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University of Colorado report examines economic effects of a statewide ban on hydraulic fracturing

With five municipalities and Boulder County in Colorado voting to ban hydraulic fracturing, the Leeds School of Business at the University of Colorado – Boulder studied the economic effects of a statewide hydraulic fracturing ban.The research was conducted on behalf of several local economic-development companies, including the Metro Denver Economic Development Corporation, who wanted to show the worst-case scenario so the public would understand the size of the oil and gas industry in Colorado.

According to the report, which assumes a 95% reduction in drilling activities, the economic consequences of a ban beginning in 2015 would be an average … Continue Reading

California hydraulic fracturing moratorium bill approved by Senate Committee

On April 4, 2014, in a 5 to 2 vote with two members abstaining, the California Senate Natural Resources and Water Committee approved proposed legislation (Senate Bill 1132) that would place an indefinite moratorium on hydraulic fracturing and acidizing activities throughout the state, both onshore and offshore, until a sufficient state study on the threats and impacts of fracking is complete and regulations are in place to protect the state and its citizens.

This bill expands on the hydraulic fracturing law (S.B. 4) that took effect on January 1, 2014, which requires oil and gas companies to:

  1. apply
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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
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Lone Pine Order in hydraulic fracturing lawsuit to be reviewed by Colorado Supreme Court

On April 7, 2014, the Colorado Supreme Court agreed to review a court of appeals decision that overturned a Lone Pine Order and a dismissal order issued by the lower court in Strudley v. Antero Resources Corporation, Antero Resources Piceance Corporation, Calfrac Well Services, and Frontier Drilling LLC (Case No. 2011-cv-2218, Denver County District Court), a toxic tort case involving hydraulic fracturing.

Two questions will be addressed by the Supreme Court:

  • Whether a district court is barred as a matter of law from entering into a modified case management order requiring the plaintiffs to produce evidence essential to their claims
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Environmental groups challenge shipments of crude oil by rail in the San Francisco bay area

On March 27, 2014, Earthjustice, on behalf of several environmental and conservation groups, filed a lawsuit against the Bay Area Air Quality Management LLC (BAAQM) for issuing a permit allowing North Dakotan Bakken crude oil to be transported to refineries in the San Francisco Bay area,  The environmentalists argue that the BAAQM issued the permit without any notice or public process, without considering the “well-known and potentially catastrophic risk to public health and safety” as evidenced in the Lac-Mégantic, Québec train derailment in July 2013, and without complying with the requirements of the California Environmental Quality Act (CEQA).

The environmentalists … 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

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

Wyoming Supreme Court reverses and remands suit on trade secret protection for hydraulic fracturing chemicals

Four environmental groups sued the Wyoming Oil and Gas Conservation Commission (WOGCC) under Wyoming’s Administrative Procedure Act (APA), asserting that the WOGCC unlawfully withheld the identification of hydraulic fracturing chemicals used by various oil and gas operators under the trade secret exception to the state’s disclosure rules.

On March 21, 2013, the district court upheld the WOGCC’s decision, ruling that the Supervisor “acted reasonably” in establishing a policy for evaluating trade secret requests and that his decisions to grant trade secret protection were not arbitrary or capricious and were in accordance with the law.

On March 12, 2014, the Wyoming … Continue Reading

Court upholds Broomfield, Colorado’s ban on hydraulic fracturing

After a recount of the votes cast on November 5, 2013, in Broomfield, Colorado, Local Question 300 banning hydraulic fracturing within the city for five years was passed by 20 votes.
The Broomfield Balanced Energy Coalition and others challenged the legality of the local moratorium by questioning the validity of the election results.

The groups pointed to a recent “bad election bill” concerning state residency requirements for voters in coordinated elections, a “deceptively written” Local Question 300, and “incompetent” election officials in Broomfield who admitted to mistakes including the discovery of a ballot box four months after the election.
In … Continue Reading

Brighton, Colorado suspends oil and gas drilling applications for 4 months

On March 4, 2014, Brighton, Colorado’s City Council unanimously voted to suspend all oil and gas drilling applications for the next four months, through July 15, 2014.
Brighton, Colorado officials explained that this is not intended as a ban on drilling operations, but merely a temporary suspension to give the council more time to update the oil and gas regulations in the Brighton city code.

The delay will give provide time to draft and revise ordinances that address local concerns and assure consistency with state regulations, to consult with the Colorado Oil and Gas Conservation Commission (COGCC) and the Colorado … Continue Reading

Colorado’s air quality control commission approves hydrocarbon emission control requirements

After a five-day public hearing, on Sunday February 23, 2014, the Colorado Air Quality Control Commission in an 8 to 1 vote approved regulations to control hydrocarbon emissions of volatile organic compounds (VOCs).

The Commission estimates that these rules which include input from the Environmental Defense Fund and a number of oil and gas companies, including Anadarko Petroleum Corporation, Noble Energy Inc., and Encana Corporation, will reduce methane emissions by an estimated 92,000 tons per year in the state.

These regulations for oil and gas operations include:

  • storage tanks – beginning May 1, 2014, owners or operators of storage tanks
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Environmental groups seek to intervene to defend Ft. Collins’ moratorium on hydraulic fracturing

On February 13, 2014, Citizens for a Healthy Fort Collins, the Sierra Club, and Earthworks filed a motion to intervene in Colorado Oil and Gas Association v. City of Fort Collins, Colorado, Case No. 2013CV031385, In the District Court, Larimer County, Colorado (December 3, 2013), a lawsuit challenging the city of Fort Collins authority to ban hydraulic fracturing.

In November 2013, the 55% of the citizens of Fort Collins, Colorado voted to ban hydraulic fracturing from their city for five years. On December 3, 2013, the Colorado Oil & Gas Association filed a lawsuit against the city, arguing that … Continue Reading

Nevada drafts hydraulic fracturing regulations

In January 2014, the Nevada Commission on Mineral Resources and the Division of Minerals proposed regulations to manage hydraulic fracturing and to establish procedures for water quality sampling.

These proposed regulations are a result of Nevada’s Governor signing Senate Bill 390 in June 2013, which requires regulations to implement a hydraulic fracturing program by January 1, 2015.

Under the proposed regulations, for the fluids used in hydraulic fracturing, the operator must insure that only chemicals listed on the Division’s website are used unless an exception is requested at least 30 days in advance of the activity and approved.

To obtain … Continue Reading

Montana disclosure regulations, effective August 26, 2011

In Montana, before a well can be hydraulically fractured, acidized, or chemically treated, either in the drilling permit application or in a notice of intent to stimulate a well, the owner, operator, or service company must fully describe the activity by providing:

  • the estimated total volume of treatment to be used;
  • the trade name or generic name of the principle components or chemicals;
  • the estimated amount of the principal components such as viscosifiers, acids, or gelling agents;
  • the estimated weight or volume of inert substances such as proppants; and
  • the maximum anticipated treating pressure or a written description of the
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California drought being used to push for a moratorium on hydraulic fracturing

With most of the state of California under abnormally dry to extreme drought conditions, opponents of hydraulic fracturing are focusing their efforts on curtailing these operations to preserve the state’s water supply.

California assemblyman Marc Levine is co-sponsoring a bill that would place a moratorium on all fracking activities, arguing these activities require too much water and deplete the state’s limited water resources.

Last year a moratorium bill failed (37 to 24) while a bill requiring disclosure of the fluids used in hydraulic fracturing was passed.

As of yet, California has not done much fracturing, with the Department of Conservation … Continue Reading

California court dismisses lawsuit filed by environmental groups to block hydraulic fracturing

On January 13, 2014, a superior court judge for Alameda County, California dismissed a lawsuit filed by several environmental groups based on the provisions of the state’s new hydraulic fracturing law (Senate Bill 4).

In this lawsuit, the environmental groups sought an injunction prohibiting any new oil and gas permit approvals until the California Department of Conservation, Division Oil, Gas and Geothermal Resources (“DOGGR”) “complied with its legal requirements to evaluate and mitigate the significant environmental and public health impacts caused by hydraulic fracturing.”

Oil and gas industry organizations intervened and moved to dismiss the lawsuit shortly after … Continue Reading

EPA requires California offshore drillers to disclose fracking fluids

The US EPA, Region 9, will require oil and gas operators engaged in hydraulic fracturing off the southern California coast to disclose all chemicals discharged into the Pacific Ocean beginning March 1, 2014.

This disclosure requirement is part of a revised general permit for oil and gas operations in federal waters.

The revised permit requires all offshore drillers to maintain an inventory of the chemicals used to formulate well treatment, completion and workover fluids, and if there is a discharge of the fluids, to report the chemical formulation of the discharges (and the discharge volume) with the quarterly discharge monitoring … Continue Reading

To drink or not to drink: Water use and disposal issues in hydraulic fracturing

The November 2013 presentation “To Drink or Not to Drink? Water Use and Disposal Issues in Hydraulic Fracturing” was given in Denver, Colorado, at the AICPA/PDI National Oil and Gas Conference.
 Water plays a major role in the production of oil and gas from shale formations by the use of hydraulic fracturing.

Within the past several years, concerns have been raised about the reduction of citizens’ water supplies due to the large volume of water used in the fracturing process, the alleged contamination of aquifers and water wells that supply drinking water, and the appropriate disposal of or recycling of … Continue Reading

Oil and gas association challenges fracking bans in two Colorado cities

In November, the citizens of Fort Collins, Colorado and Lafayette, Colorado voted to ban hydraulic fracturing from their cities. See prior blog, “Voters in three Colorado cities ban hydraulic fracturing.” In Fort Collins, a five-year ban on hydraulic fracturing was approved with 55% of the vote. Sixty percent (60%) of the voters in Lafayette approved an indefinite ban on all oil and gas development, including the deposit, storage, or transportation of fracking wastewater through “the land, air or waters” of the city. In both cities, the City Councils had opposed the bans.

On December 3, 2013, the Colorado … Continue Reading

Environmental group and congresswoman want to halt California offshore hydraulic fracturing operations

In October, the Associated Press reported that hydraulic fracturing activities off the coast of California were more extensive than previously thought. Interviews and public records revealed that oil companies had used fracking more than 200 times at six different sites over the last 20 years near Long Beach, Seal Beach and Huntington Beach.

The Center for Biological Diversity (CBD), an environmental activist group, took up the issue of offshore fracking and urged a moratorium on these activities in an October 3, 2013 letter addressed to the Bureau of Ocean Energy Management and to the Bureau of Safety and Environmental Enforcement, … Continue Reading

President Obama promises to veto hydraulic fracturing bill and other energy-related legislation

On November 20, 2013, the U.S. House of Representatives approved two energy-related bills – one bill concerning hydraulic fracturing regulations on federal lands (H.R. 2728) and the second relating to applications for permits to drill (H.R. 1965). Two other energy bills are pending, one dealing with the permitting of natural gas pipelines (H.R. 1900) and the other with the standards to be used by the EPA in disseminating its report on the impacts of hydraulic fracturing on drinking water resources (H.R. 2850).

President Obama has threatened to veto at least three of these measures in the unlikely event they pass … Continue Reading

Broomfield, Colorado re-count – Voters approve hydraulic fracturing ban

On November 5, 2013, Broomfield, Colorado voters considered a ban on  the use of hydraulic fracturing and open-pit storage of solid or liquid hydraulic fracturing waste for five years within the city and county of Broomfield. At the end of the day, it appeared that the ban had failed by 13 votes.
However, a re-count flipped the results, showing that the ban passed by 17 votes. There will be another re-count to confirm these results. This means that the voters in four Colorado towns have now voted for and approved hydraulic fracturing bans.
For information on these votes, see prior … Continue Reading

Illinois and California issue proposed administrative rules to implement hydraulic fracturing legislation

In Illinois, Governor Pat Quinn approved hydraulic fracturing legislation on June 17, 2013. The Illinois Department of Natural Resources (DNR) released proposed administrative rules to implement this legislation on November 15, 2013 – Proposed Administrative Rules for the Hydraulic Fracturing Regulatory Act and Proposed Administrative Rules for Seismicity to monitor Class II UIC wells receiving any hydraulic fracturing fluids.

The rules require oil and gas companies to disclosure chemicals used in fracking operations both before and after drilling and to test water before, during and after drilling. The rules also require the operators to provide information as to how the … Continue Reading

Wyoming requires groundwater testing before and after drilling

On November 12, 2013, the Wyoming Oil and Gas Conservation Commission (WOGCC) approved regulations to be effective on March 1, 2014, that will require oil and gas operators to conduct testing of water sources before and after drilling a well. With an Application for Permit to Drill or Deepen a Well, operators must identify all water sources within one-half mile of the surface location of the proposed oil or gas well and submit a plan to sample, analyze, and monitor at least four of these groundwater sources.

The plan must include “initial baseline water sampling and testing followed by a … Continue Reading