Fracking Insider Readers: We are pleased to bring you Volume 44 of our State Regulatory Roundup, including updates in California, Louisiana, and Maryland. As we explained in earlier volumes, we designed the Roundup to provide quick overviews on state regulatory activity. If you have any questions on any of these summaries, please do not hesitate to ask.
California – New regulations took effect July 1 that will, for the first time, require permitting for hydraulic fracturing and other high-pressure well stimulation activities. The new rules replace temporary regulations that have been in place since January 1, 2014, and were prompted by passage of SB 4 in 2013. (See our previous coverage of SB 4 here and here.) Applications will be reviewed and permits issued by the Department of Conservation’s Division of Oil, Gas and Geothermal Resources, but the State Water Resources Control Board will also review applications. The applications require an engineering review and evaluation of well integrity, as well as specific information about fluids that will be injected, groundwater monitoring, and water management plans. Well operators must inform neighboring property owners and tenants of planned well stimulation activities, and test neighboring water wells, if requested. The regulations include criteria for monitoring and testing water quality, reporting well stimulation treatments, pressure testing wells, monitoring seismic activity, and reporting water use and disposal methods.
Louisiana – Helis Oil and Gas Co. has paused its hydraulic fracturing operations in St. Tammany Parish while officials appeal a ruling that prohibited the parish from using its zoning rules to prevent the company from drilling a well. The ruling, by Judge William Morvant of the Louisiana 19th District Court, said that the parish could not use its zoning rules to block Helis from drilling its state-permitted well. A cease and desist order was issued by the parish on July 20 at the drilling site after Judge Morvant ruled that the parish could seek an appeal to suspend the effect of his earlier judgment.
Maryland – Gov. Larry Hogan (R) refused to veto a bill that includes a two-year moratorium on hydraulic fracturing in the state, beginning on October 1, 2015. The Protect Our Health and Communities Act (SB 409) directs the Department of the Environment to adopt regulations on hydraulic fracturing by October 1, 2016, but those regulations would not become effective until one year later, effectively prohibiting hydraulic fracturing for two years.
A second bill affecting potential hydraulic fracturing operations in the state received an unfavorable 5-14 vote in the House Environment and Transportation Committee, and was not advanced. HB 458 would have implemented a strict liability standard on operators, under which companies could be held liable for a broad array of alleged harms without any demonstration of negligence. Operators would also have been required to disclose the proprietary constituents in hydraulic fracturing fluids to plaintiffs irrespective of relevance, and to comply with more stringent insurance mandates. (See our previous coverage of these bills here. SB 409 is a companion bill to HB 449.)