Energy & Environmental Law Blog : Energy & Environmental Lawyer & Attorney : Vorys, Sater, Seymour and Pease Law Firm : Oil, Gas & Green Technology

The Texas Commission on Environmental Quality (TCEQ) has issued tougher air emissions regulations for producers, effective April 1, 2011, for Barnett Shale areas, according to this article in the Houston Chronicle.  "TCEQ commissioners voted Wednesday to beef up air emission limits on toxic chemicals associated with natural gas drilling and required producers to do expanded testing of their drilling sites."

For a copy of the rules and related materials, see here (Rule Project No. 2010-018-106-PR).

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The WSJ has a short article on possible legislative changes for West Virginia producers:  "One pending bill proposes rules meant to address these various concerns. Crafted by a House-Senate interim committee that studied the issue over the past year, it also proposes hefty hikes for drillers."  Those proposed hikes include a $15,000 drilling permit fee!

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The NYT is reporting on Carol Browner's imminent departure from her position as the administration's climate czar:  "Carol M. Browner, the White House coordinator for energy and climate change policy, will leave the administration shortly, officials confirmed Monday night. Her departure signals at least a temporary slowing of the ambitious environmental goals of President Obama’s first two years in the face of new Republican strength in Congress."

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The Philadelphia city council is set to vote against Marcellus Shale development, according to this article in the Philadelphia Inquirer.  "Though anti-drilling activists are hailing the measure as "bold," its effects are largely symbolic because the city has limited legal means to influence drilling activity outside its jurisdiction. The nearest drilling is taking place more than 100 miles from the city limits, and there is no gas development now in the Delaware River watershed, from which the city draws its drinking water."

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The WSJ is reporting that ExxonMobil's Outlook for Energy is optimistic for natural gas:  "Global demand for natural gas, commonly used for heating homes and businesses and for generating electricity, will increase 2% a year through 2030, the Texas oil giant says, raising the 1.8% estimate it made last year."  Interesting.  (Note:  Subscription may be required for article.)

A copy can be found here.

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WXVT15 is reporting that Arkansas state highway officials have lowered weight limits on several highways where producers are drilling in the Fayetteville Shale.  Hmmm ... Is there a method for getting a waiver if you pay a fee?

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The West Virginia MetroNews is reporting on a new study looking at the economic impact of oil and gas drilling activities on West Virginia:  "A study from West Virginia University's Bureau of Business and Economic Research labels the impact on the state's economy from natural gas production in the Marcellus Shale 'profound' and says that impact will only continue to grow."  (Emphasis is ours.)

For a copy of the study, see here (The Economic Impact of the Natural Gas Industry and the Marcellus Shale Development in West Virginia in 2009).

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We've noted before the views of ProPublica on natural gas drilling (see here).  Well, they're at it again in a new article seeking to challenge the environmental benefits of natural gas in terms of greenhouse gas emissions.  It does point out the threat to small producers, however:  "In November the EPA announced new greenhouse gas reporting rules for the oil and gas industry. For the first time under the Clean Air Act, the nation’s guiding air quality law, thousands of small facilities will have to be counted in the pollution reporting inventory, a change that might also lead to higher measurements."  After they're counted, can regulation be far away?

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The report recently issued by the presidential commission appointed to investigate last year's oil spill in the Gulf of Mexico may find rough seas ahead, according to this article in the NYT.  For example:  "'No, that's a bad idea,' Hastings [Chair of the House Natural Resources Committee] said of the suggestion to raise fees on industry to pay for more oversight. 'Listen, the amount of revenue that's coming in from the [outer continental shelf] far exceeds what it costs to regulate that industry. It seems to me that the easiest place if there's going to be more costs -- and I acknowledged there could be more costs involved -- it should come out of existing revenues that are generated with the OCS leasing right now.'"

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The Delaware River Basin Commission (DRBC) has published draft natural gas development regulations (see here).  From the DRBC's Fact Sheet:  "[T]his Article requires that water used for natural gas development projects must come from water sources that have been approved by the Commission for use for natural gas development. ***. A streamlined approval process is provided that encourages the use of existing Commission-approved water sources to minimize the need to construct and operate new water sources."

From a quick look, it appears as if the DRBC is looking to limit development through, among other things, significant bond requirements and permit fees.

Comments are due:  March 16, 2011.

[Update:  Public hearings have been scheduled for middle/late February (moved up).]

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The Intelligencer has an interesting article on natural gas processing in West Virginia.

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The Star-Gazette is reporting that the New York State Department of Environmental Conservation may allow hydraulic fracturing and increased drilling on state forest lands.  "The Strategic Plan for State Forest Management, finalized on Dec. 29, will allow the state to lease the gas rights to the Marcellus Shale formation beneath certain state-owned forest parcels, but only after public hearings are held on each lease offer."

For a copy of the Strategic Plan, see here.  It even has an interesting list of current state oil and gas leases ...

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The Dispatch is reporting that Governor Kasich is meeting with Ohio EPA to set forth his vision for the next four years:  "The 1,200 people who work at the Ohio Environmental Protection Agency don't have to wonder what Gov. John Kasich has planned for them. He and newly appointed agency Director Scott Nally are going to tell them this morning during a meeting at the Vern Riffe Center."

Not unusual, but still interesting.

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The Akron Beacon Journal is reporting on a debate recently held on hydraulic fracturing:  "What evolved was a battle of dueling experts Thursday, as four speakers debated whether a controversial means used to extract natural gas, called hydraulic fracturing or fracking, is safe or whether it poses a threat to drinking-water wells."

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The idea of drilling for oil and gas in state parks is getting another look, according to this article (with related video) from NBC4.  "David Mustine, the new director at the Ohio Department of Natural Resources, has been quoted as saying he is open to the idea of drilling in state parks and other areas to help pump money back into the state."

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The Pittsburgh Post-Gazette has an interesting article discussing recent natural gas price estimates from the U.S. Department of Energy.  A sample:  "As a result [of the growth of supply from shale formations], the Energy Department says the price of natural gas at the wellhead, before transportation and other costs are added, will remain less than $5 per thousand cubic feet through 2022. (A thousand cubic feet is roughly equivalent to a million BTUs.) Going further out, to the year 2035, it has lowered its estimate to $6.53, from an $8.19 estimate a year ago."

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That's the most recent estimate of North Dakota's oil reserves in the Bakken shale according to this Houston Chronicle article.  "Eleven billion barrels is double the previous estimate of reserves, and could eventually push North Dakota into second place among the states for oil production, leapfrogging over California and Alaska and trailing only Texas. We won't know for sure for a couple of years, but this is considered likely by experts, according to an Associated Press story published in the Chronicle ("North Dakota oil patch larger than expected: If estimate is correct, state might soon pass all but Texas in production," Page B1, Jan. 3)."

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The San Diego Union-Tribune has an article discussing concerns over air emissions from LNG expressed by local officials (at least one of whom is a member of the California Air Resources Board):  "County officials say that San Diego Gas & Electric, which operates the region’s natural gas pipelines and distribution lines, is allowing the import of the extra-polluting gas and hasn’t taken steps to minimize its impact."  The issue - it's hotter than other gas transported by the local utility.

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The Intelligencer is reporting that Dominion Transmission, Inc., is planning on constructing a natural gas processing plant along the Ohio River in West Virginia:  "The facility is designed to phase in service for processing up to 300,000 cubic feet per day of natural gas. Fractionation capacity for up to 38,000 barrels per day of liquid byproducts of natural gas."

For the Dominion press release, see here.

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U.S. EPA has announced that it is going to defer greenhouse gas permitting requirements for biomass-fired and other biogenic sources to promote them as an energy source.  "'We are working to find a way forward that is scientifically sound and manageable for both producers and consumers of biomass energy. In the coming years we will develop a commonsense approach that protects our environment and encourages the use of clean energy,' said EPA Administrator Lisa P. Jackson. 'Renewable, homegrown power sources are essential to our energy future, and an important step to cutting the pollution responsible for climate change.'"  (Emphasis is ours.)  Such as natural gas?

Reminds us of the statement:  "It's good to be the king!"  - Mel Brooks, History of the World, Part I

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The Houston Chronicle is reporting that the U.S. Court of Appeals for the District of Columbia has rejected Texas' bid to prevent U.S. EPA from regulating greenhouse gases in the state.  "The state had asked the U.S. Circuit Court of Appeals for the District of Columbia to delay the Environmental Protection Agency’s plan to seize control of permits for greenhouse gas emissions from power plants and other large industrial sources in Texas.  But the three-judge panel concluded that Texas officials have not met 'the stringent standards required for a stay' while the court reviews the EPA’s takeover of the state’s permitting authority."

Texas has refused to implement EPA's regulations.

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We reported previously on the new heads of the Ohio Department of Natural Resources and Ohio EPA (see here).  Now for another state - New York.  The NYT is reporting that NY Governor Cuomo has nominated Joseph Martens as the new head of the state's Department of Environmental Conservation.  Will it be good for NY's energy industry?  Well ...  "The announcement of Mr. Martens’s appointment drew praise from groups like the Natural Resources Defense Council. 'Joe Martens’ experience, judgment, and temperament make him the right person at the right time to meet the challenges that D.E.C. faces,' said Ashok Gupta of the natural resources council. 'He has the support and key relationships with the business and environmental community that will allow him to hit the ground running.'”

We'll see.

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USEPA issued today revisions to its guidance which describes when cleaning products are considered pesticides under FIFRA.  For example, this guidance would apply to claims related to the cleaning of algae or mold stains.  See here for the revisions.

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The NYT has an article recognizing the use of carbon dioxide to recover energy resources:  "Last month, Texas air-quality regulators approved crucial permits for two coal-fired power plants that will capture their carbon dioxide emissions and sell them for use in nearby oil fields. Also in December, a major new pipeline operated by Denbury Resources of Plano began ferrying carbon dioxide from Mississippi to oil fields near Houston."

Better late recognition than never.

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The American Petroleum Institute (API) has released a report urging increased access to areas presently off limits to E&P activities:  "“Our industry contributes more than $1 trillion to the U.S. economy and provides most of the energy that heats our homes, fuels factories and offices, and gets people to home and work. Policy decisions seeking to burden this critical industry with punitive taxes and overly restrictive rules do nothing to boost the economy or enhance energy security. Instead, they cost jobs, damage the economy and compromise our national security. (quoting Jack Gerard, President and CEO, API)."

For more, including a copy of the report, see here.

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Ohio EPA DAPC emailed the following notice of proposed rulemaking:

"Notice is hereby given that the Ohio Environmental Protection Agency, Division of Air Pollution Control (DAPC) is proposing new Ohio Administrative Code (OAC) rules 3745-31-34 and 3745-77-11 to the Joint Committee on Agency Rule Review (JCARR). The intent of these new rules is to adopt rules that are consistent with, and no more stringent than, the Federal Greenhouse Gas Tailoring Rule (75 FR 31514, June 3, 2010). and limit authority to permit greenhouse gases under the federally approved Ohio New Source Review and Title V operating permit regulations to the levels established in the greenhouse gas tailoring rule (75 FR 82536, December 30, 2010 and 75 FR 82254, December 30, 2010 respectively).

"These rules are available on Ohio EPA's Web page for electronic downloading. The URL is: http://www.epa.ohio.gov/dapc/regs/regs.html . Questions regarding accessing the web site should be directed to Arunee Niamlarb at 614-728-1342; other questions or comments about these rules should be directed to Mike Ahern at Ohio EPA, (614) 644-3631, mike.ahern@epa.state.oh.us or mailed to Mike Ahern, Ohio EPA, Division Air Pollution Control, Lazarus Government Center, P.O. Box 1049, Columbus, Ohio 43216-1049."
 

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USEPA issued a final rule ordering manufacturers and importers of 19 chemicals used to make a wide range of products to conduct laboratory studies to provide basic health and environmental effects information about those chemicals.  Manufacturers of the chemicals would have to submit study results from their research to USEPA by March 2012.

By February 7, 2011, manufacturers must state their intent to test the chemical(s) they produce or submit an exemption application.

If manufacturers of the 19 chemicals fail comply with the regulation, other manufacturers—such as those that produce the chemicals as byproducts of their manufacturing process, as impurities in other chemicals, or that process the chemicals— could be required to provide the data. However, at this time the regulations do not extend to entities other than those manufacturing the 19 chemicals.  There will be a later Federal Register notice specifying the chemicals and tests needed if none of the traditional manufacturers notify the agency of its intent to conduct the required tests.

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The Houston Chronicle is reporting on the opportunities presented by the Eagle Ford shale in S. Texas:  "That's the site of the Eagle Ford shale formation, a vast underground network of dense rock layers, discovered only recently and now thought to be one of the nation's biggest oil and gas fields."

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The Columbus Dispatch is reporting that Governor-elect Kasich has named the new Directors of Ohio EPA and the Ohio Department of Natural Resources:  "Gov.-elect John Kasich today picked Indiana native Scott Nally to run the Ohio Environmental Protection Agency and former American Electric Power executive David Mustine as head of the Ohio Department of Natural Resources."

For more, see this article from the WSJ:  "Kasich said he expected former business executive David Mustine to play a key role in exploring how Ohio would be impacted by the exploration of the Marcellus Shale."

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This headline says it all:  "Kasich hopes for gas bonanza from Marcellus Shale."  Ohio's oil and gas industry has a lot to offer the state economy, and this article from the Columbus Dispatch suggests that Governor Kasich recognizes it.

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