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Study observes possible links between hydraulic fracturing wastewater injection and seismic activity in Kansas

A new study published this month purports to link seismic activity in Kansas to wastewater disposal associated with hydraulic fracturing. Justin Rubinstein, the lead researcher, suggested that further research was needed to examine the effects of wastewater injections, stating that this study was “the tip of the iceberg as far as what we’re going to learn.”

The study examined ongoing seismicity in two counties in southern Kansas from 2013-2016, observing correlations between increases in seismic activity subsequent to increases in wastewater disposal via deep-injection wells. Additionally, seismic activity appeared to decreased at the same time as economic and regulatory forces … Continue Reading

Sierra Club files earthquake lawsuit and Oklahoma regulators issue disposal injection reduction plan

Sierra Club makes induced seismicity claims against energy companies in federal lawsuit under Resource Conservation and Recovery Act

Days after a 5.1 magnitude quake shook Oklahoma on February 13, 2016, a federal suit claiming induced seismicity was filed. Sierra Club v. Chesapeake Operating LLC, et al., No. CIV-16-134-F, (W.D. Okla. filed Feb. 16, 2016). The suit, filed under the citizen suit provision of the Resource Conservation and Recovery Act, 42 U.S.C. § 6972(a)(1)(B), is brought on behalf of Sierra Club members in Oklahoma and Kansas who have allegedly suffered property damage from earthquakes. The complaint claims earthquakes allegedly induced … Continue Reading

Quarterly Legislative Action Update: Marcellus and Utica Shale Region

Our Norton Rose Fulbright Pittsburgh-Southpointe practice tracks legislative activity that we believe may impact oil and gas development within the Marcellus and Utica shale regions (Pennsylvania, West Virginia and Ohio). This Quarterly Update contains all of the relevant legislative activity occurring in Pennsylvania, West Virginia, and Ohio during the third quarter of 2015.

The next issue of the Quarterly Update will be published in early January 2016 and will contain all of the legislative activity occurring through the fourth quarter of 2015, highlighting changes occurring during that quarter. New legislative activity occurring after publication of this Update will be posted … Continue Reading

Wyoming federal judge issues preliminary injunction against BLM’s hydraulic fracturing regulations

The Independent Petroleum Association of America (IPAA) and several states, including Wyoming, Colorado, North Dakota, Utah, and the Ute Indian Tribe rejoiced when Wyoming federal judge Scott W. Skavdahl issued a preliminary injunction against the U.S. Bureau of Land Management’s (BLM) new hydraulic fracturing regulations.

“We are pleased to see Judge Skavdahl agrees with our request to first hear the merits of our case before this final federal rule goes into effect,” IPAA Pres. Barry Russell stated following the September 30 order.

The complaint was filed by IPAA and Western Energy Alliance on March 20 to challenge BLM’s final ruling … Continue Reading

North Dakota utilizes tax incentive scheme to encourage oil production

According to the North Dakota Industrial Commission, the amount of crude oil produced in the state has decreased dramatically. Whereas 1.2 MMb/d of crude oil was produced in the state in December, only 37 Mb/d was produced in January. In addition, the number of wells completed in the state also dropped. Commentators have speculated that the drop in production and well completions is the result of low crude oil prices. However, companies may simply be biding their time until North Dakota tax incentives are triggered.

Two taxes apply to the majority of the crude oil produced in North Dakota. The … Continue Reading

Opposition to federal fracking rules grows

Earlier this year, the Department of Interior’s Bureau of Land Management (BLM) released its final version of rules governing hydraulic fracturing on federal land. As discussed in a previous post, these rules will not only impose heightened requirements on drilling operations but also increase the reporting duties for drilling operators. Shortly after the BLM released its proposal, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance (WEA) sued the BLM in Wyoming to challenge the proposed rules. The IPAA and WEA argued that the BLM’s rules are unnecessary because states adequately regulate hydraulic fracturing. The IPAA and … Continue Reading

Ohio court strikes down local drilling ban

On March 10, 2015, a Cuyahoga County trial court struck down a local ban on oil and gas development. See Bass Energy, Inc. v. Broadview Heights, Slip Opinion No. CV-14-828074 (Cuyahoga Cnty. Ct. Mar. 10, 2015). This decision comes less than a month after the Ohio Supreme Court struck down a neighboring city’s ordinance which restricted oil and gas development. See State ex rel. Morrison v. Beck Energy Corp, Slip Opinion No. 2015-Ohio-485 (Feb. 17, 2015). Review Norton Rose Fulbright’s previous discussion of the Morrison decision.

On November 06, 2012, voters in Broadview Heights, a … Continue Reading

Ohio Supreme Court strikes down local regulation of oil and gas operations

On February 17, 2015, the Ohio Supreme Court issued a long-awaited opinion in State ex rel. Morrison v. Beck Energy Corp. The Court, in a divided opinion (3-1-3), held that Ohio’s Home Rule Amendment does not allow a local municipality to enforce its own permitting scheme in addition to the statewide scheme adopted under Ohio Revised Code Chapter 1509.

The case arose after Beck Energy Corporation (Beck) obtained a permit from the Ohio Department of Natural Resources (ODNR) in 2011 to drill an oil and gas well within the city limits of Munroe Falls, Ohio. Munroe Falls then obtained … Continue Reading

North Dakota considers additional regulation of oil and gas operations

Several federal agencies have announced that they will adopt additional regulations for the oil and gas industry this year. It appears that states are also weighing additional regulatory measures. North Dakota is contemplating legislation targeted at reducing the time oil companies burn natural gas from oil wells.

The bill proposal is sponsored by Senator Connie Triplett. If enacted, the bill would mandate that companies pay royalties and taxes on natural gas within fourteen days after an oil well starts production. Under the current system, companies need not pay royalties or taxes until a year after the beginning of production. If … Continue Reading

Latest study adds to debate over the alleged connection between fracking and seismic activity

Scientists are in the midst of a heated debate concerning the alleged connection between hydraulic fracturing and seismic activity. To date, scientists have been unable to reach a consensus on this issue. The latest study appears to continue that trend. Geologists in Kansas recently released a study suggesting that there is a correlation between oil and gas operations and seismic activity—specifically, the injection of wastewater.

Indeed, Bill Buchanan, the director of the Kansas Geological Survey, testified before Kansas House Energy and Environment Committee that there is likely a link between seismic activity in the state and disposal wells. That said, … Continue Reading

North Dakota adopts heightened safety standards for the transportation of oil by rail

The increase in the number of accidents involving the transportation of oil by rail has increased the scrutiny on shippers of Bakken crude oil. In response, the United States Department of Transportation has proposed new rules to govern the shipment of oil by rail and has also issued emergency orders on this topic. It appears that states are beginning to take an active role in the regulation of Bakken crude oil as well.

On December 9th, the North Dakota Industrial Commission (Commission) announced new regulations governing the shipment of Bakken crude oil in the state. Under the new standards, companies … Continue Reading

Increased rail traffic leads to heightened regulations

Compared to last year, transportation of goods by rail has increased. The two commodities with the largest increase in rail traffic have been coal and crude oil products. Transportation of crude oil and petroleum products by rail has increased by 13.4 percent. From January to October 2014, more than 672,000 tank cars have transported oil and petroleum products. Commentators have suggested that the increase is a result of the increased production of crude oil and the limited amount of pipeline available to transport the material. The amount of crude oil and petroleum products transported by rail pales in comparison to … Continue Reading

Proposed class action filed in Illinois state court challenging denial of fracking permits

Amy Pollard and a number of mineral rights owners have filed a proposed class action against the state of Illinois in the Circuit Court for the Second Judicial Circuit of Illinois. Plaintiffs allege that Illinois’s refusal to grant fracking permits violates their rights under the Fifth Amendment of the United States Constitution as well as their rights under the Illinois constitution. Specifically, Plaintiffs argue that the state’s conduct constitutes an unconstitutional taking without just compensation.
Although Illinois law permits fracking, the state has failed to issue regulations governing fracking permits. Oil and gas operators have therefore been unable to obtain … Continue Reading

IPAA response to proposed rule on transportation of crude oil by rail

The Independent Petroleum Association of America (IPAA) and the North Dakota Petroleum Council (NDPC) recently submitted comments regarding the proposed rule concerning the shipping of crude oil by rail. In the rule, the Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) specified, among other things, that the tanker car fleet currently used must be retrofitted within a two-year period to comply with heightened standards specified in the rule.

The IPAA and NDPC commented that, according to industry experts, at least six years are needed to replace the current fleet. Imposing a two-year phase-out would, in the IPAA and … Continue Reading

Reports show Bakken crude oil within safety standards

The North Dakota Petroleum Council (NDPC) and the American Fuel & Petrochemical Manufacturers (AFPM) recently released the results of studies relating to the characteristics of Bakken crude oil and the standards required to transport crude oil by rail.

These studies in part respond to a safety alert issued on January 2, 2014, by the Pipeline and Hazardous Materials Safety Administration (PHMSA), which notified “the general public, emergency responders, and shippers and carriers that recent derailments and resulting fires indicate that the type of crude oil being transported from the Bakken region may be more flammable than traditional heavy crude oil.” … Continue Reading

Federal Judge in North Dakota dismisses thirteen gas-flaring royalty lawsuits

On May 14, 2014, US District Judge Daniel L. Hovland dismissed thirteen proposed class actions in which the plaintiffs sought payment of royalties for gas that was flared by oil and gas companies after flaring was permitted by North Dakota statute. The Judge ruled that the US District Court did not have subject matter jurisdiction because the plaintiffs had not exhausted their administrative remedies through the North Dakota Industrial Commission, the state agency that regulates oil and gas activities, including flaring violations.

The plaintiffs did not file a complaint with the Industrial Commission, arguing that exhaustion of administrative remedies was … Continue Reading

EPA reviews states’ solid waste management regulations for oil and gas operations

In an April 1, 2014 memorandum, the U.S. Environmental Protection Agency (EPA) summarized state regulatory programs concerning the management of solid waste from oil and natural gas exploration, development and production (E&P) operations.

In reviewing each state’s regulations, the EPA focused on surface storage and disposal facilities managing produced waters, drilling muds, drilling cuttings, hydraulic fracturing return fluids, and various other waste liquids and materials intrinsically related to oil and gas E&P.

The EPA found that the state regulations were primarily concerned with the “technical requirements associated with the design, construction, operation, maintenance, closure, and reclamation of surface pits, … Continue Reading

Three oil companies voluntarily provide Bakken crude oil testing information to U.S. Department of Transportation

On May 2, 2014, the U.S. Department of Transportation (USDOT) announced that three oil and gas companies voluntarily provided testing data on the crude oil that they ship from North Dakota’s Bakken Shale. This data was supplied in response to the USDOT’s call for action in January 2014, asking that oil companies, shippers, railroads, and industry stakeholders focus on ways to improve accident prevention and mitigation.

The USDOT’s announcement follows months of evaluation and discussions relating to recent train derailments of tanker cars carrying Bakken crude oil, including incidents in Minnesota, Maryland, Pennsylvania, North Dakota, and at three sites in … Continue Reading

Minnesotans seek two-year moratorium on frac sand mining

More than 6,000 residents of southeastern Minnesota signed a petition to enact a two-year moratorium on frac sand mining, declaring that “southeast Minnesota should be off-limits to the frac sand industry” in order to protect air and water quality. The Land Stewardship Project, the group sponsoring the petition, asserted that the governor had the authority to order the Environmental Quality Board to issue a moratorium under the state’s Critical Areas Act without legislation because the frac sand operations were threatening ecologically sensitive areas.

The petition was presented to the state’s governor on April 22, 2014, during Earth Day celebrations.

Governor … Continue Reading

Methane emissions from oil and gas operations targeted by state regulations

Ohio has joined Colorado and Wyoming in issuing new regulations aimed at limiting the emission of methane gas from oil and natural gas operations to address climate change and health concerns. In development for more than a year, the revised Ohio rules are effective immediately and apply to high volume hydraulic fracturing, oil and gas well site production operations. The rules modify the Ohio Environmental Protection Agency’s general permitting process and include the following:

  • Operators must now test and monitor for any fugitive emissions taking place at a well site on a quarterly basis.
  • A leak detection and repair program
Continue Reading

Bans, moratoriums and votes relating to hydraulic fracturing

Each state has legitimate interests in the orderly development of their oil and gas resources and generally regulates all oil and gas activities through a state agency which implements state laws.

Counties and municipalities have also taken interest in the development of oil and gas resources within their boundaries by enacting local ordinances ranging from set-back requirements to temporary moratoriums or permanent bans on hydraulic fracturing.

Proposals for temporary moratoriums and bans have been voted on in local elections.

For example, Vermont decided to ban hydraulic fracturing on May 16, 2012. In November 2013, four cities in Colorado (Boulder, Fort … Continue Reading

Ohio DNR investigates earthquakes near gas drilling site

The Ohio Department of Natural Resources (ODNR) is investigating four small earthquakes that occurred on March 10, 2014 in Poland Township.

These four earthquakes measured 3.0, 2.4, 2.2 and 2.6 in magnitude, causing no injuries or damages. The National Earthquake Information Center of the U.S. Geological Survey (USGS) placed the epicenter of the 3.0 earthquake near where Hilcorp Energy Company is drilling in the Carbon Limestone Landfill.

The ODNR, in “an abundance of caution” to protect public health and safety, ordered Hilcorp Energy to suspend its drilling operations pending further assessment of “the exact circumstances surrounding this event…All available information … Continue Reading

Lesser prairie-chicken added to US Fish and Wildlife Service’s list of threatened species

After more than 15 years of review, the U.S. Fish and Wildlife Service (FWS) announced on March 27, 2014 that the lesser prairie-chicken, a species of prairie grouse, is a “threatened” species, a step below “endangered” under the Endangered Species Act (ESA).

The lesser prairie-chicken’s population is in rapid decline, due largely to habitat loss and fragmentation and the on-going drought in the southern Great Plains.

Once abundant across much of the five range states of Texas, New Mexico, Oklahoma, Kansas and Colorado, the lesser prairie-chicken’s habitat of native grasslands and prairies has been reduced by an estimated 84%. The … Continue Reading

Wrongful death lawsuits, by-pass routes and first responder training – Issues relating to the transport of oil products by rail

Nineteen wrongful death lawsuits from the July 2013 train derailment and explosion in Lac-Mégantic, Quebec, Canada were transferred from U.S. District Court in Illinois to the U.S. District Court in Maine on March 21, 2014.

The Maine federal judge ordering the transfer found that these lawsuits were “related to” the Maine bankruptcy proceedings filed by Montreal Maine and Atlantic Railroad Ltd. (MMAR) one month after the accident. Presented with evidence of shared insurance between MMAR and some of the wrongful death defendants, the Court made the “limited finding that claims against certain of the defendants named therein are related to … Continue Reading