Fracking Insider Readers: We are pleased to bring you Volume 25 of our State Regulatory Roundup, including updates in California, North Carolina, and Pennsylvania. 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 – In response to recent litigation, BLM is instituting changes to the environmental analyses underlying lease and development plans that may utilize hydraulic fracturing. BLM has planned an environmental impact statement (EIS) and amendment to the resource management plan of the BLM’s Hollister Field Office. On August 5th, BLM published a notice of intent to prepare an EIS, and to amend the resource management plan for leasing and development on federal lands in central California. BLM says the EIS will focus on well completion and stimulation, including hydraulic fracturing and the use of horizontal drilling. The published notice initiates the public scoping process for the EIS, and BLM will accept comments until October 4th, 2013.

North Carolina – Gov. Pat McCrory (R) signed energy legislation on July 29th that retains a moratorium on the issuance of permits for hydraulic fracturing until appropriate regulations are developed for the practice and the legislature approves of such permitting. The governor had sought a rollback of hydraulic fracturing permitting restrictions, but signed the bill anyway, declaring that “[the] legislation is a step in the right direction, but it does not go far enough.” S.B. 76 directs regulators to develop hydraulic fracturing regulations, craft a single permit covering such activities, and establish an appropriate severance tax rate and registration requirements for “landmen” that are involved in business deals pertaining to oil and mineral rights. The legislation also urges that governor to work with his counterparts in South Carolina and Virginia to develop an offshore energy policy compact, and establishes a $250 million emergency response fund for spills resulting from offshore exploration and production.

Pennsylvania – The state has revised its air quality permit criteria, and will no longer grant unconditional exemptions to operators of unconventional natural gas wells for their air quality plans and well site permits. Under the revised technical guidance, the state Department of Environmental Protection may still grant permitting exemptions to operators that implement controls and practices more stringent than federal regulation. Specific measures that must be taken to qualify for an exemption include:

  • installation of leak detection and repair measures to the entire well site, not just to storage vessels;
  • deadline of fifteen days to repair leaks, unless the site is shut down or the operator is in the process of acquiring replacement parts;
  • more stringent control of emissions of volatile organic compounds and hazardous pollutants than what federal rules require;
  • nitrogen oxides emission limits of 100 pounds per hour, half a ton per day, and 6.6 tons per year. (Federal rules do not currently limit nitrogen oxide emissions in unconventional gas production);
  • short-term or emergency gas flaring only. (Federal rules allow unrestricted flaring until January 1st, 2015.