29 June 2015

Sidley Shale Gas and Hydraulic Fracturing Report

Vol. 4, No. 26

Topics discussed in this week’s Report include:

  • Proposed Oil and Gas Rules Go to the Office of Management and Budget for Review.
  • Federal District Court Stays BLM Rule on Hydraulic Fracturing on Public and Tribal Lands.
  • Pennsylvania: Department of Health Publishes List of Shale Development Complaints.
  • Report Asserts Gas Pipeline Infrastructure Will Meet Electric Generation Needs Under the EPA’s Clean Power Plan.
  • United States May Record Trade Surplus with OPEC in 2015.

Vol. 4, No. 26

Federal

Proposed Oil and Gas Rules Go to the Office of Management and Budget for Review. Environmental Protection Agency (EPA) sent two proposed rules relating to oil and gas development to the White House Office of Management and Budget (OMB) for formal review on June 23. One of the rules would impose direct methane limits on new and modified sources in the oil and gas sector for the first time. The second rule would set agency policy for the circumstances under which emissions from separate facilities are aggregated, subjecting the facilities to stricter regulation as major sources under the Clean Air Act’s New Source Review program. EPA anticipates soliciting public comment on both proposed rules in August, and currently hopes to publish the final methane rule by June 2016.

Federal District Court Stays BLM Rule on Hydraulic Fracturing on Public and Tribal Lands. On June 23, a federal district court judge of the District of Wyoming stayed a U.S. Bureau of Land Management (BLM) rule on hydraulic fracturing on public and tribal lands until early August. The judge stayed the rule, which was set to go into effect on June 24, so that he could have time to assess its legality before it became effective. The rule sets forth requirements regarding chemical disclosure, wastewater management and well integrity, among other topics. The judge ordered BLM to submit the rule’s administrative record to the court by July 22, after which point the court will address the petitioners’ requests for a preliminary injunction to stay implementation before a final decision is made on the validity of the rule. Petitioners and petitioner-intervenors include the Independent Petroleum Association of America, Western Energy Alliance, the states of Wyoming, North Dakota, Utah and Colorado and the Ute Indian Tribe.

States

Pennsylvania: Department of Health Publishes List of Shale Development Complaints. In response to an open records request by the environmental group Food and Water Watch, the Pennsylvania Department of Health released a log of health complaints allegedly linked to natural gas development. The log covered 86 reports by residents, workers, health agencies and doctors ranging from 2011 to 2015. Food and Water Watch has stated that it intends to publish the records. Public health experts have stated that the log, by itself, is not sufficient to evaluate whether the reported symptoms are in fact related to shale development.

Studies

Report Asserts Gas Pipeline Infrastructure Will Meet Electric Generation Needs Under the EPA’s Clean Power Plan. An Advanced Energy Economy Institute study asserted that the currently planned pipeline expansions nationwide will be sufficient to meet the increased use of natural gas for electricity generation which the EPA’s Clean Power Plan (CPP) would be expected to encourage, if the CPP were to become final. The Institute looked at pipeline expansion models between 2016 and 2030 without the CPP and then determined the additional incremental capacity likely needed due to the CPP. The researchers reported that about 70 percent of the projected additional required infrastructure is in planning stages, and an estimated three to seven percent more spending than currently planned would be necessary to meet the demands of the CPP.

Business

United States May Record Trade Surplus with OPEC in 2015. The United States is on track to record annual trade surplus with the Organization of Petroleum Exporting Countries (OPEC) for the first time in decades, and possibly ever. The United States has never run an annual surplus with OPEC nations collectively for as long as statistics have been kept. Rather, trade deficits generally grew from 1985 to 2011, with the trend towards a surplus growing in 2014. Experts say that the shale oil boom is a large reason for the reversal, since it has enabled the United States to reduce imports. Increased Canadian crude production could also be a factor in the change. The goods trade deficit with OPEC peaked at almost $178 billion in 2008.

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