Shale Law Weekly Review - February 27, 2017

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.

Environmental Hearing Board Refuses to Reconsider Permits Issued to Mariner East II Pipeline

On February 23, 2017, the Pennsylvania Environmental Hearing Board issued an opinion and order denying a motion for an expedited hearing and reconsideration of permits granted for the Mariner East 2 pipeline. The Mariner East 2 pipeline will transport natural gas liquids from Ohio and Pennsylvania to Delaware County, Pennsylvania. Permits were granted for the project on February 13, 2017. The current action was brought by the Clean Air Council, the Delaware Riverkeeper Network, and the Mountain Watershed Association to appeal all 20 permits that have been granted.

Dakota Access Pipeline Nears Completion After Receiving Last Easement

On February 21, 2017, Energy Transfer Partners said in status report that the Dakota Access pipeline construction is near completion, according to the Washington Times.  The Washington Times reports that the company is expects the pipeline to be complete between March 6th and April 1st. On February 8, 2017, Energy Transfer Partners L.P. (ETP) received the last easement necessary to complete construction of the Dakota Access Pipeline on February 8th. According to a ETP press release, the Army Corps of Engineers has granted the easement permitting the pipeline to cross land adjacent to Lake Oahe. The Army Corps granted the easement after a presidential memorandum demanded that actions should be taken to review and approve the pipeline. The Dakota Access pipeline consists of a 30-inch diameter pipe that will transfer crude oil from North Dakota to Illinois.

Study Examines Unconventional Oil and Gas Well Spill Rates

On February 21, 2017, a study was published in the journal Environmental Science and Technology that examines spills from unconventional oil and gas wells in four states: Colorado, New Mexico, North Dakota, and Pennsylvania. Colorado and New Mexico require any spill exceeding 210 gallons to be reported while North Dakota requires the reporting of any spills more than 42 gallons. Pennsylvania requires reporting of more than 5 gallons of brine “containing more than 10,000 mg/L total dissolved solids (TDS), or of at least 15 gallons of brine with a lower TDS concentration.” According to the study, “About 15% of all wells reported a spill, with more than 75% occurring within the first three years of well life.” The study is entitled “Unconventional Oil and Gas Spills: Risks, Mitigation Priorities, and State Reporting Requirements.”

New Federal Coal, Oil, and Gas Valuation Rule Postponed Due to Legal Challenges

On February 22, 2017, the Office of Natural Resources Revenue (ONRR) announced the postponement of the Consolidated Federal Oil & gas and Federal & Indian Coal Valuation Reform Rule (2017 Valuation Rule). The ONRR stated in the federal register that the rule was being postponed as a result of three petitions in federal court challenging the rule.  The purpose of the rule was to simplify and clarify product valuation for mineral interest holders and to decrease the industry’s cost of compliance.

Georgia Bill Passed by House Proposes to Regulate Oil and Gas Development

On February 23, 2017, Georgia legislators passed a bill in the House that will regulate oil and gas exploration and extraction in the state. The bill, HB205, creates an Oil and Gas Board, amends drilling permit provisions, increases the amount of drilling operation bond securities, provides a severance tax, and grants authority to local governments to zone.  The bill was passed by a vote of 162 to 1, and on February 24th it was referred to the Senate.

ShaleLaw HotLinks:

Oil exports and production increased last year to highest averages in Saudi Arabia - EnvestorFirst

Mariner East 2 pipeline project moves forward - PhillyMag

“Chesapeake focuses on well completions in Utica, Marcellus regions” - ShaleGasReporter

TransCanada submits Keystone XL presidential permit application - OGJonline

Oasis Petroleum, based in Houston, lays out its plans to grow production volumes for 2017 - ShaleDaily

New proposal in Nevada would ban hydraulic fracturing in the state - RenoGazetteJournal

Updated detailed interactive map and data about the PA Marcellus Shale - StateImpact

Overflow of storage tank was source of spill that allegedly polluted stream in Lycoming County - PennLive

Protest camp at Dakota Access Pipeline cleared on Wednesday with few protesters remaining - Deutsche Welle

Second pipeline will be built after the Mariner East 2 pipeline - PowerSource

FERC keeps Obama guidance alive in manual for gas projects - Greenwire

Georgia House approves bill that could regulate hydraulic fracturing and require a tax - AJC

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Check out this week’s Shale Law in the SpotLight: Use of the Congressional Review Act to Alter Energy and Environmental Policy in the Early Days of the Trump Administration.

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Shale Law in the Spotlight: U.S. Fish and Wildlife Service – Overview of the Final Rule on Non-Federal Oil and Gas Rights on National Wildlife Refuge Lands and Waters.

The U.S. Fish and Wildlife Service (FWS) is a bureau dedicated to fostering environmental protection and land management, and handling the environment-development nexus and associated issues. The bureau carries out diverse functions, including management of non-federal oil and gas rights on National Wildlife Refuge lands and waters under the amended National Wildlife System Administration Act of 1966. National Wildlife Refuges are part of the National Wildlife Refuge System (NWRS).

Generally, oil and gas exploration and development is prohibited on Refuge System lands and waters unless oil and gas resources are privately owned. In other words, oil and gas development may occur where the FWS does not own the subsurface mineral rights, either because the Federal government purchased the land from someone who did not own the mineral rights beneath it or who retained the mineral rights when the land was sold. 

On December 11, 2015, the FWS published to the Federal Register a proposed rule governing the management of non-federal oil and gas activities on NWRS lands and waters, which revisits codified regulations (50 CFR Part 29) that are more than fifty years old. Non-federal oil and gas rights refer to those that are under individual, company, state, local or Indian mineral ownership. In a draft environmental impact analysis, the FWS explained that “these regulations have not been updated since it was originally published [in 1960] and are ineffective at protecting refuge resources and at giving operators and Service employees clear guidance on requirements for operating on refuge lands.” Thus, the aim of the rule is to ensure clarity of regulatory interpretation for the benefit of both wildlife conservation and oil and gas industry.

On November 14, 2016, the FWS published the final rule, which applies to all operators conducting oil and gas operations on national wildlife refuge lands and waters outside of Alaska. The effective date of the final rule is December 14, 2016.

In order to provide further protection to the refuge resources, the FWS developed a new permitting system to supervise oil and gas activities on private lands within the National Wildlife Refuge System that could impact federally-owned lands and resources of the Refuge System. According to the final rule, new operators must request a Service-issued permit to develop oil and gas resources on private lands, and a subsequent permit for each development phase, including plugging and reclamation. The FWS explained that this new permitting process will enable the Service to minimize the negative impacts on refuge resources by controlling the time, place and manner of activities associated with oil and gas activities.

The final rule also stipulates that, for all existing operations authorized under a special use permit, prior to December 14, the FWS will not require a new permit, unless operators intend to modify their existing operations or conduct new operations. The FWS considers that compliance with a special use permit is enough for the purpose of protecting refuge resources and uses. In case the existing operations were performed without a Service authorization, the FWS also will not require a new permit because negative impacts would have already occurred; thus, there is no need to add on administrative and operational costs. The FWS points out that “this approach to permitting allows the Service to focus its limited time and resources on those new operations that create the highest level of incremental impacts.”

Another main change carried out by the final rule includes new performance-based standards for facility design, fish and wildlife protection, hydrology, safety, lighting and visual, noise reduction, and reclamation and protection. The final rule also provides for additional standards specific to geophysical, and drilling and production operations. The FWS highlights the necessity of a performance-based standards model to further “identify and develop specific actions and best management practices that are then incorporated into operations permits.” To support this view, the FWS argues that a prescriptive approach usually “define[s] specific requirements of time, place, and manner and may not fully consider how these measures achieve the desired level of resource protection or how they may apply in different environments.” Interestingly, the FWS reveals that it developed these standards with the idea that hydraulic fracturing operations would be carried out on refuge lands. Other main provisions include right-of-access through federal lands, financial assurance, and penalty provisions.

Finally, the final rule points out that oil and gas operations in Alaska refuges are exempt from the final rule provisions because the Alaska National Interest Lands Conservation Act and the Alaska Native Claims Settlement Act of 1971 provide enough protection to refuge resources and uses.

The FWS recognizes that the final rule is built to complement state regulatory programs even thought it admits that “the Service and State oil and gas agencies have fundamentally different missions.” The FWS hopes to resolve environmental issues the state agencies were not able to address and, by that, means that “making violation of non-conflicting provisions of State oil and gas law and regulations a prohibited act under the rule [will allow the Service] to enforce on refuges as a matter of Federal law, the same requirements already imposed on operators by a State.”

Written by Chloe Marie – Research Fellow 

U.S. Geological Survey Releases a Study Addressing Grassland Bird Density in Oil and Gas Development Areas

On October 14, 2015, the U.S. Geological Survey released a study entitled “Avoidance of unconventional oil wells and roads exacerbates habitat loss for grassland birds in the North American great plains” published in the Elsevier Journal. The study examines the population-level impacts of oil and gas development on grassland birds in northwestern North Dakota from 2012 to 2014.

The researchers measured bird density in areas with extensive oil and gas development and related infrastructures.  Based on singing bird surveys, they observed that grassland birds avoided habitat within 150 m of roadways, 267 m of single-bore well edges, and 150 m of multi-bore well edges.

The researchers noted, however, that noise from oil and gas infrastructure does not affect species in the same way, pointing out that “[v]arying tolerance of anthropogenic noise is suggested as a factor driving variation in avian avoidance of natural gas wells, but oil wells in [the study area] were considerably less noisy and thus noise is less likely to be a key driver in this system.”

The researchers concluded that placing multi-bore well pads instead of single-bore well pads along bird migration corridors “may be a viable method to minimize the footprint of oil development.” 

Written by Chloe Marie - Research Fellow

10/19/2015