Shale Law Weekly Review - May 21, 2018

Written by:

Brennan Weintraub - Research Assistant

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

Water Quality: University Study Finds No Groundwater Impacts from Drilling

On May 3, 2018, researchers from the University of Cincinnati (Ohio) published a four-year study on the effects of hydraulic fracturing (fracking) on the groundwater of the Utica Shale region of Ohio. “We found no relationship between Ch4 [methane] concentration or source in groundwater and proximity to active gas well sites,” said geology professor Amy Townsend-Small and the five other authors of the publication.

Environmental Rights Amendment: Gas Well Permits Don’t Violate PA Constitution, Panel Says

On May 11, 2018, the Pennsylvania Environmental Hearing Board issued its opinion in the Delaware Riverkeeper Network et al. v. Commonwealth of Pennsylvania case. The Board found that the state did not breach its constitutional duties as environmental trustee by issuing permits to Rex Energy Corp. to build several natural gas wells in Butler County. The relevant constitutional provision, Art. I, §27, designates the Commonwealth as the trustee of the state’s public natural resources.

Pipelines: Pennsylvania PUC Approves Restart of Mariner East 1 Pipeline

On May 3, 2018, the Pennsylvania Public Utility Commission unanimously approved a resolution allowing the Mariner East 1 pipeline to resume operations. The pipeline had been shut down after several sinkholes appeared in the area. The owners of the pipeline, Sunoco Pipeline, took “corrective actions,” per the request of the Commission.

Pipelines: Energy Transfer Partners Gets Approval for Additional Rover Facilities

On April 25, 2018, the U.S. Federal Energy Regulatory Commission gave its approval for the Rover Pipeline to put a compressor station and 51 miles of pipeline into service in northern Ohio. Nearly all of the pipeline and most of the necessary infrastructure is already finished. The entire project is expected to be completed within the next year.

Municipal Regulation: Colorado City Leaders Approve Extension of Hydraulic Fracturing Moratorium

On May 15, 2018, the Boulder City Council unanimously approved an extension of the city’s ban on hydraulic fracturing for another two years. The city has banned the practice since 2013, despite a 2016 ruling by the Colorado Supreme Court striking down a similar ban in Longmont. The Boulder ban, however, has not yet been challenged in court.

International Development: UK Makes Changes in Administration of Shale Gas Development

On May 17, 2018, the UK government announced that it will seek to make changes to regulations governing the exploration and extraction of shale gas. Greg Clark, the Secretary of State for Business Energy, and Industrial Strategy stated to Parliament that the government would create a new administrative body, the Shale Environmental Regulator, to simplify regulations. He also announced that a new support fund would be created to help local authorities process shale applications.

National Energy Policy: President Trump Alters Policy on Reduction of Energy Usage by Federal Agencies

On May 17, 2018, President Trump issued an executive order which altered requirements established by President Obama for federal agencies to reduce their energy use by 2.5 percent per year, use clean energy sources for 25 percent of their energy needs, and reduce overall water consumption by 36 percent. The new executive order removes the specific targets put into place in 2015 and allows agencies to set their own targets instead.

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Global Shale Law Compendium – Shale Governance in Australia (Western Australia, South Australia, and Queensland)

Written by Chloe Marie – Research Fellow

The Global Shale Law Compendium series addresses legal developments and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will highlight governance actions taken by some of the states in Australia to develop policies specific to shale gas development. In a previous article, we addressed shale gas development in the states of New South Wales, Victoria, and Tasmania, as well as the Federal Northern Territory.

Western Australia

The Government of Western Australia (WA) estimates that there are around 280 Tcf of potential shale gas resources located in the Canning and Perth Basins. It also identifies potential resources in the Carnarvon and Officer Basins, but those remain “still underexplored.” The Government declared that 17 exploration wells were drilled in Western Australia from 2005 to 2012, of which 13 were hydraulically fractured.

Recognizing this great potential, the WA Department of Mines and Petroleum released new draft regulations on May 30, 2014, with the purpose of strengthening its existing regulatory framework for onshore oil and gas activities in Western Australia as well as addressing issues specific to shale gas development. Those regulations were adopted on July 1, 2015.

In the meantime, on August 7, 2013, the WA Standing Committee on Environment and Public Affairs proposed to investigate the implications for Western Australia of hydraulic fracturing for unconventional gas in order to answer multiple concerns raised among the WA community. The WA Standing Committee released said report in November 2015 and stated that “the purpose of this inquiry has been to provide a comprehensive body of factual information and findings to assist the Parliament of Western Australia, future decision makers and the public in their contemplation of this industry.”

As part of its findings and recommendations on several key areas, the Committee found that “many of the concerns expressed by the community in relation to the impact of hydraulic fracturing for unconventional gas can be addressed through robust regulation and ongoing monitoring.” The Commission also recommended that the “Government establish a working group, including land owner representatives and community leaders, to draft legislation for a statutory framework for land access agreements between land owners and resource companies.”

In its response to the inquiry, the Western Australian State Government supported most of the recommendations expressed by the Committee and agreed to further work on the current regulations. It did not agree, however, on establishing a statutory body to act as an independent arbiter for land owners and resource companies in land access negotiations involving shale gas development. The Government stated that “mechanisms for negotiating access agreements with landholders have developed significantly since the Committee report.”

The discussion relating to shale gas development in Western Australia, however, took a new turn with the appointment of a new Premier in March 2017. Indeed, during the state election campaigns, Premier Mark McGowan clearly stated his intention to stand against the use of hydraulic fracturing in Western Australia. Subsequently, on September 6, 2017, a ban on hydraulic fracturing was implemented for unconventional gas covering all existing and future petroleum titles in the South-West, Peel and Perth metropolitan regions in Western Australia until further review has been performed on the potential impacts of hydraulic fracturing.

South Australia

The South Australia State Government has indicated that “early indications show that the Cooper Basin could potentially produce more than 200 Tcf [of shale gas resources]” and that “several unconventional reservoir plays are being actively explore for gas/oil by more than 20 companies in South Australia.” Originally, shale gas exploration in South Australia started in October 2012, but the developmental phase has not yet begun.

The South Australian State Government was the first state to publish a comprehensive plan for the development of its shale gas resources.  This plan, published in December 2012 and entitled Roadmap for Unconventional Gas Projects in South Australia, contains a great number of recommendations to maximize the developmental potential while minimizing impacts.

As in Western Australia, the South Australian Parliament’s Natural Resources Committee initiated in November 2014 an investigation relating to the impacts of hydraulic fracturing activities in the South East of South Australia. The Committee released a Final Report on November 29, 2016, and made a total of 5 recommendations and 10 findings. The Committee found that “the natural gas industry does not currently have social licence to operate in the South East, and in the committee’s opinion unconventional gas exploration and development should not proceed without it.” The South Australian State Government provided responses to the recommendations on March 30, 2017, and confirmed that those recommendations would be taken into consideration in any future review of the State Petroleum and Geothermal Energy Act of 2000.

Queensland

According to the Queensland State Government, shale gas exploration and development is still at a very early stage in Queensland despite having some promising potential in the Isa Superbasin, Maryborough, Georgina, Cooper and Eromanga basins. Until now, just over 20 exploration wells have been drilled in Queensland to evaluate the shale gas reserves.

Interestingly, on August 24, 2008, the Government of Queensland introduced a 20-year moratorium on developing the McFarlane oil shale deposit located in the Whitsunday Region of Queensland pending review of the potential risks associated with shale oil development on the environment. On February 13, 2013, the Government continued the 2008 moratorium, which is scheduled to end in 2028.

Shale Law in the Spotlight: Songbirds and Bats - Issues Related to Shale Gas Development

Written by Torin Miller, Research Assistant

            A few weeks ago, we took a look at the impacts of shale gas drilling on wildlife populations, with a particular focus on habitat fragmentation, water issues, and noise, light and air pollution. This week, we’ll take a closer look at species-specific impacts throughout the northeastern United States, with an emphasis on the Marcellus Shale region. Specifically, this article will focus on forest songbirds and bats, and the impacts that habitat fragmentation, greenhouse gas emissions, water consumption and contamination, and noise pollution have on their populations.

            Forest songbirds and various bat species have been at the center of the majority of the wildlife-related shale gas impact studies conducted to date. The Marcellus shale region is covered by large swathes of contiguous forest, which provides “habitat for a myriad of forest specialists and interior wildlife, including numerous species of conservation concern and many Neotropical songbirds,” a study in The Journal of Wildlife Management (JWM) states. According to the study, with less than 10 percent of the nation’s forests remaining in contiguous conditions, Pennsylvania’s title as the second most-forested state in the northeast is incredibly important for forest specialists such as songbirds and bats. “Bats may serve as the proverbial ‘canary in the coalmine’ because many of their life history traits make them sensitive to human-induced environmental changes,” a report by The Delaware Riverkeeper Network (DRN) notes.

Specific, potential impacts on both forest songbirds and bats, with a focus on habitat fragmentation, greenhouse gas emissions, water consumption and contamination, and noise pollution, will be outlined below.

Forest Songbirds

            Shale gas development’s biggest impact on forest songbird populations is habitat fragmentation. This is likely attributed to the fact that songbird breeding success and abundance are highest in large blocks of contiguous forest, according to a study in Environmental Science and Technology (EST). According to the JWM study, “Research has shown that shifts in the bird community are occurring within the large block of extensive forest in Northcentral Pennsylvania in association with shale gas development.”

The JWM study found that there has been an increase of human tolerant species near well pads and a decline in forest specialists, and that the lack of forest specialists may have been the result of edge avoidance or an influx of new species. As a result, “[t]he increase in these novel community members within the forest may result in increased levels of predation, parasitism, and resource competition,” the study notes. The loss of forest specialists is important for a variety of reasons. Notably, forest songbirds are important for insect control; “[t]hey provide a valuable ecosystem service and their role in preventing and suppressing insect outbreaks is well-documented,” the study states.

While habitat fragmentation related to shale gas development casts the biggest shadow over forest songbirds, resulting noise pollution also has its impacts. The EST study notes that noise associated with shale gas development (both short-term drilling and long-term compressors) may harm vocal species like songbirds. Additionally, a study in The Wildlife Professional notes that loud noises may affect the pairing success of songbirds, as their mating songs are drowned out by external noises. The study also notes that unnatural noises may create the possibility of “lower abundance, changes in reproductive behavior and success, altered predator-prey interactions and altered avian communities.”

According to the JWM study, “it is important to minimize disturbance to core forest habitat by minimizing fragmentation and the number of new pads established.” The study notes that methods to minimize disturbance include “clustering pad locations, maximizing the number of wells per pad, and identifying and excluding from shale gas development areas of high quality contiguous forest.”

Bats

            Like forest songbirds, various bat species are impacted by shale gas development. These impacts primarily originate from habitat fragmentation, water consumption and contamination, and greenhouse gas emissions.

            Bat abundance and diversity is highest when natural habitat is highest, and mature forests provide many places for bats to roost, according to the DRN report. Particularly, bats need large areas of undisturbed, mature habitat for roosting and foraging, and shale gas development may disrupt large areas (and will likely continue to do so), the study added.

            Destruction or disruption of hibernacula is also a concern, particularly for the endangered Indiana bat (Myotis sodalis), which are known to hibernate at only 18 sites throughout Pennsylvania, according to the Pennsylvania Game Commission. Bats require hibernacula with specific microclimate conditions, including temperature, humidity and airflow. “Modifications to the surface habitat surrounding hibernacula also can contribute to changes in microclimate conditions, as well as influence the suitability of foraging characteristics,” the DRN report notes. The report also notes that disturbing hibernating bats can cause bats to lose necessary fat reserves and abandon roost.

            Bats rely on water for two primary purposes: personal consumption and prey attraction. First, “[b]ats have relatively high rates of evaporative water loss, and must obtain much of their intake from available surface water resources,” the DRN report states. Additionally, lactating females will select roost sites near water sources to aid in milk production, the report notes. Second, riparian habitats attract insects, which bats prey upon heavily. “Thus, the extensive withdrawal of water resources from the environment, particularly in sensitive areas or areas under drought conditions, will presumably affect roost-site selection and abundance and availability of prey,” according to the report.

            Wastewater contamination from shale gas development is a concern for bat populations throughout the northeast. According to the DRN report, “[b]ats have been observed congregating and drinking from holding ponds at industrial sites,” and contaminants in ponds or other water sources can negatively impact insect populations. Insects that ingest contaminated water and are then preyed upon by bats may be harmful; “[b]ecause dietary accumulation and metabolic capacity increase at higher trophic levels, and because insectivorous bats are apex predators, bats are likely more susceptible to contaminants,” the report states.

            Lastly, greenhouse gas emissions resulting from shale gas development may impact bat populations. Bats may be highly affected by climate change because temperature changes affect hibernation, food availability and young recruitment, according to the DRN report. Warmer winter temperatures could affect energy requirements for hibernation, and spring births may occur too early, which would increase juvenile mortality and negatively impact recruitment, the report notes.

            Overall, “[a]s with other industrial practices, shale gas development contributes to water withdrawal and contamination, habitat loss and degradation, and the emission of GHGs resulting in detrimental effects on bat populations and their environment,” the DRN report concludes.

Conclusion

While more observation and analysis is necessary to truly understand the impacts of shale gas drilling on forest songbird and bat populations, current studies do provide insight into the potential impacts of habitat fragmentation, greenhouse gas emissions, water consumption and contamination, and noise pollution have on these populations, particularly throughout the northeastern United States. A subsequent Spotlight article will take an in-depth look at legal implications of wildlife-related impacts of shale gas drilling, with a focus on policy and legislation that relates to, and resulted from, these impacts.