Vol. 6, No. 12

Topics discussed in this week’s Report include:

  • Trump administration informed Tenth Circuit that it will begin a new rulemaking to rescind the BLM rule on hydraulic fracturing.
  • Appeals court denied tribes’ emergency request to prevent operation of the Dakota Access pipeline.
  • Pennsylvania Supreme Court weighs the extent to which local zoning laws may regulate privately owned oil and gas wells.
  • California poised to adopt extensive methane regulations for oil and gas industry.

FEDERAL

Trump administration informs Tenth Circuit that it will begin a new rulemaking to rescind the BLM rule on hydraulic fracturing. Following a request by the Tenth Circuit to clarify its position on the U.S. Bureau of Land Management’s regulation governing hydraulic fracturing on federal and tribal lands (BLM Rule), the Trump administration formally notified the U.S. Court of Appeals for the Tenth Circuit that it intends to begin a new rulemaking to determine whether to rescind the BLM Rule and asked the court to cancel the argument and hold the case in abeyance during the rulemaking. Several states, tribes and industry groups had challenged the BLM Rule shortly after it was finalized in 2015. The case is now in front of the Tenth Circuit, on appeal from a district court decision in June 2016 that struck down the BLM Rule and held that the Department of the Interior (DOI) lacks authority to regulate hydraulic fracturing. Earlier this month, the Tenth Circuit requested clarification from the administration regarding its position on the BLM Rule in order to determine whether to proceed with oral arguments scheduled for this week. The court has now canceled oral argument but denied the administration’s request to delay the case indefinitely. Instead, the court will seek additional briefing from the parties. DOI has indicated that it will begin a new rulemaking process within the next 90 days.

Appeals court denies tribes’ emergency request to prevent operation of the Dakota Access pipeline. Following months of protests and litigation, the Dakota Access pipeline, a 1,172-mile project extending from North Dakota to Illinois, is expected to be operating as early as this week. The Standing Rock and Cheyenne River Sioux tribes are appealing a district court’s decision not to halt construction of the pipeline, arguing that the pipeline will affect their water supply and infringe on their religious rights. On March 15, the tribes filed an emergency motion for an injunction to stop operation of the pipeline while their appeal is pending. The U.S. Court of Appeals for the D.C. Circuit denied the motion in a one-page order, finding that the tribes had failed to “satisfy the stringent requirements for an injunction pending appeal.” The decision likely will not end the legal challenges; the tribes may ask for the full D.C. Circuit to reconsider the panel’s decision. In the meantime, the pipeline’s operators submitted an updated status report to the district court on March 20 outlining the status of the pipeline’s construction and operation.

STATES

Pennsylvania Supreme Court weighs the extent to which local zoning laws may regulate privately owned oil and gas wells. The Pennsylvania Supreme Court will soon decide a case considering whether a privately owned oil and gas well may be considered a public facility, and qualify for exemptions, under local zoning laws in Gorsline v. Bd. of Sup. of Fairfield Twp., No. 67-MAP-2016. The case focuses on a group of Lycoming County residents who sued to prevent construction of a well pad in a residential/agricultural-zoned area of Fairfield Township following the Board of Supervisors’ decision to allow construction to proceed. The case has already reversed course in the lower courts, with the Lycoming County judge agreeing with the residents prior to reversal by the Commonwealth Court. The decision is expected to have statewide implications. If the residents prevail, local hearing boards will have expanded authority in determining whether and where drilling may be permitted. The decision will also decide whether a privately owned oil and gas well may nonetheless be considered “public” for the purpose of receiving exemptions from local zoning requirements. The Pennsylvania Supreme Court heard oral arguments at the beginning of March and will issue its decision in the coming months.

California poised to adopt extensive methane regulations for oil and gas industry. In contrast to recent announcements by the federal government that indicate it will review Obama-era rules and consider whether to scale back oil and gas regulation at the federal level, the California Air Resources Board will vote on its Proposed Regulation for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities at the end of March. The rule aims to reduce methane emissions at natural gas and crude oil facilities within the state, with a target of 2.5 million tons of reductions by 2025. Oil and gas operations constitute approximately 15 percent of California’s methane emissions. The rule focuses on methane releases from facility valves and connections and will apply to equipment not currently regulated by the state’s air districts. Companies may have to install leak detection controls and vapor collection systems and will have to comply with additional monitoring and reporting requirements. The California rule is considered stricter than the U.S. Environmental Protection Agency’s regulations announced in 2016 and will cover both state and federal land within the state.