NGO Sues to Block Offshore Hydraulic Fracturing Permits. The Environmental Defense Center filed suit in federal court alleging the Bureau of Safety and Environmental Enforcement (BSEE) issued 51 permits authorizing hydraulic fracturing and well acidizing off the coast of California without complying with the National Environmental Policy Act (NEPA). According to the suit, BSEE should have conducted an environmental impact statement under NEPA to review the potential risks of offshore hydraulic fracturing, including how this offshore development would potentially impact endangered species, such as certain whale species and the southern sea otter.
Forest Service Finalizes Plan for Oil and Gas Leasing in Pawnee National Grasslands. The Forest Service issued the final Environmental Impact Statement for issuing oil and gas leases for the Pawnee National Grasslands in eastern Colorado. The Forest Service leases will allow companies to access portions of the Niobrara Shale Play by horizontally drilling under the federal lands, not by placing well pads on top of the 193,000 acre reserve. While industry generally supports this compromise approach, environmental groups vowed to file formal protests against the leases, claiming that industrial activity will diminish the area’s use for birding and threaten other wildlife.
Members of Ohio NGO Files Proposed Class Action Claiming State Oil and Gas Act Violates Rights to Local Self Governance. Members of a group known as Mothers Against Drilling in Our Neighborhoods (MADION), an environmental group that helped organize Broadview Heights, Ohio’s charter amendment banning hydraulic fracturing, filed a class action lawsuit against Governor John Kasich and two oil companies claiming that the Ohio Oil and Gas Act violates residents’ right to “self governance.” Bass Energy Company and Ohio Valley Energy, both named as defendants, have a pending lawsuit challenging Broadview Heights’ ban. The companies argue that the Ohio Oil and Gas Act preempts Broadview Heights’ “community bill of rights” charter amendment prohibiting hydraulic fracturing. MADION’s suit, however, contends that state preemption of local laws unconstitutionally violates the right of town residents to make their own laws. The Community Environmental Legal Defense Fund, which worked with Broadview Heights to enact its ban – and with many other municipalities to pass similar charter amendments – asserts that similar class action suits would be filed throughout the country.
OPEC Holds Steady, Potentially Impacting U.S. Shale Development. The Organization of the Petroleum Exporting Countries (OPEC) announced that it would not cut production in light of falling oil prices, sending oil prices down further. With Brent Crude prices reaching below $70 per barrel, and West Texas Intermediate down to $66 per barrel, the trade press is reporting that North American oil and gas companies are re-evaluating their strategies in those shale plays that have higher development costs. Some analysts are predicting a material drop in exploration and production expenditures, with independent producers potentially being hardest hit due to higher leverage and an inability to reduce production without financial difficulties. A Barclay’s research report estimated that, with OPEC inaction, U.S. oil production could drop by as much as 1 million barrels per day to keep prices from declining further.
Weatherford to sell fluids unit to Lubrizol. Oilfield services company, Weatherford International, announced that it will sell off its chemistry and drilling fluids business to Lubrizol for $825 million. The business focuses on creating the fluids required to drill and stimulate oil and gas wells. Weatherford noted that the sale is part of a continuing strategy to pay down debt. For Ohio-based specialty chemical company Lubrizol, which was purchased by Berkshire Hathaway in 2011, the acquisition gains it entry into the highly competitive oil and gas services business. The companies are expected to complete the sale before the end of 2014.
Utah Universities: Oil and Gas Revenue Could Support Land Takeover. Economists at the University of Utah, Utah State University, and Weber State University released a study of the costs and benefits of the state’s attempt to takeover federal lands. According to the study, Utah could recoup management costs, or even turn a profit, from oil and gas drilling revenues. Utah’s legislature passed a bill in 2012 demanding that the federal government relinquish 31.2 million acres of land to the state, alleging that Utah is entitled to these lands under the 1894 Enabling Act and that they are poorly managed by the federal government.