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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

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

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

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

House Democrats request hearing on induced seismicity

Reps. Henry Waxman (D-Calif.), ranking member of the House Energy and Commerce Committee, and Peter DeFazio (D-Ore.), ranking member of the House Committee on Natural Resources, issued a letter to their Republican counterparts requesting a joint hearing on the issue of seismic activity induced by the underground injection of wastewater from hydraulic fracturing activities. In the letter dated December 18, 2013, the members cite the increased seismic activity in previously seismically inactive locations, the critical need for additional data, and the potential regulatory gaps in current law that put people and property at risk from man-made earthquakes.

According to the … Continue Reading

Sixth Circuit upholds “fair market value” agreements in Ohio oil and gas leases

From 2008 to 2010, numerous landowners in eastern Ohio entered into oil and gas leases with Anschutz Exploration Company, which were later assigned to Chesapeake Exploration LLC. These leases contain a “Preferential Right to Renew” or a “fair market value” provision (Paragraph 14 in the lease).

This clause provides that, “[i]f, at any time during the primary term…or within one year from the expiration, cancellation or termination of this Lease, Lessor receives an acceptable bona fide third-party offer to lease the Leasehold, in whole or in part, Lessor shall promptly provide the Lessee, in writing, of all of the verifiable … Continue Reading

Ohio advises drillers to comply with EPA chemical reporting requirements

In September 2012, the Ohio legislature passed regulations requiring oil and gas well operators to report the contents of fracking fluids, recycling fluids, and wastewater to the state’s Department of Natural Resources. These reporting regulations went into effect on September 11,2012, and require the disclosure of the trade name and volume of all “products, fluids, and substances,” maximum concentrations of additives in the fluid, Chemical Abstract Service (CAS) numbers, and maximum concentrations of ingredients intentionally added to the fluid. The total volume of any recycled hydraulic fracturing fluids must also be disclosed. Ohio Rev. Code Ann. § 1509.10(A). This information … Continue Reading

Ohio voters reject proposal to ban hydraulic fracturing in northeast Ohio

In February 2013, the City Council of Youngstown, Ohio agreed to include on its ballot a proposal to ban hydraulic fracturing within the city limits after an anti-fracking organization, Frackfree Mahoning Valley, collected sufficient signatures for a successful petition. The unofficial results of the election held on May 7, 2013 show voters rejected this proposal by a significant margin: 57 percent opposing the proposal vs. 43 percent supporting the proposal.

In Youngstown, the proposal resulted in an unusual alliance of interest groups united in their opposition to the ban. The local business community actively campaigned against the proposal and argued … Continue Reading

Flowback fluid recycling regulation in the Marcellus Shale

This is the second article in a series of blog posts evaluating the current status of flowback and produced water recycling regulations in the major shale play states. These waters are generated through the hydraulic fracturing process, and this blog post continues the discussion of the manner in which these waters are disposed.

The Marcellus Shale, the largest in the country by geographic area, extends throughout much of the Appalachian Basin, under Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia.

However, this post will focus on flowback and produced water recycling regulation in the most active hydraulic fracturing states, … Continue Reading

Ohio Governor Seeks Radiation Testing Requirements For Oil and Gas Waste

On February 12, 2013, Ohio Governor John Kasich introduced his two-year, $63.2 billion budget, including a provision that would require drillers of oil and natural gas to test their drilling waste for radiation before disposal in Ohio landfills.

The budget proposal, introduced as Ohio House Bill 59, was developed by the Ohio Departments of Health and Natural Resources and the Ohio Environmental Protection Agency.

Under Section 1509.074 of the bill, drilling wastes containing more than certain thresholds for concentrations of technologically enhanced radioactive material (“TENORM”) must either be diluted under regulatory supervision or sent to one of the out-of-state … Continue Reading

Summit Petroleum (6th Cir. Aug. 7, 2012): EPA’s Aggregation of Oil and Gas Emissions Based on “Mere Functional Relatedness” is Unreasonable

A three-judge panel of the U.S. Court of Appeals for the Sixth Circuit* in Summit Petroleum Corporation v. U.S. Environmental Protection Agency (Nos. 09-4348; 10-4572) vacated EPA’s order aggregating Summit’s sour gas wells and sweetening plant into a single major source.

The Court agreed with American Petroleum Institute and American Exploration and Production Counsel that EPA’s determination that the physical requirement of “adjacency” in an aggregation determination can be established through mere functional relatedness is unreasonable and contrary to the plain meaning of the term “adjacent.”

The court remanded the case to EPA for a reassessment of Summit’s Title V … Continue Reading

Ohio’s Governor Issues An Executive Order Relating to Underground Injection Activities

Ohio’s Governor Issues An Executive Order Relating to Underground Injection Activities
Ohio Governor John Kasich

On July 10, 2012, with the ink barely dry on the signing into law of S.B. 315, which requires water testing within 1500 feet of proposed horizontal wells and the disclosure of chemicals used in hydraulic fracturing, Ohio Governor John Kasich issued Executive Order 2012-09K.

This Executive Order immediately implements regulations and requirements on deep-injection wells.
The Executive Order authorizes the head of the Division of Oil and Gas Resources Management in Ohio’s Department of Natural Resources to require seismic testing before well drilling, regulations regarding sites that do not pass certain tests, set maximum … Continue Reading

Ohio Passes New Energy and Hydraulic Fracturing Legislation

Ohio Governor John Kasich

The Ohio General Assembly passed SB 315 last week, which contains changes to Ohio’s oil and gas conservation program.

The bill was sent to Governor Kasich on May 24, 2012. The Act will become law on June 5, unless vetoed by the Governor, which is not likely given his support for the bill.

The new law will then be filed with the Secretary of State and become effective 91 days after it is filed.

The bill contains various changes to Ohio’s oil and gas law, including changes to pooling and unitization appeals, increased liability insurance … Continue Reading

Preliminary Report on Link Between Earthquakes and Ohio Disposal Well

As previously reported in Fulbright’s Fracking Blog post, “Injection Wells and Their Possible Link to Seismic Activity,” earthquakes near Youngstown, Ohio–including a 4.0 New Year’s Day quake–sparked national interest in early 2012.

The underground injection of fluids in Class II deep disposal wells, not oil and gas drilling or the hydraulic fracturing production process, were speculated to have caused the earthquakes.

On March 9, 2012, the Ohio Department of Natural Resources (“ODNR”) released a preliminary report regarding the relationship between recent earthquakes in the Youngstown, Ohio area and the Northstar 1 Class II disposal well.

According to the report, a … Continue Reading

Ohio Issues New Standards for Transportation and Disposal of Brine

On March 9, 2012, the Ohio Department of Natural Resources (“ODNR”) announced new standards for the transportation and disposal of brine generated from oil and gas activities. According to the ODNR, the new regulatory framework makes Ohio’s rules for brine monitoring and disposal among the nation’s toughest.

The new standards come at the heels of the ODNR’s research regarding the alleged link between seismic events and brine disposal wells.  The standards will apply to new Class II disposal well permit applications and existing disposal wells, if applicable.

The safeguards “prohibit any new wells to be drilled into the Precambrian basement … Continue Reading

Injection Wells and Their Possible Link to Seismic Activity

The use of injection wells, a preferred method for disposal of various fluids such as wastewater or brine (salt water), is a popular topic in the news media lately due to a suspected link between use of these wells and earthquakes.

Texas, Arkansas, Oklahoma, the United Kingdom, and most recently Youngstown, Ohio and central West Virginia have been experiencing frequent, small earthquakes. On New Year’s Eve, a 4.0 magnitude earthquake struck just outside of Youngstown, Ohio. This quake was just one of 11 earthquakes experienced in the area since March, 2011.

D&L Energy, whose affiliate Northstar Disposal Services LLC operates Continue Reading