Shale Gas Weekly Review – June 17, 2016

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

Pennsylvania’s House of Representatives and Senate Enact a Bill Requiring the Department of Environmental Protection to Redraft Conventional Drilling Rules Independently from Unconventional Drilling Rules

On June 15, 2016, Pennsylvania’s House of Representatives and Senate enacted Senate Bill 279. This bill establishes the Pennsylvania Grade Crude Development Advisory Council, which will provide administrative support to the DEP on policies and regulations regarding conventional oil and gas wells. Additionally, the passage of SB 279 effectively requires the DEP to redraft the chapter 78 revisions for conventional oil and gas. However, the proposed chapter 78a revisions for unconventional oil and gas will continue toward implementation and will not be affected by the enactment of SB 279 due to an agreement between Governor Wolf and the Pennsylvania legislature. On June, 16, 2016, following the passage of SB 279 in both the Pennsylvania House of Representative and the Senate, SB 279 was presented to Governor Wolf to be signed for final passage.

The United States Senate Votes to Pass the “Protecting our Infrastructure of Pipelines and Enhancement Safety Act of 2016” or the “PIPES Act of 2016”

On June 13, 2016, the U.S. Senate unanimously voted and agreed to the U.S. House of Representative’s amendment to the PIPES Act of 2016. Prior to the Senate vote, the U.S. House of Representatives unanimously voted by voice vote on June 8, 2016, to pass the Senate bill as amended. The PIPES Act of 2016 reauthorizes the federal pipeline safety program within the Pipeline and Hazardous Materials Safety Administration (PHMSA). Additionally, it reauthorizes the PHMSA to halt pipeline operations and take proactive steps when pipeline practices are creating “imminent hazard.” Because the PIPES Act of 2016 was agreed upon by both the U.S. Senate and U.S. House of Representatives, it must now be approved by the President Obama in order to be enacted.

The EPA Finalizes a Rule that Bans Unconventional Oil and Gas Extraction Companies from Disposing of Hydraulic Fracturing Wastewater in Municipal Sewage Treatment Plants

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. The rule set a zero discharge standard, which prevents all pre-treated wastewater from being disposed of in sewage treatment plants. According to the EPA, this rule is consistent with the current industry practice, and was intended to ensure this practice continues into the future. Moreover, the rule was designed to improve public health and water quality because wastewater from hydraulic fracturing can contain high levels of salts, metals, and other pollutants that municipal treatment facilities are not designed to remove. More information is available here.

Report Discusses Benefits of Horizontal and Directional Drilling Technology

A June 14, 2016 report released by the Western Energy Alliance and the Petroleum Association of Wyoming found that technological advances in horizontal and directional drilling not only had a positive impact on oil and gas production, but also on wildlife habitats. According to the report, directional and horizontal drilling reduce surface disturbance by nearly 70%.

Clean Air Task Force Report Analyzes Effects of Toxic Air Emissions

Earlier this month, the Clean Air Task Force published a report discussing the cancer and respiratory health risks of air toxics produced by the oil and gas industry. The air pollutants analyzed in this report are Formaldehyde, Benzene, Acetaldehyde, and Ethyl Benzene. Of note, the report states that “[t]he areas with the greatest health risk are generally located in states with the greatest amount of oil and gas infrastructure including Texas, Louisiana, Oklahoma, North Dakota, Pennsylvania, and Colorado.”

A Colorado State University Study Finds that Emissions are Larger During Flowback

On June 14, 2016 Colorado State University released a study entitled “Characterizing Air Emissions from Natural Gas Drilling and Well Completion Operations in Garfield County, CO.” The study found that the median methane emissions rate for flowback was 40 g/s, compared to only 2.0 g/s for drilling and 2.8 g/s for hydraulic fracturing.

The U.S. District Court for the Southern District of West Virginia Rules that State and Federal Law Preempt Fayette County’s Ban on Wastewater Disposal Wells

On June 10, 2016, Judge Copenhaver, Jr. granted summary judgment for EQT, a petroleum gas corporation, concluding that Fayette County’s ban on disposal of wastewater in UIC wells and its regulation of storage at conventional vertical drilling sites was preempted by federal and state law, including the West Virginia Oil and Gas Act, and West Virginia’s UIC program, promulgated by the DEP pursuant to the Safe Drinking Water Act. Specifically, The court cited City of Huntington v. State Water Commission, 73 S.E.2d 833 stating, “[p]ublic health is a matter of statewide rather than local or municipal interest or concern and in the regulation of public health the power of the state is supreme.” Fayette County has not announced whether it will appeal the decision.

Written by Chelsea Wilson and Jessica Deyoe - Research Assistants