Regulations
The Associated Press | 17 September 2017

Regulators Take Step To Ban Hydraulic Fracturing Near Delaware River

A commission that oversees drinking water quality for 15 million people took an initial step on 13 September to permanently ban drilling and hydraulic fracturing near the Delaware River and its tributaries, drawing criticism from the natural gas industry as well as from environmental groups worried that regulators would still allow the disposal of toxic drilling wastewater inside the area.

The Delaware River Basin Commission voted 3–1, with one abstention, to begin the lengthy process of enacting a formal ban on drilling and hydraulic fracturing, the technique that has spurred a US production boom in shale gas and oil. Besides other locales, the watershed supplies Philadelphia and half of New York City with drinking water.

The resolution approved by the commission says that hydraulic fracturing “presents risks, vulnerabilities, and impacts to surface and ground water resources across the country” and directs the staff to draft regulations to ban it.

Representatives of the governors of New York, Pennsylvania, and Delaware, all Democrats, voted for the measure. A representative of Republican New Jersey Gov. Chris Christie abstained and a US Army Corps of Engineers officer, representing the administration of GOP President Donald Trump, voted “no,” drawing boos from a strongly anti-fracturing crowd attending the meeting outside Philadelphia.

“Today, we are acting to protect a watershed that supplies drinking water to more than 15 million people in one of the most densely populated areas of the country,” Pennsylvania Gov. Tom Wolf said in a statement.

Read the full story here.

The Hill | 14 September 2017

House Votes To Block Funding for EPA Methane Pollution Rule

Lawmakers voted on 13 September to block implementation of a key Environmental Protection Agency (EPA) pollution rule.

Credit: Getty Images.

The House voted 218–195 to strip funding for an Obama-era EPA effort to limit methane emissions from new oil and gas drilling sites. Eleven Republicans voted against the amendment, and three Democrats voted to block funding for the regulation.

“This rule is currently facing litigation and uncertainty, and Congress must act to block this job-killing regulation estimated to cost the US economy $530 million annually,” Rep. Markwayne Mullin (R-Oklahoma) said during debate on the measure last week.

“Methane emissions from oil and natural gas have significantly declined in recent decades without multiple, overlapping federal regulations, and this is no exception,” he said.

The EPA finalized its methane rule in early 2016 as part of an Obama administration effort to reduce emissions of the pollutant, which has significantly more global warming potential than carbon dioxide. The rule was a critical part of Obama’s second-term climate agenda.

Read the full story here.

The Associated Press | 8 September 2017

AP Source: Permanent Delaware River Drilling Ban in Works

A 7-year moratorium on natural gas development near the Delaware River would be replaced by a permanent ban under a proposal that’s being developed by the agency that oversees the water supply of more than 15 million people.

The Delaware River Basin Commission, a regulatory body that has representatives from New Jersey, New York, Pennsylvania, Delaware, and the federal government, could vote soon to begin the process of enacting a formal ban on gas drilling and hydraulic fracturing, according to a person with knowledge of the proposal. The person spoke on 7 September on condition of anonymity because the plan is not scheduled to be made public until 8 September.

The ban would apply to two counties in Pennsylvania’s northeastern tip that are part of the nation’s largest gas field, the Marcellus Shale. More than 10,000 Marcellus wells have been drilled in other parts of Pennsylvania since a natural gas boom began nearly 10 years ago, but the industry has been prevented from developing its acreage in the sensitive Delaware watershed. Neighboring New York already has a statewide drilling ban.

 

Read the full story here.

Natural Gas Intelligence | 6 September 2017

Mexico Updates Rules for Water Use in Unconventional Projects

The Mexican government continues to update its environmental regulations as authorities prepare for the first exploration and production (E&P) auction to feature blocks with unconventional oil and natural gas resources since the energy reforms of 2013.

The National Water Commission, or Conagua, published in the official gazette on 30 August rules detailing water conservation and protection measures that E&P companies must carry out during exploration and development phases of unconventional reservoirs.

The water-use rules implement previously issued regulations from the Agency for Safety, Energy, and the Environment (ASEA) and the National Hydrocarbons Commission (CNH).

“Prior to the reforms, we didn’t have as robust a regulatory framework as we do today,” CNH Commissioner Héctor Moreira said. “Among other things, it’s important to note that the reforms gave origin to ASEA itself.”

“In this sense, the reforms have allowed the hydrocarbons sector to develop with the regulations it needs to safeguard the environment, both for conventional and unconventional projects,” he said. “In the case of the latter, our country remains in the very early stages of development, hence the need for the proper regulations for their exploitation.”

The new Conagua regulations apply to projects involving hydraulic fracturing, as well as other techniques such as coalbed methane extraction and enhanced oil recovery.

Read the full story here.

Bloomberg | 5 September 2017

Oil Firms That Cheered Regulatory Cuts Are Quaking on NAFTA

The Trump administration is easing environmental regulations and opening up territory for drilling as part of the president’s bid to unleash the “vast energy wealth” of the US. Yet Donald Trump’s push to rewrite the North American Free Trade Agreement (NAFTA) could have the opposite effect.

As NAFTA negotiations resume, oil industry leaders are desperate to preserve the 23-year-old trade deal that drove a North American oil and gas renaissance and paved the way for $34 billion worth of energy exports to Canada and Mexico last year.

“Any changes that disrupt energy trade across our North American borders, reduce investment protection, or revert to high tariffs and trade barriers that preceded NAFTA could put at risk the tens of millions of jobs,” said the top oil and gas trade groups from the US, Canada, and Mexico in a joint position paper released in August.

Energy companies that sat on the sidelines during other recent trade negotiations are getting more involved on NAFTA—securing formal roles on committees advising the process, unleashing lobbyists to influence it, and outlining their priorities for the administration. Armed with a modest wish list, the industry is mostly in a defensive posture, terrified Trump will torpedo the current deal or weaken existing provisions that allow investors to sue countries over discrimination, seizures, and other injustices.

“We want to make clear in a thoughtful way that there’s really no reason to disrupt the energy component of NAFTA,” American Petroleum Institute President Jack Gerard said in an interview. “Over time, this has really evolved to a very efficient marketplace in North America with Canada, Mexico, and the United States. It’s a mature system that’s well in place, and they’re just no reasons to disrupt it.”

Read the full story here.

Arkansas Online | 17 August 2017

Appeals Panel Voids Exxon Pipe-Risk Order

A federal appeals court panel has handed Exxon Mobil a victory in the oil giant’s clash with the government over a regulatory order resulting from the Pegasus pipeline oil spill in Mayflower, Arkansas, more than 4 years ago.

In a decision issued 14 August and made public on 15 August, a three-judge panel of the 5th US Circuit Court of Appeals in New Orleans vacated an order that Exxon Mobil revise its process for determining the seam-risk factor for all of the company’s older pipes still used in lines similar to the aging Pegasus.

In an accompanying opinion, the court wrote: “The fact that the Mayflower release occurred, while regrettable, does not necessarily mean that [Exxon Mobil] failed to abide by the pipeline integrity regulations in considering the appropriate risk factors. If it did, then an operator that experiences a seam-related pipeline leak on its pipeline system could never escape liability under pipeline integrity regulations.

“The unfortunate fact of the matter is that, despite adherence to safety guidelines and regulations, oil spills still do occur,” the court added.

Read the full story here.

Akabogu and Associates via Mondaq

Nigeria: Innovations Under the Petroleum Industry Governance Bill

The recent passage of the Petroleum Industry Governance & Institutional Framework Bill, also known as the PIGIF Bill, by the Nigerian senate marks a huge step forward in revamping the status quo in the country’s hydrocarbon sector. Although the bill is yet to be passed by Nigeria’s House of Representatives and get the presidential assent, it is still essential that a comprehensive review of what could become the Petroleum Industry Governance Act is conducted.

The hydrocarbon sector is one of utmost importance to Nigeria’s growing economy. Ranked among the top 10 producers, with one of the largest gas reserves in the world, the country’s hydrocarbon sector has remained the country’s primary source of revenue, leading to calls for a review of the workings of the sector. The bill is the first of many bills targeted at causing reform to Nigeria’s petroleum industry.

Read the full story here.

The Hill | 24 July 2017

White House Details Plan To Roll Back Environmental Regulations

The Trump administration provided details for its aggressive plan to roll back environmental regulations on 20 July.

Credit: Getty Images.

In the first regulatory agenda of the Trump administration, the White House’s Office of Management and Budget detailed when and how agencies plan to repeal numerous Obama administration rules regarding air and water pollution, fossil fuel extraction, and more.

Many of the rollbacks had already been announced, though some new timelines or justifications were revealed.

The Environmental Protection Agency (EPA) said it plans to repeal the Clean Power Plan, limiting carbon dioxide output from power plants, “on grounds that it exceeds the statutory authority” given to the agency in the Clean Air Act.The EPA did not provide a timeline for when it will complete the regulatory process to repeal the climate change regulation. It will require a proposed regulation, comment period, and final rule.

Former President Barack Obama’s Clean Water Rule, also known as “waters of the United States,” is also on the chopping block.

The EPA revealed in the regulatory agenda that it plans to propose a replacement for the water rule in December. It has already formally proposed to repeal the 2015 Obama rule but did not provide a timeline for completing that repeal process.

Read the full story here.

Reuters | 24 July 2017

White House Deregulation Push Clears Out Hundreds of Proposed Rules

The White House said on 20 July that it had withdrawn or removed from active consideration more than 800 proposed regulations that were never finalized during the Obama administration as it works to shrink the federal government’s regulatory footprint.

In a report, the Trump administration said it had withdrawn 469 planned actions that had been part of the Obama administration’s regulatory agenda published last fall. Officials also reconsidered 391 active regulatory proceedings by reclassifying them as long-term or inactive “allowing for further careful review,” the White House said.

The steps to eliminate regulations makes good on a much-repeated Trump campaign promise to promote business-friendly policies. Investors have anticipated the action, helping to push share prices higher on hopes that fewer regulations will boost business growth and lead to higher corporate profits.

The Trump administration has identified nearly 300 regulations related to energy production and environmental protection it plans to rescind, review or delay across three agencies—the Environmental Protection Agency and the Interior and Energy Departments.

Trump had identified several of the regulations as targets in his March executive orders on energy, but they will now undergo a formal rulemaking process to be rescinded or revised.

Read the full story here.

The Hill | 14 July 2017

Court Lets EPA Put Drilling Pollution Rule on Hold

A federal appeals court is letting the Trump administration put on hold an Environmental Protection Agency (EPA) methane pollution rule for oil and natural gas drilling.

Credit: Getty Images.

The Court of Appeals for the District of Columbia Circuit ordered on 13 July that its decision last week rejecting the EPA’s delay of the regulation could itself be delayed for 14 days while the Trump administration considers whether to appeal the ruling.

The court wrote in a brief order that putting the rule on hold “for longer would hand the agency, in all practical effect, the very delay in implementation this panel determined to be” illegal.

The same court had ruled on 3 July that the EPA overstepped its authority under the Clean Air Act when it put a 90-day pause on the Obama administration’s rule limiting methane emissions from oil and gas drilling operations.

The 90-day delay was meant to give the EPA time to go through the process of formally repealing the regulation.

Read the full story here.

 

Blakes via Mondaq | 14 July 2017

Canada: Emission Limit Implementation Recommendations From Alberta’s Oil Sands Advisory Group

On 16 June 2017, the Alberta Oil Sands Advisory Group (OSAG) released its report Recommendations on Implementation of the Oil Sands Emissions Limit Established by the Alberta Climate Leadership Plan, which sets out recommendations for implementing and remaining within the 100 megatonne per year greenhouse-gas (GHG) emissions limit for the oil sands sector articulated in Alberta’s Climate Leadership Plan.

The report recommends the introduction of a regulatory regime that places a continued emphasis on emissions intensity as GHG emissions approach the emissions limit. The new regime includes forecasting requirements and the issuance of annual authorizations for GHG emissions by oil sands facilities. Through the allocation of these authorizations and other mechanisms, the regime seeks to encourage innovation and ensure that the emissions limit is not exceeded.

The OSAG was established by Alberta’s Minister of Environment and Parks in July 2016 to advise the Alberta government on the implementation of the plan as it relates to the oil sands. Pursuant to its mandate letter, the OSAG was specifically tasked with advising on the implementation of the emissions limit. Its membership for the purposes of the preparation of the report included a cross-section of representatives, including environmental, aboriginal, and industry leaders.

Read the full story here.

Read the OSAG report here (PDF).

Morning Consult | 14 July 2017

Advocates for Methane Rule Dominate EPA Hearing

Public interest groups and local stakeholders at a public hearing on 10 July urged the Environmental Protection Agency to continue to enforce methane regulations.

EPA Administrator Scott Pruitt. Credit: Scott Olson/Getty Images.

The hearing at the EPA’s headquarters in Washington related the agency’s recent moves to delay the Obama administration’s methane rules for 2 years. Conservationists, health experts, and community members focused on the effects of methane emissions and climate change on their lives.

In a 2-1 decision, the United States Court of Appeals for the District of Columbia Circuit ruled that the EPA could not postpone implementing the methane rule for 3 months, denying the agency’s request. But Justice Department lawyers representing the EPA asked to delay enforcement while the agency considers an appeal.

The EPA continues to identify methane as a greenhouse gas. The Obama administration in 2016 added regulations for methane gas that escapes through oil and gas wells. But the EPA under President Donald Trump has said that staying enforcement on those rules for the next 2 years would save businesses USD 235 million during that time period.

The EPA was not immediately available for comment on the regulation and its enforcement.

At least two-thirds of more than 150 speakers registered to comment at the hearing were tied to an environmental group, health association, or person who opposed the rule’s reconsideration and delay.

Read the full story here.