1. Water resources and, federal wildlife enforcement programs may be on a collision course with Oil and Gas Exploration and Production.

Oil and gas exploration and production are expanding in midwestern and western states, and at the same time there are water shortages and severe drought conditions in some areas. From North Dakota to Texas hard questions are being asked about the potential contamination of surface and sub-surface water caused by oil and gas activities. Increasing the tension, the U.S. Geological Survey has prepared aerial surveys of water bodies in North Dakota and has turned the information over to U.S. Fish and Wildlife, who are responsible for protection of migratory water fowl, endangered species and water resources. Similar wetland inventories are reported in Kansas, Oklahoma and Texas. Owners and operators of exploration and production facilities can take precautions by assuring that they are meeting state and federal requirements regarding pits and ponds at their properties, and assuring that oil, gas or production wastes do not reach waters of the states or of the U.S.

  1. State and federal fines and penalties increasing for oil and gas activities.

According to the Denver Post, in 2013 the Colorado Oil & Gas Conservation Commission entered 16 consent agreements with oil and gas companies, compared to 9 in 2012. Reported penalties ranged from $9,000 to $13,000. Other states from North Dakota to Texas report similar enforcement penalties but generally fewer and at lower penalty amounts.

On the federal level, the EPA reported Chesapeake Energy paid $3.2 million in fines to the EPA for illegally filling in wetlands near natural gas extraction sites in eight counties in West Virginia. The EPA also announced a penalty of $34,000 for a Clean Air Act violation, self- disclosed by Vintage Production California, LLC. According to the EPA, Vintage constructed three steam generators without obtaining a permit under the EPA's Prevention of Significant Deterioration (PSD) permitting program. The penalty resulted from negotiations, after the company obtained permits. The EPA's PSD program requires air emission permits for oil and gas operations in areas found by the EPA to be in non-attainment of air quality standards. Vintage operations were in the San Joaquin Valley, California, a non-attainment area.

Owners and operators near wetland areas may need permits if operations impact wet areas, and those near large cities or other non-attainment areas should check with EPA or state air permitting authorities on air permit requirements.

  1. Carbon capture for enhanced oil recovery gets a boost from the EPA.

Use of naturally-occurring CO2 for enhanced oil recovery is an established and effective practice. The EPA is investigating whether CO2 from electric power plants or other industrial facilities can be used for EOR. Due to concerns of generators of CO2 in the power industry, the EPA has proposed and requested comments on a rule that would state that industrial CO2 used for EOR is not a waste. Without this clarification, it is possible that the power generation company which created the CO2 used for EOR could be charged with illegal disposal of a hazardous waste and be subjected to fines and penalties. The EPA's clarification does require that application of CO2 for EOR be permitted under the Underground Injection Program administered by the EPA under the Safe Drinking Water Act, to assure protection of safe drinking water. Any owner or operator using or considering industrial CO2 for EOR should be aware of the EPA Guidance.