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North America Shale Blog

U.S. EPA Announces Peer Review Panel For Hydraulic Fracturing Study

By Jason Yearout on Posted in Hydraulic Fracturing, U.S. EPA, Water

On Monday, March 25, the USEPA’s Science Advisory Board (SAB) announced that it has formed an independent body of experts to peer-review the agency’s ongoing hydraulic fracturing research.    Specifically, the Hydraulic Fracturing Research Advisory Panel (Panel) will review USEPA’s Congressionally-mandated draft report from its national study on any potential impacts of hydraulic fracturing on drinking water resources.  That report is due to be released next year.  Our prior coverage of USEPA’s study (requested by Congressional resolution in 2009 and commenced in 2011) can be found here and here.  Before the report is released, the Panel also will provide scientific feedback on USEPA’s research and hear presentations by outside experts on hydraulic fracturing technologies.

The Panel is comprised of 31 academics and experts, including five representatives from companies and consulting firms, two government employees, and 21 academics/university professors (including some previously employed in industry).  It has at least three experts in each of the following nine areas of expertise:  Petroleum/Natural Gas Engineering; Petroleum/Natural Gas Well Drilling; Hydrology/Hydrogeology; Geology /Geophysics; Groundwater Chemistry/Geochemistry; Toxicology/Biology; Statistics; Civil Engineering; and Waste Water and Drinking Water Treatment.

On May 7-8, 2013, the Panel will meet to provide individual feedback from panel members on the study’s progress report, which USEPA publicly released in late 2012 (executive summary available here).  Public comments can also be provided for the Panel’s consideration.  Later meetings will include presentations to the Panel by experts in fracturing technologies. 

Media coverage of the SAB’s announcement can be found here, here, and here.  This blog will continue to monitor the progress of USEPA’s study and the Panel’s comments and input as to that study.

Industry, Environmentalists Agree On Voluntary Hydraulic Fracturing Standards

By Jason Yearout on Posted in Groundwater, Hydraulic Fracturing, Pennsylvania, Water

Yesterday a consortium of energy companies, environmental organizations, and philanthropic foundations announced that they have collaborated to form an organization — the Center for Sustainable Shale Development (CSSD) — that will provide an independent, third-party certification process for shale developers.  The CSSD is expected to focus on certifying operations in the Marcellus and Utica shale regions, chiefly in eastern states such as Pennsylvania, Ohio, and West Virginia. 

The CSSD also released yesterday its initial 15 performance standards, developed in discussions over the past two years.  These standards will serve as the basis for the CSSD’s certification process.   The standards focus on minimizing air and water pollution, and will later be expanded to include safety considerations.  With respect to air emissions, the initial standards include:  limitations on gas well flaring; use of “green completions”, including no-leak vales and piping; emission controls on storage tanks; and reductions in compressor and engine emissions.  The CSSD water standards require:  development of groundwater protection plans; recycling 90% of flowback and produced water within two years; utilization of a closed loop system for drilling fluids;  improved impoundment integrity; well casing design requirements; and public disclosure of the components of hydraulic fracturing fluids.  Some of these requirements, such as those relating to public disclosure of the chemical constituents used in well stimulation fluids, largely mirror those adopted by many states over the past several years.

The CSSD will operate as an independent entity with an initial budget of $800,000, to be funded in part by the participating energy companies and in part by other organizations.  Its board is comprised of 12 members — 4 from industry, 4 from environmental groups, and 4 independent members.  Energy companies can begin seeking certification from the CSSD starting later in 2013.

Media coverage of yesterday’s announcement and the CSSD performance standards can be found here, here, here, here, and here.  

Youngstown City Hydraulic Fracturing Ban Approved for May Ballot

By George Skupski on Posted in Hydraulic Fracturing, Legislative, Water

In late February, we covered the state and federal legislative and enforcement responses to the release of hydraulic fracturing waste into a Youngstown, Ohio area tributary by a local oil and gas drilling operator. Shortly after the announcement of federal criminal charges and state civil enforcement actions and related legislation, the Youngstown City Council (Council) approved an ordinance submitting for a vote in the May 7 primary elections a city charter amendment banning oil and gas drilling activities within city limits.

The Youngstown law director acknowledged that the Council was compelled to pass the proposal without considering its contents because the sponsoring anti-fracturing group obtained the required number of signatures. But, as the law director also noted, even if passed, the amendment would likely be preempted by Ohio law governing oil and gas drilling operations. In fact, on February 6, in State of Ohio ex rel. Morrison v. Beck Energy Corp., 2013-Ohio-356, the Ninth District Court of Appeals held that the state’s oil and gas regulatory regime prevented the enforcement of conflicting local ordinances requiring municipal drilling permits and zoning certificates for the construction of an oil and gas well. As we noted in our prior coverage of the Morrison case, the invalidated ordinances fell well short of a flat ban on oil and gas activities as is contemplated by the Youngstown measure.

We will monitor the results of Youngstown’s proposal on the May 7 ballot.

New York State Assembly Votes to Extend Hydraulic Fracturing Moratorium

By Scott Bent on Posted in Hydraulic Fracturing, Legislative, New York

The New York State Assembly voted on March 6 to suspend the issuance of drilling permits for high-volume hydraulic fracturing in the Marcellus and Utica formations until May 15, 2015. A copy of the bill—Assembly 5424-A—can be found here. The vote came as the state’s de facto moratorium approaches the five-year mark. Under the current de facto moratorium, the state will not issue drilling permits for hydraulic fracturing until the New York Department of Environmental Conservation (DEC) completes its environmental impact statement and issues recommendations. The moratorium bill now moves to the New York State Senate, where many expect it will be shot down by strong Republican opposition.

New York state’s ban on high-volume hydraulic fracturing (HVHF) began in 2008, when the DEC determined that HVHF activity in the state warranted environmental investigation and the publication of an environmental impact statement. The state ceased issuing HVHF permits while awaiting the DEC’s impact statement and recommendations. The DEC recently missed a February 27 deadline for issuing final drilling regulations, and therefore the de facto moratorium is set to continue into the foreseeable future.

Assembly bill 5424-A would officially extend the moratorium until May 15, 2015, to “give the Legislature sufficient time to more fully review the available data and to assess the findings of the Department of Environmental Conservation once they are released.” The bill also requires that a school of public health within the state’s public university system conducts a “comprehensive health impact assessment…to identify the risks associated with horizontal drilling and high-volume hydraulic fracturing, and to develop a long-term plan for monitoring, evaluating, tracking and mitigating potential public health impacts.”

The bill was sponsored by Kevin K. Sweeney, chairman of the Assembly Committee on Environmental Conservation. Over forty co-sponsors signed onto the bill, including Assembly Speaker Sheldon Silver. In his speech announcing the bill, Speaker Silver stated that there are “too many unanswered questions” to allow HVHF to move forward at this point. Silver specifically referred to questions about the health effects of hydraulic fracturing on drinking water, its potential impact on climate change, and the risk posed by radioactive materials in the wastewater produced during the hydraulic fracturing process. The Speaker also expressed skepticism that hydraulic fracturing can be done safely.

The bill now moves to the Senate, where it will face strong opposition from the Republican majority. Senate Deputy Majority Leader Thomas Libous has made it his goal to “make sure no [moratorium] bill passes the Senate.” Senator Libous, whose district lies within the Marcellus Shale formation, will fight to keep the moratorium bill from getting a vote on the Senate floor. New York Governor Andrew Cuomo recently predicted that the bill would die in the Senate. 

Nonetheless, the bill does have friends in the Senate. Senator David Carlucci introduced a similar but separate moratorium bill in the Senate just one day before the Assembly passed bill 5424-A. According to Carlucci, legislators need to “wait for…[environmental] studies to be done, get the science on the table and get all the data possible.”

If the moratorium bill makes it through the Senate, Governor Cuomo will then decide whether to sign it into law. According to reports out of Albany, pressure from drilling supporters has brought the Governor closer than ever to allowing a limited number of closely-monitored hydraulic fracturing wells. But it remains uncertain how the Governor would come down on the bill. Cuomo recently declined to state his position, observing instead that the Senate “would have to pass a bill first.”  

Cuomo’s signature would not necessarily end the years-long moratorium dispute. The state’s current budget does not include money for hydraulic fracturing. Supporters of the moratorium note that the Assembly could potentially block any effort to move forward with HVHF by denying the DEC funds for enforcement.

Virginia AG: Localities Cannot Ban Gas Drilling Through Zoning

By Jason Yearout on Posted in Hydraulic Fracturing, Land Use, U.S. EPA, Virginia, Water

Continuing on this blog’s ongoing exploration of the intersection of state and local regulation of shale drilling (see last week’s post here, as well as prior posts here and here), several weeks ago Virginia Attorney General Ken Cuccinelli issued an advisory opinion finding that state oil and gas law effectively prevents localities from barring drilling for natural gas.  In February of 2012, Washington County, Virginia’s Board of Zoning Appeals postponed consideration of zoning changes until the U.S. Environmental Protection Agency issues a public health assessment of the practice — which, as we previously discussed, will not be finalized until 2014.  State Rep. Terry G. Kilgore (R) requested the Attorney General opinion on the legality of  the county’s action. 

By way of background, the Virginia Gas and Oil Board has established four, 160-acre units for drilling gas wells in Washington County.  Although the opinion letter does not describe the type of drilling at issue, according to the Virginia Department of Mines, Minerals, and Energy all gas drilling in the state involves hydraulic fracturing. 

In the January 11 opinion, Cuccinelli noted that Virginia’s Gas and Oil Act allows localities to control the location and siting of oil and gas drilling operations via their zoning authority “that are reasonable in scope and consistent with” state law.  However, the law bars localities from effectively prohibiting drilling altogether.  Key quote from the AG’s opinion:

Reading §45.1-361.5 so broadly so as to allow a locality to adopt a complete ban on the exploration and drilling of oil and natural gas would permit a few jurisdictions to thwart the stated policy goals of the Commonwealth, as expressed in the Commonwealth Energy Policy.
Two aspects of Virginia law may limit the nationwide import of this opinion, though.  First, Virginia is a Dillon’s Rule state rather than a home rule state.  In Dillon’s Rule states, local units of government only have powers that are expressly granted to them by the state government; in home rule states, localities have inherent powers to regulate certain types of activities.  Key shale states such as Pennsylvania, Ohio, and Colorado are home rule states.  Second, the state Gas and Oil Act contains an express carve-out from the Act’s pre-emptive nature for, among other things, “local land-use ordinances” — including zoning laws.  Oil and gas laws in other states do not contain such an express carve-out.  For example, Ohio’s revisions last year to its oil and gas laws expressly pre-empted most local regulation of drilling, and Pennsylvania’s Act 13 (the subject of the Robinson Township case before the state Supreme Court) took a similar approach as to local land use regulation.

Fort Collins Gives Final Approval to Hydraulic Fracturing Ban

By Paul Enockson on Posted in Colorado, Hydraulic Fracturing, Land Use, Legislative

On March 5, 2013, the Fort Collins City Council by a vote of 5 to 2 gave final approval to a ban on oil and gas operations, hydraulic fracturing, and some waste storage within city limits.  Our prior coverage of this issue in Fort Collins can be found here.  Fort Collins is now the second Colorado city to move forward with a hydraulic fracturing ban.  Our prior coverage of Longmont, Colorado’s ban and the lawsuits following it can be found here, here, here, and here. 

Colorado Governor John Hickenlooper has already stated publicly that Colorado will be left with no choice, and will now sue the city of Fort Collins.  According to the Governor, the ban violates the state’s authority over the regulation of oil and gas operations.  Last week Governor Hickenlooper warned other cities that similar bans will be meet with legal challenges from the State. The Colorado Oil & Gas Association, which also sued Longmont over its ban, also indicated its belief that Fort Collins’ ban is illegal and stated that it is “evaluating taking legal action.”

Media coverage of the Fort Collins City Council’s vote can be found here, here, and here.  This blog will continue to provide updates as to local hydraulic fracturing bans in Colorado and any resulting litigation.

BakerHostetler Shale Symposium: Political and Policy Trends in 2013

By Jason Yearout on Posted in Colorado, Hydraulic Fracturing, Ohio DNR, Ohio EPA, Pennsylvania, Texas

On Thursday, March 7, BakerHostetler’s Shale Team will host a panel discussion on political and policy trends related to shale development at The Houstonian Hotel.  Michael G. Oxley – former Congressman and Chairman of the House Financial Services Committee, former member of the Energy House Committee and co-author of the landmark Sarbanes-Oxley Act of 2002 – will moderate the panel.

Key officials from shale states will discuss legislative and regulatory trends, including recent and future changes, related to the current state of hydraulic fracturing, as well as the policies and politics that will drive those changes.  To register, please sign up at the following link.

PANELISTS

Seminar offered in-person or by webinar.

Webinar access and dial-in information will be sent prior to the event.

12:30 – 1:00 p.m.  Registration and Lunch
1:00 – 5:30 p.m.    Presentations and Panel Discussion
5:30 – 7:30 p.m.    Cocktail Reception

CLE credit pending

Contact for more information:  Monica Farrar or call 713.276.1672

Ohio Court: State Oil And Gas Law Pre-Empts Local Drilling Regulations

By Scott Bent on Posted in Hydraulic Fracturing, Land Use, Legislative, Litigation, Ohio DNR

The nationwide oil and gas boom has exposed a rift in the relationship between state and local governments seeking to regulate shale drilling and development.  This tension has been playing out in several key shale states – for example, the Pennsylvania Supreme Court will soon issue its opinion in the Robinson Township case, which will determine whether local government zoning ordinances that restrict hydraulic fracturing are pre-empted by state oil and gas laws.  See our coverage of developments in Pennsylvania and Colorado here, here, here, here, here, and here.  This week we will begin exploring how different states seeing increased shale activity are approaching these issues.

Ohio courts recently entered this debate.  Ohio’s Ninth District Court of Appeals recently found that state oil and gas statutes preempted several local ordinances attempting to regulate hydraulic fracturing.  State ex rel. Morrison v. Beck Energy Corp., 2013-Ohio-356, at ¶ 76 (9th Dist. Feb. 6, 2013).  In 2011, Beck Energy (Beck) applied for and received drilling permits from the Ohio Department of Natural Resources (ODNR) prior to drilling a well in Munroe Falls, but did not obtain drilling, zoning, and construction permits required by city ordinances.  The city cried foul when Beck began drilling, and obtained an injunction from the Summit County Court of Common Pleas that barred Beck from continuing operations within Munroe Falls until it complied with 11 different ordinances cited by the city.

The Ninth District struck down the injunction and held that many of the city’s ordinances were preempted by Ohio’s oil and gas drilling statutes.  The court’s analysis centered on Revised Code section 1509.02 (overhauled last year by Senate Bill 315), which reads in relevant part:

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Fort Collins Moves Forward On Efforts To Ban Hydraulic Fracturing

By Paul Enockson on Posted in Colorado, Hydraulic Fracturing, Legislative

On February 19, 2013, the Fort Collins City Council became the second city in Colorado to move forward with a ban on hydraulic fracturing.  The City Council gave initial approval to an ordinance that would bar oil and gas exploration, including hydraulic fracturing, within the city limits.

The next day, Governor John Hickenlooper’s office weighed in on Fort Collins’ proposed ban, again expressing its position that outright bans violate private property rights, and that the better approach is regulations to protect health and safety.  The Colorado Oil and Gas Association (“COGA”), which has a lawsuit pending against the City of Longmont over its voter-approved referendum that banned hydraulic fracturing, echoed similar sentiments.  According to COGA, if the Fort Collins ban passes, it will assess the need for legal action.  The state, which also sued the City of Longmont over its regulations (but not the voter-approved ban), indicated that it too would need to explore litigation if the ban passes. 

The potential for new oil and gas development within the city of Fort Collins has been reported as low to moderate.  In December 2012, the City Council authorized a moratorium preventing any further drilling of oil and gas wells within the city limits.  That moratorium is in place until July 31, 2013.  It remains to be seen if the City Council will give final approval to the ordinance that was proposed on February 19.

On Friday, February 22, 2013, reports surfaced that the views of certain businesses in Fort Collins may not have been accurately reflected by COGA.  COGA has acknowledged that mistakes were made in obtaining signatures on petitions from Fort Collins businesses it claimed were opposed to the City’s proposed ban.  COGA is conducting an internal investigation to determine what happened and why certain businesses’ views were incorrectly stated by COGA.  Media coverage of the recent activities in Fort Collins can be found here, here, and here.

Texas Agencies Announce Rules to Streamline Permitting and Ease Requirements for Oil and Gas Well Operators

By Cassie J. Dallas on Posted in Air Emissions, Groundwater, Hydraulic Fracturing, Texas

In recent weeks, both the Texas Commission on Environmental Quality (TCEQ) and Texas Railroad Commission (TRRC) have proposed rules that would ease requirements for operators.

On February 8, 2013, the TCEQ announced that it would propose a rule to streamline the process for authorizing air emissions plans for oil and gas well sites.  The rule will create a permit-by-rule system requiring permit holders to develop a plan and to use best management practices to minimize emissions.  The TCEQ expects that the non-mandatory permit-by-rule will be more appealing to owners and operators of eligible oil and gas facilities than other permitting options available to them.  The TCEQ is expected to formally announce the proposed rule on February 27.  Following the announcement, the public comment period would be open from March 15 through April 15, and the rule would be adopted July 24.  Background on the proposed rule is available here.

On February 15, the TRRC released a revised version of a set of rules it previously proposed to prevent potential groundwater contamination from hydraulic fracturing fluids.  The revised rules would ease cement casing requirements and allow operators to use one of three methods to calculate the necessary depth of the casing.  The revised rules include a new term—“potential flow zones”—which describes areas that could impose sustained pressure on a well and which operators must plug in order to avoid potential leaks.  The rules also retain a requirement that operators test and monitor the mechanical integrity of wells before and during a fracturing treatment.  The revised rules are available here. 

We will continue to monitor developments in Texas that will impact oil and gas operators.