North America Shale Blog

North America Shale Blog

BOEM’s “Proposed Guidance” Shakes Up the Agency’s Supplemental Bonding Requirements

Posted in Pipeline

Row of floating wind turbines during hazy day.

The Bureau of Ocean Energy Management (“BOEM”) has backed away from its proposed rulemaking regarding financial assurance requirements for the Outer Continental Shelf (“OCS”). On August 19, 2014, BOEM published an Advance Notice of Proposed Rulemaking (“ANPR”) seeking input on “risk management, financial assurance, and loss prevention,” all designed to overhaul the agency’s method of determining how much money a company must pledge or tie up to ensure compliance with financial and performance obligations arising from an offshore lease.

Even after it published the ANPR, the agency warned it would issue a new Notice to Lessees (“NTL”) in the interim while the rulemaking was pending. Now, the agency has confirmed its intent to modify its financial assurance criteria – but it apparently no longer intends to do so through a rulemaking. This means that new regulations will be issued through a revised NTL, without any corresponding changes to the Code of Federal Regulations. This allows the agency to tighten the screws on industry without implementing any of the other industry-recommended improvements. Continue Reading

Federal Judge Grants Preliminary Injunction Blocking Enforcement of New BLM Hydraulic Fracturing Rules

Posted in Hydraulic Fracturing, U.S. Bureau of Land Management

Natural_Gas_Drilling_Rig_PeekingOn September 30, 2015, the U.S. District Court for the District of Wyoming granted a motion for a preliminary injunction preventing enforcement of the U.S. Bureau of Land Management’s (BLM) recently issued hydraulic fracturing rule. BLM issued the rule in March, attempting to exert jurisdiction over hydraulic fracturing on federal and Indian lands. But the district court’s decision prohibits the BLM from implementing the new rule while litigation over the rule’s legality is pending.

The lawsuit, filed shortly after BLM issued the hydraulic fracturing rule, was originally brought by the Independent Petroleum Association of America (IPAA) and the Western Energy Alliance (the Alliance) in the U.S. District Court for the District of Wyoming. The lawsuit now includes challenges from four states—Wyoming, North Dakota, Colorado, and Utah—and the Ute Indian Tribe. Continue Reading

Migratory Bird Treaty Act: Question Of Unintentional “Take” Primed For Potential Fifth Circuit En Banc Or Supreme Court Review

Posted in Uncategorized
obrecht 1

Photo Courtesy of the U.S. Fish & Wildlife Service

Recently, industry won a major legal victory regarding liability—or lack thereof—for unintentional and indirect bird deaths under the Migratory Bird Treaty Act (MBTA). Unfortunately, that victory could be short lived, depending on the results of the rehearing and appeals process.

At first read, the MBTA’s statutory language seemingly subjects companies to criminal liability for any bird that may die in or around industrial operations. MBTA liability not only extends to typical industrial operations—wind farms, wastewater ponds, oil and gas equipment, transmission lines, logging, communication towers, etc.—but could also extend to absurd results such as criminal prosecutions for building owners or even house-cat owners. Continue Reading

Pennsylvania Appeals Court Reverses Lower Court Decision and Allows a Natural Gas Well Project to Proceed in a Residential Neighborhood

Posted in Natural Gas, Pennsylvania

On September 9, 2015, Judge Mary Leavitt of the Commonwealth Court of Pennsylvania reversed the Court of Common Pleas of Lycoming County’s ruling, which had set aside the Board of Supervisors of Fairfield Township’s (the “Board”) grant of a conditional use permit to Inflection Energy LLC for the construction and operation of a natural gas well.

Inflection Energy applied to the Board, which acts as a zoning hearing board, in 2013 for a permit to build a natural gas well pad on property owned by David and Eleanor Shaheen. The site in question was in a region of the township designated as a “Residential Agriculture” district under the township’s zoning ordinance. After public hearings and the imposition of certain restrictions, the township board approved the conditional use permit. Continue Reading

North Dakota Saltwater Disposal Enforcement Actions Highlight Key Legal and Social License Risks

Posted in North Dakota, Oil and Gas

Wastewater treatment - 165476814Spills or improper disposal of oilfield produced water—which can be more than 10 times saltier than seawater and may also contain heavy metals and other chemicals—can turn even staunchly pro-oil and gas residents against drilling in their area.[1] Improper disposal and spills also can attract serious civil, and in some cases, criminal penalties. Several recent enforcement actions by state and federal authorities in North Dakota suggest a more aggressive regulatory stance toward oil and gas activities that the government believes could threaten groundwater supplies. Continue Reading

Birds of a Feather? Greater Sage-Grouse Decision Shows That Conservation and Energy Development Can Flock Together

Posted in Oil and Gas

On September 22, energy developers in the West breathed a sigh of relief when the U.S. Fish and Wildlife Service (FWS) announced that the greater sage-grouse does not require protection under the Endangered Species Act (ESA).[i] The FWS noted that in 2010 it believed that “habitat loss, fragmentation, and inadequacy of existing regulatory mechanisms” could warrant ESA listing for the grouse.[ii] Yet five years later, focused public-private conservation partnerships have borne fruit, as FWS now says that “[b]ased on the best available scientific and commercial information, we have determined that the primary threats to greater sage-grouse have been ameliorated by conservation efforts implemented by Federal, State, and private landowners.”[iii]

sage grouse

Source: USFWS

Continue Reading

State Supreme Court Imposes Strict Limitations on Secretary of State’s Authority to Block Anti-Fracking Ballot Measures, Granting Oil and Gas Interests a Limited Victory

Posted in Hydraulic Fracturing, Ohio, Oil and Gas

Ohio Statehouse original_smThis week the Ohio Supreme Court denied three Ohio counties’ attempts to ban high-volume hydraulic fracking. But that denial was procedural, not substantive, so the victory is limited to the instance at hand and the counties are free to try again.

Earlier this summer, citizens of Medina, Fulton, and Athens counties petitioned their respective Boards of Elections to place on the November 3, 2015, general election ballot a measure to introduce a new county charter that would increase the ability of the electorate to make laws through popular voting methods, such as initiatives and referenda. The target of these proposed charters was to ban high-volume hydraulic fracking as well as new oil or gas exploration in each county. Following ballot protests filed by county electors against the petitions, Ohio Secretary of State Jon Husted invalidated the petitions and struck them from the November ballot. In August, the petitioners challenged Secretary Husted’s decision by seeking a writ of mandamus from the Ohio Supreme Court, asking the Court to order Secretary Husted to certify their petitions and allow their proposed charters on the ballot. The Ohio Supreme Court denied the petitioners’ requests and upheld Secretary Husted’s decision to block the county charters from a general election vote this November. Continue Reading

Texas Wastewater Injection Wells Off the Hook for Causing Earthquakes

Posted in Oil and Gas, Oklahoma, Texas

Earthquake_Seismic_iStock_000019145469SmallOn September 10, the Texas Railroad Commission absolved a second oil and gas company of causing a series of earthquakes in northern Texas finding that the seismic activity was due to “natural tectonic processes.” The Commission issued two preliminary reports in the past two weeks addressing whether two oil and gas companies—XTO Energy and EnerVest— caused earthquakes by injecting wastewater into the ground produced by the drilling industry. The Commission, which oversees Texas’s oil and gas industry, found the connection between the two companies’ wastewater injection practices and the recent increase in earthquakes to be too small to imply causation.

In October 2014, the Commission adopted amendments to rules concerning wastewater disposal wells in areas that have experienced or are likely to experience seismic activity. Under the rule amendments, the Commission was granted authority to modify, suspend, or terminate a disposal well permit if it is determined that a disposal well is likely to be or determined to be contributing to seismic activity. The XTO and EnerVest hearings were the first conducted by the Commission under that newly granted authority. The hearing was also prompted by a study published by Southern Methodist University in Nature Communications finding that the injection wells most likely caused a number of recent earthquakes.

Continue Reading

Lawsuit Challenges Ohio’s Disqualification of Local Anti-Frac Ballot Initiatives

Posted in Hydraulic Fracturing, Ohio

Ohio Flag Of The State Of OhioResidents in three Ohio counties have sued the state after Secretary of State Jon Husted invalidated three ballot proposals to ban hydraulic fracturing projects in Fulton, Medina, and Athens counties. The bans, if passed, would become part of the respective county charters.

Husted based his decision on the Ohio Supreme Court’s February ruling in State ex rel. Morrison v. Beck Energy Corp. In Beck, the court held that local governments lack the authority to block drilling activities otherwise permitted by state oil and gas law, thus invalidating five local ordinances that placed additional restrictions on drilling operations.

According to Husted, the new ballot proposals are merely attempts to circumvent the legal rules established by the Ohio Supreme Court in BeckContinue Reading

The Second Circuit Court of Appeals Affirms Ruling That New York State’s Moratorium on Hydraulic Fracturing Did Not Extend the Primary Terms of Oil and Gas Leases

Posted in Hydraulic Fracturing, New York, Oil and Gas

Energy CollageNew York’s 2010 moratorium on hydraulic fracturing, culminating in Governor Andrew Cuomo’s formal ban of the practice in his state on December 17, 2014, made many large waves in the political, legal, and public arenas, the residual effects of which have yet to ebb completely.

The latest installment came on August 19, 2015, when the United States Court of Appeals for the Second Circuit held that defendants Inflection Energy LLC, Victory Energy Corp., and Megaenergy Inc. (the “Energy Companies”), which held leases in upstate New York, could not extend their leases in Tioga County, based on the statewide moratorium on hydraulic fracturing, which had been put into effect in 2010.  Continue Reading