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Shale & Fracking Tracker

News & Flashes

  • 14
  • May
  • 2015

New York Releases Final SGEIS on Fracking

Following the December 2014 recommendation of the New York Department of Health (“DOH”) that New York not move forward with high-volume hydraulic fracturing (“HVHF”), the New York Department of Environmental Conservation (“DEC”) published its Final Supplemental Generic Environmental Impact Statement (“SGEIS”) on the Oil, Gas and Solution Mining Regulatory Program on May 13, 2015. The final SGEIS includes analysis of additional data regarding both the economic impacts of HVHF and its potential environmental and health-related impacts. The final SGEIS generally considered significantly expanding upon many of the mitigation measures previously proposed in earlier drafts, including a prohibition against HVHF on private lands, an expansion of sensitive areas where HVHF would be prohibited, additional site-specific environmental assessments, and increased setback and buffer requirements. However, the SGEIS concludes that implementation of these measures would result in a significant portion of the Marcellus Shale being unavailable for HVHF operations and impose additional costs on operators, thereby impacting the potential economic benefits associated with HVHF in New York.

The DEC Commissioner will issue a legally binding “findings statement,” which is expected to call for an outright ban on HVHF, after 10 days. Read the full final SGEIS here.

  • 13
  • March
  • 2015

Pennsylvania Federal Judge Determines That Compressor Stations Are Not Interdependent

A federal district court in Pennsylvania recently declined to aggregate as a single air emissions source under federal and state laws certain gas gathering operations involving eight compressor stations, thirteen well pads, and associated equipment based in part on a factually-intensive determination that these operations were not interdependent. Plaintiff, Citizens for Pennsylvania's Future, brought a citizen suit against defendant, Ultra Resources, Inc., alleging that defendant's gas gathering operations should be aggregated such that they constitute a major source of NOx emissions, in which case they would have been constructed without the proper permit. Because the compressor stations were not "adjacent" according to the plain meaning of that term, and the plaintiff presented no facts demonstrating that defendant's gathering operations were unique in a way that would justify looking beyond the plain meaning of "adjacent" and finding them "interdependent," the court granted defendant's motion for summary judgment. In determining that defendant's operations were not interdependent, the court noted that "there is no relationship between the compressor stations, except in the satellite arrangements which do not have the NOx potential to emit over 100 TPY, and that each compressor station is connected to the metering and regulation station, but not to each other" via a unidirectional connection. Though the plaintiff argued that the compressor operations should be aggregated because they are "integrated and collectively function as a production unit" based on each compressor's connection to the central metering and regulation station, the court rejected plaintiff's argument, finding "no discernable relationship between the individual emission stations" and noting that the compressor stations "operate independently of one another." Read the full opinion in Citizens for Pennsylvania's Future v. Ultra Resources, Inc. , No. 4:11-CV-01360 (M.D. Pa. Feb. 23, 2015), here.

  • 06
  • February
  • 2015

Texas Supreme Court Avoids Ruling On Subsurface Trespass Claims

On February 6, 2015, the Texas Supreme Court issued its decision in Environmental Processing Systems, L.C. v. FPL Farming Ltd. The case involved a claim of trespass damages based on subsurface migration from a wastewater injection well. When the Supreme Court first heard the case in 2011, it rejected the well operator's argument that a valid injection permit provided blanket immunity from trespass liability and remanded the case to the trial court. On remand, the jury found that no trespass occurred, but the court of appeals reversed the jury's verdict.

In today's decision, the Court avoided the trespass issue altogether. Instead, the Court decided an ancillary issue regarding the burden of proving "consent" in a trespass cause of action. The trial court's instructions to the jury stated that to recover damages for trespass, the plaintiff had to show that it did not consent to the entry of the defendant's injections beneath its property. The court of appeals held that this jury instruction was erroneous because consent should be an affirmative defense, which the defendant must prove to defeat the plaintiff's claim. The Texas Supreme Court reversed the court of appeals on this point, holding that the burden of proving lack of consent belongs to the plaintiff. In addition, the Court held that the trial court properly denied the plaintiff's motion for a directed verdict (an order from the presiding judge to the jury to return a particular verdict) on the issue of consent. Since the jury found that no trespass occurred based on the facts of the case, the Court did not need to reach the main question in the appeal-whether deep subsurface wastewater migration is an actionable trespass under Texas law.

The oil and gas industry, working interest owners, and other stakeholders have closely monitored this litigation. Many hoped that the Court would resolve the subsurface trespass issue. In prior decisions, the Court has held that well injections performed during enhanced oil recovery activities do not give rise to trespass claims, but recent decisions have raised many questions with respect to the viability of trespass claims in the context of hydraulic fracturing and injection wells. Today's decision does not resolve those questions and will allow other lawsuits against wastewater disposal owners to proceed. Read the opinion here.

  • 05
  • January
  • 2015

California Approves Final Hydraulic Fracturing Regulations

On December 30, 2014, California's Office of Administrative Law approved final regulations regarding hydraulic fracturing pursuant to Senate Bill 4. The regulations are comprehensive, and will be administered by the California Department of Conservation's Division of Oil, Gas and Geothermal Resources ("DOGGR"). The rules address the information operators must disclose to regulators and the public and regulate the storage and handling of well stimulation fluids and wastes. Surface property owners within 1,500 feet of the wellhead or 500 feet of the subsurface horizontal path of the well may request baseline and post-stimulation testing of well and surface waters on their property that are fit for drinking or irrigation uses. The regulations also require operators to monitor seismic activity within an area five times the size of the stimulation area. Upon discovery of an earthquake of magnitude 2.7 or greater, the operator must notify DOGGR and cease hydraulic fracturing activity until DOGGR is satisfied that the fracturing activity does not create an increased risk of seismic activity. The final regulations, which are similar to interim regulations under which industry has operated since January 1, 2014, will become effective on July 1, 2015. Read the final regulations here.

  • 29
  • August
  • 2014

Texas Railroad Commission Proposes New Rule Addressing Seismic Events for Disposal Wells

Today, the Texas Railroad Commission ("RRC") published a proposed rule that would impose new permitting requirements for oilfield waste injection wells. The requirements are intended to address concerns that the technique could be inducing earthquakes in parts of the state.

The proposed rule would require companies planning to locate a disposal well in an area where there is an increased risk of fluid migration to submit information such as location of historic seismic events, as well as logs, geologic cross-sections, and/or structure maps to show the well is safe. Such "increased risk" areas may include, for example, areas with complex geology, proximity of the baserock to the injection interval, transmissive faults, and/or a history of seismic events in the area.

If "injection is suspected of or shown to be causing seismic activity," the RRC would have the authority to modify, suspend, or terminate the operating permit for the well. The RRC estimates that the new requirements would cost applicants approximately $300 more per disposal well permit. The proposal was published in the Texas Register on August 29, 2014, and the RRC will accept public comments on the proposal until noon on September 29, 2014. Read the proposed rulemaking here.

  • 02
  • July
  • 2014

New York Municipalities Can Prohibit Fracking, Says State High Court

The New York Court of Appeals, the State's highest court, concluded recently that two towns, Dryden and Middlefield, could use local zoning laws to ban hydraulic fracturing and other oil and gas activities within their municipal boundaries.  The court grounded its decision in the state's Municipal Home Rule Law, which empowers municipalities to pass laws for the protection and enhancement of their physical and visual environment and the safety, health, and well-being of their residents and property. Opponents to the local bans argued that the "supersession clause" of the state's Oil, Gas and Solution Mining Law preempts local zoning law such that the towns lacked the authority to proscribe natural gas activities. The court rejected this argument, holding that the Oil, Gas and Solution Mining Law's supersession clause was not a clear expression of State Legislature intent to preempt local zoning law. Read the opinion here.

  • 05
  • June
  • 2014

North Carolina Law Lifts Statewide Moratorium on Fracking Permits

North Carolina's Energy Modernization Act of 2014, signed into law on June 4, lifts a statewide ban on the issuance of permits for oil and gas exploration and development activities using horizontal drilling and hydraulic fracturing. The new law also prohibits local ordinances that would prevent oil and gas exploration, development, and production activities, including any ordinances that prohibit horizontal drilling or hydraulic fracturing. Additionally, the legislation criminalizes the unlawful disclosure of confidential information associated with hydraulic fracturing activities, such as the constituents of hydraulic fracturing fluid. Fracking activities could begin in the state as early as May 2015. Read the Energy Modernization Act of 2014 in full here.

  • 10
  • April
  • 2014

Ohio Issues New General Permits With Additional Fugitive Emissions Detection Requirements

The Ohio EPA's Division of Air Pollution Control issued revised Model General Permits for oil and gas well sites on April 4, 2014. The revised general permits include requirements aimed at reducing fugitive emissions of methane by requiring more frequent leak detection inspections and quick repair of detected leaks. It allows operators to use infrared cameras or portable sampling instruments to detect leaks. For more information on the new general permits, visit the Ohio EPA webpage here.

  • 14
  • November
  • 2013

Wyoming Requiring Pre-Drilling Groundwater Testing

The Wyoming Oil and Gas Conservation Commission unanimously approved rules on November 12th requiring companies to perform groundwater baseline sampling, analysis, and monitoring on water sources within a half-mile radius of a proposed well. The rule requires initial baseline water sampling followed by resampling 12 to 24 months and again 36 to 48 months after setting the production casing or liner. The rule allows for variances in certain instances, such as a landowner declining to grant access. It establishes notification requirements in the case of measured increases of gases, BTEX compounds, or TPH. The rule will not create a presumption of or against liability, fault, or causation. The rule goes into effect on march 1, 2014 and can be found here.

  • 27
  • February
  • 2013

RRC Proposes Amendments to Casing, Cementing, Drilling, Well Control, and Completion Rules

On February 15, 2013, the Railroad Commission of Texas (RRC) issued new proposed amendments to its rules governing casing, cementing, drilling, well control, and completion of oil and natural gas wells, which may be downloaded here. The RRC simultaneously withdrew its prior proposed amendments to these rules. The changes from the previous proposed amendments are largely technical in nature. The RRC will accept public comments on the new proposed amendments until 12:00 p.m. on April 1, 2013.

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