Monday, December 26, 2016

Shale Law Weekly Review - December 26, 2016

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

New Bill Passed to Improve Safety for Oil Train First Responders
On December 16, 2016, President Obama signed into law a new bill intended to help first responders safely deal with spills from trains transporting crude oil.  The bill is called the RESPONSE Act of 2016 and establishes a subcommittee to provide recommendations on additional tools or resources that first responders may need to react to spills in the safest manner possible. According to a press release by Senator Heidi Heitkamp, she decided to sponsor this bill after the derailment of a crude oil train in Casselton, North Dakota.

California and New Mexico Join BLM in Support of New Oil and Gas Regulations
On December 15, 2016, California and New Mexico filed a memorandum to intervene on behalf of the Bureau of Land Management (BLM) in the ongoing case against the BLM in response to their new oil and gas regulations. The new rule, “Waste Prevention, Production Subject to Royalties, and Resources,” will become effective January 17, 2017. California and New Mexico argue in their memorandum that they will be benefited by the rule because the new regulations will generate more royalty revenue and benefit the health of state citizens by diminishing emissions. The two states also filed a motion in opposition to a preliminary injunction sought by Wyoming, Montana, and North Dakota.

Texas Will Monitor Earthquakes With TexNet System
On December 14, 2016, the Center for Integrated Seismicity Research (CISR) co-hosted a meeting with the manager of the Texas Seismological Network (TexNet) to discuss research progress, according to a press release by the University of Texas at Austin. CISR is a center at the University of Texas at Austin that conducts research on naturally occurring and induced seismic events. TexNet is an earthquake monitoring system that spreads across Texas and is intended to locate and determine the origins of earthquakes.

New Study by NBER Shows Economic Benefits of Shale Development
A working paper by the National Bureau of Economic Research (NBER) was issued in December 2016 on Fracking, Drilling, and Asset Pricing: Estimating the Economic Benefits of the Shale Revolution. According to the study, “shale oil development is responsible for $3.5 trillion of the increase in stock market value…” between 2012 and the third quarter of 2015. In addition, the study suggests shale oil development explains the employment growth rates during the same time frame.

British Court Rules Hydraulic Fracturing Permit was Issued Legally
On December 20, 2016, the High Court in Britain ruled in favor of a permit granted to an oil and gas development company, according to Reuters. The permit at issue was granted to developer Third Energy in 2012 to allow the company to use hydraulic fracturing in Yorkshire. The approval of the permit was challenged by several environmental groups due to health and safety concerns. The groups claim that despite this loss, they will continue to campaign against hydraulic fracturing.

New Mining Rules to Protect Water Sources Will Go Into Effect Next Year
On December 20, 2016, the Office of Surface Mining Reclamation and Enforcement (OSMRE) finalized their Stream Protection Rule. The new rule revises current regulations and is intended to protect water supplies from “the adverse impacts of surface coal mining operations and provide mine operators with a regulatory framework to avoid water pollution and the long-term cost associated with water treatment.” The rule will require mining operators to collect pre-mining data to establish a baseline in the event of any change in water quality. The new rule will go into effect January 19, 2017.

Oklahoma Develops Seismicity Guidelines to Mitigate Induced Earthquakes
According to a news release by the Oklahoma Corporation Commission (OCC) on December 20, 2016, the OCC Oil and Gas Conservation Division (OGCD) and the Oklahoma Geological Survey have developed new seismicity guidelines for oil and gas operations in two areas. The affected areas include the South Central Oklahoma Oil Province and the Sooner Trend Anadarko Basin Canadian and Kingfisher counties. The OCC states that neither operational area generates much wastewater but these guidelines will hopefully help mitigation earthquake activity. The rule impact statement for OAC 165:10, Oil and Gas Conservation states that persons most affected by these new rules include well operators and royalty owners in Oklahoma.

President Obama Bans Oil and Gas Leasing in Atlantic and Arctic Outer Continental Shelf
On December 20, 2016, President Obama banned mineral leasing in areas of the Atlantic Coast as well as the Arctic Outer Continental Shelf under the Outer Continental Shelf Lands Act, (OCSLA) 43 U.S.C. 1341(a). The OCSLA empowers the Secretary of the Interior to grant leases for oil and gas exploration. A statement released by the White House said “...even with the high safety standards that both our countries have put in place, the risks of an oil spill in this region are significant and our ability to clean up from a spill in the region’s harsh conditions is limited.”

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