17 May 2017

Sidley Shale and Hydraulic Fracturing Report

Vol. 6, No. 20

Topics discussed in this week’s Report include:

  • U.S. Senate blocked repeal of Interior Department’s methane emissions rule.
  • FERC blocked certain natural gas pipeline work following mud spill in Ohio wetland.
  • Settlement extended moratorium on oil and gas leases on public land in California.

U.S. Senate blocks repeal of Interior Department’s methane emissions rule. Republican Sens. John McCain of Arizona, Susan Collins of Maine and Lindsey Graham of South Carolina joined Senate Democrats on Wednesday, May 10, to block a resolution to repeal the Bureau of Land Management’s (BLM) methane emissions rule. The rule, finalized during the last weeks of President Barack Obama’s administration, requires oil and gas companies to collect methane that historically has been flared at drilling sites on federal land. The rule aims to reduce methane emissions by an estimated 180,000 tons per year. Industry groups have criticized the rule as unnecessary and voiced concerns about its cost and impact on U.S. energy development and job creation, while environmental groups have hailed it as an important step in the fight against climate change. The resolution, which passed in the U.S. House of Representatives at the end of January, would have made it difficult for BLM to issue similar regulations in the future. Following the Senate vote, Interior indicated that it will shift focus to revising and replacing the current rule.

FERC blocks certain natural gas pipeline work following mud spill in Ohio wetland. The Federal Energy Regulatory Commission (FERC) has directed Energy Transfer Partners LP (ETP), the owner of the natural gas Rover pipeline, not to conduct horizontal drilling operations along several areas of the pipeline until Rover receives further authorization from FERC staff. FERC’s action follows a report by Rover to FERC’s Compliance Monitor that two million gallons of drilling mud had been released, covering approximately six acres of wetland near the Tuscarawas River outside Akron, Ohio. Rover is a $4.2 billion pipeline project from West Virginia and Pennsylvania to Michigan. ETP has stated that some spills of the nontoxic mud used as lubricant in drilling operations were contemplated in its permit application and have been unintentional. FERC blocked further drilling while it investigates the spill, which regulators called “several orders of magnitude greater” than other spills and incidents associated with the project. FERC also will require the company to use a third-party auditor to review drilling operations and a plan for restoration of the wetlands.

Settlement extends moratorium on oil and gas leases on public land in California. BLM and environmental groups reached a settlement in early May that will bar the federal government from leasing oil and gas drilling rights on public lands. The lawsuit, filed by the Center for Biological Diversity and Los Padres Forest Watch in 2015, alleged that BLM’s Bakersfield Resource Management Plan was inadequate under the National Environmental Policy Act (NEPA). The plan evaluates the environmental impact of oil and gas development on more than one million acres in California’s Central Valley. The settlement requires BLM to revise the plan to correct the NEPA violations. BLM will also prepare a supplemental environmental impact statement that will evaluate hydraulic fracturing effects on groundwater and public health. Until the analysis is complete, BLM will not lease the land for development.