Drilling Contractor | 6 December 2016

Regulatory Outlook: Air Quality, Methane Waste Prevention Rules on the Horizon While Industry Still Working To Clarify Well Control Rule

As the current administration draws to a close and the US prepares for the incoming president and Congress, several new regulations have recently been proposed or finalized by various regulatory bodies.

BSEE Director Brian Salerno testified before the US Senate and Natural Resource Committee in December 2015 regarding the then-proposed Well Control Rule. The final rule was announced in April 2016 and officially took effect on 28 July. However, the industry is still working with BSEE to get clear answers to questions about several of the rule’s requirements.

BSEE Director Brian Salerno testified before the US Senate and Natural Resource Committee in December 2015 regarding the then-proposed Well Control Rule. The final rule was announced in April 2016 and officially took effect on 28 July. However, the industry is still working with BSEE to get clear answers to questions about several of the rule’s requirements.

Three items of concern are especially notable on the regulatory horizon: the Well Control Rule from the Bureau of Safety and Environmental Enforcement (BSEE), the Air Quality Rule from the Bureau of Ocean Energy Management (BOEM), and the Methane Waste Prevention Rule from the Bureau of Land Management (BLM). For many in the industry, the timing of these rules and proposals are clear attempts to push through new regulations before the current administration ends in January.

OSHA | 2 December 2016

OSHA Issues Final Rule Updating Walking-Working Surfaces Standards and Establishing Personal Fall Protection Systems Requirements

The US Department of Labor’s Occupational Safety and Health Administration (OSHA) on 17 November issued a final rule updating its general industry Walking-Working Surfaces standards specific to slip, trip, and fall hazards. The rule also includes a new section under the general industry personal protective equipment standards that establishes employer requirements for using personal fall protection systems.

“The final rule will increase workplace protection from those hazards, especially fall hazards, which are a leading cause of worker deaths and injuries,” said Assistant Secretary of Labor for Occupational Safety and Health David Michaels. “OSHA believes advances in technology and greater flexibility will reduce worker deaths and injuries from falls.” The final rule also increases consistency between general and construction industries, which will help employers and workers that work in both industries.

OSHA estimates the final standard will prevent 29 fatalities and more than 5,842 injuries annually. The rule becomes effective on 17 January 2017 and will affect approximately 112 million workers at 7 million worksites.

The final rule’s most significant update is allowing employers to select the fall protection system that works best for them, choosing from a range of accepted options including personal fall protection systems. OSHA has permitted the use of personal fall protection systems in construction since 1994, and the final rule adopts similar requirements for general industry. Other changes include allowing employers to use rope descent systems up to 300 ft above a lower level; prohibiting the use of body belts as part of a personal fall arrest system; and requiring worker training on personal fall protection systems and fall equipment.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to ensure these conditions for America’s working men and women by setting and enforcing standards, and providing training, education, and assistance.

StateImpact | 22 November 2016

New Methane Rules Coming for Pennsylvania’s Oil and Gas Industry

Pennsylvania regulators are soon planning to introduce new regulations to reduce methane emissions from the oil and gas industry, despite expectations President-Elect Donald Trump may seek to roll back new federal rules.

Credit: Joe Ulrich/WITF.

Credit: Joe Ulrich/WITF.

Methane is the main component of natural gas and a potent greenhouse gas that contributes to global climate change.

The state Department of Environmental Protection is expected to unveil new general permit requirements for Marcellus Shale well pads at a meeting of its Air Quality Technical Advisory Committee on 8 December. A broader regulatory package, designed to curb methane leaks from existing sources, is expected in early 2017.

“A lot of these issues now revert to the states to take action,” said Matthew Stepp, policy director for the environmental advocacy group PennFuture. “The environmental community is rightly concerned at the federal government reversing course.”

Jones Day via Mondaq | 4 November 2016

EPA Issues Guidelines Addressing VOC Emissions From Oil and Gas Sector

The US Environmental Protection Agency (EPA) is adopting guidelines that will ultimately require oil and gas sources in certain areas with elevated ozone concentrations to implement emissions controls for volatile organic compounds (VOCs). Some of the areas subject to the new guidance are in states with significant oil and gas activity, such as California, Colorado, Pennsylvania, and Texas.

The EPA links elevated ambient ozone concentrations with human health impacts, and the federal Clean Air Act therefore requires the imposition of reasonable control measures. The guidelines will have the additional effect of reducing greenhouse gas emissions, as many of the VOCs that will be controlled are also greenhouse gases.

The Associated Press | 4 November 2016

Oklahoma Regulators Close Wells, Reduce Volumes After Quake

Oil and natural gas regulators in Oklahoma are ordering the operators of 70 disposal wells to either shut them down or reduce disposal volumes after a 4.5 magnitude earthquake shook northern Oklahoma.

The Oklahoma Corporation Commission said on 3 November that the new guidelines affect 38 disposal wells within 15 miles of the quake’s epicenter that are under its jurisdiction and another 32 wells under the sole jurisdiction of the Environmental Protection Agency.

Akin Gump Strauss Hauer and Feld via Mondaq | 25 October 2016

EPA to the Oil and Gas Industry: The Request Is in the Mail

It looks like the Environmental Protection Agency (EPA) will have its own scary treat for the oil and gas industry this Halloween—an information request under Section 114 of the Clean Air Act designed to help the EPA regulate methane emissions from those facilities. The EPA submitted the request for the Office of Management and Budget’s approval on 29 September 2016, starting a 30-day clock for interested parties to comment. That means the request could go out to the more than 18,000 affected facilities as early as November 2016.

The request will require a typical recipient, within 30 days, to report the number and location of each oil- or gas-production facility; whether flare or thermal combustors are used; and the number and types of atmospheric tanks, separators, dehydrators, reciprocating processors, and dry- or wet-seal centrifugal compressors used at the facility. In addition, a limited number of respondents within each industry segment will be required to complete a much more detailed Part 2 Facility Survey, requiring detailed design, operational, and regulatory information regarding a diverse range of facility equipment, including emission-control devices, production well injection storage wells, tanks, separators, pneumatics, acid gas removal units, dehydrators, equipment leaks, compressors, blowdown events, and acid gas removal units. Companies selected for the more detailed survey would have 120 days to submit their reports.

Philadelphia Inquirer | 17 October 2016

Shale Industry Sues To Block New Pennsylvania Drilling Rules

The shale-gas industry on 13 October filed a legal challenge to block controversial new rules intended to reduce the surface effects of oil and gas drilling in Pennsylvania.

Aerial view in 2014 of a Marcellus Shale drilling operation near Waynesburg, Pennsylvania. Credit: Michael Bryant/Philadelphia Inquirer.

Aerial view in 2014 of a Marcellus Shale drilling operation near Waynesburg, Pennsylvania. Credit: Michael Bryant/Philadelphia Inquirer.

The Marcellus Shale Coalition, the trade group representing unconventional-gas producers, on 13 October asked the Commonwealth Court to delay implementation of the new drilling regulations until its appeal can be decided. The new rules went into effect on 15 October.

The legal action is the latest skirmish over regulation of the shale-gas industry, which critics say was able to grow rapidly in Pennsylvania under old rules designed for less-intensive drilling. The industry says that the state’s laws already are among the nation’s most stringent and that the new rules add more burdens without improving environmental protection.

The shale coalition says it is not challenging the entire package of Department of Environmental Protection regulations, known as Chapter 78a of the Pennsylvania Code. The lawsuit, assembled by the Pittsburgh law firm Babst Calland, takes narrow aim at specific provisions that the industry says are vague or are unsupported by authorizing legislation.

“These shortcomings are immediately harmful to our industry because they affect our ability to conduct business and remain competitive,” said David J. Spigelmyer, the president of the shale coalition.

PowerSource | 11 October 2016

Pennsylvania Publishes New Rules for Shale Drillers

An array of stricter environmental regulations for Pennsylvania shale gas drilling took effect on 8 October, opening a new phase of legal challenges to the rules after a punishing 5-year effort to get them published.

A Consol Energy horizontal gas drilling rig near Waynesburg, Greene County, Pennsylvania. Credit: Mladen Antonov/AFP/Getty Images.

A Consol Energy horizontal gas drilling rig near Waynesburg, Greene County, Pennsylvania. Credit: Mladen Antonov/AFP/Getty Images.

The state Department of Environmental Protection’s (DEP’s) new regulations update requirements for aboveground operations at oil and gas well sites for the first time since 2001 and reflect heightened scrutiny of the industry since Marcellus Shale drilling revolutionized natural gas production in Pennsylvania.

In a statement, Acting DEP Secretary Patrick McDonnell said the rules “create some of the most protective regulations in the nation and ensure safe development of this important resource.”

Oil and gas trade groups have already signaled that they plan to file lawsuits to challenge some of the standards, which they consider excessively burdensome and expensive without substantially improving environmental protection.

Pennsylvania Independent Oil and Gas Association executive director Dan Weaver said the industry “has been consistent in identifying significant legal problems with these regulations, yet the department has refused to change even the most glaring and obvious errors and overreaches.”

Major changes include new procedures for shale gas companies to screen for protected public resources and underground hazards around their proposed wellsites before drilling; new waste handling and spill cleanup standards; the elimination of most pits; and new construction standards for large fluid holding ponds.

Argus | 11 October 2016

EPA Commits To Review Emissions From Drilling Sites

The US Environmental Protection Agency (EPA) on 7 October committed to take a closer look at the decades-old formulas it uses to estimate the volume of smog-forming emissions from flares at natural gas production sites.

That review, which EPA plans to finish in 2018, could lead to tougher air emissions regulations for the industry if the agency finds the flares emit significantly more volatile organic compounds than it thought. Those compounds can create smog when they react in the atmosphere with light and nitrogen oxides.

Emission factors provide a way for regulators to estimate air emissions from industrial facilities without having to install costly air monitors on every piece of equipment. But environmentalists say those EPA-approved formulas frequently underestimate emissions. This can translate into weaker rules when states write plans, called state implementation plans (SIPs), for complying with the Clean Air Act.

“We have got to get a proper accounting of flares to do things like plan our next ozone SIPs or make sure that hazardous air pollutants are not impacting nearby communities,” Air Alliance Houston executive director Adrian Shelley said.

Reuters | 8 September 2016

US Judge Halts Hydraulic Fracturing Plan for Federal Lands in California

A US judge on 7 September halted a plan to allow hydraulic fracturing on public lands in central California, saying a federal agency’s environmental plan should have taken a “hard look” at the potential effects of the process.

A pumpjack brings oil to the surface in the Monterey Shale, California, in this file photo dated 29 April 2013. Credit: Reuters/Lucy Nicholson.

The ruling, by US District Judge Michael Fitzgerald, was at least the second setback in 3 years for fracturing in California and came as the Obama administration’s rules for hydraulic fracturing on federal lands have been tied up in another court.

The US Department of the Interior’s Bureau of Land Management (BLM), which periodically leases out land to private producers, offered a plan that would have allowed hydraulic fracturing on about a quarter of new wells drilled on some 1 million acres across central California.

The final outcome is not clear as Judge Fitzgerald asked both sides for a further briefing on 21 September as the case enters its remedy phase.

But, it could be similar to that a 2013 case in which a federal judge ruled that the BLM violated the National Environmental Policy Act when it issued oil leases in California’s Monterey County without considering the environmental dangers of hydraulic fracturing.

Since that ruling, the BLM has refrained from holding any lease sales in that area until it completes an environmental review of the risks of hydraulic fracturing, said one of the plaintiffs in the cases, the Center for Biological Diversity.

Reuters | 31 August 2016

Australian Explorer Looking at Grounds for Lawsuit Over Hydraulic Fracturing Ban

Lakes Oil, a junior oil and gas explorer in Australia, is considering the grounds it may have for suing Victoria state, after the government there permanently banned hydraulic fracturing and extended a ban on onshore conventional gas drilling to 2020.

Lakes Oil shares sank as much as 50% on Wednesday in their first trading since the ban was announced, and the stock was the fourth most active on the Australian exchange.

The move by the state in the country’s southeast means Lakes will not be able to go ahead with two tentative deals lined up in 2014 to supply gas from its Wombat onshore conventional gas field to US giant Dow Chemical and Australian food manufacturer Simplot.

“What the government’s done is just unbelievable. It’s unprecedented,” Lakes Oil Chief Executive Roland Sleeman said.

Jones Day via Mondaq | 23 August 2016

US Congress Reauthorizes Pipeline Safety Agency and Mandates New Pipeline Safety Requirements

On 22 June 22 2016, President Obama signed the PIPES Act of 2016 into law. The act reauthorizes the US Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration through fiscal year 2019. The act makes dozens of changes to the federal pipeline safety laws, including:

  • Requiring that DOT adopt, for the first time, federal minimum safety standards for underground natural gas storage facilities
  • Authorizing DOT to issue emergency orders to address imminent hazards posed by gas pipelines or hazardous liquids
  • Allowing a certified state authority to participate in a DOT inspection of an interstate pipeline facility
  • Increasing inspection requirements for certain hazardous liquid pipeline facilities located underwater
  • Imposing on DOT the duty to submit, on an ongoing and periodic basis, reports to Congress addressing the status of DOT’s yet-to-be completed actions implementing the 2011 Pipeline Safety Act