North America Shale Blog

North America Shale Blog

Colorado Oil & Gas Association Seeks Overturn of Broomfield Hydraulic Fracturing Ban

Posted in Colorado, Fracking, Hydraulic Fracturing, Oil and Gas

On Monday, November 24, the Colorado Oil & Gas Association (COGA) filed a lawsuit in the Broomfield District Court for declaratory judgment to invalidate that city’s temporary ban on hydraulic fracturing. The ban, known as Question 300, passed in November 2013 by 20 votes, places a five-year moratorium on hydraulic fracturing and prohibits storage in open pits and disposal of waste from hydraulic fracturing in Broomfield. Question 300 was put on the ballot by a grassroots group called Our Broomfield, which acted in response to oil and gas company Sovereign’s plans to begin hydraulic fracturing in the North Park area near Prospect Ridge Academy.

Similar drilling bans in Fort Collins, Lafayette and Longmont have already been struck down this year because they violated state law. “Colorado has among the most stringent and well-constructed oil and gas regulations in the nation, and we have a court system that respects the rule of law and rights granted through contractual agreements,” stated COGA President Tisha Schuller in a news release Monday. “For the last three years, COGA has worked diligently to create operating agreements with local jurisdictions that respect the law and meet the needs of local communities. It is my sincere hope that we can get the lawsuits resolved so we can focus on the important and successful work of engaging with our communities.” Continue Reading

EPA Announces New Greenhouse Gas Reporting Rule for Oil and Gas Sector

Posted in EPA Issues, Oil and Gas

On Friday, the U.S. Environmental Protection Agency (EPA) announced new rules for reporting greenhouse gas emissions that will apply to the oil and gas sector, part of EPA’s plan to institute a comprehensive strategy for dealing with methane in oil and gas production. The proposed rules would alter the greenhouse emissions reporting program first mandated by Congress in 2008.

Specifically, the new rules will change the calculation methods for oil and gas emissions by changing the units of measurement, altering the equations used for collecting and reporting data, and requiring separate reports for methane, carbon dioxide and nitrous oxide rather than a single category for “carbon dioxide equivalent.”  Additionally, the new rules would alter the equations for global warming potential and require oil and gas operators to calculate individual emissions in metric tons.

The proposal predicts that these new rules will “reduce the likelihood of errors and inconsistencies” by “reduc[ing] the number of calculations that need to be completed by reporters” and otherwise improving consistency among reporting entities. Continue Reading

The Myth of the Regulatory Gap: BLM’s Proposed Hydraulic Fracturing Rule Compared to Existing State Law

Posted in California, Colorado, Hydraulic Fracturing, New Mexico, North Dakota, Utah, Wyoming

For the better part of the last decade, oil and natural gas production from domestic wells has increased steadily. Technical advancements in identifying promising sources of oil and gas and extracting hydrocarbons from previously inaccessible formations has allowed domestic producers to reach production levels once thought impossible. Virtually all of this increased production has come through the application of the innovative but controversial well stimulation technique of hydraulic fracturing – the procedure by which oil and gas producers inject water, sand, and certain chemicals into tight-rock formations (typically shale) to create fissures in the rock and allow oil and gas to escape for collection in a well.

But while overall production growth has been profound, the domestic energy renaissance has left behind one important group of potential beneficiaries: American taxpayers. Because although domestic production continues to grow steadily, the percentage of that production that is extracted from federal lands has declined for most of the last decade. At first glance, this divergence should be surprising given that the federal government controls approximately 650 million surface acres – approximately one-third of the nation’s surface area – and over 700 million acres of federal mineral estate, as well as more than 55 million acres of Indian mineral estate. And for oil and gas operators in the western United States, in particular, federal lands are exceedingly difficult to avoid.

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Ohio Elections Yield Mixed Results on Local Hydraulic Fracturing Bans

Posted in Hydraulic Fracturing, Ohio

Last week’s Election Day in Ohio produced victories for fracing supporters and opponents alike. Proposed hydraulic fracturing bans were on the ballot in four different municipal contests.  Voters in one city, Athens, approved a ban, while similar legislation was rebuffed in three other municipalities. Looming in the background of these referenda, however, is the Ohio Supreme Court’s anticipated decision in Monroe Falls v. Beck Energy Corporation, which could determine the extent of localities’ authority to regulate fracing activities.

The ban in Athens, a city in the southeastern part of the state, passed in resounding fashion with 78% of the vote. There, voters endorsed legislation that prohibits fracing as well as the transportation of wastewater from any such operations. Although no oil or gas drilling currently occurs within the city’s borders, proponents of the ban say the measure is necessary to protect Athens’s drinking water. City councilman Jeffrey Risner voiced this sentiment: “We’re very cognizant of the fact that if fracking fluids got in there, we could not get them out.” Continue Reading

Bakken Crude-by-Rail: Environmental Groups Ask New York to Regulate DOT-111 Tank Cars

Posted in New York, Oil and Gas

A recent state-law challenge by environmental groups to an aspect of crude-by-rail transportation has teed up the question of federal supremacy over railroad regulation. Because federal law generally preempts state regulation of railroads, the environmental groups must fashion their state-law challenges to invoke a traditional area of state regulation—in many instances, land use.1 But a recent petition filed by environmental groups in New York attempts to finagle state regulation over an aspect of rail transportation traditionally preempted by federal law.2

The bottom line is this: Bakken players will continue to face state-law challenges to any midstream or end-user project that transports or receives crude by rail. Effectively managing and combating these challenges will require both Bakken players’ and trade associations’ proactive involvement to monitor and attack environmental groups’ state-law challenges that push the boundaries of permissible state regulation. Continue Reading

High Stakes Out on the Range: Gunnison Sage-Grouse Listed as an Endangered Species

Posted in Colorado

In the first salvo of a larger environmental-industry showdown impacting Western shale development, the U.S. Fish and Wildlife Service announced Wednesday (Nov. 12, 2014) that the Gunnison sage-grouse would be granted endangered-species protection as a “threatened” class. The decision had been delayed for six months while state and local officials in Colorado and Utah undertook extensive conservation measures to avoid the listing.

Both states’ economies benefit from oil and natural gas exploration and production and renewable energy development, and the listing will impact current and future energy-related development efforts. Prior to the decision, Colorado Governor John Hickenlooper promised a lawsuit against the federal government if the agency listed the Gunnison sage-grouse as either “threatened” or “endangered.” After the announcement, Governor Hickenlooper renewed his threat.

GSG

(April 2014 photo from the Colorado Department of Parks and Wildlife) Continue Reading

Bakken Crude-by-Rail Update: Transloading Projects Dealt a Setback in California

Posted in California, Oil and Gas

Recently, we covered environmental groups’ increasing array of state-law challenges to midstream and end users of Bakken crude that transport or receive oil by rail. Since then, a California regulator has admitted to erroneously permitting a crude oil transloading facility without complying with the proper environmental review, and the company has voluntarily returned the permit. These developments signal a setback for recently permitted and proposed transloading facilities. Because the setback likely means that environmental groups will continue to pursue similar state-law challenges in California, Bakken players and trade associations must proactively involve themselves with state and local regulators to ensure valid permitting.

In late September 2014, environmental groups represented by Earthjustice filed a lawsuit in California state court that challenged a transloading facility’s permit.1 The lawsuit alleged that the Sacramento Air Quality Management District violated the California Environmental Quality Act when the district issued the crude oil rail-to-truck transloading permit without public notice and comment.
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Railroad Commission Chairwoman: “It’s My Job to Give Permits, Not Denton’s”

Posted in Fracking, Texas

At a November 6 event, Texas Railroad Commission Chairwoman Christi Craddick unequivocally stated that the Commission would continue to issue drilling permits to operators in Denton, despite the November 4 vote making it the first city in Texas to ban hydraulic fracturing. “It’s my job to give permits, not Denton’s. We’re going to continue permitting up there because that’s my job,” said Craddick at an event sponsored by the Texas Tribune.

Chairwoman Craddick’s comments are similar to the arguments raised in the lawsuits filed last week by the Texas General Land Office and the Texas Oil and Gas Association, which assert that Denton’s municipal fracking ban is preempted by the Texas constitution and statewide laws governing the development of oil and gas.

The North America Shale Blog will continue to monitor developments in the litigation related to the Denton fracking ban.

“Frac Free Denton” Faces Legal Fight

Posted in Fracking, Legislative, Texas

On November 4, 2014, Denton, Texas, became the first Texas city to vote to ban fracking within city limits, as covered by Reuters, the Star-Telegram, and The Wall Street Journal. The ballot initiative, which passed with just short of 59 percent of the vote, will require the Denton City Council to sign an ordinance reflecting the election results and ban fracking within Denton city limits.

The North American Shale Blog has been tracking the history of this ballot initiative. See our posts on:

Study Linking Earthquakes to Fracing May Shake the Ballots

Posted in California, Earthquakes, Hydraulic Fracturing, Illinois, Legislative, Ohio, Texas

On October 15, seismologist Paul A. Friberg published an article in the journal Seismological Research Letters that links earthquakes to hydraulic fracturing. The report was published less than a month before today’s vote, in which several communities will make decisions affecting the burgeoning domestic energy business.

The article links hydraulic fracturing, not only to the more common imperceptible low-magnitude earthquakes, but also to larger, positive-magnitude earthquakes. Friberg lists Oklahoma and Ohio as locations where such earthquakes have been observed. In particular, the report shows that hydraulic fracturing in Harrison County, Ohio is linked to positive-magnitude earthquakes on a previously unmapped fault. Texas, Ohio, and California have all adopted regulations designed to prevent earthquake-related drilling accidents, but the study will still likely trouble voters.

Today, community members in those three states will decide whether to ban hydraulic fracturing.  Ohio counties – Athens, Gates Mills, Kent, and Youngstown have bans on the ballot. In addition, Santa Barbara, Mendocino and San Benito counties in California, and Denton County in Texas are weighing similar measures. Today’s vote will also likely impact Illinois fledgling unconventional drilling industry, as Illinois Governor Pat Quinn’s reelection may impact the eagerly awaited fracing permits that hinge on the Illinois Department of Natural Resources’ pending regulations.