23 November 2015

Sidley Shale and Hydraulic Fracturing Report

Vol. 4, No. 47

Topics discussed in this week’s Report include:

  • Intervenors seek immediate appeal of district court’s preliminary injunction of Bureau of Land Management’s (BLM) hydraulic fracturing rules.
  • Maryland: Activists seek a permanent statewide ban on hydraulic fracturing.
  • North Dakota: Majority of oil now shipped by pipeline.
  • University study reports that Utica Shale will continue to support economy.

Federal

Intervenors seek immediate appeal of district court’s preliminary injunction of Bureau of Land Management’s (BLM) hydraulic fracturing rules. Environmental non-governmental organizations (NGOs) filed a motion requesting that a federal judge in Wyoming consolidate his September 2015 preliminary injunction preventing the implementation of the U.S. Department of the Interior’s BLM rules concerning hydraulic fracturing on public lands with a final judgment on the merits. The NGOs, which intervened in the case to support BLM’s rules, seek a final judgment so they can appeal the court’s injunction immediately. The motion argues that the court ruled that BLM lacks authority as a matter of law to promulgate the regulations, thus leaving no reason for further proceedings before the trial court. In the alternative, the motion seeks a stay pending appeal of the preliminary injunction to the Tenth Circuit.

States

Maryland: Activists seek a permanent statewide ban on hydraulic fracturing. A group of environmental activists recently published a statement calling for a permanent ban on hydraulic fracturing in Maryland. The coalition, calling itself Don’t Frack Maryland, called for a legislatively imposed ban, which would be the first permanent, statewide ban in the United States. Western Maryland sits above a portion of the Marcellus formation, with extensive and valuable shale gas deposits. However, to date, no development has been permitted in the state, as the previous administration froze permitting until an advisory commission completed a study on the issue. The new administration, under Governor Larry Hogan (R), supports development, but earlier this year the Democratic-controlled state legislature imposed a two-year moratorium on hydraulic fracturing, which Governor Hogan chose not to veto. The legislation bars the state from issuing drilling permits until October 2017 and requires Maryland’s Department of the Environment to adopt regulations by October 2016.

North Dakota: Majority of oil now shipped by pipeline. A North Dakota agency reported that more oil there was transferred by pipeline than by truck in April 2015, a milestone for the state. That month, over 725,000 barrels of oil were sent off of well sites by pipeline as opposed to approximately 440,000 by truck. Despite this shift, in absolute numbers, the volume of truck traffic in the state has not decreased much over recent years. In April 2012, there were approximately 2,100 oil truckloads per day; in April 2015, there were approximately 2,000 such truckloads.

Studies

University study reports that Utica Shale will continue to support economy. Researchers at Cleveland State University recently released a study showing that the recent drop in oil prices should not have a detrimental effect on economic opportunity in the Utica Shale over the next half decade. On the contrary, the study found that the downstream industry will continue to see Utica Shale products as a source of natural gas liquids, ensuring continued development. The researchers looked at three possible production levels in the Utica Shale over the next five years, finding that under the most likely scenario, production will result in an abundance of ethane needed for petrochemical operations. The study concludes that continued development will contribute to considerable job growth across multiple sectors through the end of this decade.

If you have any questions regarding this Report, please contact us.

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