North America Shale Blog

North America Shale Blog

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.
Continue Reading

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.

Texas Railroad Commission Adopts Rules for Disposal Wells in Potential High-Risk Seismic Areas

Posted in Disposal Wells, Shale, Texas

On Tuesday, October 28, 2014, the Texas Railroad Commission unanimously adopted amendments to rules concerning disposal wells in areas that have experienced or are likely to experience seismic activity. As covered by the North America Shale Blog in August, the amendments were proposed in response to questions from residents in towns sitting atop the Barnett Shale Formation in North Texas of whether a connection exists between disposal wells, which are used to dispose of saltwater and fluids used in hydraulic fracturing operations, and increased seismic activity in the area.

The amendments adopted on Tuesday take effect on November 17, 2014. The highlights of the amended rules are as follows: Continue Reading

City of Fort Collins, Colorado, Appeals Ruling Striking Down Fracking Bans

Posted in Colorado, Fracking, Oil and Gas

The week of September 22, the Fort Collins, Colorado, City Council voted to appeal a decision rendered last month that struck down the city’s fracking ban.  The North America Shale Blog previously covered that decision here.

In that August 2014 decision, a Larimer County District Court Judge ruled that Colorado’s 1951 Oil and Gas Conservation Act (“Act”) preempts the city’s five-year moratorium on fracking that was set to expire on August 5, 2018.  The decision addressed the conflict between Article XX of the Colorado Constitution, which gives local governments “home-rule” powers—defined as “the full right to self-government” on local and municipal matters—and local attempts to regulate oil and gas activities.  The court reasoned that Article XX does not permit a city to enact ordinances in areas of mixed state and local concern, or areas of statewide concern that intrude on state law, meaning that a local ordinance may be preempted where it would “conflict with the operation of a state statute.”  The court then reasoned that the Act impliedly, though not expressly, preempted the city’s five-year fracking ban because it impeded the state’s interest in oil and gas development.

The Fort Collins resolution council voted 6-1 on Tuesday to direct the city’s interim attorney to appeal that decision to the Colorado Court of Appeals and to seek a stay pending appeal.  If successful, a stay of the decision would leave the fracking ban in place pending the outcome of the appeal.  Before the vote, several citizens, including a representative of the group Citizens for a Healthy Fort Collins, made public comments in support of the appeal.  This appeal will make Fort Collins the second Colorado city to appeal a decision striking down a local fracking ban.  Fort Collins follows Longmont, Colorado, where a coalition of environmental groups appealed a similar Boulder County District Court decision to the Colorado Court of Appeals in September.

Additional coverage can be found here:

Fort Collins appeals judge’s fracking decision

Fort Collins appealing judge’s ruling on fracking ban

Fort Collins appealing to keep fracking ban

Multistate Regulators Meet in Columbus, Discuss Seismic Activity

Posted in Earthquakes, Hydraulic Fracturing, Ohio, Oil and Gas

From October 19th to 21st, the Interstate Oil and Gas Compact Commission hosted its 2014 annual conference in Columbus, Ohio.  The organization is a collection of regulators from states in which there is significant oil and natural gas exploration and development, and it advocates for states’ rights to govern petroleum resources within their borders.  One of the key topics at the conference was reported to be the potential implications of recent news published in a study in the journal Seismological Research Letters that numerous, unnoticeable earthquakes in Harrison County, Ohio, likely were connected to oil and natural gas exploration activities.  The earthquakes ranged from magnitude 1.7 to 2.2 on the Richter scale, and 190 of them occurred in the 39 hours after hydraulic fracturing activity occurred at one well in late September and early October 2013.  It has been suggested that this is the fifth documented instance of a linkage between hydraulic fracturing earthquakes on a fault.

One source indicated that, if the Ohio Department of Natural Resources’ recently-announced regulations had been in place when these earthquakes occurred, drilling activity in the state would have been halted. The stricter regulations, previously discussed on this blog, were announced in response to an earlier connection suggested by the Ohio Department of Natural Resources between hydraulic fracturing activity, seismic activity, and what is believed to be a previously unknown microfault near Youngstown, Ohio.  It remains unclear whether the links posited by this latest study will lead to further regulatory action, but the BakerHostetler North America Shale Blog will keep readers apprised of developments.

Uncertainty Prevails as Illinois Delays a Decision on Fracing Regulations

Posted in Fracking, Hydraulic Fracturing, Illinois

Last week, Illinois’s Joint Committee on Administrative Rules voted to push back its decision about whether to approve proposed rules governing horizontal fracturing operations until November 6.  The delay promises to fuel uncertainty among fracing supporters and opponents alike about the legality of conducting unconventional drilling operations within the State if the draft rules are not ultimately adopted.

If the committee chooses not to accept the regulations by November 15, the Illinois Department of Natural Resources (IDNR)—the agency responsible for promulgating the standards—is obligated to restart the rulemaking process which promises to further postpone the implementation of state-wide standards for the foreseeable future.  IDNR officials have said that the agency will not approve any unconventional drilling permits without rules in place, unless told otherwise by the courts. Continue Reading