On June 21, 2016, the U.S. District Court for the District of Wyoming (“District Court”) set aside the U.S. Department of the Interior, Bureau of Land Management’s (“BLM’s”) “Hydraulic Fracturing on Federal and Indian Lands” rule, finding that the rule exceeded BLM’s statutory authority. Challengers to the rule previously succeeded in obtaining a preliminary injunction in September 2015, pending a final decision on the merits of the case. In the merits decision issued this week, the District Court held that “Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing.”
The BLM rule would have, among other requirements, mandated that operators planning to conduct hydraulic fracturing on federal and Indian lands: (1) submit detailed information regarding the proposed operation, including wellbore geology information and the estimated length of fracture propagation; (2) design and implement a casing and cementing program that meets certain best management practices and performance standards; (3) manage recovered fluids in rigid enclosed, covered, or netted and screened aboveground storage tanks, with very limited exceptions; and (4) disclose the chemicals to be used in hydraulic fracturing to BLM and the public, with limited exceptions for trade secrets.
BLM is expected to appeal the District Court’s decision to the U.S. Court of Appeals for the Tenth Circuit.
In a recent non-precedential opinion, the Third Circuit affirmed a decision of the Middle District of Pennsylvania dismissing an action on the basis that a doctor lacked standing to challenge what he refers to as the “Medical Gag Rules” of Act 13. In Rodriguez v. Secretary of Pennsylvania Department of Environmental Protection, the plaintiff, a doctor specializing in the treatment of renal diseases, hypertension and advanced diabetes, asserted he is unable to obtain critical information about the quality of local water. Specifically, he claimed that he needed the information to properly diagnose and treat patients whose illnesses or medical conditions allegedly resulted from contact with environmental contaminants. He therefore challenged Section 3222.1 of Act 13, which provides two mechanisms for health professionals to learn proprietary information about the chemicals used in hydraulic fracturing—one for medical emergencies and one for non-emergency situations. Dr. Rodriguez argued Act 13’s non-emergency provision, which requires a written statement and the execution of a confidentiality agreement, impermissibly restricts his speech and is unconstitutionally vague and overbroad.
The Middle District of Pennsylvania held that Dr. Rodriguez’s alleged injury was too speculative to satisfy the requirements of standing under Article III of the U.S. Constitution. In this regard, Dr. Rodriguez did not allege that he had ever been in a situation where he needed or attempted to obtain such information, or that he had ever been forced to sign a confidentiality agreement under Act 13. In short, he never suffered an injury-in-fact.
On appeal, the Third Circuit agreed with the District Court, holding that it was insufficient for Dr. Rodriguez to rely on “naked assertions devoid of further factual enhancement.” Rather, he must allege that he suffered an invasion of an interest that is actual or imminent, not conjectural. The Third Circuit also distinguished Dr. Rodriguez’s reliance upon the Supreme Court of Pennsylvania’s 2013 opinion in Robinson Twp., Washington Cty. v. Com. The court ruled that Dr. Rodriguez’s reliance on Pennsylvania law as authority regarding federal standing requirements was misplaced.
Judge David W. Hummel, Jr. of Marshall County, West Virginia has dismissed the second in a pair of lawsuits aimed to restrict operator Gastar Exploration, Inc.’s ability to hydraulically fracture several wells in Marshall County, West Virginia. According to the Order entered by Judge Hummel in December, on April 22, 2014 Eagle Natrium, LLC, a wholly owned subsidiary of Axiall Corporation, filed suit against Gastar seeking a preliminary injunction to keep Gastar from hydraulically fracturing wells located under Eagle’s lands in Marshall County, West Virginia, due to the threat of irreparable damage to existing salt wells and operations. Judge Hummel denied Eagle’s request for a preliminary injunction and dismissed the Case (Civil Action No. 14-C-179), noting that the issue had already been resolved by a Pennsylvania court, and that a party cannot seek relief for the same problem in multiple courts without some intervening change in circumstance.
The Inspector General (IG) for the U.S. Environmental Protection Agency (EPA), Arthur Elkins, has vowed to continue to evaluate the effectiveness of state and federal regulations of hydraulic fracturing. The IG recently responded by letter to early October correspondence from Senator James Inhofe (R-OK), who claimed that the IG does not have the proper authority to review federal and state hydraulic fracturing regulations. In February 2014, the IG announced its preliminary review of EPA and the states’ existing regulations concerning the management and responsiveness of potential threats to water resources, with the purpose of identifying preventive and response measures and improving coordination among relevant agencies. In May 2014, five Republican Senators, including Inhofe, sent a letter to the IG questioning his authority for such a review, stating that the mission of the EPA Inspector General is to prevent and detect fraud, waste and abuse within the EPA, and not “to investigate either the states themselves or the efficacy of their regulatory programs.”
On June 4, 2014, North Carolina Governor Pat McCrory signed into law the Energy Modernization Act, which lifts a 2012 moratorium that blocked the issuance of oil and gas drilling permits in the state. In addition to allowing for the permitting of hydraulic fracturing and horizontal drilling, the law also prevents local governments from prohibiting oil and gas exploration, development and production activities and criminalizes the unauthorized disclosure of chemical trade secrets, including the chemicals which are used in the hydraulic fracturing process. As a result of this new law, hydraulic fracturing is expected to begin in North Carolina as early as next year.
Today the U.S. Environmental Protection Agency (USEPA) announced the availability of an advance notice of proposed rulemaking (ANPR) to solicit public comments on “the information that should be reported or disclosed for hydraulic fracturing chemical substances and mixtures and the mechanism for obtaining this information.” USEPA’s action responds to a 2011 petition signed by Earthjustice and more than 100 other groups requesting that USEPA require toxicity testing of chemicals and mixtures used by the oil and gas industry and submission of various records pursuant to the federal Toxic Substances Control Act. Upon the ANPR’s publication in the Federal Register, USEPA will accept comments for 90 days on a number of issues relating to the “design and scope” of voluntary and/or mandatory approaches for USEPA to obtain information about chemicals and mixtures used in hydraulic fracturing. Jim Jones, USEPA Assistant Administrator for the Office of Chemical Safety and Pollution Prevention, considers the ANPR to be “an important step in increasing the public’s access to information on chemicals used in hydraulic fracturing activities.”
As reported in the Spirit of Jefferson newspaper, Senate Bill 474, introduced in the West Virginia Senate on Monday, February 3, would amend W. Va. Code § 22-15-8 to allow commercial waste facilities to accept drill cuttings and associated hydraulic fracturing waste above and beyond their monthly tonnage waste limits without a public approval process, provided that the drilling waste is placed in a separate cell dedicated solely to the disposal of such waste. Normally, commercial waste facilities must go through an approval process, including public hearings, to accept solid waste beyond their usual monthly tonnage limits (usually 10,000 or 30,000 tons). The bill, which was drafted by the West Virginia Department of Environmental Protection, must gain approval from the Senate Government Organizations Committee and the Senate Judiciary Committee before taking affect. A public hearing was held in regard to the bill on Monday, February 17 at 5 p.m. in Charleston.
New York State Department of Health Commissioner Nirav Shah announced earlier this week that his public health review of hydraulic fracturing will continue in private until it is complete. Despite facing harsh criticism for a lack of transparency in the review process, Shah told reporters that the scientific work surrounding hydraulic fracturing must be conducted in a “sacred space” to maintain objectivity. “The process needs to be transparent at the end, not during,” Shah said. Governor Andrew Cuomo said that there is no timetable for completion of the health review, although he reportedly anticipates it will be finished in 2014. “But my timeline is whatever Commissioner Shah needs to do it right and feel comfortable,” Cuomo said. “It’s a major decision.” Governor Cuomo previously said in June 2013 that he would make a decision on the State’s hydraulic fracturing moratorium before the 2014 election.
The Department of the Interior has released its Statement of Regulatory Priorities, a subsection of which highlights the Bureau of Land Management (BLM)’s priorities on energy issues including hydraulic fracturing. BLM’s stated highest regulatory priorities include revising antiquated hydraulic fracturing regulations, preventing waste of produced oil and gas, and ensuring a fair return to the American taxpayer for oil shale development. BLM’s stated priorities also address solar and wind energy projects and the management of waste mine methane. The current regulatory agenda of the Department is also publicly available.
On October 23rd, the Middle District of Pennsylvania dismissed Dr. Alfonso Rodriguez’s complaint challenging Act 13’s so-called “Medical Gag Act.” If, during the course of treating a patient, a health professional deems it necessary for an operator to disclose the exact mixture of hydraulic fracturing fluids, Act 13 requires the operator to disclose the information upon a verbal acknowledgement by the health professional that the information will not be used for purposes other than the health needs asserted and must be maintained confidentially.
Dr. Rodriguez is a nephrologist who allegedly treats patients who have been directly exposed to high volume hydraulic fracturing fluid. In his complaint, he alleged that Act 13 violates the First and Fourteenth Amendments of the United States Constitution, and that it requires him to violate his ethical obligations as a physician. The Court dismissed his complaint on the grounds that Dr. Rodriguez never suffered an actual injury and thus, did not have standing. The Court held that the alleged injury was “too conjectural to satisfy the injury in fact requirement of Article III standing” which requires an alleged injury to be “distinct and palpable” rather than “abstract.” In other words, Dr. Rodriguez does not have standing to sue because he has never been in a position “where he was required to agree to any sort of confidentiality agreement under the act.” His alleged injuries are hypothetical.
EQT Corporation and Green Field Energy Services announced on Monday that they had achieved a major milestone in the hydraulic fracturing field. Using pumps powered entirely by “field” gas, or gas supplied from a separate (and previously drilled) natural gas well, Green Field successfully completed multiple stages in the hydraulic fracturing process on lands leased by EQT Corp.
What this means for the industry is a potentially cleaner method of operating some of the machinery necessary in the hydraulic fracturing process. Rather than relying on diesel-powered trucks and pumps, Green Field’s Turbine Frac Pump technology uses natural gas, a cleaner and more environmentally friendly fuel than diesel. Steve Schlotterbeck, Senior VP and President of EQT Exploration and Production noted that this new technology allows companies to “reduce emissions of carbon monoxide, carbon dioxide, nitrogen, and sulfur oxides; as well as decrease the amount of truck traffic on local roads.”
EQT began a program in 2012 to convert a number of their drilling rigs to natural gas-powered rigs, and so far four such rigs have been converted.
Platts.com reports that Dominion has begun talks regarding farming out 100,000 acres in West Virginia in the Marcellus Shale located near Dominion’s gas storage assets near the Ohio and Pennsylvania borders. Thomas Farrell, CEO of Dominion, indicated that this acreage has potential gas reserves of 1 trillion cubic feet and that Dominion retained the ownership of the gas rights in order to ensure that drilling in the area would not compromise its storage facilities.
The Wheeling Planning Commission has approved plans of GreenHunter Resources, Inc. for a water recycling and barging facility to be constructed in Wheeling, WV. The $1.7 million construction project, as reported by the Pittsburgh Business Times, is GreenHunter’s latest solution for dealing with production water resulting from hydraulic fracturing activities in West Virginia. The facility will treat production water to be re-used by companies, with any remaining water transported by barge to disposal wells. GreenHunter estimates that every 10,000 barrel barge load can remove 100 trucks from the water transportation process.
A report created by the West Virginia Department of Environmental Protection’s Office of Oil and Gas, which was anticipated pursuant to previous studies conducted by the DEP, indicates that no new rules are necessary to protect West Virginia’s air quality from natural gas drilling, reports The Sacramento Bee. The report stated that based upon air quality monitoring data there were no indications of a public health emergency or threat because of hydraulic fracturing. The results of the study were presented to West Virginia State Lawmakers on Tuesday during an interim committee meeting.
During a recent radio interview, New York Governor Andrew Cuomo said that additional initiatives beyond hydrofracking, including reducing taxes and increasing tourism and manufacturing, will be required to improve the economy of Upstate New York. “If we approved hydrofracking today, that is not in and of itself going to change the trajectory of the upstate economy,” Cuomo said. Governor Cuomo also indicated that the New York Department of Health has not provided an update on its review of the potential health impacts of hydrofracking, which Cuomo previously said needs to be completed before a decision is made on lifting the state’s five-year-old moratorium.