Regulations
Eco Magazine | 10 February 2015

EPA Seeks Comments on Published Rule Changes for Oil Dispersants

The Environmental Protection Agency has published changes to National Oil and Hazardous Substances Pollution Contingency Plan requirements in an effort to improve oil-spill planning and response. Comments are due by 22 April 2015. Entities potentially affected by this proposed rule include, among others, oil and gas extraction industries.

Among other things, the proposed changes include new and revised product toxicity and efficacy test methodologies for dispersants and other chemical/biological agents, new toxicity and efficacy criteria for listing agents, new human health and safety information requirements from manufacturers, revised area planning requirements for use authorization of chemical/biological agents, and new dispersant monitoring requirements when used on certain oil discharges. The Council on Environmental Quality first published the National Oil and Hazardous Materials Pollution Contingency Plan in 1970.

Morgan Lewis | 28 January 2015

Oil and Gas Regulatory Outlook for 2015

Twice per year, the US government lists its regulatory plans. At the end of 2014, it announced its plans for the following regulatory initiatives affecting the oil and gas industry.

The following lists the regulatory area, followed by the federal agency involved and the status of the regulation:

  1. Volatile organic compound and methane emission regulation
    Environmental Protection Agency (EPA), prerulemaking
    Department of the Interior (DOI)/Bureau of Land Management (BLM), prerulemaking
  2. Hydraulic Fracturing
    DOI/BLM, proposed rule
  3. Royalty rates for onshore leases
    DOI/BLM, prerulemaking
  4. Blowout preventers
    DOI/Bureau of Safety and Environmental Enforcement (BSEE), prerulemaking
  5. Arctic drilling
    DOI/BSEE/Bureau of Ocean Energy Management (BOEM), prerulemaking
  6. Transportation of crude oil by rail
    Department of Transportation (DOT), proposed rule
  7. Renewable fuel standards
    EPA, proposed rule

This collection of initiatives serves as a preview of the Obama administration’s agenda for the oil and gas industry. As a result of the November 2014 election, in which several Senate Democrats from energy-producing states either retired or were defeated, these initiatives may become more prominent, allowing the Obama administration to pursue a regulatory agenda without necessarily having to consider the political fallout in those states.

The Baltimore Sun | 28 January 2015

Column: A Path Forward for Responsible Gas Shale Regulations

Newly inaugurated Maryland Gov. Larry Hogan and his team have only a few weeks to review and take action on the previous administration’s proposed “gold standard” rules governing oil and gas development in western Maryland or the regulations will go into effect.

Hogan has every right to thoroughly review, modify, or even pull back the draft regulations; at the same time, his team should recognize and credit the exhaustive and productive work conducted by former Gov. Martin O’Malley’s Marcellus Shale Advisory Commission.

Almost 4 years ago, O’Malley created the commission and charged it with assisting state officials in determining whether and how Marcellus Shale gas development could be accomplished without unacceptable risks of adverse impacts to public health, safety, and the environment. As commission members, we drove thousands of miles to attend meetings and spent hundreds of hours studying this issue. Members conducted 35 public meetings, debated one another, heard from dozens of witnesses and oversaw development of reports on best management practices, human health impacts and economic effects. In the end, the Maryland Department of the Environment and the Department of Natural Resources, supported by most commission members, concluded that with the proper regulatory framework and a well-funded enforcement commitment in place, responsible natural gas development could take place in western Maryland.

The Wall Street Journal | 21 January 2015

EPA Set To Regulate Oil and Gas Methane Emissions

The Obama administration unveiled plans on 14 January to regulate methane emissions from the nation’s oil and natural-gas industry for the first time, a move aimed at meeting climate-change goals while not hampering the nation’s energy boom.

The Environmental Protection Agency plans to propose federal regulations to cut methane emissions from the oil and gas sector by 40 to 45% over the next decade from 2012 levels, White House and agency officials said.

The rules, scheduled to be proposed this summer and completed by 2016, would apply only to new or modified sites. For existing oil and gas operations, the EPA is set to rely mostly on voluntary measures to cut methane, a move backed by the industry.

To reduce emissions, companies would have to install technology that prevents methane from being inadvertently leaked and monitor their operations for possible leaks. Many companies are already using this kind of equipment, according to industry executives and the EPA.

Fuel Fix | 14 January 2015

Feds Aim To Boost Requirements for Oil Spill Dispersants

The Environmental Protection Agency on 13 January proposed new requirements for testing the toxicity and effectiveness of chemical dispersants used to break up oil spills.

The move comes 14 years after the agency first announced it planned to rewrite rules governing dispersants and 5 years after the Deepwater Horizon disaster vividly illustrated shortcomings in existing mandates.

The proposed rule aims to strengthen the requirements dispersants must meet before they can be added to a government schedule of chemicals that may be authorized for use on spilled oil.

Existing rules require only that a substance proposed for the list disperse at least 45% of oil in a laboratory test. It also must be tested for toxicity in two marine species—the mysid shrimp and silverside fish—but the rules sets no toxicity threshold for making it the list.

By contrast, the EPA proposal would create a new method for testing the efficacy of dispersants, require that the test be conducted at different temperatures on two different types of crude, and set new toxicity requirements.

Shale Energy Insider | 12 January 2015

Labour Proposes Tighter Hydraulic Fracturing Regulations

As part of the debate in the House of Lords of the controversial Infrastructure Bill, the UK Labour Party has proposed amendments to tighten regulation.

Under amendments proposed by Labour ahead of the debate in the House of Lords, hydraulic fracturing would be prohibited on any land that acts as a collection point for public drinking water.

In addition, the opposition is pressing to overturn an initial clause that would allow shale gas companies to avoid individual notifications for hydraulic fracturing activity.

Labour is also opposing a clause in the bill that would allow companies to place substances under residential areas and leave it there for storage.

These fresh suggestions add to Labour proposals from a previous debate on the Infrastructure Bill that advocated independent monitoring and inspection of gas well and protecting areas of particular value from any hydraulic fracturing activity.

Shale Energy Insider | 8 January 2015

Western Australia EPA Issues Updated Hydraulic Fracturing Guidelines

The Environmental Protection Authority (EPA) for Western Australia has issued updated guidelines, which had initially been published in 2011, for the environmental regulatory process of fracturing of tight rock and shale formations to extract onshore natural gas resources.

The purpose of the document is to:

  • Define the circumstances under which the EPA will assess proposals that include hydraulic fracturing
  • Outline the EPA’s expectations for environmental impact assessments with respect to hydraulic fracturing activities
  • Ensure that the EPA has sufficient information to undertake a thorough assessment of impacts and risks to the environment from proposals involving hydraulic fracturing

The EPA said that the content of the bulletin centers on “activities and potential environmental impacts specifically related to hydraulic fracturing, which have not routinely been assessed by the EPA”, rather than “a broader range of environmental issues which may be associated with the development of gas resources from shale and tight rocks.”

McDermott Will & Emery via Mondaq | 11 December 2014

An Update on EPA’s Approach to Methane Emissions From the Oil and Gas Sector

The US Environmental Protection Agency (EPA) is expected to announce between now and 31 December its plan for pursuing methane reductions from the oil and gas sector—including whether it will propose new emission reduction regulations. Additionally, the agency recently modified its greenhouse gas reporting rules for oil and gas systems and also proposed expanding those rules so that they would cover many additional oil- and gas-related sources. This post briefly summarizes these recent developments.

Read the full story here.

OSHA | 2 December 2014

New OSHA Reporting Requirements Go Into Effect January 1

Beginning 1 January 2015, there will be a change to what covered employers are required to report to the Occupational Safety and Health Administration (OSHA). Employers will now be required to report all work-related fatalities within 8 hours and all in-patient hospitalizations, amputations, and losses of an eye within 24 hours of finding about the incident.

Previously, employers were required to report all workplace fatalities and when three or more workers were hospitalized in the same incident.

The updated reporting requirements are not simply paperwork but have a life-saving purpose: They will enable employers and workers to prevent future injuries by identifying and eliminating the most serious workplace hazards.

Shale Energy Insider | 28 November 2014

Outgoing Maryland Governor Proposes “Gold Standard” Rules for Hydraulic Fracturing

Maryland’s Democratic Governor, Martin O’Malley, said that he is preparing to create one of the strictest sets of hydraulic fracturing regulations in the US, with a significant focus on environmental and public health issues.

The proposals for legislation will be primarily formed from the recommendations from a specifically commissioned environmental report.

The plans would allow hydraulic fracturing for natural gas from the lucrative Marcellus shale formation that runs through western Maryland.

The Democratic governor is to be replaced in January by his Republican rival, Larry Hogan, but Gov. O’Malley is pressing forward with his initial proposals to then be adopted by his successor.

O’Malley’s proposed legislation includes a requirement that permit applicants produce a 5-year “comprehensive gas development plan” covering all their anticipated wells, a policy that would be unique to the US.

“After 3 years of exhaustive study, we’ve compiled what many believe to be the gold standard for best-management practices in the country,” O’Malley said in a statement.

Read the full story here.

JD Supra | 21 November 2014

EPA Announces New Greenhouse Gas Reporting Rule for Oil and Gas Sector

On 21 November, the US Environmental Protection Agency (EPA) announced new rules for reporting greenhouse gas emissions that will apply to the oil and gas sector, part of the EPA’s plan to institute a comprehensive strategy for dealing with methane in oil and gas production. The proposed rules would alter the greenhouse emissions reporting program first mandated by Congress in 2008.

Specifically, the new rules will change the calculation methods for oil and gas emissions by changing the units of measurement, altering the equations used for collecting and reporting data, and requiring separate reports for methane, carbon dioxide, and nitrous oxide rather than a single category for “carbon dioxide equivalent.” Additionally, the new rules would alter the equations for global warming potential and require oil and gas operators to calculate individual emissions in metric tons.

Hydrocarbon Processing | 18 November 2014

Environmental Regulations: How Much Do They Really Cost?

It is not unusual for some hydrocarbon processors to make environmental compliance activities a lower priority than daily operational needs, such as plant maintenance, product flow, and product transport. After all, compliance does not directly generate profit. Although not all owners/operators intentionally ignore environmental compliance, this mode of operating has been seen in the industry throughout the years—until now.

In the past decade, a great shift has occurred in hydrocarbon processors’ operating environments. As America’s robust oil and gas market expands—combined with increased international competition and unending news coverage of “environmentally unsound” industry practices—the US Environmental Protection Agency (EPA) has increased compliance enforcement, enacting nearly 78 civil cases and settlements in 2013 alone.

Furthermore, the EPA is considering a diverse array of new rules and regulatory program obligations to achieve the US’ long-term environmental goals. Recent examples include the Obama administration’s September 2013 announcement that it will direct the EPA to use the Clean Air Act to cut carbon dioxide pollution at power plants under the Climate Action Plan.

In the wake of this evolving and dynamic regulatory environment, owners/operators can spend a considerable amount of time and resources attempting to understand and comply with new or revised rules and regulatory program obligations. Instead of investing in new equipment or totally refocusing their processes, hydrocarbon processors should instead grasp some understanding of the costs and benefits by asking themselves: “How much will these changes really cost, and what’s in it for me?”