North America Shale Blog

North America Shale Blog

Nova Scotia Bans Hydraulic Fracturing

Posted in Hydraulic Fracturing

On September 3, Nova Scotia’s government announced that it will indefinitely ban high volume hydraulic fracturing onshore. According to Energy Minister Andrew Younger, “Nova Scotians have overwhelmingly expressed concern about allowing high volume hydraulic fracturing to be a part of onshore shale development in this province at this time.” The government will introduce legislation this fall.

Before making its decision, the government of Nova Scotia commissioned the Verschuren Centre for Sustainability in Energy and the Environment at Cape Breton University to conduct an independent study and 10-month comment period on the socio-economic impacts of hydraulic fracturing. Dr. David Wheeler, President of Cape Breton University, led the study. The nearly 400-page final report, released on August 28, 2014, recommended that “Nova Scotia should design and recognize the test of a community permission to proceed before exploration occurs for the purpose of using hydraulic fracturing in the development of unconventional gas and oil resources.”

The government also received input from Mi’kmaq communities, indigenous to Canada’s Maritime provinces, including Nova Scotia. The Mi’kmaq have aboriginal, treaty and statutory rights that the government has to consider. According to the report, “if the Mi’kmaq people possess Aboriginal title rights over portions of Nova Scotia where there is subsurface unconventional gas, unless an exceptional justification test is met, the Mi’kmaq have the right to decide whether that gas will be exploited.” The Mi’kmaq have expressed support for the ban.

Environmental groups are also pleased with the government’s announcement, but the decision to ban high volume hydraulic fracturing has drawn criticism from groups such as the Canadian Association of Petroleum Producers (“CAPP”). Dave Collyer, president and CEO of CAPP, was disappointed in the decision, stating, “the government’s decision appears to be largely based on considerations other than the technical knowledge and experience of industry regulators and experts in Canadian jurisdictions.” While noting the viability of Nova Scotia’s onshore natural gas is not yet proven, Collyer fears that the government’s decision may “preclude Nova Scotians from benefitting from the responsible development” of hydraulic fracturing.

Additional media coverage can be found at the links below:

Illinois Releases New Draft of Hydraulic Fracturing Rules

Posted in Hydraulic Fracturing, Illinois, Legislative

Last Friday, the Illinois Department of Natural Resources (IDNR) released its highly anticipated revised hydraulic fracturing rules. The IDNR had taken the past year to “re-tool” its oil and gas regulations, and took into consideration more than 31,000 comments. The revisions attempt to address many of the issues typically raised by environmentalists in opposition to oil and gas drilling. Some of the more notable revisions require:

  • mandatory site restoration;
  • public application hearings within 30 miles of the proposed site’s county; and
  • hydraulic fracturing fluids be removed from reserve pits within seven days of being introduced.

Several significant revisions come on the heels of an Ohio spill that revealed potential gaps in Ohio’s fracturing-fluid-disclosure laws. The Illinois revisions try to fill these gaps. In Ohio, the state protected proprietary fracturing fluids as trade secrets. This protection allegedly delayed emergency responders’ access to the exact list of chemicals contained in the spill. Although the Illinois rules will still give fracturing companies protection for any legitimate trade secrets contained in its fracturing fluids, the rules require that the company provide information that would help responders react to a spill.

The revisions to the disclosure section of the rules require, among other things, that a company supplement a redacted chemical with additional information such as:

  • a description of the chemical class and function of the redacted chemical;
  • the chemical family and chemical effects of any redacted additive;
  • a detailed justification of why the redacted chemical is a trade secret; and
  • the contact information where the trade secret holder may be reached 24 hours/7 days a week in case of medical emergency.

These revisions are under review by Joint Committee on Administrative Rules – a bipartisan legislative oversight committee – for 45 days, and possibly another 45-day extension. The panel will either sign off, change, or block the rules.  Judicial appeals of the rules could follow.

Additional media coverage can be found here.

TX House Subcommittee Hears Testimony from Railroad Commission Seismologist on Proposed Rules Related to Disposal Wells in High-Risk Seismic Areas

Posted in Disposal Wells, Texas

Following the Texas Railroad Commission’s recent proposal for additional rules related to disposal wells in “high-risk” seismic areas, on Monday, August 25, members of the Texas House Subcommittee on Seismic Activity heard testimony from Dr. Craig Pearson, the seismologist hired by the Railroad Commission to investigate the possible correlation between seismic events and oil and gas activity. Pearson’s hiring followed a number of small earthquakes that occurred in late 2013 near the town of Azle, Texas, which sits atop the Barnett Shale formation. Pearson testified that seismic activity has continued in the previously affected area, but the tremors have registered below 1.0 on the Richter Scale, and are unfelt by most people.

The proposed rule amendments would include a new requirement that an applicant for a disposal well determine the radius of the 10-year, five pounds per square inch (psi) pressure front boundary from the proposed disposal well location and use that radius to retrieve information from the U.S. Geological Survey regarding the locations of any historical seismic events within that radius. “When you start injecting into an underground reservoir, you begin to build the pressure anomaly within that reservoir, and there’s a front that moves away from the well with time and volume,” said Pearson. Continue Reading

Texas Supreme Court to Hear Defamation Case Involving Fracking Claims

Posted in Fracking, Texas, Water

On August 21, 2014, the Texas Supreme Court agreed to hear oral arguments in an ongoing dispute between a homeowner and Texas-based oil driller Range Resources Corp. The case is not a typical homeowner vs. oil driller lawsuit, though—in this case, Range is counterclaiming for defamation, and the Texas Supreme Court has agreed to hear the case.  The case turns on what Range views as an issue of first impression: how much evidence a plaintiff needs to show to avoid dismissal of a suit under the Texas Citizens Participation Act , which is intended to prevent strategic lawsuits against public participation, or SLAPP suits.

The lawsuit was filed by Steven Lipsky and his wife in 2011, when they alleged that Range’s fracking activities contaminated their drinking water supply. But the saga began in 2009, when Lipsky started to have issues with the water supply pump to his family’s Parker County, Texas, home. He had his water well driller come out to repair the pump, and Lipsky alleges that the pump wasn’t the issue – the real issue was “explosive levels of methane gas” in the well. He notified state inspectors from the Texas Railroad Commission, who investigated and found evidence of a leak in one of Range’s gas wells near the Lipskys’ home that was causing the contamination of the Lipskys’ water supply. They cited Range for a violation. Range fixed the leak, but Lipsky insisted that the repair did not help with the high gas content in his water well. Continue Reading

Colorado State Court Strikes Down a Second City-Wide Fracking Ban

Posted in Colorado, Fracking

A Colorado state judge recently struck down a city’s voter-approved moratorium on hydraulic fracturing, or “fracking.” This marks the second time a Colorado judge has quashed a city’s fracking ban within a matter of two weeks.

As we previously reported, three Colorado cities approved bans on fracking in late 2013. In Fort Collins and Boulder, the voters passed a five-year moratorium on in-town drilling, while in Lafayette the voters amended the city charter to ban the practice completely. At the time, the governor of Colorado, along with the Colorado Oil & Gas Association (COGA), threatened a lawsuit claiming the bans violated state law.

In his nine-page opinion, Larimer County District Court Judge Gregory Lammons granted the COGA’s motion for summary judgment and agreed that the city may not ban drilling entirely—a practice that Colorado regulates extensively within the state. Specifically, he held that Fort Collins’ ban on fracking is “preempted by the Colorado Oil and Gas Conservation Act for two reasons: the five-year ban substantially impedes a significant state interest and the ban prohibits what state law allows.”

This decision comes just two weeks after a Boulder County District Judge, D.D. Mallard, ruled that Longmont, Colorado’s ban on fracking clearly conflicted with the state’s regulations. Although Judge Mallard noted that the city may regulate aspects of oil and gas production related to the health and safety of its citizens, he ultimately held that Longmont’s regulation caused an untenable “operational conflict,” and that the state rules take precedence.

Below is additional media coverage of the rulings:

The North American Shale Blog will continue to track and report on the development of these cases.

Pennsylvania Public Utilities Commission Appeals Act 13 Ruling to State Supreme Court

Posted in Oil and Gas, Pennsylvania

The Pennsylvania Public Utilities Commission (PPUC) is asking the state Supreme Court to review a July ruling by the Pennsylvania Commonwealth Court that strips PPUC of its authority to review and approve local drilling ordinances.

Specifically, PPUC is appealing the Commonwealth Court’s rejection of PPUC’s right to withhold “impact fees” imposed under Pennsylvania’s oil and gas law, known as “Act 13,” from municipalities that enacted rules restricting drilling.  Over the past three years, the state has collected more than $600 million in impact fees from well owners.  The results of recent litigation related to Act 13, however, have undermined PPUC’s centralized regulatory authority and have instead vested municipalities with authority to modify and enforce local zoning laws within their respective jurisdictions. Continue Reading

Oil and Gas Developer Challenges an Extreme Waste Disposal Ordinance Enacted by a Pennsylvania Township

Posted in Pennsylvania

Oil and gas developer Pennsylvania General Energy Company, LLC (“PGE”) recently filed suit against Grant Township in Indiana County, Pennsylvania, alleging that a waste disposal ordinance enacted by the Township violates the United States Constitution and Pennsylvania statutes.  The nationwide oil and gas boom has given rise to disputes similar to this all over the country.  See our coverage of other cases addressing the authority of federal, state, and local governments to regulate oil and gas development here, here, here, here, here, here, here, and here.

Grant Township adopted an ordinance on June 3, 2014 titled “Community Bill of Rights Ordinance.”  Under the Community Bill of Rights Ordinance (the “Ordinance”), it is “unlawful within Grant Township for any corporation or government to engage in the depositing of waste from oil and gas extraction.”  The Ordinance provides that any “corporation or government that violates any provision of [the] Ordinance shall be…sentenced to pay the maximum fine allowable under State law for that violation.”  Continue Reading

Fracking Hearings Set to Begin in North Carolina

Posted in Fracking, Legislative

This Wednesday in Raleigh will see the first of four upcoming public hearings in North Carolina over the state’s proposed fracking rules.  The hearings are part of the final phase of rule making, coming after two years of research, discussion, and compromise.  Though the hearings are meant to focus on technical details of the proposed rules, they will more likely serve as an opportunity for fracking supporters and opponents to try to sway state officials and make a broader political point in a large public forum.  The other three hearings will take place in Sanford, Reidsville, and Cullowhee.

Speakers at the hearings will have three minutes to make their case on the rules the N.C. Mining and Energy Commission (the “Commission”) has proposed.  There are more than 100 proposed rules, but the issues most speakers are expected to address are “chemical disclosure, drilling distances from homes and water wells, baseline testing of drinking water, and the risks of storing chemical-laced fluids in open-air pits.”  Samples of the Commission’s proposed rules can be found here.  Speakers at the hearings are also expected to comment on areas not covered by the proposed rules, such as forced pooling, air quality monitoring, regulatory fees, road use, storm water control, waste disposal, and taxes.  According to the Commission, these and other “perceived holes” are either still under review or outside the Commission’s jurisdiction.

Fracking opponents are also likely to advocate for increasing safety buffers and setbacks, adding landowner protections and changing some of the proposed rules.  For example, this year the Commission decided to allow energy companies, upon approval by the Commission, to not disclose fracking chemicals under a “trade secret” provision.  A proposed rule change would eliminate these trade secret exemptions.

The Commissioners presiding over the hearings will accept public comments, but will not answer questions.  The Commission recognizes that most of the comments will be general declarations about energy policy, but notes that the most helpful remarks will address specific rules.  Public comments could modify the fracking rules, which will go before the state legislature in January.

For additional coverage of the hearings, click here, here, and here.

Texas Railroad Commission Proposes New Regulations for High-Risk Seismic Areas

Posted in Earthquakes, Hydraulic Fracturing, Texas

On Tuesday, amidst claims that hydraulic fracturing could be causing earthquakes in some parts of Texas, the Texas Railroad Commission proposed amendments to permitting regulations for injection wells. The proposed rules would require drillers to submit additional information as part of the permit application process for injection wells in areas designated as high-risk for seismic activity.

The proposed rules define an area as “high-risk” if it has characteristics that may increase the risk that hydraulic fracturing fluids won’t be confined exclusively to the injection interval, including areas that exhibit complex geology or a history of seismic events. Permit applicants who want to operate an injection well in a high-risk area would be required to submit information from the United States Geological Survey related to seismic activity in the area of elevated pressure created by the injection of fluids into the subsurface, logs, geologic cross-sections and structure maps. The proposed rules would also allow the Commission to suspend or terminate a permit if seismic activity occurs near an injection well.

“Whether there is a definitive link or not between disposal wells and seismic activity in Texas has not been determined,” Commission spokeswoman Ramona Nye said. “As our agency continues to work with the scientific community to coordinate an exchange of information … we have seen a need for laying the groundwork for some basic industry best practices.” The Commission estimates that the proposed regulations would add about $300 per injection well permit application. The public comment period for the regulations is open until noon on September 29, 2014.

Media Coverage Resources:

Proposed Amendment of 16 Tex. Admin. Code § 3.9, relating to Disposal Wells, and § 3.46, relating to Fluid Injection into Productive Reservoirs; Oil & Gas Docket No. 20-0290951.

Quake reaction: Railroad Commission looks at new rules for injection wells

Governor Christie Vetoes New Jersey Fracking Ban

Posted in Fracking, New Jersey

Last week, New Jersey Governor Chris Christie vetoed legislation that would have banned the treatment, discharge, and disposal of fracking wastewater in the state, arguing that the bill violated the United States Constitution.  This is the second time the governor has vetoed a prohibition on fracking waste since entering office.

The bill, known as S1041, which easily passed both houses of the state legislature with bipartisan support, would have forbidden the storage or release of fracking byproducts as well as their use on roads as de-icing agents.

Citing the legislation’s outright ban of fracking waste from any state, Governor Christie issued his veto on the grounds that the bill violated the dormant Commerce Clause.  In his veto message, he argued that since no fracking operations currently exist in New Jersey, the bill was designed as an embargo on out-of-state waste, which “would have created an unconstitutional restraint on interstate commerce.”  He also referenced his 2012 veto of similar legislation, contending “Dormant Commerce Clause jurisprudence has not changed in a way that would cause me to sign a bill that I previously rejected on constitutional grounds.”

Sponsors of the legislation argue the prohibition is necessary to safeguard the public water supply from becoming tainted by toxic chemicals sometimes found in fracking water.  While conceding that fracking does not occur in New Jersey, proponents of the bill point out that at least three sites in the state have been used to dump wastewater from operations in Pennsylvania.  Oil and gas industry representatives, however, counter by arguing that fracking water can be safely reused and recycled.

State legislators are currently weighing whether to stage a vote to override the governor’s veto.  Senator and bill supporter Robert Gordon argued that the bill “could withstand any challenge on constitutional grounds,” as it concerned a matter of public health and safety.

Click here and here for additional coverage.