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. 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.
The West Virginia Fair Pooling bill, which we first described last week, has been approved in the West Virginia House of Delegates by a vote of 60-40. In order to become law, the bill must be approved by the State Senate before March 14, when the legislative session ends. Governor Tomblin of West Virginia must then sign the bill in order for it to become law.
A bill, HB2688, designed to allow oil and gas operators to create oil and gas production units without the express authority of all oil and gas owners within the unit boundary, is currently pending before the West Virginia House Judiciary Committee. The bill would require the owners of 80% of the interests in any given unit boundary to agree to pooling and unitization for horizontal wells before an operator could apply to the West Virginia Conservation Commission for a “horizontal well unit order.” Proponents say that the bill could reduce the administrative burdens against operations in the West Virginia Marcellus Shale region by allowing oil and gas operators to commence operations without locating unknown, un-locatable or abandoning oil and gas owners. Opponents fear that the bill, if passed, would be used to infringe individual landowners’ rights. The bill has already passed the West Virginia House Energy Committee.
As reported by the Charleston Gazette on February 4, 2015, West Virginia Governor Earl Ray Tomblin has signed legislation originally known as Senate Bill 280, which streamlines the transfer process of well work permits to eliminate a requirement that companies must re-apply for well work permits after acquiring assets from existing operations in West Virginia. The approved change was introduced and fast-tracked by both the House of Representatives and Senate in favor of Southwestern Energy Company, which bought $5 billion in assets from Chesapeake Energy Corporation in October of 2014. Please see our original blog post on S. B. 280 for further information.
The West Virginia Division of Air Quality will release a new general air quality permit, the G80-A, which will regulate air quality in regard to natural gas production, compressor and dehydration facilities. On February 5, 2014, the DEP will host a meeting to release the draft of the G80-A and cover the timeline, procedures for the official public notice for the draft permit, and subsequent public meetings.
Currently, General Permits G30-D and G35-A cover air quality relating to natural gas compressor facilities while G70-A covers air quality relating to natural gas facilities which are designed and operated for natural gas production at a well site. The general air quality permits currently in existence will continue, but there will be no future registrations, modifications or administrative updates to the G30-D, G35-A or G70-A permits. After the rollout of the new general permit, registrants wishing to modify an existing registration must register under the General Permit G80-A.
The meeting will take place from 9 a. m. to 4 p. m. at the DEP’s headquarters and will also be live-streamed over the internet.
This week the New York State Department of Environmental Conservation adopted regulations establishing a permitting program for the siting, construction and operation of liquefied natural gas (LNG) facilities in New York State. The New York Legislature previously enacted a statewide moratorium on the construction of LNG storage facilities after the explosion of an LNG tank on Staten Island killed 40 workers in 1973. The new regulations, which take effect on February 26, 2015, require owners and operators to obtain a permit prior to the preparation of a site for, construction of, or operation of facilities that store LNG or convert LNG into natural gas. The regulations include a maximum storage capacity of 70,000 gallons of LNG at each permitted facility. Intrastate transportation of LNG is prohibited unless the route has been certified by the New York State Department of Transportation. The regulations do not affect the statutory moratorium prohibiting the siting of LNG facilities within New York City. Furthermore, the regulations do not apply to compressed natural gas or liquefied petroleum gas, and LNG-fueled vehicles and vessels are exempt from the permitting requirements.
As reported by The State Journal, the West Virginia Senate has passed Senate Bill 280 (“SB 280”) which, if it becomes effective, would allow the Secretary of the West Virginia Department of Environmental Protection to transfer well work permits from one business entity to another, a process that has been previously prohibited by State Code. SB 280 was ultimately pushed in favor of Southwestern Energy, a company that has invested more than $5 billion to purchase wells in West Virginia and Pennsylvania. To become effective legislation, SB 280 must first pass through West Virginia House of Representatives before ultimately needing the approval of West Virginia Governor Earl Ray Tomblin.
Today the U.S. Environmental Protection Agency (EPA) released a fact sheet outlining the agency’s strategy for reducing emissions of methane and ground level ozone-forming pollutants from the oil and natural gas sector. Release of the EPA strategy is part of a broad multi-agency initiative by the Obama Administration to curb emissions from the sector. In March 2014, the White House identified the reduction of methane and other emissions from the sector as a key element of President Obama’s Climate Action Plan, and directed EPA to assess how best to pursue such reductions. According to EPA’s recently-released fact sheet, emissions of methane (the primary constituent of natural gas) from the sector are “projected to increase by about 25 percent over the next decade if additional steps are not taken to reduce emissions from this rapidly growing industry.” EPA plans to use both “regulatory” and “voluntary” approaches to avoid this anticipated emissions increase.
Among other actions, EPA plans to “build on” its New Source Performance Standards (NSPS) for the sector, namely NSPS Subpart OOOO, to reduce methane emissions and further restrict emissions of volatile organic compounds (VOCs). The fact sheet indicates that EPA intends to issue a proposed rule in late summer and a final rule in 2016. EPA also plans to provide state air permitting agencies with special “guidelines” for controlling VOC emissions from existing oil and gas sources located in ozone nonattainment areas and the Ozone Transport Region, which includes Pennsylvania and New York. EPA expects to propose these Control Technique Guidelines this summer and issue final guidelines in 2016.
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.”
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.”
The Ohio Department of Natural Resources has opened the comment period on its draft rules for the construction of horizontal well sites. All interested parties may submit comments in writing by the close-of-business on Monday, October 06, 2014 to dogrm.rules@dnr.ohio.gov.
The federal Bureau of Land Management (BLM) has taken another step towards finalizing updated regulations for hydraulic fracturing on federal and Indian lands, by sending a revised final rule to the White House Office of Management and Budget (OMB) for review. The revised rule was published in the Federal Register in May 2013. During the subsequent public comment period, BLM received a large number of comments on the rule from both public interest organizations and industry groups. Any revisions will not become public until OMB completes its review and the final rule is published, perhaps by late fall of this year. The rule would apply to hydraulic fracturing operations conducted on the approximately 700 million acres of federal mineral estate and 56 million acres of Indian mineral estate overseen by BLM.
Today the U.S. Environmental Protection Agency (USEPA) published in the Federal Register its advance notice of proposed rulemaking regarding the disclosure of chemicals and mixtures associated with hydraulic fracturing (see previous post). Public comments will be accepted through August 18, 2014.
On May 9, 2014, the Ohio Division of Oil and Gas Resources Management announced changes in the procedure for obtaining orders approving drilling units. The procedure, established by R.C. 1509.28, authorizes the Division to approve drilling units that contain unleased properties and properties leased to operators who decline to agree to inclusion in the proposed drilling unit. The procedure is most often used to assemble units for horizontal drilling. The changes include extending the minimum period of time between the filing of an application and the hearing on the application from 45 to 120 days, requiring the submission of additional information by affidavit in the application, and providing additional notice to the public of the hearing. The changes appear in the Division’s guidelines for administering the unitization statute.