On February 12, 2013, two environmental groups reportedly filed a lawsuit in federal district court against the Town of Sanford, New York, alleging that the town board unconstitutionally restricted free speech rights by passing a resolution that precludes further discussion of natural gas drilling at monthly board meetings. Sanford, with a population of 2,400 residents, is located near the Pennsylvania border and lies above the Marcellus Shale formation. In September 2012, the board unanimously approved a resolution which provided that “hereafter no further comment will be received during the public participation portion of this or any future meeting regarding natural gas development,” until the New York State Department of Environmental Conservation completes its environmental review of hydraulic fracturing. The board has heard extensively from both sides of the hydraulic fracturing debate and, according to Sanford attorney Herb Kline, “the fracking discussions occupied so much time during the public participation portion of the prior meeting that the town board was not able to accomplish its regular business.” As an alternative, Mr. Kline said the board is willing to accept written materials regarding gas drilling.
As we anticipated in a previous post, the U.S. Department of the Interior, Bureau of Land Management (BLM), has reportedly submitted to the White House Office of Management and Budget its revised proposal for regulation of hydraulic fracturing on federal lands. The original proposal released in May 2012 prompted significant criticism from industry representatives, state regulators, and environmental groups alike. BLM expects to release its new proposal sometime in the first quarter of 2013.
The U.S. Department of the Interior Bureau of Land Management (BLM) recently announced that it will revise its draft proposal to regulate fracking on federal lands. According to BLM, approximately 90 percent of wells drilled on federal and Indian lands utilize hydraulic fracking. BLM is seeking to address concerns raised in over 170,000 comments it received in response to its May 2012 proposal. Revisions will reportedly be sent to the Office of Management and Budget next week for review. BLM spokesman Blake Androff reportedly stated that the agency is improving the draft proposal “in order to maximize flexibility, facilitate coordination with state practices and ensure that operators on public lands implement best practices.” BLM expects to release the revisions by March 31, 2013, and will seek comments on the revised proposal.
Pennsylvania state Senator Daylin Leach (D-Montgomery County) recently circulated a memorandum to state senators stating that he would re-introduce legislation in the 2013-2014 Regular Session to amend portions of Act 13 of 2012 that relate to disclosure of confidential hydraulic fracturing constituents to health professionals. Act 13 contains provisions regarding when chemicals used in hydraulic fracturing and considered proprietary by an operator may be disclosed to health professionals and limiting the disclosures. In his memorandum, Senator Leach stated that the provisions of Act 13 on this issue are “poorly drafted” and that his bill would provide “clarifying language” regarding circumstances when such information can be requested and disclosed by a health professional.
An anticipated decision by the U.S. Coast Guard will determine when oil and gas producers can start transporting “frack water” by barge through West Virginia for treatment. “Frack water” is water containing chemicals used by oil and gas production companies in the hydraulic fracturing process. According to the West Virginia State Journal, if the Coast Guard designates the “frack water” as a hazardous material, then additional regulation and safety measures will be required before barge transportation can begin. As treatment of “frack water” occurs in centrally-located facilities, oil and gas operators must ship the frack water for treatment. Barge transportation has been identified as a cost-effective method to get the frack water to treatment facilities.
The New York Times recently uncovered an eight-page New York Health Department analysis which concluded in early 2012 that fracking could be conducted in a safe manner in New York. The analysis states, “the Department expects that human chemical exposures during [high-volume hydraulic fracturing] operations will be prevented or reduced below levels of significant health concern.” The analysis also states that too many assumptions would need to be made and too many variables exist to project the probability of various hazards. The analysis is a summary of research conducted by the state and other parties, and concludes that fracking can be done safely within the regulatory system that the state has developed over the past several years.
On December 21, 2012, EPA released a much-anticipated progress report as part of its major hydraulic fracturing study. EPA began research in 2011 under its “Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources,” in order to assess the potential impacts, if any, of hydraulic fracturing on drinking water. In the 278-page progress report, EPA outlines past and future research efforts but avoids drawing any preliminary conclusions. EPA expects to release draft research results in late 2014.
Acknowledging the agency’s limited authority to regulate hydraulic fracturing under the principal environmental statutes such as the Safe Drinking Water Act and the Resource Conservation & Recovery Act, the United States Environmental Protection Agency (EPA) is now considering its authority under the Federal Insecticide, Fungicide & Rodenticide Act (FIFRA) to ensure that hydraulic fracturing is adequately regulated. Small quantities of antimicrobial chemicals are used in hydraulic fracturing operations to prevent algal and microbial growth that could impede the flow of oil or natural gas during the extraction process. Biocides commonly used in hydraulic fracturing fluid including, acrolein, dazomet, and glutaraldehyde are pesticides and therefore regulated under FIFRA. While EPA is only in the initial stages of weighing the risks associated with the use of antimicrobial chemicals in hydraulic fracturing, industry has raised several FIFRA compliance-related issues including, industry obligations under FIFRA, registration status of certain biocides, and enforcement liability.
On October 9, Michael Hohn, director of the West Virginia Geological and Economic Survey, briefed the West Virginia joint House and Senate Judiciary Committee Subcommittee A with the findings of a report of the National Research Council entitled “Induced Seismicity Potential in Energy Technologies,” reported by the State Journal. The report indicates that hydraulic fracturing poses very little risk of inducing seismic activity. However, the report found that subsurface disposal of waste water does pose a risk of inducing seismic activity, but that the circumstances necessary to induce seismic activity were rare. Hohn indicated that the long-term effect of waste water disposal upon seismic activity is unknown, and that predicting the effects is difficult because of a lack of information regarding rock systems, including the presence and locations of faults.
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In July 2011, PIOGA filed a motion in the U.S. District Court for the Western District of Pennsylvania seeking to hold the United States Forest Service in contempt of court for allegedly failing to adhere to the Court’s December 2009 preliminary injunction order in the Minard Run, et al. v. United States Forest Service, et al. litigation. That order prevented the Forest Service from requiring mineral owners to prepare a NEPA document before the development of oil and gas rights in the Allegheny Forest. It also required the parties to revert to a drilling proposal process that they had used from 1980 until the litigation began in 2009.
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Tags: Cracker plant,
Energy law,
Environmental law,
Fracking,
Gas drilling,
Natural gas,
Natural resources,
PA Act 13,
Pennsylvania,
Pipeline construction,
Shale gas,
Utica Shale
On Tuesday March 20, Williams Partners L.P., a Williams Companies, Inc. affiliate, announced an agreement to acquire Caiman Eastern Midstream LLC, a midstream subsidiary of Caiman Energy, for $2.5 billion. Caiman Eastern’s holdings include existing physical assets such as a gathering system, two processing facilities and a fractionator. Expansions to the gathering system, processing facilities and fractionator are currently under construction. An ethane pipeline is also planned. The physical assets are supported by long-term contracted commitments for 236,000 dedicated gathering acres from 10 producers in West Virginia, Ohio and Pennsylvania. Through this acquisition, Williams Partners is able to establish a major footprint in the liquids-rich area of Marcellus shale. In coordination with this acquisition, Williams Partners is also announcing its intention to participate in a new joint venture with Caiman Energy to develop midstream infrastructure in the natural gas liquids and oil-rich areas of the Utica Shale, primarily in Ohio and northwest Pennsylvania.