Regulations | 4 February 2016

Pennsylvania Board Approves New Rules for Gas and Oil Drillers

The Pennsylvania Environmental Quality Board (EQB), which promulgates the state’s environmental regulations, on 3 February approved controversial new rules intended to reduce the surface effects of oil and gas drilling.

The EQB approved the new rules by a 15–4 vote. The rules will likely face a legal challenge from the industry.

The last revision of the rules came in 2001, 3 years before the first Marcellus shale well was drilled, launching a boom that has turned Pennsylvania into the nation’s second-largest gas-producing state.

“Work on this package began almost 5 years ago,” said John Quigley, secretary of the Department of Environmental Protection. “It’s time to finish the job and put these reasonable, balanced, and incremental protections for public health and the environment into effect.”


The Hill | 27 January 2016

Obama Targets Methane Emissions on Federal Land

The Obama administration is targeting oil and natural gas drillers on federal land in its latest regulatory push to cut down on methane emissions.

In a set of standards proposed 22 January by the Interior Department, regulators want to restrict the rates at which drillers deliberately or accidentally release natural gas.

The standards are also intended to restrict the deliberate burning of gas that is not captured.

It’s the latest climate-change-related push from the Obama administration and comes after several organizations pronounced 2015 as the warmest year on record.The administration has vowed to crack down not only on carbon dioxide but also on methane. Methane is the main component of natural gas, and, though it doesn’t stay in the atmosphere very long, it has more than 25 times the global warming power of carbon.

Read the full story here.

Borden Ladner Gervais via Mondaq | 15 January 2016

Year in Review: Legislative, Regulatory, and Policy Changes of Import to the Canadian Oil and Gas Industry

In 2015, politics drove policy. With new federal and Alberta governments, last year ushered in unprecedented changes for the Canadian oil and gas industry. There is more to come. Greenhouse gas regulation and a revised royalty regime are poised to be two of the sector’s leading business challenges in 2016—along with stubbornly low price—as energy companies determine the impact to their bottom lines.

There are significant transitions happening to Canada’s energy economy. Pipelines remain elusive. Mergers-and-acquisitions activity is nascent and waiting for further price and policy clarity. International oil supply, buoyed by an end-of-year US policy shift to permit crude exports, continues to be robust. Green energy and renewable sources will play a larger role in the country’s energy mix. As the year progresses, companies with strong balance sheets and a low cost of capital are likely to be some of the biggest winners in 2016.

Canada’s oil and gas sector looks ahead to not only the implementation of provincial carbon initiatives, but also the federal government pursuing its own climate change agenda. This involves new international obligations arising from the 2015 United Nations Climate Change Conference as well as a commitment to set national emissions targets—and coordinate with existing provincial ones. 2016, therefore, will be a watershed year for energy companies navigating the shoals of carbon policy and economic transition. Changes are expected to be rapid and multidimensional, effects complicated.


The Associated Press | 14 January 2016

Massive Gas Leak Spurs Legislation To Avert Future Disasters

California lawmakers proposed stronger regulations on 11 January to prevent a natural gas storage leak like one that has sickened Los Angeles residents and driven thousands from their homes.

Sen. Fran Pavley, D-Agoura Hills, said the legislation would prevent a replay of the massive uncontrolled leak that has persisted nearly 3 months in the San Fernando Valley.

“I know we can do better,” Pavley said at a news conference in the Porter Ranch neighborhood, where residents have complained of nausea, headaches, nosebleeds and other ailments since the leak was discovered on 23 October. “How can we make sure this kind of tragedy never happens again?”

More than 4,500 families either plan to or have moved out of Porter Ranch while Southern California Gas tries to stop the leak. It has cost the company more than USD 50 million and is not expected to be plugged until March.

One proposed bill would require safety valves, better leak protection, and tighter restrictions if facilities are close to homes or schools.

Penn Live | 7 January 2016

New Pennsylvania Regulations Ban Pits

The Pennsylvania Department of Environmental Protection (DEP) on 6 January made available thousands of pages of documents outlining new rules for the oil and gas industry.

Among the trove of public documents are increased regulations for unconventional drillers, which apply to companies extracting natural resources from the Marcellus Shale.

Some of the biggest changes include “a prohibition on all pits,” such as the pits used for drill cuttings and flowback fluids.

A driller that still wants to use a centralized impoundment will need a residual waste permit, in addition to DEP permits.

Regulators say the changes are necessary after a number of cases in which pits and impoundments were found to be leaking.

“The risks all too often have been realized in Pennsylvania,” said Scott Perry, deputy secretary of DEP’s Office of Oil and Gas Management.

Kallanish Energy | 6 January 2016

Oil Firm Resists Call To Shut Down Wells Amid Earthquake Concerns

SandRidge Energy thus far is defying the Oklahoma oil and gas regulator’s request that it shut down six wastewater injection wells, despite allegations the injections may be contributing to earthquakes.

The Oklahoma City, Oklahoma-based independent producer has complied with similar requests in the past, but this time said it will not stop using its wastewater wells.

Research links earthquakes in Oklahoma and other oil- and gas-producing states to disposal wells, although SandRidge and other shale producers have criticized geologic reports.

“We continue to work closely with the Oklahoma Corporation Commission [OCC]. We look forward to addressing this issue through OCC’s established rules and procedures, which will ensure decisions are based on scientific analysis. This is a complex issue, and science must be our guide as we work together to address it,” David Kimmel, SandRidge’s communications director, said.

The commission is working on legal action to modify SandRidge’s permits to force it to abandon the wells, Matt Skinner, a commission spokesman, told the Wall Street Journal.

The Associated Press | 5 January 2015

Oklahoma Oil, Gas Regulators Order Changes After Earthquakes

The state commission that regulates Oklahoma’s oil and natural gas industry ordered some injection well operators to reduce wastewater disposal volumes on 4 January after at least a dozen earthquakes hit an area north of Oklahoma City in less than a week.

The Oklahoma Corporation Commission said it was implementing a plan that affects five wastewater injection wells operating within 10 miles of the center of earthquake activity near Edmond, a northeast suburb of Oklahoma City. Among the recent quakes to hit the area was a 4.2 magnitude temblor on New Year’s Day that caused minor damage but no injuries.

“We are working with researchers on the entire area of the state involved in the latest seismic activity to plot out where we should go from here,” Oil and Gas Conservation Division Director Tim Baker said, adding that responding to the swarm of earthquakes in the region was an ongoing process.

The Associated Press | 14 December 2015

EPA Approves Water Quality Rules Dividing Montana, Wyoming

The US Environmental Protection Agency waded into a long-running skirmish between two states by approving water quality rules meant to protect southeastern Montana cropland from waste water produced during natural gas drilling in neighboring Wyoming.

Wyoming officials and oil and gas companies have assailed the rules as a threat to energy production. The rules set standards that limit how much salty water—a byproduct of drilling—can enter waterways in the Tongue and Powder River basins along the Montana/Wyoming border.

Gas production in the region has declined dramatically in recent years because of falling prices. But Montana rancher Mark Fix said that he continues to see evidence of high salt levels in the Tongue River during the annual spring runoff because of past drilling. That has forced him to alter how he irrigates his fields.

Some farmers have said their crop yields dropped by more than half due to poor-quality water flowing out of Wyoming gas fields.

The Denver Post | 14 December 2015

Colorado High Court Hears Cases on City Oil and Gas Fracturing Bans

Colorado Supreme Court justices plunged into oral arguments as Front Range cities push to limit oil and gas development near people—a step toward resolving a long-running tussle over local vs. state power to regulate industry.

The question is how far cities, towns, and counties can go to shield residents under current law, which establishes an overriding Colorado interest in production of oil and gas.

Fort Collins voters in 2013 passed a 5-year moratorium on hydraulic fracturing inside city boundaries, defying Gov. John Hickenlooper and state authorities, who contend locals lack the power to regulate oil and gas.

Longmont leaders in 2012 imposed rules for oil and gas activity. Colorado’s attorney general at the time, John Suthers, sued the city. Longmont voters responded by banning hydraulic fracturing.

The Colorado Oil and Gas Association (COGA) and state have been fighting the ban and moratorium. COGA and state attorneys argue both are illegal because case law and regulations give only the state the right to regulate hydraulic fracturing.

The Associated Press | 14 December 2015

Report Says Short Review Did Not Compromise Alaska Lease Sale

A federal agency rushed through an environmental review of an Alaska offshore petroleum lease sale at the insistence of high-level managers but did not compromise its quality, a federal reviewer has concluded.

The Office of the Inspector General, which investigates fraud, abuse, and misconduct, concluded that managers edited an environmental review of the 2008 Chukchi Sea lease sale and established an “expedited timeline” for its completion by an Interior Department agency.

The Environmental Protection Agency, however, concluded that the review contained adequate scientific information, according to the report. And the short time frame for the review, ordered by Interior Department chief of staff Tommy Beaudreau, was put in place to protect the Interior Department from blame if Royal Dutch Shell had decided it could not drill exploratory wells on its Chukchi leases in 2015, he told inspectors.

BakerHostetler via Mondaq | 19 November 2015

Column: Do You Dare To Flare? A North Dakota Field Office Provides a View Into the Federal Regulatory Future

While high-profile regulatory efforts focused on hydraulic fracturing, waters of the United States, sage grouse, and greenhouse gas emissions have grabbed media headlines over the last several months, a potent stew of seemingly mundane technical initiatives has been simmering under the noses of domestic energy companies.

Taken individually, narrow regulatory proposals related to oil and gas accounting, permitting and planning requirements, procedural rules for administrative appeals, royalty reporting, weights and measures, bonding requirements, and infrastructure development have been of interest to only a small group of regulatory and legal technocrats. But understood collectively, these less glamorous initiatives have the potential to fundamentally change the scale and nature of oil and gas development in the United States.