StateImpact | 14 August 2015

New Oil and Gas Rules Irk Both Environmentalists and Industry

State environmental regulators are asking for comments on the final version of new oil and gas rules. The Pennsylvania Department of Environmental Protection (DEP) released detailed updates to its oil and gas rules on 12 August. The proposals result from a 4-year process that garnered nearly 30,000 public comments to DEP.  Still, this latest version is getting push back from both industry and environmentalists.

In a call with reporters, DEP Secretary John Quigley called the announcement a “great step forward in responsible drilling in Pennsylvania.”

“DEP’s definition of responsible drilling is protecting public health and the environment while enabling drilling to proceed,” Quigley said.

Although the release of the draft rules marks the final leg of a long process that began as a result of the passage of the state’s drilling law Act 13 in 2012, Quigley says there’s more to come.

“This is not the end of the process,” he said. “There is more study needed on additional measures, and there will be more rule making in a separate process to ensure responsible drilling and protection of communities, public health, and the environment.”

The proposed rules include everything from what defines a public playground to how drillers store their waste water. Previous proposals included new regulations on noise. But the DEP has tabled that issue for now, saying more scientific study is needed. The DEP also affirmed its authority to deny drilling permits if the agency decides it would pose too much of a risk to water supplies.

Some environmentalists have criticized the department for not using its authority to shut down bad actors or prevent drilling in high risk areas.

“We argued with them for years that they should be making those decisions,” said Tracy Carluccio with the Delaware Riverkeeper Network. “But it’s good that they’re recognizing this power and putting it in black and white.”

Industry is unhappy with the proposals, calling the rules a “regulatory overreach,” and saying they would cost drillers too much money to implement.

“Unfortunately, DEP’s regulatory proposal will cost Pennsylvania job creators nearly USD 2 billion annually without providing meaningful environmental benefits,” said Marcellus Shale Coalition president David Spigelmyer.

The Associated Press | 14 August 2015

Shell Seeks Modified Permit for Arctic Offshore Drilling

With a key safety vessel repaired and in northern waters, Royal Dutch Shell has applied to amend its federal exploratory drilling permit to allow drilling into oil-bearing rock in the Arctic Ocean off Alaska’s northwest coast.

Shell in July received permission to begin some drilling at two sites in the Chukchi Sea but was banned from digging into petroleum zones roughly 8,000 ft below the ocean floor.

The federal Bureau of Safety and Environmental Enforcement limited the permit then because equipment was not on hand to handle a possible well blowout.

The equipment is on the Fennica, a leased Finnish icebreaker that suffered hull damage 3 July as it left Dutch Harbor, a port in the Aleutians Islands.

Arctic offshore drilling is strongly opposed by environmental groups that say industrial activity will harm polar bears, Pacific walrus, ice seals, and threatened whales already vulnerable from climate warming and shrinking summer sea ice.

They also say that drilling in US Arctic waters, which the government estimates holds 26 billion bbl of recoverable oil, will delay a transition to renewable energy.

The Associated Press | 29 July 2015

Panel Scales Back New Oil Rules for North Dakota Reservation

Tribal leaders from a prolific portion of North Dakota’s oil-rich Fort Berthold Reservation are scaling back proposed drilling regulations that industry officials warned could slow crude production.

Leaders of a section of the reservation that produces the most oil recently formed the West Segment Regulatory Commission, based in Mandaree, to impose its own regulations on oil drilling activity in its region. The idea was not well received by industry officials, existing regulators or overall leadership of the Three Affiliated Tribes, which represents the Mandan, Hidatsa, and Arikara people on the million-acre reservation in western North Dakota.

John Mahoney, an attorney for the commission, said on 28 July that it agreed to back off on most of the proposed rules. The commission will continue to require companies working in the area to register and pay a “nominal fee” and will “supplement and enhance” state, federal, and tribal laws already in place, he said.

“We’re being very cautious and easing into this,” said Mahoney, who also is a part-time tribal judge on the reservation. “We’re not going into this with a big club.”

San Antonio Express-News

New Offshore Safety Rules Would Make Drilling Some Wells Too Difficult, Industry Lobbyists Tell White House

The oil industry is blasting an Obama administration plan to better safeguard offshore exploration, arguing that the Deepwater Horizon-inspired proposal imposes costly and “ill-advised” mandates that could make some wells impossible to drill.

The Interior Department’s Bureau of Safety and Environmental Enforcement rule, unveiled in April, aims to prevent a repeat of the 2010 Gulf of Mexico disaster by codifying a number of voluntary steps that companies have already taken to better keep offshore wells in check.

But it goes further in laying out specific mandates for the design of wells and the emergency devices known as blowout preventers that are meant to serve as a final protection against uncontrolled surges of oil and gas.

A coalition of oil trade groups insists that the proposed rule goes too far by establishing “prescriptive new requirements that would impose unjustified economic burdens, discouraging economic growth (and) innovation” often without a clear rationale.”

And the groups—including the American Petroleum Institute, Independent Petroleum Association of America, and International Association of Drilling Contractors—insist that some of the proposed mandates “would introduce new risk rather than reduce (it).”

Reuters | 21 July 2015

Oklahoma Broadens Oil and Gas Drilling Regulations To Stem Quakes

Oklahoma is expanding restrictions on drilling activities to stem a sharp increase in earthquakes that has damaged homes and raised concerns about the future of the energy industry in the state.

But the action, announced on 17 July, fell short of more drastic measures expected after a further increase in the rate of significant quakes last month prompted the state’s regulator to say the situation was a “game changer.”

Oklahoma and several other states in the central US have experienced a sharp increase in earthquakes since 2009, which scientists say is linked to underground injection of briny wastewater, a byproduct of booming oil and gas production.

Noticeable quakes—above magnitude 3.0—now strike the state at a rate of two per day or more, compared with two or so per year prior to 2009.

The earthquakes are not related to hydraulic fracturing, a widely used drilling technique. Instead, researchers say, the quakes stem from the reinjection of saltwater that occurs naturally in oil and gas formations.

On 17 July, the Oklahoma Corporation Commission, the state’s oil and gas regulator, released a directive that expands “Areas of Interest”—parts of the state that have been worst-hit by the quakes—and adds restrictions for 211 disposal wells.

Rigzone | 21 July 2015

Canada Provinces Agree to Strategy on Pipelines, Climate Change

Canada’s provinces reached a long-sought deal on 17 July over an energy plan for the country, agreeing broadly to curb greenhouse gas emissions while also promoting the use of pipelines.

The oil-producing province of Alberta originally conceived the strategy as a way to ensure that it could move its fuel to market. The plan was changed at the insistence of some of the provinces to reflect their desire to fight climate change.

Alberta and Saskatchewan have limited markets for their land-locked oil, with environmentalists opposing pipelines that have to go through other provinces to reach the Pacific or Atlantic oceans. These include the Energy East pipeline proposed by TransCanada, which is also trying to build the controversial Keystone XL pipeline through the United States.

Canada’s provinces agreed to ensure that regional, Canadian, and international infrastructure exists for sending energy products to domestic and international markets. The agreement was announced following the premiers’ annual summer conference, which was held this year in St. John’s, Newfoundland.

Saskatchewan Premier Brad Wall said he was more comfortable with the stronger language in the document on ensuring there is infrastructure in place to get energy to market. Quebec Premier Philippe Couillard, whose government has said Energy East must meet seven conditions before being allowed through the province, sounded conciliatory and mindful of the Lac-Megantic oil-by-rail disaster in his province in 2013.

“The bottom (line) is, oil will have to move,” he told reporters. “If it’s not moving by pipeline, it’s moving by rail. Is it really better by rail or safer by rail? I can tell you that in Quebec we have a different perspective on this.”

The energy plan includes goals and efforts for reducing greenhouse gas emissions, but did not lay out specifics.

The Hill | 6 July 2015

Regulators Seek Faster Pipeline Spill Notifications

Federal regulators want operators of pipelines for oil and other materials to notify federal officials within an hour after breaches and leaks.

The 1 July proposal came weeks after an oil pipeline was breached along the Pacific Ocean coast in Santa Barbara County, California, leaking more than 100,000 gallons into the ocean and coating beaches.

The owner of that pipeline, Plains All American Pipeline, did not notify the federal government until at least 90 minutes after it discovered the leak, according to The Associated Press. The Pipeline and Hazardous Material Safety Administration is proposing to require operators to notify its National Response Center at the “earliest practicable moment” after a leak, but not within more than an hour.

The requirement is part of an overhaul of the rules regarding how pipeline operators respond to incidents like leaks, including personnel training, drug and alcohol testing, and assessing pipeline cracks.

Rigzone | 1 July 2015

EU Offshore Safety Regulations: Guidance on New Rules

After the Deepwater Horizon accident occurred in the Gulf of Mexico in April 2010, the European Commission reviewed the existing regulatory framework around Europe. It concluded that the divergent and fragmentary nature of the requirements in place applying to the safety of offshore oil and gas operations did not provide adequate assurance that risks from offshore accidents were minimized.

As a result, the European Commission published the Offshore Directive on 28 June 2013. This aims to “help prevent accidents, as well as respond promptly and efficiently should one occur. The directive, broadly based on the UK’s current offshore safety regime according to the UK’s Health and Safety Executive, includes requirements relating to licensing, environmental protection, emergency response, and liability, as well as safety. And it will come into effect in just a few weeks’ time, 19 July.

Under the new regulations, companies must prepare a major hazard report for their offshore installation before exploration or production begins. This report must contain a risk assessment as well as an emergency response plan and be updated whenever appropriate.

Washington Examiner | 1 July 2015

Twenty-Two States Sue EPA Over Water Rule

Litigation against the US Environmental Protection Agency’s clean water rules reached a fevered pitch on 30 June.

Nine states added to a frenzy of lawsuits being leveled against the EPA and the Army Corps of Engineers after the Waters of the United States rule was published in the Federal Register on 29 June.

The publishing of the rule marks the day a regulation officially becomes law and, thus, ripe for litigation.

North Dakota led a group of 13 states on 29 June in a lawsuit filed in the US District Court in Bismarck, challenging the EPA over the rule. The states include Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, and Wyoming, and the New Mexico Environment Department and State Engineer.

Officials say the goal is to delay or defeat the regulations before they take effect at the end of August.

West Virginia led the charge with eight other states in a separate court filing against the EPA on 30 June. The states argue that the rules undermine the constitutional rights of states to manage their own waterways.

BSEE | 18 June 2015

BSEE Proposes Regulations To Improve Safety of Offshore Cranes

The Bureau of Safety and Environmental Enforcement (BSEE) on 12 June announced another key step in reducing risk offshore. The proposed rule, published in the Federal Register, would implement best practices and update regulations regarding the safety of cranes mounted on fixed platforms on the outer continental shelf.

“Over the past 7 years, 16% of fatalities offshore have been associated with lifting incidents,” said BSEE Director Brian Salerno. “We are focused on reducing risk offshore and are proposing this rule to improve the safety of cranes for offshore workers.”

The proposed rule, which will be open for public comment, addresses safety issues for cranes mounted on fixed platforms including the loading of cranes, their service life, braking systems, and personnel safety. It would include the incorporation of accepted industry best practices and update ​​current BSEE regulations.

The Wall Street Journal | 10 June 2015

Obama Administration Readies Big Push on Climate Change

The Obama administration is planning a series of actions this summer to rein in greenhouse-gas emissions from wide swaths of the economy, including trucks, airplanes, and power plants, kicking into high gear an ambitious climate agenda that the president sees as key to his legacy.

The Environmental Protection Agency (EPA) is expected to announce as soon as 10 June plans to regulate carbon emissions from airlines, and soon after that, draft rules to cut carbon emissions from big trucks, according to people familiar with the proposals. In the coming weeks, the EPA is also expected to unveil rules aimed at reducing emissions of methane—a potent greenhouse gas—from oil and natural-gas operations.

And in August, the agency will complete a suite of three regulations lowering carbon from the nation’s power plants—the centerpiece of President Barack Obama’s climate-change agenda.

The proposals represent the biggest climate push by the administration since 2009, when the House passed a national cap-and-trade system proposed by the White House aimed at reducing carbon emissions.

Reuters | 3 June 2015

Alberta Pledges New Climate Regulations

Alberta, the Canadian province whose carbon-intensive oil sands are the largest source US oil imports, said on 2 June that it would have new climate change regulations in place by 30 June, when the current rules expire.

Shannon Phillips, the environment minister for the province’s newly elected left-wing government, said in a statement that her first steps would include energy-efficiency and renewable-energy strategies.

The New Democratic Party, which ended 44 years of government by the Conservative Party in Alberta in an election last month, has been pressed to have a new climate change strategy in place before late November’s United Nations Climate Change Conference in Paris.

“This government will take leadership on the issue of climate change and make sure Alberta is part of crafting solutions with stakeholders, other provinces, and the federal government,” Phillips said.