Shale Law Weekly Review - February 19, 2018

Written by:

Jacqueline Schweichler - Education Programs Coordinator

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

Methane Emissions: BLM Proposes Revisions to Waste Prevention Rule

On February 12, 2018, the U.S. Bureau of Land Management (BLM) announced a proposed rule revising the Waste Prevention, Production Subject to Royalties, and Resource Conservation rule, known as the “venting and flaring rule.” The rule is part of a regulatory review spurred by the 2017 executive order, Promoting Energy Independence and Economic Growth. The purpose of the revision is to “eliminate duplicative regulatory requirements” and encourage domestic energy production. Public comments on the proposed rule are due within 60 days of the rule’s publication in the Federal Register.

Wastewater Treatment/Disposal: Environmental Groups Sue EPA for Alleged Oil and Gas Pollution in the Gulf

On February 13, 2018, several environmental groups filed a lawsuit against the U.S. Environmental Protection Agency (EPA) for granting permits allowing oil and gas companies to dispose of leftover waste from drilling and hydraulic fracturing operations in the Gulf of Mexico. The lawsuit, filed in the U.S. Court of Appeals for the 5th Circuit, states that EPA violated the Clean Water Act and the National Environmental Policy Act. Specifically, the environmental groups challenge that Clean Water Act permit issued for new and existing offshore oil and gas platforms near Texas and Louisiana. According to the Center for Biological Diversity (CBD), the permit allows oil and gas companies to dump unlimited waste fluid into the Gulf of Mexico. CBD states that the largest concentration of offshore oil and gas drilling activity occurs within this area and tens of billions of gallons of wastewater are deposited yearly.

State Regulation: Colorado Approves New Rules for Flowlines

On February 13, 2018, the Colorado Oil & Gas Conservation Commission(COGCC) approved new rules for detecting and preventing spills from flowlines. COGCC began the rulemaking process last year after a broken flowline caused a home explosion in Firestone. The new rules set new installation, testing, and shut-down requirements for flowlines, according to the Associated Press. The new rules can be found here.

Induced Seismicity: Research Suggests Different Seismicity Effects Result from Hydraulic Fracturing Depths

On February 5, 2018, the Proceedings of the National Academy of Sciences of the United States of America (PNAS) published an article that focuses on induced seismicity as a result of hydraulic fracturing. The researchers focused on Harrison County, Ohio where no seismicity was found before 2010 and the arrival of wastewater injection and hydraulic fracturing into the area.  The study found induced seismicity in two depth zones, including a shallower zone in Paleozoic rocks and a deeper zone on old faults in the Precambrian basement. The research suggests that induced seismicity at the shallower depth zone created more small-magnitude earthquakes that continued after drilling ceased. They also found that the deeper zones resulted in larger magnitude earthquakes where the seismicity stopped in conjunction with drilling.

Production and Operation: EIA 2016 Year-End Report Shows Increase In Pennsylvania Natural Gas Reserves

On February 13, 2018, the U.S. Energy Information Administration (EIA) released their Year-end 2016 U.S. Crude Oil and Natural Gas Proved Reserves. Total natural gas proved reserves in the United States in 2016 increased from 324.3 trillion cubic feet (Tcf) to 341.1 Tcf. In 2016, Pennsylvania had the greatest shale natural gas proved reserves. In addition, Pennsylvania experienced the highest net increase of natural gas proved reserves with a 6.1 Tcf increase. EIA attributes the significant increase in Pennsylvania’s natural gas reserves to the development of the Marcellus shale.

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"Canada, facing protests, seeks to overhaul pipeline assessments" - Reuters

"Deal reached to bring PennEast Pipeline through Bethlehem watershed" - LeghighValleyLive

"Connecticut Wins Court Fight Over Pennsylvania Plant Pollution" - Hartford Courant

"From Oil to Solar: Saudi Arabia Plots a Shift to Renewables" - NY Times

"Alberta Forest Town Shakes as Frackers Drill for Light Oil"  - Bloomberg

"Pennsylvania allows Sunoco to resume work on Mariner NGL pipeline" - Rueters

"Pennsylvania sits on nearly 63 trillion cubic feet of natural gas, report says" - TribLive

"Trump Takes Aim at Obama-Era Rules on Methane Leaks and Gas Flaring" - Inside Climate

"2017 shale gas well impact fees top $219.4M in Pa."  - Shale Gas Reporter

"Recent Cold Convinces New England To Rethink Attitude Toward Pipelines" - Oil and Gas Investor

"DEP: Shale well fee increase needed to fix 'dire' funding picture" - Pittsburgh PG

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See our Global Shale Law Compendium and this week’s article, Shale Governance in the Michigan

Check out this week’s Shale Law in the Spotlight: UPDATE: Current Legal Developments Relating to Bureau of Land Management Rules on Methane Waste Prevention and Hydraulic Fracturing

Stay informed with our monthly Agricultural Law Brief located here.

Shale Law in the Spotlight: UPDATE – Current Legal Developments Relating to Bureau of Land Management (BLM) Rules on Methane Waste Prevention and Hydraulic Fracturing

Written by Chloe Marie – Research Fellow

·         Update on BLM Methane Waste Prevention rule

On December 8, 2017, the Bureau of Land Management (BLM) issued a final rule, the purpose of which is to “temporarily suspend or delay certain requirements” provided for in the Waste Prevention, Production Subject to Royalties, and Resource Conservation rule – also known as the Methane Waste Prevention rule. More precisely, the Methane Waste Prevention rule now will not become effective until January 17, 2019. This most recent final rule follows the publication by BLM of a proposed rule in the Federal Register on October 5, 2017.

The Methane Waste Prevention final rule was published on November 18, 2016, as part of President Obama’s Climate Action to further tackle U.S. methane emissions. This rule provided for a new set of regulations designed to help curb methane emissions released through venting or flaring during oil and gas operations carried out on Federal and Indian lands.  In a Presidential Executive Order No. 13783 dated March 28, 2017, the White House directed Secretary of Interior Ryan Zinke to review the Methane Waste Prevention rule as part of a plan to reduce regulation that would limit energy development and production. BLM was then commissioned to conduct an initial review of the rule.

From this initial review, BLM raised “concerns regarding the statutory authority, cost, complexity, feasibility, and other implications of the 2016 final rule, and therefore wants to avoid imposing temporary or permanent compliance costs on operators for requirements that might be rescinded or significantly revised in the near future.” BLM also declared that it would work on a proposed revision of the 2016 rule in order to comply with the priorities expressed in the Executive Order mentioned above.

On December 19, 2017, a number of environmental groups brought legal action against the Secretary of Interior before the U.S. District Court for the Northern District of California challenging BLM’s decision to suspend or delay certain requirements provided for in the Methane Waste Prevention rule (Sierra Club et al. v Ryan Zinke et al., No. 3:17-cv-07186). The environmental groups argue that such decision “creates a regulatory and policy vacuum that BLM concedes will decrease the amount of natural gas brought to market by [9 bcf]” before adding that “this will result in a reduction in royalties and will have harmful impacts on public health and the environment by increasing emissions of methane … and other air pollutants.” As a result, they are seeking an order vacating such decision and reinstating all provisions of the 2016 Methane Waste Prevention rule.  

·         Update on BLM Hydraulic Fracturing rule

On December 29, 2017, BLM issued a final rule repealing the Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands rule that initially was published in the Federal Register on March 26, 2015. The purpose of the Hydraulic Fracturing rule was to amend existing requirements for oil and gas operations on Federal and Indian lands and set stringent regulations relating to wellbore integrity, water quality protection, and public disclosure of chemicals used during hydraulic fracturing operations. The Hydraulic Fracturing rule was scheduled to become effective on June 24, 2015; however, implementation of the rule was delayed amid judicial and regulatory challenges.

As with the Methane Waste Prevention rule, Secretary of Interior Ryan Zinke was instructed to examine whether the Hydraulic Fracturing rule was consistent with the policies established in section 1 of Executive Order No. 13783. Subsequently, Secretary Zinke ordered the repeal of the 2015 rule following its review.

In the 2017 final rule, BLM explains that this rescission is needed because the original Hydraulic Fracturing rule would have “impose[d] administrative burdens and compliance costs that are not justified.” BLM also declared that it “believes that the appropriate framework for mitigating these impacts exists through state regulations, through tribal exercise of sovereignty, and through BLM’s own pre-existing regulations and authorities.”

Following the release of this rescission rule, the state of California initiated legal proceedings against BLM on January 24, 2018. The state of California is asking the U.S. District Court for the Northern District of California to vacate the rescission rule and reinstate all provisions of the 2015 Hydraulic Fracturing rule. California also alleges that “by repealing the Fracking Rule in its entirety, Defendants have tossed aside the public interest in ensuring that fossil fuel development is conducted in an environmentally sound and safe manner in service of what their own data shows is a negligible increase in oil and gas operators’ profits.” Stay tuned for further legal developments.