On April 21, 2016, the Independent Regulatory Review Commission (IRRC) approved the Environmental Quality Board’s Chapter 78 (conventional wells) and Chapter 78a (unconventional wells) regulations by a vote of 3-2. Vice Chairman Mizner, in making a motion to disapprove the regulation, noted that the Department of Environmental Protection did not:
- provide enough information on the cost of the regulations;
- meet its burden to show that the revisions as applied to conventional operations are necessary;
- conduct the required flexibility analysis for small businesses;
- adequately consult with the Conventional Oil and Gas Advisory Committee or the Oil and Gas Technical Advisory Board; or
- develop a consensus on the regulations with industry.
The motion to disapprove the regulation failed by a vote of 3-2, followed by the motion to approve the regulation. Commissioners voting to approve the regulation noted that consensus on the regulation was likely impossible to achieve but that the Department had acted earnestly to develop necessary regulations for an evolving industry and that current regulations are not adequate.
Both the House and Senate Environmental Resources and Energy Committees previously voted to disapprove the regulations. IRRC’s approval begins a 14-day window in which the legislative committees may report to the House or Senate a concurrent resolution barring the revisions. If a resolution adopted by the General Assembly is not vetoed, or if the Governor’s veto is overridden, the Environmental Quality Board is barred from promulgating the final regulations. The Attorney General will conduct a review of the regulation as to form and legality before the regulation may be published in the Pennsylvania Bulletin as final. Publication of the rule as final could occur in June or July of 2016, becoming effective immediately on the day of publication.
As reported by the Charleston Gazette-Mail and Natural Gas Intelligence, the West Virginia Senate recently passed SB 419, which, if enacted, would eliminate certain volumetric fees that natural gas producers pay in addition to the state’s severance tax. The tax was implemented as part of the Workers’ Compensation Debt Reduction Act of 2005 in order to generate revenue to pay state workers’ compensation debts. It imposes a 4.7 cent per Mcf fee on natural gas production and a 56 cent per ton fee on coal producers. Although the fees generated $122 million for the state in fiscal year 2015, a spokesperson from Governor Earl Ray Tomblin’s office stated that the tax was only intended to be in force until the workers’ compensation debts were paid off. These debts have just about been repaid, more than 10 years ahead of schedule, due in large part to increased production from the Marcellus Shale in recent years. SB 419 was introduced on January 28, was unanimously passed by the Senate last Thursday and is now before the House of Delegates.
On January 19, 2016, Pennsylvania Governor Tom Wolf and the Department of Environmental Protection (DEP) announced a sweeping new regulatory strategy for reducing methane emissions from oil and natural gas operations in the Commonwealth. Methane, the primary constituent of natural gas, is considered by federal and state agencies to be a potent greenhouse gas which contributes to climate change. Governor Wolf stated that Pennsylvania, as the nation’s second-largest producer of natural gas, is “uniquely positioned to be a national leader in addressing climate change.”
The Pennsylvania methane reduction strategy is expected to result in significant changes to the air permitting and regulatory regime that currently applies to oil and natural gas industry sources. For more information, read our Administrative Watch.
On January 14, 2016, the U.S. Fish and Wildlife Service (“USFWS”) published in the Federal Register the Final 4(d) Rule for the Northern Long-Eared Bat. USFWS issues such rules pursuant to Section 4(d) of the Federal Endangered Species Act in order to promulgate regulations that are tailored to the conservation needs of specific threatened or endangered species. The final 4(d) rule issued by USFWS for the Northern Long-Eared Bat prohibits the incidental take of the species in certain circumstances, including incidental takes resulting from tree cutting activities that: (1) occur within 0.25 miles of a known hibernaculum; or (2) result from the cutting or destruction of “known occupied maternity roost trees,” or any other trees within a 150-foot radius of the maternity roost tree during pup season (June 1 through July 31). The final rule replaces the Interim 4(d) Rule issued by USFWS on April 2, 2015.
Today the U.S. Environmental Protection Agency (EPA) formally announced its highly-anticipated proposal to regulate methane emissions from the oil and natural gas sector. Specifically, EPA is proposing to amend the New Source Performance Standards (NSPS) rule for the sector, NSPS Subpart OOOO, to include standards for reducing methane as well as volatile organic compound (VOC) emissions from sources located across the oil and natural gas source category (i.e., production, processing, transmission and storage). This proposal is part of the agency’s broader strategy for reducing emissions of ground level ozone-forming pollutants from the oil and gas sector. Public comments will be accepted for 60 days following publication in the Federal Register, and EPA is planning to host public hearings on the rulemaking. In conjunction with today’s announcement regarding the proposed NSPS revisions, EPA also announced proposed guidelines for states to follow in order to reduce VOC emissions from existing oil and gas sources located in areas where the ambient air quality does not meet certain thresholds with respect to ozone.
The U.S. Environmental Protection Agency (EPA) is revising important definitions in the New Source Performance Standards (NSPS) rule for the oil and gas sector, NSPS Subpart OOOO, in response to stakeholder petitions. In a final rule published today, EPA is revising the definition of “low pressure gas well”, in order to identify the wells that cannot implement a reduced emission completion (otherwise known as REC or “green completion”) because of a lack of necessary reservoir pressure. EPA is also revising the definition of “storage vessel” to remove references to “connected in parallel” and “installed in parallel”, in order to clarify which storage vessels are subject to NSPS Subpart OOOO. The revisions are effective immediately.
The Ohio Department of Natural Resources (ODNR), Division of Oil and Gas Resources Management has adopted rules requiring the approval of plans for horizontal well sites prior to the construction or material modification of the sites. The rules, codified at OAC 1501:9-2-01, 1501:9-2-02, and 1501:9-12-01, became effective on July 16, 2015.
The rules require the electronic submission of an application for approval of the well site (consisting of the well pad, access roads, areas altered to install ponds and other water control components, storage facilities, and other areas altered for drilling and production operations), and provide that construction or material modification of the site may not commence without first obtaining a permit from the Chief of the Division. The rules prescribe the information to be provided in the application, including detailed drawings of all features within the well site boundary prepared and certified by a professional engineer, a sediment and erosion control plan, a dust control plan, a geotechnical report, and a stormwater hydraulic report.
The applicant and a representative of the Chief must meet at the site within 15 days of notification by the Chief that the application is complete. The applicant must submit certification by a professional engineer after completion of the well site that the site has been constructed in conformity with the approved application. The text of the rules, a discussion of the rules’ contents, and forms prescribed by the Chief are available on the Division’s website.
On July 9, 2015, Governor Tomblin announced the formation and appointment of members to the West Virginia Commission on Oil and Natural Gas Industry Safety. Publicized during Governor Tomblin’s State of the State address in early 2015, the Commission is charged with “reviewing current federal and state oil and natural gas workplace safety regulations and provid[ing] recommendations for improving workplace safety” according to the State Journal. The Commission is comprised of secretaries of the DEP, Dept. of Commerce, Dept. of Transportation, and Public Safety, among others, as well as members of the natural gas industry and labor representatives. The Commission is to issue its first report on or about November 16, 2015.
Today the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers published in the Federal Register a joint final rulemaking to redefine “waters of the United States” and the scope of the federal agencies’ jurisdiction under the Clean Water Act. This final rule will be effective on August 28, 2015. For more information, read our Administrative Watch regarding the Clean Water Rule.
On May 27, 2015, the United States Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (Corps) released the long-awaited final rule redefining the extent of the agencies’ jurisdiction over “waters of the United States” (WOTUS) under the Clean Water Act. The Final Rule, known as the “Clean Water Rule,” abruptly changes (i.e., within 60 days of publication in the Federal Register) the types of waters that will be regulated under numerous federal programs, including NPDES permitting, wetland and watercourse (i.e., dredge and fill) permitting, spill response planning, and spill reporting. The Final Rule will affect all types of industries, real estate development, construction activities, and other entities by increasing the types and extent of waters that will be regulated under the Clean Water Act and introducing a new analysis for evaluating whether a water is jurisdictional.
For more information, read our Administrative Watch regarding the Clean Water Rule.
Today the U.S. Environmental Protection Agency (EPA) published a proposed rule under the Clean Water Act that would prohibit the discharge of unconventional oil and gas extraction wastewaters to publicly owned treatment works (POTWs). The rule would apply to wastewater associated with production, field exploration, drilling, well completion and well treatment for unconventional operations, but would not apply to wastewater produced by conventional operations. According to EPA, the industry does not currently discharge unconventional wastewater to POTWs and this rule “will ensure that such current industry best practice is maintained over time.” The rule would be immediately effective on the date of publication of the final rule. Comments on the proposed rule must be received on or before June 8, 2015.
This week the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) announced that they have submitted to the White House Office of Management and Budget (OMB) a joint final rule aimed at clarifying which water bodies are subject to Federal jurisdiction under the Clean Water Act. On April 6, 2015, the agencies announced on an EPA blog that the draft final rule was recently submitted to OMB for interagency review. EPA and the Corps published their initial rulemaking proposal in early 2014 and reportedly received more than one million stakeholder comments since then. Interagency review of a final draft rule is generally considered the last step in the federal rulemaking process.
Today the U.S. Department of the Interior, Bureau of Land Management (BLM) announced the release of a highly-anticipated final rule addressing hydraulic fracturing on millions of acres of Federal and Indian lands. According to BLM, there are more than 100,000 oil and gas wells on federally-managed lands, and more than 90 percent of wells currently being drilled use hydraulic fracturing. This rulemaking supplements existing BLM requirements for oil and gas operations and now requires, for example, the disclosure of hydraulic fracturing fluid information within 30 days of completing fracturing operations for each well. The agency reportedly received more than 1.5 million public comments during the rulemaking process. The final rule will be effective 90 days after it is published in the Federal Register.
On December 19, 2014, the U.S. Environmental Protection Agency (EPA) finalized amendments to the New Source Performance Standards (NSPS) for the oil and natural gas industry, just a few days in advance of a key regulatory deadline. Under NSPS Subpart OOOO, each well completion operation with hydraulic fracturing begun on or after January 1, 2015 must comply with so-called “green completion” or reduced emission completion requirements. In the latest revisions to Subpart OOOO, which have not yet been published in the Federal Register, EPA provides additional detail on how gas and liquids are to be handled during well completion operations. EPA also addresses a number of other issues, including storage tank standards, in response to petitions received from stakeholders since Subpart OOOO was first promulgated in 2012. Additional changes to Subpart OOOO may be forthcoming. In a fact sheet related to the revisions, EPA indicates that this rulemaking responds to just “some” of the issues raised by petitioners, and that the “agency is continuing to evaluate other issues raised in the petitions.”
Today the U.S. Environmental Protection Agency (USEPA) published proposed amendments to federal air regulations at 40 C.F.R. 60, Subpart OOOO (Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution). Subpart OOOO was first promulgated in 2012 and later revised in 2013. In response to petitions for administrative reconsideration, USEPA is now proposing additional changes to Subpart OOOO and requesting public comment on a limited set of issues, including the management of flowback gases and liquids associated with well completions. Comments are due on August 18, 2014 (or September 2, 2014, if a public hearing is requested).