Fracking Insider Readers: We are pleased to bring you Volume 6 of our State Regulatory Roundup. 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 – The South Coast Air Quality Management District (SCAQMD) announced that it will undertake a rulemaking to regulate hydraulic fracturing activities within the District. In doing so, it is moving ahead of CEQA initiatives designed to increase hydraulic fracturing regulation statewide. In its staff directive, the SCAQMD requested called for rules requiring the disclosure of fracking chemicals, and a review of air emissions rules applicable to oil and gas operations.
North Dakota – On September 20, 2012, FERC approved an 80 mile pipeline to carry Bakkan shale gas to markets. In particular, Alliance Pipeline, Inc. will take associated gas from oil shale fields in North Dakota and Montana that is currently being flared and ship it to a Tioga, North Dakota processing plant that will then ship it to Chicago. Without pipelines such as this, gas from the Bakkan was considered stranded from downstream markets. By tying Bakkan gas to markets, operators can significantly reduce flaring – a practice that facing increased regulatory scrutiny.
Ohio – On October 1, 2012, Ohio joined the ranks of states with municipalities imposing local bans on hydraulic fracturing and underground injection. Yellow Springs, a small town east of Dayton, issued the ban despite the fact it is not in a play that is likely to be developed. The Yellow Springs’ ban is in direct conflict with Ohio’s new natural gas extraction law passed this summer. It is unclear how, or whether, Ohio Department of Natural Resources will respond given the ban is mostly symbolic.
Pennsylvania – Earlier this month, Pennsylvania Governor Tom Corbett (R) signed the Indigenous Mineral Resources Incentives Development Act, which allows for increased oil and gas leasing on state-owned land. Previously, leasing of state-land was restricted to the state Department of Conservation and Natural Resources. This Act allow state schools and prisons to similarly lease subsurface rights. Payments and royalties for such rights are divided among the host agencies and with the general treasury.
Wyoming – In late September, the Wyoming Occupational Safety & Health Commission adopted amendments its rules for workers at oil and gas drilling sites. The rules require, among other things increased use of fire-retardant clothing when in close proximity to the well bore and increased use of emergency shutdown procedures and devices for diesel engines on drilling sites. The changes come on the heels of three worker fatalities in the Wyoming oil and gas industry and a worker safety culture that has been heavily criticized.