Shale & Fracking Tracker

OCC Issues New Seismicity Protocol

On February 27, 2018, the Oklahoma Corporation Commission (“OCC”) issued a new seismicity protocol for oil and gas operators in the South Central Oklahoma Oil Province (“SCOOP”) and the Sooner Trend Anadarko Basin Canadian and Kingfisher counties (“STACK”) plays. The new protocol requires all operators in a certain defined area to have access to a seismic array giving real-time seismicity readings; lowers the minimum level at which operators must take response actions from 2.5 magnitude to a 2.0 magnitude; and requires some operators to pause their operations for 6 hours at when readings exceed 2.5 magnitude, rather than 3.0 magnitude under the previous protocol. (Readings from the seismic array are necessary because tremors of less than magnitude 2.5 generally cannot be felt by humans on the ground surface.)

The new protocol is separate from existing rules addressing wastewater injection in the Arbuckle formation, in the northern area of Oklahoma. Drilling activities in the SCOOP and STACK plays have far less water associated with them than similar activities in the Arbuckle, where the disposal of produced water remains Oklahoma regulators’ “larger concern” in addressing seismic activity, according to an OCC news release. Indeed, seismic activity in the SCOOP and STACK plays is “relatively rare and smaller on average than [that] linked to injection activity. Most importantly, the risk of such events appears to be manageable,” according to the OCC. Read the news release in full here.

Federal Court’s Order Sends BLM Methane Rule into Force, For Now

On February 22, 2018, the United States District Court for the District of California granted a preliminary injunction on the Bureau of Land Management’s (“BLM”) attempt to delay certain requirements of the 2016 Waste Prevention Rule (“Waste Prevention Rule”) for one year. In December 2017, BLM finalized a rule to delay the requirements of the Waste Prevention Rule originally effective January 17, 2018 until January 17, 2019 (the “Postponement”). The states of California and New Mexico (California et al. v. BLM et al., Case No. 17-cv-07186) and several environmental groups (Sierra Club et al. v. Zinke et al., Case No. 17-cv-07187) sued to enjoin the Postponement. 


The states and the environmental groups filed motions for preliminary injunctions, the court held a hearing on February 14, 2018, and the court issued its order the following week. In granting a preliminary injunction, the court considered only the Postponement and not BLM’s February 12, 2018 proposed rule intended to replace the Waste Prevention Rule (the “Proposed Replacement”). The comment period for the Proposed Replacement is ongoing and will end on April 23, 2018. 


The separate legal challenge to the validity of the Waste Prevention Rule in United States District Court for the District of Wyoming (Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al., Case No. 16-cv-00280) remains stayed, although two groups of states have already filed motions with the court to lift the stay. The joint motion of North Dakota and Texas seeks to establish an expedited schedule for further proceeding, while the motion of Wyoming and Montana requests that the court “immediately suspend the implementation deadlines in the Waste Prevention Rule until either the Bureau of Land Management promulgates the replacement rule or the Court rules on the merits of the Petitions for Review.”  For now, the Waste Prevention Rule, including the leak detection and repair, emission reduction, and reporting requirements (originally effective as of January 17, 2018) is in effect.

BLM Proposes to Eliminate Emissions-Related Provisions of Currently-Postponed Waste Prevention Rule

On February 12, 2018, the Bureau of Land Management (“BLM”) released a pre-publication version of a proposed rule (the “Proposed Rule”) to modify the 2016 Waste Prevention Rule (the “Waste Prevention Rule”). The proposed modifications to the Waste Prevention Rule include the elimination of provisions aimed at reducing methane emissions from oil and gas facilities on federal lands. Compliance with these provisions of the Waste Prevention Rule has already been postponed until January 2019 pursuant to a final rule (the “Postponement”) promulgated by BLM on December 8, 2017, though the Postponement remains subject to pending judicial review.

BLM’s Waste Prevention Rule, initially promulgated in November 2016, covers a number of methane emissions sources associated with oil and gas production activities on federal lands, including natural gas emissions from venting or flaring, gas leaks from equipment and facilities located at the well site, and well drilling and completions. The Proposed Rule would eliminate many of the requirements aimed at reducing these emissions, and modify several others to reflect an approach similar to that in effect prior to the promulgation of the Waste Prevention Rule. For example, the Proposed Rule would eliminate the requirement that operators prepare “Waste Minimization Plans” when submitting an Application for Permit to Drill, as well as operational and equipment-related requirements applicable to well drilling operations, well completions, pneumatic controllers, pneumatic diaphragm pumps, storage vessels, and leak detection and repair. Pursuant to the Proposed Rule, the Waste Prevention Rule’s requirements related to gas capture, downhole well maintenance, liquids unloading, and measuring/reporting volumes of gas vented and flared would be “modified and/or replaced” to reflect the policies set forth in BLM’s NTL-4A, which governed venting and flaring from BLM-administered leases prior to the promulgation of the Waste Prevention Rule.

BLM has justified its proposed rule on “overlap” with the Environmental Protection Agency’s (“EPA”) New Source Performance Standards (“NSPS”) and a revised cost-benefit analysis, which concluded that “the value of the conserved gas would not outweigh the costs” of the regulation. Read more about BLM’s justification for the Proposed Rule here.

Meanwhile, the Postponement remains in effect, though it is subject to a pending judicial challenge brought by the states of California and New Mexico (California et al. v. BLM et al., Case No. 17-cv-07186) and several environmental groups (Sierra Club et al. v. Zinke et al., Case No. 17-cv-07187) in the United States District Court for the Northern District of California. Both the states and the environmental groups have filed motions for a preliminary injunction that would reinstate the Waste Prevention Rule’s original January 2018 compliance deadlines. The court heard oral arguments on these motions on February 14, 2018. A separate legal challenge to the validity of the 2016 Waste Prevention Rule brought by several industry groups and states also remains pending in Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al., Case No. 16-cv-00280 in the United States District Court for the District of Wyoming. In that case, the court granted a motion to stay the case pending BLM’s rulemaking to rescind or revise the Waste Prevention Rule, and BLM continues to file status updates with the court in accordance with the court’s order granting the stay.

The Proposed Rule will remain open for public comment for a 60-day period following its publication in the Federal Register. BLM has stated that it intends to conclude this rulemaking effort within the period during which compliance with the Waste Prevention Rule has been suspended pursuant to the Postponement. Nonetheless, the pending motions seeking preliminary injunctions in the litigation challenging the Postponement create continued uncertainty for operators on federal lands, raising the prospect that the Waste Prevention Rule’s original January 2018 compliance deadlines could be reinstated — at least temporarily while BLM finalizes the Proposed Rule — by court order.

BLM Rescinds 2015 Hydraulic Fracturing Rule

On December 29, 2017, the Bureau of Lang Management (“BLM”) issued a final rule (the “Rescission”) rescinding in its entirety the agency’s 2015 final rule regulating hydraulic fracturing activities on Federal and Indian lands (the “2015 Rule”). The 2015 Rule (link to 2015 white paper on fracking website) included a comprehensive set of well-bore integrity requirements, standards for the interim storage of recovered waste fluids, mandatory notifications and waiting periods for key parts of the fracturing process, and chemical disclosure requirements. However, these requirements had not yet taken effect as a result of a stay issued in connection with the ongoing judicial challenges to the 2015 Rule. Pursuant to the Rescission, BLM’s hydraulic fracturing regulations (43 CFR Part 3160) in effect prior to effective date of the of 2015 Rule (June 24, 2015) will now govern hydraulic fracturing activities on Federal and Indian lands going forward, effective immediately. 

In the preamble to the Rescission, BLM explains that rescission of the 2015 Rule is preferable to the 2015 Rule because it will “relieve operators of duplicative, unnecessary, costly and unproductive regulatory burdens.”  Specially, BLM estimates the Rescission will result in savings of $9,690 in compliance costs per well. The preamble further explains that the agency reviewed incident reports associated with hydraulic fracturing activities on Federal and Indian lands since December 2014 and found a “rarity of adverse environmental impacts that occurred from hydraulic fracturing operations since promulgation of the 2015 [R]ule.”  BLM concludes in the preamble that the BLM’s own pre-existing regulations, coupled with state/tribal oversight and regulations, mitigate such risks. 

The preamble also explains that the Rescission “eliminates the need for further litigation about BLM’s statutory authority.”  In litigation challenging the 2015 Rule, the District Court for the District of Wyoming concluded (link to June 22, 2016 frack flash) that regulating hydraulic fracturing activities was outside the BLM’s statutory authority. Although the United States Court of Appeals for the Tenth vacated the District Court’s final order, plaintiffs in that case have moved for rehearing or reconsideration en banc. These proceedings are pending, and it remains to be seen what effect the Rescission will have with respect to the continuing litigation regarding the 2015 Rule. 

While the Rescission is effective immediately, judicial challenges to the Rescission are likely. Read the Rescission in full here.

BLM Finalizes Postponement of Waste Prevention Rule

On December 8, 2017, the Bureau of Land Management (“BLM”) published a final rule (the “Postponement”) postponing certain requirements of the 2016 Waste Prevention Rule (“Waste Prevention Rule”) for one year. BLM’s Postponement reflects the completion of BLM’s latest effort to delay the requirements of the Waste Prevention Rule after a court in the Northern District of California vacated BLM’s previous attempt to postpone the effective dates of the rules through alternative procedures. 

BLM’s Waste Prevention Rule, initially promulgated in November 2016, covers a number of methane emissions sources associated with oil and gas production activities on federal lands, including natural gas emissions from venting or flaring, gas leaks from equipment and facilities located at the well site, and well drilling and completions. While the Waste Prevention Rule called for operators to submit “waste minimization” plans by January 2017, the Rule’s leak detection and recovery, emission reduction, and reporting requirements were scheduled to go into effect on January 17, 2018. BLM issued a proposed rule in October 2017 proposing to extend the Waste Prevention Rule’s January 2018 effective dates to January 2019. The proposed rule was open to public notice and comment for a 30-day period concluding November 6, 2017. The Postponement formally promulgates the October 2017 proposed rule, extending the Waste Prevention Rule’s original January 17, 2018 effective dates to January 17, 2019. 

The Postponement is currently in effect, but remains subject to judicial challenge in the future. Any such future judicial challenge could also raise a prospective stay of the Postponement, which could bring the original 2016 Waste Prevention Rule deadlines back into effect pending the court’s resolution of the judicial challenge to the Postponement. Meanwhile, a separate legal challenge to the validity of the 2016 Waste Prevention Rule brought by several industry groups and states remains pending in Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al, Case No. 16-cv-00280 in the U.S. District Court for the District of Wyoming. In that case, the Federal Respondents have filed a Motion to Dismiss, or, in the alternative, for a Stay of Proceedings in light of the Postponement.

DRBC Proposed Rule Would Ban High-Volume Hydraulic Fracturing

On November 30, 2017, the Delaware River Basin Commission (“DRBC”) published a proposed rule that, if finalized, would prohibit “high-volume hydraulic fracturing” within the Delaware River Basin.  The proposed rule reflects the DRBC’s conclusion that “high volume hydraulic fracturing poses significant, immediate and long-term risks to the development, conservation, utilization, management, and preservation of the water resources of the Delaware River Basin.”  The Delaware River Basin extends into four northeastern states and includes seventeen counties in Eastern Pennsylvania, many of which lie above the Marcellus Shale formation.

The proposed rule defines “high-volume hydraulic fracturing” as fracturing operations that use “a combined total of 300,000 or more gallons of water during all stages in a well completion . . . whether the water is fresh or recycled and regardless of the chemicals or other additives mixed with the water.”  This definition is likely to capture most hydraulic fracturing operations.   For example, the preamble to proposed rule states that the average hydraulically fractured natural gas well in the nearby Susquehanna River Basin injected 4.3 million gallons of water from 2008-2013; similarly, the preamble cites the United States Environmental Protection Agency’s 2016 hydraulic fracturing study, which concluded that the median volume of water used per well fracturing event in Pennsylvania between January 2011 and February 2013 was 4.18 million gallons.

In addition to the proposed ban on high-volume hydraulic fracturing, the proposed rule would also discourage the exportation of waters from the Delaware River Basin “to support hydraulic fracturing outside the Basin,” require an assessment of alternatives before allowing the importation of produced water into the Delaware River Basin, and require DRBC approval for produced water treatment within the Delaware River Basin.

The DRBC is accepting comments on the proposed rule through February 28, 2018 at 5 PM.  In addition, the DRBC will convene a series of public hearings on the proposed rule on January 23, 2018 in Waymart, Pennsylvania and on January 25, 2018 in Philadelphia, Pennsylvania.  Read the proposed rule in full here.

Court Vacates BLM’s Postponement of Obama-Era Waste Prevention Rule

On October 4, 2017, in a consolidated decision for Sierra Club, et al. v. Zinke, et al., No. 17-cv-03885, and State of California, et al. v. United States Bureau of Land Management, et al., No. 17-cv-03804, the U.S. District Court for the Northern District of California vacated the Bureau of Land Management’s (”BLM”) postponement of BLM’s 2016 final rule entitled “Waste Prevention, Production Subject to Royalties, and Resource Conservation” (the “Waste Prevention Rule”). The district court held that BLM’s postponement did not comply with Section 705 of the Administrative Procedure Act. The decision vacates BLM’s June 15, 2017 notice postponing the Waste Prevention Rule’s January 17, 2018 compliance deadlines pending a decision in Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al, Case No. 16-cv-00280 in the U.S. District Court for the District of Wyoming, in which several industry groups and states have challenged the finalized Waste Prevention Rule’s legal validity. 

BLM’s Waste Prevention Rule, initially promulgated in November 2016, covers a number of methane emissions sources associated with oil and gas production activities on federal lands, including natural gas emissions from venting or flaring, gas leaks from equipment and facilities located at the well site, and well drilling and completions. While the Waste Prevention Rule called for operators to submit “waste minimization” plans by January 2017, the Rule’s leak detection and recovery, emission reduction, and reporting requirements are scheduled to go into effect on January 17, 2018. 
 
The BLM Waste Prevention Rule is currently in effect and compliance with those portions of the rule with initial compliance deadlines of January 2018 will be required absent additional administrative or judicial action in the interim. Several such actions remain possible, and Department of Interior officials have previously pledged to “suspend, revise or rescind” the rule in light of its “significant regulatory burden.” Primary among these efforts is BLM’s October 5, 2017 proposed rule that would extend the Waste Prevention Rule’s January 2018 deadlines to January 2019. The comment period for this proposed rule is currently open through November 6, 2017, leaving BLM with limited time following the comment period to promulgate a final rule in advance of the January 2018 deadlines. In addition, industry’s judicial challenge to the Waste Prevention Rule in Western Energy Alliance remains pending. Finally, appropriations bill HR 3354, which has passed the House of Representatives and has been placed on the Senate Legislative Calendar, would, if signed into law, prohibit BLM from using its funds to enforce the Waste Prevention Rule.

Scotland Expected to Ban Fracking

On October 3, 2017 Scotland’s Energy Minister Paul Wheelhouse announced an effective ban on hydraulic fracturing. Hydraulic fracturing had already been prohibited in Scotland under a temporary moratorium in 2015 as a result of campaigns by various environmental and community groups. This was followed by a series of environmental and economic reports on fracking in 2016, as well as a full public consultation in early 2017. The environmental reports found that fracking’s impact on global emissions would be neutral, that the probability of an earthquake that can be felt is small, and that there is “inadequate” evidence to reach firm conclusions regarding the activity’s health impacts. On the economy, the reports determined that fracking could create anywhere from 470 to 3,100 jobs and contribute from £100 million to £4.6 billion to the Scottish economy through the year 2062. Reports aside, the primary driver of the ban appears to be the public consultation, which the energy minister described as showing “overwhelming” opposition. Indeed, 99% of the 60,000 respondents supported the ban. While the decision to ban fracking will not be final until Parliament endorses the ban in a vote after the October recess, commentators predict that the vote will be a formality.

D.C. Circuit Strikes Down EPA’s 90-day Stay – New Standards for Oil & Gas Sector

On July 3, 2017, in Clean Air Council, et al. v. E. Scott Pruitt, No. 17-1145, the D.C. Circuit struck down EPA’s 90-day stay on the June 3, 2016 final rule entitled “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources,” which amended and established updated new source performance standards (“NSPS”) for the oil and natural gas sector. This final rule was codified in EPA’s NSPS regulations as Subpart OOOOa to 40 C.F.R. Part 60 or “Quad Oa.” The D.C. Circuit later recalled its mandate in Clean Air Council, et al. v. E. Scott Pruitt, No. 17-1145, giving EPA until July 27, 2017 to file a petition for rehearing or petition for rehearing en banc. On July 31, 2017, after EPA failed to file a timely petition, the D.C. Circuit reissued its mandate. Consequently, all Quad Oa provisions are now in effect.

On June 16, 2017, the United States Environmental Protection Agency (EPA) published a proposed rule that would stay for two years parts of Quad Oa. EPA’s proposed two-year stay was intended to be an extension of the 90-day stay that EPA announced on June 3, 2016 to delay implementation of Quad Oa and that was struck down by the D.C. Circuit. Like the 90-day stay, the proposed two-year stay covers aspects of Quad Oa related to leak detection and reporting requirements for (1) fugitive emissions at well sites and compressor stations and (2) fugitive emissions from pneumatic pumps as well as (3) the requirement of a professional engineer certification in relation to the closed vent system design and capacity for a number of affected facilities (e.g., centrifugal compressors, reciprocating compressors, pneumatic pumps, and storage vessels). If finalized, the proposed two-year stay would effectively suspend Quad Oa’s compliance deadlines. In addition to proposing a two-year stay on these aspects of Quad Oa, EPA’s July 16, 2017 proposed rule would include a review of Quad Oa in its entirety. EPA has held open the June 16, 2017 proposed comment rule period until August 9, 2017 because it received and granted a request for hearing on the proposed rule. EPA held the hearing in question on July 10, 2017.

When the D.C. Circuit issued its mandate, two main deadlines under Quad Oa became effective. First, Quad Oa requires that facilities covered by the rule conduct an initial monitoring survey by June 3, 2017. 40 C.F.R. § 60.5397a(f). Second, Quad Oa requires facilities covered by the rule to submit their initial annual monitoring by 90 days after the “initial compliance period” defined under the rule ended. This compliance period ended, at the latest, on August 2, 2017, meaning that facilities covered by Quad Oa have 90 days from that date to submit their initial annual monitoring report. See 40 C.F.R. §§ 60.5420a and 60.5410a. It remains to be seen (1) whether EPA will finalize its proposed two-year stay before the reporting deadline in Quad Oa passes and (2) whether EPA’s two-year stay withstands judicial scrutiny.

TAMEST Report Concludes that Hydraulic Fracturing Has Not Induced Seismicity in Texas

On June 19, the Academy of Medicine, Engineering, and Science of Texas (“TAMEST”) issued its report titled Environmental and Community Impacts of Shale Development in Texas. The report includes several noteworthy findings, including that:

• Potentially-induced, felt seismicity in Texas to date has been associated with Class II disposal wells, not with hydraulic fracturing operations; 
• Direct fracturing into drinking water zones has not been observed in Texas, and such a result is unlikely given the depth separation between oil-bearing formations and drinking water zones; an
• Shale development “primarily contributes positively to local, regional, and state economies.”

In addition to the above, the report includes other findings and recommendations on geology and earthquake activity, land resources, air quality, water quantity and quality, transportation, and economic and social impacts.  

Other of the report’s recommendations call on the industry to more closely track the environmental and ecological impact of shale operations, and make information surrounding shale development more transparent. For example, as to land resources, the report suggests that “baseline land and habitat conditions at the oil and gas play level should be characterized, and changes to wildlife populations and vegetation should be tracked over time where there are opportunities on both private and public lands,” and that “the existing, nonproprietary information about land impacts of shale development that is collected and evaluated by multiple state and federal agencies should be assembled and made available online to the public.”

The report is the culmination of the efforts of TAMEST’s Shale Task Force, which was convened in 2015 and consists of multiple academic and scientific representatives from institutions and organizations throughout Texas. Read the report in full here.