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Shale & Fracking Tracker

News & Flashes

  • 03
  • June
  • 2015

Maryland Bans Fracking for at Least Two Years

On May 30, 2015, the Maryland General Assembly instated a moratorium that will prevent the issuance of permits to hydraulically fracture natural gas wells for at least two years. House Bill 449 will take effect on October 1, 2015 and prohibits the Maryland Department of the Environment ("MDE") from issuing any drilling permits for hydraulic fracturing before October 1, 2017. The bill also directs the MDE to promulgate permitting regulations specific to hydraulic fracturing activities by October 1, 2016, with those regulations becoming effective one year later.

Hydraulic fracturing has been under a de facto moratorium in Maryland since June 2011, when former Governor Martin O'Malley issued an Executive Order directing the MDE and the Department of Natural Resources to study economic, environmental, and public health issues related to horizontal drilling and hydraulic fracturing in the Marcellus Shale. After reviewing several thousand public comments, the departments released their final study on November 25, 2014, which concluded that any environmental or health risks from hydraulic fracturing could be adequately managed through a regulatory regime based on best practices and recommendations identified in their report. On January 9, 2015, the MDE proposed stringent regulations that would require an application for a permit to drill a well to include an Environmental Assessment and two years of baseline monitoring in the vicinity of the well pad, chemical disclosure, and drilling setbacks, among other things.

There has been no hydraulic fracturing in Maryland in recent years, even though two counties in the state's panhandle region overlie the rich Marcellus Shale formation. You can read the text of House Bill 449 here .

  • 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.

  • 14
  • May
  • 2015

NIOSH Posts Case Study on Fatalities of Workers Exposed to Hydrocarbons while Checking Tanks

The National Institute for Occupational Safety and Health (“NIOSH”) recently published a case study and blog post on the deaths of nine workers who died while gauging, sampling, or transferring fluid in flowback and production tanks at oil and gas sites. The nine cases examined by NIOSH occurred between 2010 and 2014. Exposure to hydrogen sulfide was ruled out as a cause of death in all nine cases, but NIOSH determined that hydrocarbon exposure caused or contributed to at least three of the deaths. The cause of the remaining fatalities remains unknown. Although NIOSH appears to single out the fracking industry, the study does not show that fracking caused the workers’ deaths; hydrocarbon and chemical exposure remains a risk to all oil and gas operations, and the NIOSH materials released to date do not suggest that fracking operations are uniquely at risk. Nonetheless, NIOSH still makes recommendations that employers engaged in fracking should consider remote methods to sample tanks, provide workers with self-contained breathing apparatuses, provide hazard training, and ensure workers do not work alone when there is a high risk of exposure to hydrocarbons. Additional results, conclusions, and recommendations based on the results of NIOSH’s case study are forthcoming.

  • 03
  • April
  • 2015

Natural Gas Industry Associations Comment on Draft NEPA GHG Guidance

On March 25, 2014, the Natural Gas Council and several other natural gas associations submitted a joint comment letter to the Council on Environmental Quality (CEQ) urging the agency to withdraw its recent draft guidance on considering greenhouse gas emissions and the effects of climate change under the National Environmental Policy Act (NEPA). Federal agencies must undertake NEPA analyses for "major Federal actions" significantly affecting the quality of the human environment, which can include issuing permits for private development. The new CEQ guidance states that agencies should consider (1) the potential effects a proposed action will have on climate change as a result of its greenhouse gas emissions and (2) the impact of future climate change on the proposed action, such as sea level rise or the increased frequency of severe weather events. The Natural Gas Council's comment letter argues that CEQ's new guidance "could have serious impacts on the development of our nation's critical natural gas infrastructure" and "would create unnecessary litigation delays, costs and inefficiencies in the permitting of natural gas infrastructure projects while providing only speculative environmental benefits."

  • 01
  • April
  • 2015

EPA Releases Analysis of Hydraulic Fracturing Fluid Data from FracFocus Chemical Disclosure Registry

EPA's 2015 Analysis of Hydraulic Fracturing Fluid Data from the FracFocus Chemical Disclosure Registry is now publically available here. The Analysis summarizes chemical and water use data from more than 38,000 oil and gas production wells hydraulically fractured between January 1, 2011, and February 28, 2013, and looks at how chemical and water use vary in different locations across the country. This Analysis summarizes the most frequently reported additive ingredients in disclosures associated with oil and gas wells and also contains state-specific data with statistics on total water volumes and additive ingredients per disclosure. The data indicates that frac fluids generally contained water as a base fluid, quartz as proppant, and a variety of additive ingredients. Methanol, hydrochloric acid, and hydrotreated light petroleum distillates were reported as additives in more than 65% of oil and gas disclosures. In total, 692 unique additive ingredients were disclosed. EPA has been investigating the interaction between hydraulic fracturing and groundwater since 2010.

  • 20
  • March
  • 2015

BLM Releases Long-Awaited Hydraulic Fracturing Regulations

On March 20, 2015, the U.S. Interior Department's Bureau of Land Management (BLM) issued a much-anticipated final rule on hydraulic fracturing on federal and Indian lands. The rule includes well-bore integrity requirements, imposes standards for interim storage of recovered waste fluids, and requires disclosure of chemical usage. The chemical disclosures can be made via the industry-supported FracFocus web site. The rule will take effect in 90 days. See DOI's press release here, and the final rule here. Check back for more detailed analysis of the new rule early next week.

  • 19
  • March
  • 2015

North Carolina Fracking Rules Go Into Effect, Lifting Moratorium

The North Carolina moratorium on hydraulic fracturing was lifted when the state's Department of Energy and Natural Resources ("DENR") rules relating to fracturing became effective on March 17, 2015. Under the Clean Energy and Economic Security Act, DENR's Mining and Energy Commission (the Commission) was charged with reviewing North Carolina's existing oil and gas regulations and adopting rules to protect the public health and safety, the environment, and other natural resources, while also promoting the efficient development of the State's oil and gas resources. The Commission's rules, which were initially proposed in July 2014, cover a variety of topics, including chemical disclosures, water storage, buffer zones between residential developments and drilling sites, and the permitting process. After reviewing over 200,000 public comments, the Commission finalized the rules in November 2014, and North Carolina's Rules Review Commission ("RRC") subsequently approved the rules. The RRC then forwarded the regulations to the statute legislature for consideration, starting the 61-day clock for the rules to become effective. The legislature took no action, so companies can now begin applying for oil and gas well permits, including those authorizing the use of well stimulation techniques such as hydraulic fracturing, in North Carolina. Read the full set of rules here (see 15A N.C.A.C. 05H.0101 et seq.).

  • 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.

  • 13
  • March
  • 2015

PHMSA Issues New Pipeline Safety Regulations

On March 11, the Pipeline and Hazardous Materials Safety Administration ("PHMSA") issued new final regulations relating to natural gas pipeline safety that will take effect on October 1. The final rules restrict who can inspect newly-constructed transmission pipelines or mains and require operators of Type B gathering lines to conduct leak surveys. Specifically, operator personnel who help construct new natural gas transmission lines or mains (as those terms are defined in 49 C.F.R. 192.3) cannot also inspect their construction work. PHMSA clarified that third-party inspections are not required, and that other operator personnel who did not participate in the construction can inspect the work. Additionally, operators of Type B natural gas gathering lines must conduct leak surveys in accordance with 49 C.F.R. 192.706, which generally requires such surveys at least once per calendar year at intervals not to exceed fifteen months. Moreover, any leaks in Type B natural gas gathering lines must be promptly repaired. Read the full set of finalized rules 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.

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