Sidley Shale and Hydraulic Fracturing Report - 12 July 2016

Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000. VOLUME 5, NO. 28, JULY 12, 2016 SIDLEY UPDATE Shale and Hydraulic Fracturing Federal Congress holds contentious hearing on land planning changes. U.S. Bureau of Land Management (BLM) officials faced significant criticisms from members of Congress representing Western states over its proposed rule to change how it plans to use federal lands. BLM has touted the proposal, coined “Planning 2.0,” as a way to reduce controversies about competing land uses, such as recreation, oil and gas development, and grazing. If finalized, the rule would cover all of the federal lands BLM manages, representing approximately 10 percent of all federally owned lands and 30 percent of U.S. mineral rights. The hearing, convened by the House Committee on Natural Resources’ Subcommittee on Oversight and Investigations, saw Western state representatives and witnesses from the Western Governors’ Association criticize the proposed rule as eliminating any meaningful role for state and local governments over how federal lands within their borders are managed. Critics also argued that the proposal would reduce the role of BLM state directors and field offices and consolidate authority in BLM headquarters to accommodate environmental groups seeking to restrict or block natural resource development on public lands. Litigation Environmental groups seek to intervene in Delaware Basin suit. The Delaware Riverkeeper Network moved to intervene in a suit between a Pennsylvania landowner and the Delaware River Basin Commission (DRBC) over the ongoing moratorium imposed by the DRBC on shale gas development within the Basin. A multi-state body with authority over the Delaware River’s 13,500-square-mile watershed, the DRBC imposed a de facto drilling moratorium in 2010 while it drafted rules governing hydraulic fracturing. Wayne Land & Mineral Group, which owns mineral rights in Pennsylvania, sued the Commission seeking a declaratory judgment holding that it lacks the power to block drilling. The Delaware Riverkeeper Network claims that hydraulic fracturing would threaten the drinking water supply for 17 million people if natural gas exploration and development were allowed in the watershed. Studies Study claiming hydraulic fracturing health risks retracted. The authors of a study touting that air pollution from hydraulically fractured gas wells increases the risk of cancer and respiratory disease have retracted their paper. In the May 2015 paper, published in Environmental Science and Technology, authors Kim Anderson of Oregon State University and Erin Haynes of the University of Cincinnati blamed gas wells for SIDLEY UPDATE Page 2 exposing nearby residents to carcinogenic polycyclic aromatic hydrocarbons (PAHs) at levels above the Environmental Protection Agency’s one-in-one-million lifetime cancer risk standard. The study garnered widespread media attention and was lauded by environmental groups while industry groups heavily criticized its methodology and the authors’ association with anti-fracking groups. The authors now claim that the finding was the result of a “spreadsheet error” that, once corrected, showed that PAH concentrations actually correlated with a 0.04-in-one-million cancer risk. 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