, Virginia, West Virginia, Pennsylvania, and Colorado filed suit against the EPA. The complaint sought “to compel the U.S. Environmental Protection Agency . . . to fulfill long-delayed nondiscretionary duties and promulgate revised regulations and guidelines for the disposal, storage, transportation, and handling of oil and gas wastes.” More specifically, the plaintiffs sued the EPA because radioactive waste from hydraulic fracturing allegedly continues to make it into the landfill around the Marcellus Shale and Appalachian Basin due to lack of regulation. On June 13, 2016, the EPA finalized a rule, as an update to the Effluent Guidelines under the Clean Water Act, which bans unconventional oil and gas extraction facilities from disposing of wastewater in municipal sewage treatment plants. However, the case has not yet been ruled on by the judge.

BLM Prepares EIS for the Monument Butte Area Oil and Gas Development Project

On June 23, 2016 the Bureau of Land Management (BLM) filed a notice of availability for “a Final Environmental Impact Statement (EIS) for the Monument Butte Area Oil and Gas Development Project.” The Final EIS examines the impacts of a proposal made by Newfield Exploration Company, as well as the impacts of alternatives. 

Preliminary Investigation Points to Poor Track Maintenance as Cause of Oregon Train Derailment

On June 23, 2016 the Federal Railroad Administration released its Preliminary Factual Findings Report concerning the June 3 train derailment in Oregon. While the cause was determined to be "broken lag bolts leading to wide track gauge,” the braking system could have exacerbated the resulting damage. According to the report, fewer train cars could have been derailed and punctured had the train been equipped with electronically controlled pneumatic brakes.

Germany’s Hydraulic Fracturing Ban Not Sufficient for Environmentalist Group

Earlier in June, Germany’s government agreed to a ban on hydraulic fracturing, which is to be revisited in five years. The ban does not apply to hydraulic fracturing in dense sandstone. Friends of the Earth Germany (BUND) issued a press release on June 24 indicating that the ban is not satisfactory. While BUND acknowledges that the current ban is a step in the right direction, the environmental group would call for an absolute ban on hydraulic fracturing.

Written by Chelsea Wilson and Jessica Deyoe - Research Assistants