06 December 2016

Sidley Shale and Hydraulic Fracturing Report

Vol. 5, No. 49

Topics discussed in this week’s Report include:

  • Army Corps decided against granting an easement to Dakota Access pipeline.
  • EPA updated greenhouse gas reporting requirements for the oil and gas industry.
  • EPA extended rulemaking process regarding compliance deadline for discharge of wastewater from unconventional oil and gas production facilities to POTWs.
  • Study concluded that Oklahoma earthquakes could mostly cease within several years.

Federal

Army Corps decides against granting an easement to Dakota Access pipeline. The U.S. Army Corps of Engineers (Army Corps) declined to grant an easement allowing the Dakota Access pipeline to cross Lake Oahe, a dammed portion of the Missouri River located in North Dakota. The Army Corps announced that it would instead develop an environmental impact statement under the National Environmental Policy Act that would contain further analysis of impacts and alternative routes. The denial of the easement is a victory for protesters who have been opposing the pipeline for months, but its long-term impact is uncertain, given the incoming Trump administration’s expected support for fossil fuel development.

EPA updates greenhouse gas reporting requirements for the oil and gas industry. The U.S. Environmental Protection Agency (EPA) issued a final rule that amends the petroleum and natural gas systems source category of the federal Greenhouse Gas Reporting Program. The amendments add new leak detection methods for oil and natural gas sources, which EPA states are consistent with the fugitive emissions monitoring methods in the recent New Source Performance Standards for the oil and gas industry. The amendments also include new emissions factors to be used in conjunction with the new monitoring methods when oil and gas facilities report greenhouse gas emissions data. EPA published the rule in the Federal Register on Nov. 30, which began a 60-day period in which parties can challenge the rule in the U.S. Court of Appeals for the District of Columbia Circuit.

EPA extends rulemaking process regarding compliance deadline for discharge of wastewater from unconventional oil and gas production facilities to POTWs. EPA has withdrawn a direct final rule that had extended to Aug. 29, 2019, the deadline by which hydraulic fracturing operations must cease discharging wastewater to publicly owned treatment works (POTWs). As discussed in this publication, in June EPA issued its effluent limitation guideline (ELG) rule for discharges from onshore, unconventional oil and gas production facilities into POTWs, which established a prohibition on such discharges, partly based on the conclusion that no such discharges were occurring. In October, EPA issued its direct final rule, announcing it had learned of existing discharges that the June ELG rule would cover and was prepared to give those dischargers until August 2019 to come into compliance. When it issued the deadline extension, EPA noted that it would withdraw the direct final rule if it received any adverse comments. In withdrawing the direct final rule on Nov. 28, EPA noted that it “received comments that could be construed as adverse” and that it will issue a new final rule, which it expects will be based on a proposed rule that contained the same deadline.

Studies

Study concludes that Oklahoma earthquakes could mostly cease within several years. A study by researchers at Stanford University found that the current, reduced rates of underground injection of wastewater in Oklahoma, if maintained, would lead seismicity in the state to return to baseline levels within “the next few years.” However, the researchers’ model also asserts that there is a reasonable chance of at least one damaging earthquake in that time period. The researchers conclude that increased underground injection of wastewater should not occur in the areas of Oklahoma that have experienced increased seismicity in recent years.

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