In the last few months, the federal government has ramped up criminal enforcement actions against oil and gas drilling companies for violations of the Clean Water Act, and other environmental statutes. Alleged violations occurred in Ohio, Louisiana, North Dakota, Oklahoma, Texas and West Virginia.
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In a 9-0 decision in favor of the Los Angeles County Flood Control District (the District), the U.S. Supreme Court reversed an opinion from the 9th Circuit yesterday, holding water flowing from an improved segment of a navigable waterway into an unimproved segment of the same waterway does not constitute a “discharge of a pollutant” under the Clean Water Act.
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The United States Court of Appeals for the Eleventh Circuit recently issued a decision limiting the ability of plaintiffs to recover attorneys’ fees under the Clean Water Act when their trial court victory is mooted by new regulations. In the case before the Eleventh Circuit, Friends of the Everglades v. South Florida Water Management District, No. 11-15053, plaintiffs sued to require the water management district to obtain a NPDES permit before transferring allegedly polluted canal water into Lake Okeechobee. The district court issued an injunction in plaintiffs’ favor, which the water management district appealed. While the appeal was pending, EPA issued a new rule that confirmed NPDES permits are not required for water transfers such as the one at issue here. Also during the pendency of the appeal, one of the plaintiffs filed a motion for attorneys’ fees pursuant to the Clean Water Act
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On March 30, 2012, the Department of Justice and Range Resources jointly dismissed a Safe Drinking Water Act enforcement case that DOJ brought against Range Resources in January 2011. The suit sought to enforce an Imminent and Substantial Endangerment Administrative Order that the Environmental Protection Agency (EPA) had issued in December 2010 pursuant to the Safe Drinking Water Act. The EPA order, which Range challenged, had alleged that gas wells drilled by Range were responsible for the presence of certain chemicals in two nearby private water wells.
Range filed a petition for review of the order in the Fifth Circuit Court of Appeals, arguing that EPA had not adequately investigated whether the company’s wells could be responsible for the contamination before issuing its order. The district court stayed the enforcement case pending the outcome of this appeal. The Fifth Circuit held oral argument in October 2011, but had not yet issued a decision when the parties filed the voluntary dismissal.
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Today, the United States Supreme Court, in Sackett v. U.S. Environmental Protection Agency, held that a compliance order issued by the U.S. Environmental Protection Agency (EPA) for alleged violations of the Clean Water Act (CWA) was a “final agency action” under the Administrative Procedure Act (APA) and was judicially reviewable as the CWA does not preclude judicial review under the APA. Click on the following link for a copy of the full opinion: http://www.supremecourt.gov/opinions/11pdf/10-1062.pdf
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Today, the United States EPA released its “Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources.” EPA will examine the full cycle of the hydraulic fracturing process according to the press release. This means the study will focus on five key areas: water acquisition, chemical mixing, well injection, flowback and produced water, and wastewater treatment and waste disposal.
The initial findings of the study will be released to the public in the early part of 2012, while the final report will be issued in 2014.
Industry members believe the EPA is overextending itself and going beyond what Congress requested them to do. While environmentalists believe the study doesn’t believe it does enough and avoids subjects like public safety and air quality around well fields.
For more information on the EPA’s plan for hydraulic fracturing click here.
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On Thursday, the United States Environmental Protection Agency (EPA) announced plans to begin regulating wastewater discharges associated with hydraulic fracturing and shale gas production. The rulemaking process, which will begin in 2014, is geared towards developing standards for the disposal of wastewater from shale gas drilling.
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Hydraulic fracturing could be suspended in the state of Ohio at least until 2014 if House Bill 345 and Senate Bill 213 in Ohio’s General Assembly last week, pass. These Bills establish “a moratorium on horizontal stimulation of oil and gas wells” in Ohio until the USEPA publishes its report on the relationship of hydraulic fracturing to drinking water resources. The moratorium would also remain in effect until Ohio’s Division of Oil and Gas Resources determines how the state will address any issues raised by the EPA report. For the Ohio hydraulic fracturing industry, this could mean a halt in operations at least until the year 2014. According to the most recent proposed timeline for the study on the EPA’s website, EPA’s initial research results are expected by the end of 2012 with a goal for a report set for 2014. EPA commissioned the study in March 2010 following a Congressional directive to study the relationship between drinking water and hydraulic fracturing.
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Pennsylvania Governor Corbett announced his Marcellus Shale proposal which he believes will “make sure that Pennsylvania’s economy benefits from developing this new source of wealth and energy independence, while also ensuring that the environment and natural beauty of this state are protected.” The plan incorporates recommendations of the Marcellus Shale Advisory Commission. As stated in the PaDEP press release, proposed standards include:
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At a meeting of the Ground Water Protection Council (GWPC) last week, the Acting Director of EPA’s Drinking Water Protection Division said that industry should expect a broad definition of diesel fuel included in EPA’s upcoming draft guidance for permitting hydraulic fracturing operations using diesel fuel. EPA is authorized to permit fracturing using diesel fuel under the Safe Drinking Water Act (SDWA) Class II UIC program. This is the only fracturing process that EPA has authority to regulate.
The proposed definition would encompass substances with physical and chemical characteristics of diesel, specifically BTEX compounds such as benzene, toluene, ethylbenzene and xylene. This larger scope may be problematic for companies using BTEX compounds in their fracturing fluid in two ways. First, some states’ Class II programs—such as Montana’s—actually prohibit injection pressures high enough to cause fracturing of the rock formation. A broader definition in EPA’s guidance would have the impact of prohibiting fracturing using BTEX compounds in such states. Second, in states that do allow sufficient injection pressures, some companies may be deterred by the 30 day public comment periods on permits that the Class II UIC program requires.
EPA will submit its draft guidance to the White House Office of Management & Budget (OMB) for review within a few weeks. OMB review takes at least 90 days, pushing the expected timeline for the guidance’s release into early next year.
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Earlier this week the New York Department of Environmental Conservation(DEC) released proposed hydraulic fracturing regulations. The draft rule would allow for point-source discharges from hydraulic fracturing wells into state waters. It also sets up other regulations for the fracturing process, which were indicated earlier this month when the DEC released its draft SGEIS, which we blogged about previously. Specifically for the construction phase of the project it requires “the owner/operator must develop and implement a Construction SWPPP in conformance with technical standards or demonstrate equivalency.”
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The Railroad Commission of Texas issued its proposed rule for hydraulic fracturing chemical disclosure last week in the Texas Register. The proposed rule is part of the implementation process of HB 3328, which Governor Perry signed into law earlier this year. Many consider it to be landmark hydraulic fracturing legislation. The rule requires companies to submit their chemical ingredients and the volume of water used in the fracturing fluid to the website FracFocus, a joint project of the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. The proposed rule is open to public comment until October 11, 2011.
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Last week was full of news on state-level hydraulic fracturing chemical disclosure legislation. Montana succeeded in its effort while California stalled. What does this whirlwind of developments mean for the oil and gas industry?
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In a unanimous per curiam decision issued on June 28, 2011, the U.S. Court of Appeals for the 11th Circuit reversed a controversial July 17, 2009 order by the multi-district litigation (MDL) court presiding over the tri-state water war between Alabama, Florida, and Georgia. That 2009 order imposed a July 2012 deadline for the states to arrive at a water-sharing agreement over the Appalachicola-Chattahoochee-Flint (ACF) River Basin or the Atlanta metropolitan area risked losing much of its primary water supply. The 11th Circuit’s opinion contains two key rulings:
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On Monday, July 12, Interior Secretary Ken Salazar again ordered a pause in deepwater drilling, a moratorium that applies to all drilling from floating rigs. This order is suspected to render moot pending litigation concerning a like moratorium that was issued in May. For more information, see http://www.politico.com/morningenergy/ or contact Renee Guzman-Simon at renee.guzman-simon@alston.com.
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Never mind that it’s lined in concrete and dry for up to five months of the year, the Los Angeles River has received a huge boost in its image and its legal status. On July 7, 2010, U.S. EPA Administrator Lisa P. Jackson designated the river as a navigable water under the federal Clean Water Act. That decision overturned an earlier draft determination by the U.S. Army Corps of Engineers which found that only four miles of the river could be considered traditionally navigable.
What is navigable under the CWA includes not only water bodies that are navigable in fact but also tributaries of navigable waters and non-navigable intrastate waters whose use or misuse could affect interstate commerce. 40 Fed. Reg. 31,320-21 (1975). That said, a determination of navigability has been complicated since the Supreme Court’s decision in United States v. Rapanos, 547 U.S. 715 (2006), where the court narrowed the definition of navigable waters. As a navigable water now, the Los Angeles River will not need to undergo Rapanos analysis and will be entitled to broader protections under the CWA. The decision will protect not only the river itself but also tributary streams and wetlands that make up the LA River watershed. EPA and the Army Corps of Engineers will have the ability, along with state and city regulators, to enhance pollution controls for the river.
In a press release related to the decision, EPA explains that "[t]he public regularly uses the river for recreational boating, fishing, educational activities, bird watching, artistic festivals, and other community activities." Except for those who have lived in Los Angeles since 1960, most people probably do not remember when the Los Angeles River was last used recreationally. In fact, the river was once a real thriving river without graffiti-ridden concrete barriers. Destructive flooding prior to the 1930s prompted the Army Corps of Engineers to channelizing the river. Today, only a few parts of the river are unpaved. (http://dpw.lacounty.gov/wmd/watershed/LA/History.cfm) In recent years, environmental groups have kayaked the river in protest of the river being regarded primarily as a flood control channel. http://www.laweekly.com/2008-07-31/news/l-a-river-really-floats-their-boats/).
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The State of California is considering listing bisphenol A under Proposition 65. Bisphenol A is a chemical produced in large quantities for use primarily in production of polycarbonate plastics and epoxy resins. Hence, it is an ingredient found in food and drink packaging, compact discs, impact-resistant safety equipment and medical devices. It is used in linings of metal products such as food cans, bottle tops, and water supply pipes, as well as some dental sealants.
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This advisory discusses the “historic” state legislation enacted in early November 2009 aimed at improving the reliability of California’s water supplies. This package of bills covers a wide range of important matters affecting the quality and quantity of the state’s water supply. But for those in the real estate development community, one burning question remains—can the legislation help support the Water Supply Assessments (WSAs) required for significant development projects?
The advisory is provided in PDF on the Alston & Bird web site: http://www.alston.com/eld_advisory_ca_wsa
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Bruce Pasfield was quoted in a Foxnews.com article discussing attempts by environmental groups to highlight and curtail the dumping of raw sewage by cruise ships into waters just off shore. He notes that such groups finally have “an administration and Congress that are amenable to [their perspective].” He continued: “From what I can see, this kind of legislation has been tried, unsuccessfully, in a number of legislative sessions.”
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