Sidley Shale and Hydraulic Fracturing Report
Vol. 6, No. 28
Topics discussed in this week’s Report include:
- District court allows offshore hydraulic fracturing challenge to proceed.
- Atlantic Pipeline project gets regulatory approval but faces additional hurdles.
- Evaluation of oil and gas flow lines is underway in Colorado.
- Nuns attempt to block Atlantic Sunrise pipeline with chapel construction.
District court allows offshore hydraulic fracturing challenge to proceed. Environmental groups may continue their longstanding dispute over hydraulic fracturing in the Pacific Ocean after the U.S. District Court for the Central District of California rejected the government’s motion to dismiss the litigation last week. Several environmental groups, including the Environmental Defense Center and Center for Biological Diversity, originally filed lawsuits in 2015 and 2016 to prevent the use of hydraulic fracturing in oil and gas wells located off California’s coast. Those suits were settled after the Department of Interior agreed to delay permitting in order to conduct an environmental review. The review concluded that the contemplated offshore hydraulic fracturing would have no significant effect on the environment, prompting the groups to sue again, alleging that the study is inadequate under the National Environmental Policy Act (NEPA). The government, joined by industry groups, argued that the litigation should be dismissed because the environmental assessment is not a judicially reviewable final agency action and must wait until a permit is actually issued. The district court rejected this argument, finding the Ninth Circuit has repeatedly found that NEPA documents constitute final agency action. The case will proceed on the merits later this year.
Atlantic Pipeline project gets regulatory approval but faces additional hurdles. The Federal Energy Regulatory Commissions (FERC) released an environmental impact statement on July 21 for the proposed Atlantic Pipeline project — a 600-mile natural gas pipeline planned from West Virginia to North Carolina. Developers say the pipeline will result in over $300 million in energy savings and create thousands of jobs. According to FERC, although there will be some effects on water, wildlife and natural resources, the mitigation measures proposed by the project developers, such as erosion control and wildlife conservation measures, will likely minimize them to insignificant levels. FERC’s report concludes that the project can be constructed safely and provides a path forward for final approval of the project later this year. However, developers will likely face additional hurdles. Environmental groups are already planning formal objections to a draft permit that is likely to be approved that will allow parts of the pipeline to be built through national forest land. Developers must also obtain water quality permits from state regulators in West Virginia, Virginia and North Carolina.
Evaluation of oil and gas flow lines is underway in Colorado. Oil and Gas operators in Colorado are working to inspect, repair and shut down thousands of pipelines to comply with a state safety notice. The Oil and Gas Conservation Commission’s (OGCC) issued a notice last spring that asks operators to evaluate the safety of oil and gas drilling in proximity to residential buildings. Gov. John Hickenlooper ordered a review of oil and gas operations following a fatal home explosion in May caused by severed natural gas lines. The notice requires operators to inspect and pressure-test flowlines and ensure that inactive flowlines are properly abandoned below ground and sealed pursuant to OGCC rules. Industry operators report that the vast majority of active lines that have been pressure-tested have passed inspection, and those that have not are being repaired and retested. Operators have until the end of July to comply with the order. Once compliance is complete, OGCC will use the inspection data to continue to evaluate flowline integrity.
Nuns attempt to block Atlantic Sunrise pipeline with chapel construction. A Pennsylvania order of Catholic nuns filed a religious freedom complaint against FERC alleging that the Atlantic Sunrise natural gas pipeline will pass through their property, including an outdoor chapel, in Lancaster County, Pennsylvania. The order, the Adorers of the Blood of Christ, has 2,000 members worldwide and emphasizes environmental protection and activism. Earlier in 2017, FERC authorized construction of the pipeline to proceed, including allowing seizure of the land by eminent domain. Now, the nuns are using the Religious Freedom Restoration Act, a 1993 federal statute that prohibits government interference with religious practice without compelling justification, to argue that the pipeline impedes their religious practice. The case was filed in the United States District Court for the Eastern District of Pennsylvania. Federal courts have taken inconsistent positions on whether religious groups are protected from eminent domain. The United States Court of Appeals for the Third Circuit has not ruled on the issue, so this case is likely to be closely watched.