Monday, January 23, 2017

Shale Law Weekly Review - January 23, 2017

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


Commonwealth Court Limits Pollution Fines for Continuing Violations  
On January 11, 2017, the Commonwealth Court of Pennsylvania held that the Clean Streams Law does not allowed continuing penalties for pollution remaining in waterways (EQT Production Company v. DEP).  Following a spill at one of EQT’s natural gas wells, the Department of Environmental Protection (DEP) issued fines against EQT under the Clean Streams Law. The DEP calculated the fines by interpreting the Clean Streams Law to authorize penalties for each day the pollution lingered in Pennsylvania waters. EQT challenged the penalties, arguing that the Clean Streams Law only authorized penalties for the initial waste violation.


Federal Court Denies Preliminary Injunction Against BLM Venting and Flaring Rule
On January 16, 2017, the United States District Court for the District of Wyoming denied Western Energy Alliance, Wyoming, and Montana’s motion for preliminary injunction (Wyoming v. United States DOI, No. 2:16-CV-0285-SWS). Through the preliminary injunction, the petitioners sought to enjoin the Bureau of Land Management’s final rule regarding the reduction of waste from natural gas venting, flaring, and leaks (Waste Prevention, Production Subject to Royalties, and Resource Conservation). The court held that the petitioners did not establish that “their right to relief is clear and unequivocal.”


BLM Releases Final Rule for Oil Shale Regulations
On January 10, 2017, the Bureau of Land Management released the final rule amending the Federal oil shale management regulations. The 2008 royalty system required increased royalty payments over a period of twelve years. The rule changes the 2008 system by allowing the Secretary of the Interior to decide whether a higher royalty would be appropriate in the first five years of production. In addition, the new rule establishes five and 12.5 percent as the minimum royalty payment for production years one and thirteen. The final rule also allows the Secretary to deny a plan of development based on impacts to the environment or natural resources.  


PHMSA Issues Final Rule to Improve Pipeline Safety
On January 19, 2017, the Pipeline and Hazardous Materials Safety Administration issued a final rule called “Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Changes.” Among several changes, the rule will require a specific time frame for notification of natural gas accidents or emergency events. The changes will also require a report to PHMSA when pipeline operators change a product “from liquid to gas, from crude oil to highly volatile liquids (HVL) or a permanent reversal of flow that lasts more than 30 days.” The rule will become effective March 24, 2017.


BLM Ends Comment Period for Oil and Gas Development in San Rafael Desert
On January 21, 2017, the Bureau of Land Management (BLM) closed the comment period for the preliminary alternatives for the San Rafael Desert Master Leasing Plan (MLP). The MLP for the San Rafael Desert covers 525,000 acres of land in Utah. The plan is intended to “provide a roadmap for the orderly development of oil and gas resources in the planning area, while also protecting important conservation areas...”  All documents relevant to the San Rafael Desert MLP can be found here.


DOT Requests Comment on Use of Fusion Centers to Collect Hazardous Train Data
On January 19, 2017, the Department of Transportation published a notice of proposed rulemaking in the federal register requesting comment for certain provisions of the Fixing America’s Surface Transportation Act (FAST) of 2015. The FAST Act requires railroads transporting hazardous materials to report “accurate, real-time, and electronic train consist information,” in an effort to provide first responders with information they need to deal with emergencies. The request by the Pipeline and Hazardous Materials Safety Administration specifically asks for comments and information on costs and benefits related to use of fusion centers to collect and disseminate train information during an emergency.


PHMSA Will Consider Whether There Should Be A Vapor Pressure Threshold
On January 10, 2017, the Secretary of Transportation signed an Advance Notice of Proposed Rulemaking which invites consideration of whether a vapor pressure threshold should be established for unrefined petroleum products during transportation. The Pipeline and Hazardous Materials Safety Administration (PHMSA) is requesting comment from interested stakeholders in government, industry, and the public to determine potential safety benefits and costs. PHMSA is considering this vapor pressure limit revision to the Hazardous Materials Regulations after receiving a petition for rulemaking from the Attorney General of New York.


University of Chicago Publishes Study on Effects of Hydraulic Fracturing on Communities
On December 22, 2016, the Energy Policy Institute at the University of Chicago published a paper called “The Local Economic and Welfare Consequences of Hydraulic Fracturing.” The purpose of the paper was to study the impact of hydraulic fracturing and to develop a measure of community welfare. The study found that “counties with high fracing potential produce roughly an additional $400 million of oil and natural gas annually three years after the discovery of successful fracing techniques…” These counties generally see an increase in salaries, total income, and employment. However, these counties also experience “significant estimates of higher violent crime rates, despite a 20 percent increase in public safety expenditures.”


Cracker Plant Receives Approval to Discharge Wastewater into Ohio River
On January 5, 2017, the Ohio Environmental Protection Agency (Ohio EPA) issued a news release regarding the issuance of permits for the proposed Belmont County Cracker plant. The Ohio EPA approved two permits and the applicant, PTTGC America LLC will be permitted to select which option to develop. One permit allows for the discharge of wastewater into the Ohio River and Big Run. the other permit allows for the discharge of wastewater into the Ohio River and Lockwood Run.


Lawsuit Challenges Montana Hydraulic Fracturing Chemical Disclosure Rules
On January 13, 2017, several landowners and environmental groups filed suit against the Montana Board of Oil and Gas Conservation (Montana Environmental Information Center, et al. v. Montana Board of Oil and Gas Conservation). The suit challenges a rule that allows energy companies to conceal chemicals used during the hydraulic fracturing process if the company considers the chemical to be a trade secret. The lawsuit states that without full disclosure, landowners cannot “effectively determine the baseline quality of water sources on their land - critically undermining their ability to establish the source of any subsequent contamination…”


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Written by Jacqueline Schweichler - Education Programs Coordinator

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