by James A. Pardo and Brandon H. Barnes
At the request of residents in Dimock, PA, for the past several months EPA has been testing drinking water wells for contamination that the residents attribute to nearby fracing activities by Cabot Oil. Earlier this month EPA concluded that the water in several of these wells was safe to drink. Last Monday, EPA reported that the water in several other wells also was safe to drink.
by James A. Pardo and Brandon H. Barnes
The practice of hydraulic fracturing (fracing) for natural gas is arguably the most visible and controversial energy/environmental issue of the day. Federal, state and local regulators across the country are racing each other to regulate. Academic, industry, environmental, community and a myriad of other interest groups and non-governmental entities are attempting to influence the regulatory process. The media, and the plaintiffs’ trial bar, is circling.
In “Drilling Down on Hydraulic Fracturing,” presented at the 63rd Annual Oil & Gas Law Conference in Houston in February 2012, McDermott trial partner, James A. Pardo, provides an overview of the most significant issues and recent developments that may effect fracing in 2012 and beyond. These issues are of potential importance not only to oil, gas and energy companies, but to any company with a "stake in the game" on fracing: financial institutions, private equity investors, pension funds, hedge funds, developers, etc.
In the weeks since that presentation, several developments have occurred which touch on one or more of the topics discussed in this paper. In one of the latest developments, the U.S. Environmental Protection Agency (EPA) announced on March 30 that it was dismissing claims that fracing by Range Production Company (RPC, a subsidiary of Range Resources Corporation) had contaminated groundwater near Fort Worth, Texas.
In December 2010, EPA issued a Safe Drinking Water Act (SDWA) emergency order requiring RPC to halt fracing activity and undertake remediation of the groundwater. Because fracing largely is exempted from the SDWA, the agency acted against RPC by invoking the “emergency powers” it retains under that statute to act when it believes a company’s activity may pose an imminent and substantial danger to human health. Fracing stakeholders have been concerned that EPA was using the action against RPC as a test case for broader “emergency powers” regulation of fracing that, in effect, would allow the federal agency to circumvent Congress’ SDWA exemption.
Considering that the facts in this action were particularly weak for EPA, the agency’s decision to drop enforcement of its emergency order (and a companion lawsuit) against RPC should not be interpreted as EPA disclaiming SDWA “emergency powers” entirely. Unless and until Congress revokes the SDWA exemption, EPA can be expected to continue its efforts to regulate fracing from several different angles. We would not be surprised to see the agency file another "emergency powers" action on better facts, and against a less-motivated opponent, in the coming weeks or months.
Nevertheless, EPA’s dismissal unquestionably is a setback for the agency that has been forced to beat two other retreats from fracing-related regulatory efforts in recent weeks (e.g., Pavillon, WY; and Dimock, PA).
by James A. Pardo and Brandon H. Barnes
The public and regulators alike continue to scrutinize the impact of hydraulic fracturing on water resources – e.g., possible contamination of drinking water; volume of water used; and disposal of used fracing wastewater. These water issues have dominated the debate for some time, overshadowing concerns that some have raised about potential impacts from an air quality perspective. Recent events, however, indicate that air emissions are likely to become a fracing issue.
On April 3, Henry Waxman (D-CA) and Diana DeGette (D-CO) wrote to Environmental Protection Agency (EPA) Administrator Lisa Jackson asking the agency to consider a recent Colorado School of Public Health (CSPH) study linking air emissions from hydraulic fracturing activities to increased risks of cancer and non-cancer illnesses. The letter comes one day after EPA delayed publication of final rules for air emissions from oil and gas extraction activities to give itself time to review the more than 156,000 public comments submitted on the draft rules.
The CSPH study found that residents of Battlement Mesa who reside within 1/2 mile of a hydraulically fractured well have an increased risk of contracting illnesses due to volatile organic compounds (VOC) that drilling operations release into the air. The study methodology and analysis have been criticized by stakeholder groups for using data gathered before enactment of stricter state air standards; for assuming that residents remain in town for 350 days per year, 24 hours per day, thus receiving 24-hour doses; and, for disregarding VOC contributions from local highway traffic.
The study was commissioned by Garfield County in 2010 at the request of Battlement Mesa residents, then decommissioned by the county in May 2011 after questions were raised by the County Department of Public Health. CSPH scientists continued with the analysis on their own, and are scheduled to publish the results in an upcoming edition of the magazine, Science of the Total Environment. Garfield County, however, disavows any connection to the study.
Battlement Mesa residents are part of what is widely considered the test case for class actions alleging harm from hydraulic fracturing. The suit contends that residents have suffered health impacts from air and water contamination as a result of natural gas development at a well pad near the community, and stand to endure further environmental effects and diminution of property value because of plans to drill up to 200 additional wells within town limits..
The CSPH study follows a National Oceanographic and Atmospheric Administration (NOAA ) study on fracing emissions, reported in the Journal of Geophysical Research in February. The NOAA study concluded that fugitive natural gas emissions from drilling operations ranged from 3 to 5 percent. These findings were roughly in line with an earlier Howarth (Cornell University) study and were above industry reported levels. Critics of the industry quickly pointed to the study as evidence that fracing is making significant contributions to greenhouse gas emissions, invoking the results as a basis for increased federal regulation.
by James A. Pardo and Brandon H. Barnes
Pennsylvania Towns Challenge State Legislation Preempting Local Bans on Hydraulic Fracturing
Last month, the Pennsylvania Legislature passed HB 1950, putting into place comprehensive new rules for hydraulic fracturing activity in the state. Among the new rules are strict limits (akin to those proposed in New York) on where new wells can be located. Citing the need for statewide uniformity to ensure the most efficient development of oil and gas resources, and consistent environmental protections for all residents, the legislature also declared that all local ordinances — including local zoning rules — must allow for reasonable development of oil and gas resources consistent with the new legislation. In short, HB 1950 preempts all stricter local zoning ordinances, including any ordinances that might seek to totally ban hydraulic fracturing.
The preemption provisions of HB 1950 quickly came under fire from environmental and community groups. The controversy escalated last week when seven Pennsylvania towns – joined by Delaware Riverkeeper – filed suit challenging the provisions as an unconstitutional stripping of the towns’ power to zone and a denial of their ability to carry out their constitutional obligation to protect public natural resources. That case, Robinson Township et al. v. Commonwealth of Pennsylvania et al. (No. 284-MD-2012) is pending in the Commonwealth Court in Harrisburg.
The use of local zoning ordinances to ban hydraulic fracturing is contentious in neighboring New York – where two such ordinances recently withstood legal challenge and are now headed for appellate court review. How the challenges are resolved is important since local zoning ordinances have the potential to create a difficult "patchwork quilt" of regulations with which oil and gas explorers and developers would have to comply.
Coalition to Oppose Hydraulic Fracturing in Empire State
An eclectic mix of organizations are coordinating and working together on hydraulic fracturing (fracing), last week several groups announced the formation of a coalition — "New Yorkers Against Fracking" — to organize their efforts in the Empire State. The coalition is led by several anti-fracing groups historically active in New York: Food & Water Watch; Water Defense; Catskill Mountainkeeper; and United for Action (David Braun). The coalition has received initial funding from Sandra Steingraber, the biologist and environmental writer who recently won the Heinz Award for her work on how chemical contaminants in air, water and food endanger human health. Steingraber is donating her $100,000 prize to the group.
The coaltion’s stated goal is to achieve an outright ban on fracing, suggesting that it will not seek to work with New York State Department of Environmental Conservation (NYSDEC) to bolster the fracing rules that the agency expects to finalize this year. This is an uphill battle in New York, where all indications are that Governor Cuomo and NYSDEC intend to allow fracing, albeit subject to the nation’s strictest regulations. Not surprisingly, the more mainstream "national" NGOs (e.g., Sierra Club, Natural Resources Defense Council) — which largely have resisted pursuing unlikely bans [...]
Continue Reading
by James A. Pardo and Brandon H. Barnes
A recently released United States Geological Survey (USGS) abstract, "Are Seismicity Rate Changes in the Midcontinent Natural or Manmade?," has added fuel to the debate over whether hydraulic fracturing can cause earthquakes. Noting that the increased rate of >3.0 magnitude quakes in certain regions in the Midwest is unprecedented outside of volcanic settings or main shock, the abstract authors conclude that "[w]hile the seismicity rate changes … are almost certainly manmade, it remains to be determined how they are related to either changes in extraction methodologies or the rate of oil and gas production."
To date, the "earthquake debate" has focused not on the fracking process itself, but on the disposal of fracking wastewater by way of deep well injection – a process that some claim caused the recent earthquakes in Arkansas, Oklahoma and Youngstown, Ohio. But the real debate will be over whether fracking as a technique for gas extraction can cause increased seismic activity, something that Cuadrilla Resources concluded happened last year in western England. While far from a definitive conclusion linking fracking to earthquakes, the language employed by USGS – "how they are related" – may suggest that USGS believes such a link to exist. Either way, USGS’s conclusions are certain to fuel a debate where the stakes already are high. If the fracking process can be causally linked to earthquakes, regulators may begin requiring seismic studies as a condition for obtaining a well permit; and such studies can be very expensive.
USGS will present the full results of its study on April 18 at the Seismological Society of America annual meeting.
by James A. Pardo and Brandon H. Barnes
Three recent court decisions could affect parties with an interest in hydraulic fracturing, particularly in New York and Ohio. Two New York courts held that New York’s Oil & Gas Law does not preempt local zoning ordinances that completely ban hydraulic fracturing, and an Ohio court issued a ruling that could impair stakeholders’ ability to conduct hydraulic fracturing operations in that state.
To read the full article, click here.
The Railroad Commission of Texas now requires the disclosure of chemicals used for hydraulic fracturing (fracking) of oil and natural gas deposits. The disclosure rule, adopted on December 13, 2011, and codified at Rule 3.29 of Title 16 of the Texas Administrative Code, implements fracking disclosure legislation that the state enacted earlier in 2011. Arkansas, Colorado, Louisiana, Montana, Michigan, Pennsylvania and Wyoming likewise regulate fracking through legislation or regulation. Given the increasing use of fracking techniques worldwide and heightened public scrutiny of industry practices, an increasing number of states are expected to adopt comparable laws and regulations.
The rule applies to fracking treatments of wells in Texas for which the Railroad Commission has issued an initial drilling permit on or after February 1, 2012. The rule defines “fracking treatment” as the stimulation of a well by applying fracking fluid under pressure to create fractures in a target geologic formation in order to enhance oil and natural gas migration and production. The rule requires the supplier (the entity who provides additives for use in fracking treatments) or the service company (the entity that performs fracking treatments) to provide the well operator (the person responsible for the physical operation and control of a well) with the identity of each chemical ingredient intentionally added to the fracking fluid within 15 days of completing fracking treatments.
The rule also imposes new requirements on well operators. On or before the date a well completion report is submitted to the Railroad Commission, the operator must complete a Chemical Disclosure Registry form and upload it on the Chemical Disclosure Registry, known as FracFocus, a publicly accessible national fracking chemical registry website. This form includes information about the chemicals and volume of water used in a fracking treatment, as well as other well-related information. Not required to be disclosed are chemicals: (1) not disclosed to the supplier, service company or operator; (2) not intentionally added to the fracking treatment; (3) that occur incidentally or are otherwise unintentionally present; and (4) eligible for trade secret protection.
A supplier, service company or operator is generally not required to publicly disclose trade secrets unless the Texas Attorney General or a court determines that the information is not entitled to such protection. If an entity withholds information about a chemical ingredient, it must still disclose specific information to the Commission. Only certain individuals may challenge a claim of trade secret protection, and if any health professional or emergency responder is given trade secret information, that person must keep it confidential, with limited exceptions for diagnostic or treatment purposes.
Violations of the rule may subject a person to monetary penalty and/or other penalties or other sanctions and/or lead to revocation of a well’s certificate of compliance (a certificate from the Railroad Commission stating that the well operator has complied with applicable rules).
Subscribe
