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U.S. Key State-Level Hydraulic Fracturing Activities

Colorado: Several cities in the state – including Boulder, Fort Collins, Lafayette and Longmont – have voted over the last several years to temporarily or permanently halt drilling and/or hydraulic fracturing within city limits.  The Colorado Oil and Gas Association (“COGA”) sued Longmont, Lafayette and Fort Collins on the grounds that local governments are preempted by state law from banning oil and gas development, and courts invalidated all of these bans. The Colorado Supreme Court agreed to hear appeals in these cases due to the amount of public attention given to the decisions. On May 2, 2016, the Colorado Supreme Court ruled that Fort Collins’ moratorium and Longmont’s ban were preempted by the state’s oil and gas law.  In light of the Supreme Court decision, on June 28, 2016, Boulder County rescinded its moratorium that was to last until July 2018 and replaced it with a shorter term moratorium to allow the County time to put local oil and gas rules in place. Meanwhile, two ballot initiatives failed to gain enough signatures to get on the November ballot in the state; one would have created a 2,500-foot setback for new oil and gas wells and the other would have allowed local governments to pass regulations or otherwise limit oil and gas development.

Boulder County’s interim moratorium will end on November 18, 2016.

Pennsylvania:  The Pennsylvania Department of Environmental Protection (“PADEP”) has issued final requirements for unconventional gas wells to implement the state’s oil and gas law (“Act 13”), ending a five-year rulemaking process.  The final rules went into effect on October 8, 2016.  The regulations originally contained requirements for conventional oil and gas wells, but in June 2016 the legislature adopted a bill that vacated these rules and created a council to advise on the creation of new requirements for conventional wells.  The Marcellus Shale Coalition filed a lawsuit to challenge the final rules for unconventional gas wells on October 13, 2016, alleging that the permit review process and other provisions such as spill reporting are overly burdensome.  On November 8, 2016, the state district court granted a preliminary injunction blocking the challenged provisions while the litigation proceeds.  Meanwhile, on September 28, 2016, the Pennsylvania Supreme Court held that certain provisions of Act 13 were unconstitutional, including those that require health professionals receiving proprietary chemical composition information regarding frac fluids to keep that information confidential – but that also create an obligation on the part of service companies to provide the information to requesting health professionals in the first place.  In addition, on September 1, 2016, a Pennsylvania appellate court ruled that PADEP may consider the impact of oil and gas wells on public and natural resources when issuing well permits.  The Pennsylvania Independent Oil & Gas Association had argued that a 2013 state supreme court ruling on Act 13, the state oil and gas law, limited PADEP’s ability to consider impacts on public and natural resources during the well permit application process.  The Association intends to appeal the ruling.

Additional States:

California:  The Division of Oil, Gas & Geothermal Resources (“DOGGR”) is in the process of implementing its Renewal Plan, issued in October 2015, which sets forth guiding principles for an overhaul of its regulatory program.  The Plan is intended to address the recommendations of the 2015 study of well stimulation in California performed by the California Council on Science and Technology.  The plan includes “updating regulations for [HF]” but does not reference hydraulic fracturing chemicals or disclosure requirements specifically through updates to its well stimulation regulations.  In the meantime, DOGGR and Kern County have been coordinating on the issuance of oil and gas permits in the county.  Kern County’s well stimulation requirements went into effect on December 9, 2015, and require permitting for all new oil and gas wells in the county, cap the number of permits issued annually, adopt a tiered system for addressing competing land uses, and require compliance with mitigation measures, including the use of a tracer and the provision of Safety Data Sheets or toxicological reports for well stimulation fluids.  The issuance of both state and Kern County permits has recently stalled, however, due to a disagreement over whether Kern County must require additional toxicity testing before issuing oil and gas permits.  In the meantime, several other counties – including Alameda County, Butte County and most recently Monterey County – have adopted hydraulic fracturing bans; these counties generally do not have any hydraulic fracturing activity anyway.

The U.S. District Court for the Central District of California issued an order on September 6, 2016 requiring BLM to prepare a supplemental environmental impact statement that analyzes the environmental consequences of hydraulic fracturing on federal lands managed by BLM’s Bakersfield, California field office.  The court found that in preparing an EIS for its proposed update of its resource management plan for the area, BLM failed to adequately analyze the environmental impact of the plan because it did not consider the risks of hydraulic fracturing.  CBD and Los Padres ForestWatch brought suit last year, claiming that BLM violated the National Environmental Policy Act by failing to take the required “hard look” at the risks of hydraulic fracturing when it determined the lands to be made available for oil and gas development.

Louisiana:  On June 17, 2016, the Louisiana Supreme Court held that St. Tammany Parish’s ordinance prohibiting hydraulic fracturing was preempted by state law, and that the state government has the legal authority to grant hydraulic fracturing permits over the objections of local governments in the state.

Maryland:  The Maryland Department of the Environment (“MDE”) issued draft proposed oil and gas regulations on September 26, 2016, including hydraulic fracturing disclosure provisions that require public disclosure of all hydraulic fracturing chemicals in a systems format.  The draft regulations were posted on the agency’s website and submitted to the state administrative committee for review.  Following the committee’s review, the draft regulations will be published in the Maryland Register and subject to a 30-day comment period.  It is anticipated that the regulations will be published on November 15, 2016.

Montana:  On September 22, 2016, the Montana Oil and Gas Conservation Board unanimously rejected a petition calling on the Board to adopt an hydraulic fracturing chemical disclosure program similar to that of Wyoming’s requiring full public disclosure of hydraulic fracturing chemicals.

New Mexico:  The Tenth Circuit issued a ruling on October 24, 2016 upholding a lower court’s decision not to grant an injunction against drilling in the San Juan Basin.  Environmental groups sued BLM in 2015 alleging that BLM failed to adequately consider the environmental impacts of approving drilling in the region.

Ohio:  Citizen groups in three counties attempted to place anti-hydraulic fracturing ballot measures on the November ballot, but the measures were not approved by the secretary of state and local election boards.  The groups sued to challenge the disapprovals, but on September 13, 2016 the Ohio Supreme Court ruled that the local election boards and the secretary of state lawfully rejected the measures when they found that they did not satisfy constitutional requirements.  Voters in Youngstown rejected for the sixth time a proposed “Community Bill of Rights” that included a ban on hydraulic fracturing.

Virginia:  The Virginia Department of Mines, Minerals and Energy (“DMME”) is expected to soon finalize amendments to the state’s existing hydraulic fracturing rules.  The proposed requirements (issued in October 2015) would require pre-frac disclosure of all ingredients to DMME, including trade secret ingredients, as well as post-frac reporting to FracFocus.  The rules provide that DMME would keep confidential the identities of any ingredients it determines are trade secrets based on “information that meets the criteria specified in law for a trade secret and is contained on such forms and filings as is required under this chapter.”  DMME planned to submit the final rules for executive branch review in August 2016.

West Virginia: The U.S. District Court for the Southern District of West Virginia ruled on June 10, 2016 that a local county ordinance banning the storage of hydraulic fracturing wastewater was preempted by both state oil and gas law and federal permitting laws.

Wyoming:  Wyoming’s Department of Environmental Quality (“DEQ”) released the final report regarding its investigation of the water quality issues in drinking water wells in Pavillion, Wyoming on November 10, 2016.  Consistent with the draft report issued in December 2015, the final report concludes that “it is unlikely that [HF] fluids (injected into the deeper production zone(s)) have risen to the depths utilized by water-supply wells.”  In March 2016, EPA Region 8 submitted comments criticizing the draft report’s findings for failing to address uncertainties associated with the evaluation of potential health concerns.  EPA Region 8 also said that DEQ needed to provide a more robust basis for its conclusion.  In DEQ’s response to comments, the agency stood by its conclusion but supported EPA’s recommendation for additional investigation.  DEQ plans to provide a scope of work to address select data gaps identified in the report.

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