Pennsylvania's Act 13 Odyssey

by:  Michael K. Reer

On December 13, 2016, Law 360 published "Pennsylvania's Act 13 Odyssey,"  a Harris, Finley & Bogle article examining legal challenges to Pennsylvania's Act 13 of 2012 and the subsequent Chapter 78a regulations.  A copy of the article is available here.  

Tuesday, December 13, 2016

President-Elect Trump Nominates Scott Pruitt as USEPA Administrator


On December 7, 2016, the Wall Street Journal reported that President-Elect Donald Trump will nominate Oklahoma Attorney General Scott Pruitt to serve as the Administrator to the U.S. Environmental Protection Agency. Pruitt was in private practice until his election to the Oklahoma Senate in 1998. Pruitt was elected Oklahoma Attorney General in 2010, and has since been critical of USEPA’s regulatory efforts on several fronts. According to the Wall Street Journal, one of Pruitt’s “major roles as EPA administrator would likely be to try to roll back . . . regulations.”
Monday, December 12, 2016

PADEP Air Quality Committee Reviews Draft Air Permits


On December 8, 2016, the Pennsylvania Department of Environmental Protection Air Quality Technical Advisory Committee discussed new draft general permits designed to reduce methane emissions from oil and natural gas operations in the Commonwealth. The draft permits contain significant leak detection and repair provisions that would require operators to test certain equipment for methane leaks on a quarterly basis. If a leak is found, the operator would be required to begin attempts to repair the leak within five calendar days. The operator must complete all repairs within 15 calendar days unless a part must be ordered to complete the repair or the repair is infeasible to perform without a shutdown, blowdown, or shut-in.

Under the draft general permits released by PADEP, owners or operators of a well site or remote pigging station may track the percentage of leaking components and reduce the frequency of inspections to semi-annually if the percentage of leaking components is less than or equal to 2% in two consecutive quarterly inspections. If a semi-annual inspection finds that more than 2% of the components are leaking, quarterly inspections must resume.

The new draft permits are part of Governor Tom Wolf’s larger Methane Reduction Strategy, first announced in January 2016. According to PADEP, “reducing methane leaks from the oil and gas sector is one of the essential steps needed to reduce global greenhouse gas emissions and reduce the impacts of climate change.”
Friday, December 09, 2016

NETL AWARDS SIX RESEARCH PROJECTS TO INVESTIGATE UNCONVENTIONAL SHALE PROPERTIES


On December 5, 2016, the U.S. Department of Energy National Energy Technology Laboratory announced that it awarded funding for six research projects at four national laboratories that will investigate new procedures for hydrocarbon extraction from unconventional shale plays. The research projects, which NETL will fund over a period of two years, are designed to test methods of increasing hydrocarbon recovery efficiency from tight shale plays. While recent technology advancements have unlocked vast quantities of oil and natural gas in low-permeable shale formations, recovery efficiencies from shales are currently less than 30% for natural gas and 10% for oil.

Lawrence Berkeley National Laboratory will investigate the permeability of fractures in shale gas formations and how various proppants impact the sustainability of underdeveloped shale reservoirs. NETL states that understanding the relationship between shale properties and their impact on fluid/gas transport will help optimize decisions regarding the choice and control of proppants, leading to improved recovery.

Lawrence Berkeley National Laboratory will evaluate the adsorption of water onto shale surfaces to better understand factors that control the potential blocking or constriction of flow pathways for oil and natural gas recovery. Through the investigation of water and hydrocarbon fluid displacement, the laboratory will identify fracturing fluid compositions and properties that support optimal recovery. Additional research will evaluate the influence of non-water-based fracturing fluids on shale gas and oil recovery.

Lawrence Berkeley National Laboratory will address the challenges associated with the production of low-viscosity oil from tight shale systems. Using laboratory investigations and computational simulations, the team will evaluate factors involved in hydrocarbon production from tight systems and identify methods that improve recovery of low-viscosity liquids.

Los Alamos National Laboratory will use experimental and computational tools to investigate the hydraulic fracture processes in order to improve oil and gas production from shale formations. NETL states that the results of this work will yield a better understanding of shale fracture properties, hydraulic fracture performance, and methods to specifically target features within the fracture systems to improve production.

Sandia National Laboratories will build on prior research to further define component interaction and flow in shale pores. NETL believes that this research will assist in developing a fluid model for gas release and recovery from shale formations. The new model will be combined with an existing simulation tool for the prediction of oil and gas production from shale reservoirs.

Stanford Linear Accelerator Center (SLAC) National Accelerator Laboratory will investigate how hydraulic fracturing fluids induce damaged zones in shale formations. Damaged zones are associated with reduced flow and recovery of oil and gas. NETL states that the results of this work will provide a better understanding of the interaction of fracture fluids with shale, leading to the optimization of fracture fluid compositions and exposure times based on shale properties.
Friday, December 09, 2016

PADEP Settles Enforcement Actions for $3.5 Million

By: Michael K. Reer


On December 7, 2016, the Pennsylvania Department of Environmental Protection assessed an oil and natural gas operator $3.5 million in civil penalties to settle statutory and regulatory violations at 10 well sites and six pipeline locations. The violations occurred in Washington and Greene Counties, and, according to the PADEP news release, include: 

• $1,633,550 for leaks from an unpermitted wastewater impoundment and insufficient erosion and sediment controls, failure to stabilize the well site, and other violations at two well sites in Greene County; 

• $1,314,275 for failure to obtain a permit before earthmoving activities, failure to obtain a pre-operational inspection prior to drilling, and multiple erosion and sediment control violations in Washington and Greene Counties; 

• $437,100 for erosion and sediment control violations and a well casing violation at sites in Washington and Greene Counties; 

• $97,852 for failure to obtain a permit for a culvert, illegal discharge into a waterway, and erosion and sediment control violations at sites in Washington and Greene Counties;

• $14,850 for slope failure and sediment discharge outside of the permitted limit of disturbance at sites in Greene County;

• $11,750 for violations associated with the operator’s failure to maintain erosion and sedimentation controls in Washington County; and

• $35,075 for well site stabilization, casing, and road construction violations in Greene County.

Thursday, December 08, 2016

PADEP Appeals Chapter 78a Injunction to Pa. Supreme Court


On December 6, 2016, the Pennsylvania Department of Environmental Protection requested that the state’s Supreme Court overturn a Commonwealth Court Order enjoining parts of Chapter 78a. Chapter 78a contains the Commonwealth’s new environmental performance standards for unconventional oil and natural gas development. On November 8, 2016, the Commonwealth Court temporarily enjoined key provisions of Chapter 78a, including provisions relating to public resource agencies, area of review and well monitoring, well development impoundments, and well site restoration. The Chapter 78a regulations were published as final in the October 8, 2016 Pennsylvania Bulletin and challenged in Commonwealth Court on October 13, 2016 by the Marcellus Shale Coalition, a trade association based in Pittsburgh.


Wednesday, December 07, 2016

18 States Challenge USFWS Rulemaking


On November 29, 2016, 18 states filed suit in the U.S. District Court for the Southern District of Alabama to challenge two final rules published by the U.S. Fish and Wildlife Service on February 11, 2016. The states allege that the final rulemakings exceed the authority given to USFWS in the Endangered Species Act.


In their complaint, the states allege that the final rulemakings erode the distinctions between occupied and unoccupied critical habitat mandated by the ESA. Specifically, the states allege that USFWS may only designate areas unoccupied by an endangered species as critical habitat “when a designation limited to [the species’] present range would be inadequate to ensure the conservation of the species.” The states allege that the final rulemakings allow USFWS to designate areas as “occupied critical habitat” even if the areas are not occupied and are not capable of supporting the species.


The case is State of Alabama v. Nat. Marine Fisheries Serv., 1:16-cv-00593 (S.D. Ala. Filed Nov. 29, 2016).  

Tuesday, December 06, 2016

AP Reports Decrease in Oklahoma Seismicity


On December 2, 2016, the Associated Press released a statistical analysis showing that seismic activity in Oklahoma has dropped significantly since May 28, 2016, when the state ordered Class II-D Underground Injection Control wells to decrease injection volumes by 40%. Specifically, the AP reported that since Oklahoma ordered a 40% reduction in injection volumes, the state has seen a decrease of seismic activities of magnitude 3.0 or larger. The AP reports that prior to the reduction in injection volumes, the state experienced an average of 2.3 seismic events of magnitude 3.0 or larger per day. By comparison, the state averaged 1.3 seismic events of magnitude 3.0 or larger per day in November 2016, and just one such seismic event per year prior to 2009.

The AP analysis was released shortly after the journal Science Advances published a paper by Cornelius Langenbruch and Mark Zoback that detailed the findings of computer simulations of future seismic events in Oklahoma. According to Langenbruch and Zoback, their computer simulations show that seismic events in Oklahoma will continue to decrease to pre-2009 levels over the next several years. 
Monday, December 05, 2016

USEPA Reaches $8.2 Million Settlement With ND Operator


On December 1, 2016, the U.S. Environmental Protection Agency and the U.S. Department of Justice announced a settlement with a North Dakota operator to resolve alleged violations of the Clean Air Act. The settlement resolves USEPA’s allegations that the operator failed to adequately design, operate, and maintain vapor control systems on its storage tanks at approximately 170 oil and natural gas well pads in North Dakota. USEPA states in its announcement that inadequately designed, operated, or maintained vapor control systems can lead to uncontrolled emissions of volatile organic compounds, which contribute to the formation of ground-level ozone and hazardous air pollutants.

As part of the settlement, the operator agreed to implement system upgrades, monitoring, and inspections at an estimated cost of $4.1 million. The settlement also requires the operator to use advanced technology such as infrared cameras and electronic pressure monitors to detect and fix emissions sources. Additionally, the operator is required to spend at least $2 million to fund environmental mitigation projects and pay a $2.1 million civil penalty. The settlement is part of USEPA’s larger national enforcement initiative to reduce public health and environmental impacts from energy extraction activities.

Friday, December 02, 2016

Wyoming to Hold Public Meeting on Pavillion Investigation

By:  Michael K. Reer

On November 23, 2016, the Wyoming Department of Environmental Quality and the Wyoming Oil and Gas Conservation Commission announced that they will host a public meeting and open house regarding the Pavillion Area Groundwater Investigation. At the meeting, WODEQ and WOGCC will provide information regarding their final investigation report. The final report was issued November 10, 2016 and concludes that “it is unlikely that hydraulic fracturing fluids have risen to shallower depths intersected by water-supply wells.” The report also states that WODEQ and WOGCC were unable to determine whether methane found in the Pavillion water wells was naturally occurring in shallow gas formations or if the methane had migrated from the annular space in nearby production wells.

By way of background, in 2009, the U.S. Environmental Protection Agency began an investigation into alleged groundwater contamination within the Pavillion Gas Field Cistern Area. USEPA published a draft report in December of 2011, concluding that hydraulic fracturing fluids may have impacted the groundwater. The methodology used by USEPA in its draft report was heavily criticized, and USEPA subsequently announced that it would not publish a final report concerning its investigation. In June of 2013, WODEQ and WOGCC announced that they would conduct a separate investigation into the alleged groundwater contamination, which now concludes with the release of the final report.

Thursday, December 01, 2016

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The Oil & Gas Law Blog is made available for educational purposes only and to give you general information as well as a general understanding of the law, not to provide specific legal advice. Use of this blog does not create an attorney-client relationship between you and any of the blog contributors or Harris Finley & Bogle. The Oil & Gas Law Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.