Regulations
Bloomberg | 14 June 2017

Trump Weighing Combining Agencies Separated After Gulf Spill, Sources Say

After the 2010 Gulf oil spill, the Obama administration broke the scandal-plagued federal agency that policed offshore drilling into separate bureaus.

Now, the Trump administration is considering putting it back together again.

The change, described by Interior Department officials and lobbyists familiar with the deliberations, would combine two agencies: one that enforces regulations on offshore drilling safety and another in charge of leasing offshore tracts. Keeping those roles separate was a key recommendation of a presidential commission that investigated the Deepwater Horizon blast that killed 11 men and sent oil gushing into the Gulf of Mexico for months.

Merging the bureaus could send a signal that Interior is easing off on enforcement, right as President Donald Trump expands areas available for offshore oil drilling, according to Bob Graham, a former Florida senator who led the commission.

“I have heard no indication of why we’re doing this,” Graham said in an interview. “It’s just 7 years after this enormous disaster—and this was one of the key steps in at least mitigating the chances of a repetition.”

Read the full story here.

CNBC | 6 June 2017

Trump’s EPA Hit With Lawsuit Over Suspension of Oil- and Gas-Drilling Rules

A group of conservation organizations sued the Environmental Protection Agency (EPA) on 5 June, saying the agency unlawfully suspended Obama-era rules to cut methane pollution.

President Donald Trump, left, listens to EPA Administrator Scott Pruitt after announcing his decision that the United States will withdraw from the Paris Climate Agreement, in the Rose Garden of the White House on 1 June. Credit: Kevin Lamarque, Reuters.

The lawsuit is another sign that environmentalists intend to use the courts to block President Donald Trump’s effort to roll back energy regulations and climate change initiatives pushed by his predecessor.

Environmental groups have already sued the president over his approval of the Keystone XL pipeline and for seeking to overturn President Barack Obama’s ban on offshore drilling in the Arctic. Some nonprofits, including the Natural Resources Defense Council, have also sued over Trump’s executive order requiring federal agencies to repeal two regulations for every new one they propose.

Six conservation groups on 5 June filed suit after the EPA suspended implementation of rules meant to prevent methane leaks from oil and gas operations. They said EPA Administrator Scott Pruitt issued a 90-day stay without giving the public advance notice or the opportunity to comment, as required by law.

Read the full story here.

The Hill | 1 June 2017

EPA Halts Obama-Era Rule on Methane Pollution

The Environmental Protection Agency (EPA) has halted an Obama administration rule to cut down on pollution of methane, a greenhouse gas produced at oil and natural gas drilling wells.

Credit: Getty Images.

The EPA on 31 June said it had issued a 90-day stay of agency rules designed to limit methane leaks at drilling sites, as well as rules setting standards for equipment and employee certification.

President Trump ordered the EPA to reconsider the methane standards in March when he signed an executive order to repeal several Obama administration climate regulations.

Obama administration officials finalized the methane rule last May. The regulation, part of a federal methane reduction strategy that Trump has also repealed, was designed to cut 520,000 short tons of methane pollution by 2025. The EPA said compliance costs would be approximately USD 530 million. Drillers opposed the rule, saying it was costly and duplicative. Several states sued over the standards at the time, including Oklahoma, whose then-attorney general, Scott Pruitt, is now administrator of the EPA.

The EPA said in April it would formally review the methane rule, a lengthy process that includes a formal federal rulemaking.

The decision to roll back its methane standards comes as Canada begins the process of tightening its standards. Obama and Canadian Prime Minister Justin Trudeau announced their methane reduction strategies together in 2016.

The Hill | 1 June 2017

Canada Proposes Methane Pollution Standards for Oil and Gas Drilling

Canadian regulators are formally proposing rules to reduce methane pollution from the oil and natural gas sector.

Canadian Prime Minister Justin Trudeau. Credit: Greg Nash.

The announcement from Environment and Climate Change Minister Catherine McKenna on 25 May came despite the Trump administration’s actions in the United States to reverse course on methane regulations written by former President Barack Obama.

Methane is the main component of natural gas and a greenhouse gas about 80 times as potent as carbon dioxide.

In proposing the rules, McKenna specifically cited the examples of California, Colorado, and North Dakota as jurisdictions that Canada wants to emulate on methane regulation.

“By better detecting and patching leaks, companies will be able to save and sell that natural gas and do their part to fight climate change. And this will support more modern technology and good new jobs in the oil and gas sector,” McKenna said in a statement.

“Our government knows that, through innovation and technology, we can reduce emissions while improving the health of Canadians.”

The rules target methane leaks in the drilling process, leaks from equipment, and venting unused gas at wells and at compressor stations, among other places.

Read the full story here.

The Hill | 23 May 2017

Court Pauses Lawsuit Over Obama Methane Rule

A federal court on 18 May formally paused a lawsuit over an Obama administration methane regulation.

Credit: Getty Images.

The order, from the Court of Appeals for the District of Columbia, halts consideration of an oil industry suit challenging the Environmental Protection Agency’s (EPA) rules cracking down on methane emissions from oil and gas drilling wells.

President Trump signed an executive order in March asking the EPA to review that regulation as part of an effort to undo several Obama-era environmental rules he argues hurt the energy industry.

In early April, Trump administration lawyers asked the court to hold the case in abeyance because they had started the process of reviewing the rule.

“Pursuant to the executive order, EPA is initiating its review of this rule and providing advanced notice of forthcoming rulemaking proceedings consistent with the president’s policies,” federal lawyers wrote in a motion then. “If EPA’s review concludes that suspension, revision, or rescission of this Rule may be appropriate, EPA’s review will be followed by a rulemaking process that will be transparent, follow proper administrative procedures, include appropriate engagement with the public, employ sound science, and be firmly grounded in the law.”

A three-judge panel formally paused the rule in a one-paragraph ruling on 18 May.

Read the full story here.

The Hill | 23 May 2017

Former Louisiana Official Tapped as Lead Offshore Drilling Regulator

The Trump administration has tapped a former Louisiana utility regulator to lead the agency responsible for offshore oil and natural gas drilling safety.

Angelle

Scott Angelle, most recently vice-chairman of Louisiana’s Public Service Commission, is now the head of the Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE), the agency said on 22 May.

“Scott Angelle brings a wealth of experience to BSEE, having spent many years working for the safe and efficient energy production of both Louisiana’s and our country’s offshore resources,” Interior Secretary Ryan Zinke said in a statement.

“As we set our path towards energy dominance, I am confident that Scott has the expertise, vision, and the leadership necessary to effectively enhance our program and to promote the safe and environmentally responsible exploration, development, and production of our country’s offshore oil and gas resources.” Zinke has the power to appoint Angelle without Senate confirmation.

“It is an exciting and challenging time for BSEE; I look forward to leading our efforts to empower the offshore oil and gas industry while ensuring safe and environmentally responsible operations,” Angelle said in the statement.

Read the full story here.

Reuters | 18 May 2017

US Industry Seeks Faster Permits, Simpler Rules in Trump Regulation Reset

US industry groups have told President Donald Trump’s administration that they want two main things from his promised regulatory overhaul: a speedier permit process and simpler environmental rules.

US President Donald Trump gestures as he walks on the South Lawn of the White House upon his return to Washington on 17 May. Credit: Yuri Gripas/Reuters.

Associations representing the drilling, refining, mining, and building industries have submitted hundreds of pages of documents to the Commerce Department and Environmental Protection Agency (EPA) in recent weeks, outlining regulations they want to see eliminated or modified.

The comments, many targeting the EPA, come in response to a pair of executive orders Trump signed during his first weeks in office, meant to cut the regulatory burden on companies. Trump and the Republican-controlled Congress have already moved to rescind a slew of Obama-era environmental protections, including some aimed at combating global climate change.

The EPA’s regulatory reform office alone has received remarks from more than 65,000 people and groups, many of them criticizing the regulatory rollback plan as a potential threat to public health. But business groups have embraced the plan, calling it the best chance in more than a decade to reshape the regulatory landscape and boost growth without undermining air and water quality.

“Last time I remember this was 2001. That was the last big opportunity to make some changes,” said David Friedman, vice president of regulatory affairs for the American Fuel and Petrochemical Manufacturers industry group.

That year, then Vice President Dick Cheney chaired an energy task force that produced a National Energy Policy report, a road map to boosting domestic systems and supplies. Much has changed since: US oil and gas production hit all-time highs during the administration of former President Barack Obama, helped by high crude prices and improved drilling technology.

This time around, industry groups appear focused on easing the permitting process for new facilities and installations, according to a Reuters review of the comments.

Read the full story here.

Reuters | 11 May 2017

Bid To Revoke Obama Methane Rule Fails in Surprise US Senate Vote

The US Senate on 10 May rejected a resolution to revoke an Obama-era rule to limit methane emissions from oil and gas production on federal lands, dealing a blow to President Donald Trump’s efforts to free the drilling industry from what he sees as excessive environmental regulation.

A pumpjack brings oil to the surface in the Monterey Shale, California, in a file photo. Credit: Lucy Nicholson/Reuters.

The Congressional Review Act resolution received just 49 votes after Republican leaders scrambled for weeks to secure the 51 needed to pass it. The resolution would have revoked the rule and prevented similar regulations from being introduced.

Getting the Trump administration to repeal the Bureau of Land Management (BLM) rule had been a top priority of the oil and gas industry. Companies said it was unnecessary and would could cost them tens of thousands of dollars per well and hinder production.

But not all Republicans supported the measure, in part because it would have made regulating methane waste more difficult in the future.

Republican Senator John McCain of Arizona made a surprise vote against the resolution, joining fellow Republicans Lindsey Graham of South Carolina and Susan Collins of Maine in opposition to torpedo it.

“While I am concerned that the BLM rule may be onerous, passage of the resolution would have prevented the federal government, under any administration, from issuing a rule that is ‘similar’,” McCain said in a statement.

He said the Interior Department should issue a new rule on to replace the existing one on methane leaks, which he called a public health and air quality issue.

Gray Reed and McGraw via Mondaq | 5 May 2017

Column: A Development In Earthquakes and Hydraulic Fracturing

Sierra Club v. Chesapeake Operating LLC et al.  is news more shocking than “Man Bites Dog.” A federal court has acknowledged that others are better equipped to address certain issues than the judiciary.

Sierra Club alleged that that deep injection of liquid waste from operations by Chesapeake, Devon, and New Dominion has contributed to earthquakes throughout Oklahoma and southern Kansas. Sierra asserted that waste disposal activities present an imminent and substantial endangerment to the public health or environment. This was a citizen suit under the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (RCRA).

Sierra Club alleged

  • Earthquakes in Oklahoma increased more than 300-fold from before 2009 to 2015, from 167 to 5,838.
  • The severity has increased.
  • Seismologists say a magnitude 7 quake is possible in the Nehama fault.
  • Earthquake risks in Oklahoma are now the highest in the nation.

Sierra Club wanted an order requiring defendants to

  • Reduce “immediately and substantially” the amount of wastes injected into the ground
  • Reinforce vulnerable structures that would be affected by a large magnitude earthquakes
  • Establish independent earthquake monitoring and prediction

The defendants urged the court to

  • Allow the Oklahoma Corporation Commission to take action in response to increased seismicity in the state
  • Dismiss, because Sierra did not join every company that disposes of liquid wastes
  • Dismiss, because the claims fall outside the “zone of interests” Congress intended to protect under RCRA

The court sided with the defendants, concluding that dismissal is appropriate under the Burford abstention and primary jurisdiction doctrines. Here’s why:

  • In 1981, the US Environmental Protection Agency gave primary enforcement responsibility for underground injection control to the state of Oklahoma.
  • Oklahoma vests that authority in the Oklahoma Corporation Commission.
  • The OCC exercises exclusive jurisdiction over injections wells.
  • The OCC has an extensive regulatory structure in place for injection well control.

Read the full story here.

Stikeman Elliott via Mondaq | 3 May 2017

Alberta Court of Appeal Rules That Receivers and Trustees Can Orphan “Bad” Wells

In a much anticipated decision, a 2–1 majority of the Alberta Court of Appeal (ABCA) has upheld the Alberta Court of Queen’s Bench decision in Re Redwater Energy Corporation, 2016 ABQB 278. The ABCA found in favor of receivers, trustees, and secured creditors on the basis that the Bankruptcy and Insolvency Act takes precedence over the provincial oil and gas regulatory schemes, making such schemes inoperative to the extent that they purport to require trustees and receivers to comply with abandonment, reclamation, and remediation requirements of disclaimed assets.

This decision will continue to prevent the Alberta Energy Regulator (AER) from refusing to transfer licensed assets in an insolvency process unless ongoing environmental obligations tied to disclaimed licensed assets are met. The ABCA’s split decision also likely signals a period of continued uncertainty because it is reasonable to expect that the AER and the Orphan Well Association will be seeking leave to appeal this decision to Canada’s top court. Moreover, whatever happens in Alberta will affect policy in the other western Canadian provinces.

Read the full story here.

The Associated Press | 24 April 2017

EPA Chief Delays Methane Rule at Behest of Oil and Gas Firms

The Environmental Protection Agency (EPA) is again moving to derail Obama-era regulations aimed at reducing pollution from the fossil fuel industry.

Environmental Protection Agency headquarters building in Washington, D.C. Credit: Getty Images.

EPA Administrator Scott Pruitt announced on 19 April that he’s issued a 90-day delay for oil and gas companies to follow a new rule requiring them to monitor and reduce methane leaks from their facilities. Pruitt said the agency will now reconsider the 2016 measure, which the companies were required to comply with by June.

It was the latest in a slew of actions by Pruitt to set aside environmental regulations opposed by corporate interests. The American Petroleum Institute, the Texas Oil and Gas Association, and other industry groups petitioned Pruitt to scrap the requirement.

“American businesses should have the opportunity to review new requirements, assess economic impacts, and report back before those new requirements are finalized,” Pruitt said in a statement.

Read the full story here.

Reuters | 19 April 2017

Trump’s EPA To Reconsider Oil and Gas Emissions Rule

The US Environmental Protection Agency will reconsider a rule on greenhouse gas emissions from oil and gas operations and delay its compliance date, the agency said on 19 April in the Trump administration’s latest move to reduce regulations.

US President Donald Trump speaks between Vice President Mike Pence, left, and EPA Administrator Scott Pruitt before signing an executive order on ”Energy Independence,” eliminating Obama-era climate change regulations. Credit: Carlos Barria/Reuters.

Oil interest groups, including the American Petroleum Institute and the Texas Oil and Gas Association, had petitioned the EPA a year ago to reconsider the rule limiting emissions of methane and other pollutants from new and revamped oil and gas wells and systems.

The EPA said in a statement that it would delay the rule’s 3 June compliance date by 90 days and take public comments during that period.

Under Democratic President Barack Obama, the EPA released the first methane limits on the facilities in May 2016, saying it would cost energy companies USD 530 million but would lead to USD 690 million in benefits, including lowering medical bills.

Scott Pruitt, the EPA chief in the administration of Republican President Donald Trump, joined dozens of other states in challenging the rule when he was attorney general of oil-producing Oklahoma. Pruitt has said he does not believe that greenhouse gas emissions are the main driver of climate change.

Read the full story here.