NETL Researchers Examine Low-Frequency Seismicity and Reservoir Stimulation

By: Michael K. Reer

On April 25, 2017, the Department of Energy’s National Energy Technology Laboratory issued a press release detailing the findings of a recent study that analyzed the impact of low-frequency seismicity on oil and natural gas production from unconventional shales. According to NETL, data collected as part of the study could assist operators in optimizing oil and natural gas production from unconventional shale. Specifically, NETL believes that “information about reservoir stress states and distribution of natural fractures linked to low frequency earthquakes can be used to plan reservoir stimulation in a manner that is both optimally efficient and most productive as a long-term energy resource.”
Thursday, April 27, 2017

Trump to Sign Order on National Monuments

By: Michael K. Reer

On April 24, 2017, the New York Times reported that President Donald Trump is expected to sign an executive order today that orders a review of the national monument designations made within the last 20 years. The Antiquities Act of 1906 authorizes the president to designate “objects of historic or scientific interest that are situated upon the lands owned or controlled by the Government” to be national monuments. A national monument designation is generally considered to greatly restrict certain land uses, including oil and natural gas development. President Trump’s executive order, if signed, would continue a controversy surrounding President Barack Obama’s designation of Bears Ears National Monument in 2016 – an area that oil and natural gas operators had expressed interest in developing. The review is expected to be overseen by Secretary of the Interior Ryan Zinke and to take approximately four months to complete.
Wednesday, April 26, 2017

Duke Researchers Release Report on Impacts of Hydraulic Fracturing

By: Michael K. Reer

On April 24, 2017, researchers from Duke University released “The Geochemistry of Naturally Occurring Methane and Saline Groundwater in an Area of Unconventional Shale Gas Development” – a peer reviewed study that examined the effects of hydraulic fracturing activities on water quality in West Virginia. Significantly, the study tested water wells before and after nearby hydraulic fracturing activities, and found that the test results “showed no evidence of anthropogenic contamination” in groundwater. The study also examined the effects of fluid spills on nearby surface waters, finding that the chemistry and isotope ratios of surface waters near known spills or leaks mimicked the composition of Marcellus flowback fluids. The study’s finding with respect to surface waters is unsurprising given that the researchers specifically targeted water bodies nearby reported spills. The industry blog Energy in Depth has posted an extensive analysis of the study.
Tuesday, April 25, 2017

EPA to Delay and Reconsider Methane Rule

By: Michael K. Reer

On April 18, 2017, the U.S. Environmental Protection Agency announced a delay and reconsideration of “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed and Modified Sources” a final rule published by the Obama Administration that finalized new emissions regulations applicable to new, reconstructed, or modified sources in the oil and natural gas sector. Even though the new source emissions requirements were finalized by the previous administration, Clean Air Act Section 307(d)(7)(B) allows the agency to convene a proceeding for reconsideration of a final rule issued under the CAA if a party raises an objection to the final rulemaking and if it was impractical to raise the objection within the public comment period. EPA states that as a result of the reconsideration, the agency will issue a 90-day stay of the compliance date for the fugitive emissions monitoring requirements and that sources need not comply with the requirements while the stay is in effect.
Monday, April 24, 2017

USGS Estimates Bossier and Haynesville Formations

By: Michael K. Reer

On April 13, 2017, the U.S. Geological Survey announced that the Bossier and Haynesville formations onshore and within state waters along the Gulf Coast contain an estimated 4.0 billion barrels of oil, 304.4 trillion cubic feet of natural gas, and 1.9 billion barrels of natural gas liquids. The estimate marks the largest continuous natural gas assessment ever conducted by USGS and includes both conventional and unconventional reserves as well as undiscovered, technically recoverably resources. Undiscovered resources are those that are estimated to exist based on geologic knowledge and statistical analysis of known resources. Technically recoverable resources are those that can be produced using currently available technology and industry practices.

The assessment is part of a larger USGS effort to assess domestic petroleum basins using standardized methodology and protocol. In November 2016, USGS estimated that the Wolfcamp shale in the Permian Basin contains 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas, and 1.6 billion barrels of natural gas liquids.
Tuesday, April 18, 2017

Trump Administration Means Widespread Changes for Oil and Gas

By: Michael K. Reer

On April 17, 2017, The American Oil and Gas Reporter published “Trump Administration Initiating Major Changes” – an Harris, Finley & Bogle, P.C. analysis of the new administration’s executive and regulatory initiatives affecting the oil and natural gas industry. The American Oil and Gas Reporter is the official publication of nearly 30 oil and gas trade associations across the United States.
Tuesday, April 18, 2017

Dimock, Pa. Verdict Overturned

By:  Michael K. Reer

On March 31, 2017, the U.S. District Court for the Middle District of Pennsylvania overturned a $4.24 million verdict related to alleged contamination from unconventional development activities. The Scranton, Pennsylvania jury found in favor of nine plaintiffs who claim that an operator’s drilling activities at two gas wells in Susquehanna County was negligent and caused compensable nuisance injuries by interfering with and damaging access to well water.

Specifically, the Court found that “the weaknesses in the plaintiffs’ case and proof, coupled with serious and troubling irregularities in the testimony and presentation of the plaintiffs’ case – including repeated and regrettable missteps by counsel in the jury’s presence – combined so thoroughly to undermine faith in the jury’s verdict that it must be vacated and a new trial ordered. Moreover, the jury’s award of more than $4 million in damages for private nuisance bore no discernable relationship to the evidence, which was at best limited; and even were the Court to find that the jury’s verdict of liability should stand, the Court can perceive no way in which the jury’s damages award could withstand even passing scrutiny regardless of the applicable standard of review.”

The Court found that the evidence demonstrated “convincingly” that problems with the plaintiffs’ water supply began prior to the development of the wells at issue. “The plaintiffs all acknowledged that they experienced problems with the water in their wells at least a month before Cabot started to drill on the Gesford pads. This manifest problem of ‘cause and effect’ was never adequately explained by the plaintiffs, who time and again either evaded this issue, attempted to impeach their own stipulation, or endeavored to provide some alternative explanation for their own prior representations.”
Thursday, April 13, 2017

EPA Requests Feedback on Expendable Regulations

By: Michael K. Reer

On April 10, 2017, the U.S. Environmental Protection Agency released a request for comment for publication in the Federal Register. The request for comment seeks public comments “on regulations that may be appropriate for repeal, replacement, or modification.” Through comments to EPA, operators may now suggest regulations that they believe inhibit the development of oil and natural gas.

The request for comment is issued pursuant to President Trump’s February 24, 2017 executive order “Enforcing the Regulatory Reform Agenda” – which directed federal agencies to establish a Regulatory Reform Task Force. The Task Force is responsible for evaluating existing regulations and making recommendations to agency heads regarding their repeal, replacement, or modification. Among other items, the executive order directs the Task Force to identify regulations that: eliminate jobs, or inhibit job creation; are outdated, unnecessary, or ineffective; impose costs that exceed benefits; create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies; or derive from or implement executive orders or other presidential directives that have been subsequently rescinded or substantially modified.

Comments are due 30 days after the request is published in the Federal Register.
Thursday, April 13, 2017

Court Rejects Challenge to DRBC Moratorium

By: Michael K. Reer

On March 24, 2017, The U.S. District Court for the Middle District of Pennsylvania dismissed a landowner challenge to the Delaware River Basin Commission’s de facto moratorium on unconventional development activities in the eastern third of Pennsylvania. In 2010, the DRBC placed a moratorium on shale gas development projects until the Commission could enact new regulations governing the practice – which have yet to be finalized. The landowner group challenging DRBC’s jurisdiction over natural gas development alleged that the DRBC does not have authority to prohibit or regulate shale gas drilling operations in the basin.

The DRBC includes portions of New York, New Jersey, and the eastern third of Pennsylvania. The Delaware River Basin Compact defines “project,” in part, as “any separate facility undertaken or to be undertaken within a specified area, for the conservation, utilization, control, development or management of water resources which can be established and utilized independently . . .” The Court found that “[d]espite the DRBC’s best efforts to side-step this issue, it is apparent from the fact of Plaintiff’s Complaint that its proposed activities which include inter alia, a ‘natural gas well pad, a gas well and related facilities and associated activities,’ constitute a ‘project’ subject to DRBC project review.”

The landowner group is expected to appeal the decision. Wayne Land & Mineral GRP., LLC v. Del. River Basin Comm’n, No 3:16-CV-00897 (M.D. Pa. 2017).
Thursday, April 13, 2017

EPA Requests Extension in Methane Lawsuit

By: Michael K. Reer

On April 7, 2017, the U.S. Environmental Protection Agency requested that the U.S. Court of Appeals for the District of Columbia Circuit temporarily halt a lawsuit brought by the American Petroleum Institute that challenges EPA’s recent new source performance standards for sources in the oil and gas sector. EPA stated in a filing that it will review the challenged regulation in accordance with President Donald Trump’s March 28, 2017 executive order that directs EPA to review the final rulemaking and, “if appropriate . . . suspend, revise, or rescind” the final rulemaking.

Thursday, April 13, 2017

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