24 January 2017

Sidley Shale and Hydraulic Fracturing Report

Vol. 6, No. 4

Topics discussed in this week’s Report include:

  • Montana’s chemical disclosure rule challenged.
  • New PHMSA rule amended pipeline incident notification requirements.
  • Gas pipeline projects received FERC approval.

Montana’s chemical disclosure rule challenged. A group of Montana environmental and health advocates and landowners filed a lawsuit last week challenging a state rule regulating the disclosure of chemicals used in hydraulic fracturing operations. The rule, promulgated in 2011 by the Board of Oil and Gas, allows hydraulic fracturing operators to withhold the identity of specific chemicals that are considered to be trade secrets. The lawsuit alleges that the rule does not provide adequate opportunities to scrutinize and challenge trade-secret claims. The plaintiffs argue that operators should have to support their trade-secret claims and disclose chemical ingredients to state regulators who can assess the validity of the claim. Environmental groups attempted to overturn the rule last year, but state regulators denied their petition. This lawsuit directly challenges that decision.

New PHMSA rule amends pipeline incident notification requirements. In an effort to improve notification response times, the Pipeline and Hazardous Materials Safety Administration (PHMSA) announced a new rule that will require pipeline operators to report spills by phone or electronically within an hour of confirming the incident. The rule will include operator qualification provisions and require additional drug and alcohol testing requirements following an accident. The rule was announced on Jan. 19. It will take effect 60 days after publication in the Federal Register.

Gas pipeline projects receive FERC approval. On Jan. 19, the Federal Energy Regulatory Commission (FERC) approved the Leach XPress and Rayne XPress gas pipelines proposed by TransCanada Corp. in the Utica and Marcellus shale plays by issuing certificates of public convenience and necessity. In October, the U.S. Environmental Protection Agency (EPA) had questioned FERC’s assessment of the pipelines’ greenhouse gas and climate change effects, but EPA is not expected to oppose the projects following last week’s presidential transition. TransCanada estimates that the projects will total approximately $1.8 billion in investment and plans to begin construction on the projects in February. The pipelines have a targeted in-service completion date of Nov. 1.