The Fracking Debate: Legal Perspectives on Hydraulic Fracturing

Earlier this month, the Environmental Protection Agency released a draft study linking fracking, a controversial process of drilling for natural gas, to contaminated well water in Wyoming. It’s the first time the EPA has found any connection between the practice of hydraulic fracturing (aka ‘fracking’) and groundwater contamination, and the preliminary results of the study (which won’t be completed until 2014) are likely to add fuel to the ongoing debate over the regulation of natural gas drilling.

For your reference, here is a broad reading list of fracking-related commentary and analysis, from lawyers and law firms on JD Supra:

Environmental Impact Statement and Regulations Related to Hydraulic Fracking Released for Public Review (Sedgwick LLP):

“In September 2011, the New York State Department of Environmental Conservation (DEC) published the long-awaited Revised Draft Supplemental Generic Environmental Impact Statement (RDSGEIS). In accordance with New York State’s Environmental Quality Review Act, the RDSGEIS assesses the environmental impacts associated with horizontal drilling and high-volume hydraulic fracturing of the Marcellus Shale, a black shale formation extending from Ohio to New York that is estimated to contain between 168 trillion to 516 trillion cubic feet of natural gas. In October 2011, the DEC released proposed regulations pertaining to hydraulic fracking operations.” Read more»

Chance for Marcellus Shale Legislation Approval in Pennsylvania Before Year’s End (Duane Morris LLP):

“The Pennsylvania House and Senate approved separate versions of legislation to strengthen environmental rules surrounding drilling in the Marcellus Shale, and to impose a per-well impact fee to fund local infrastructure. The state Senate approved its version of the bill on November 15; the state House approved its version on November 17. Legislative sources say that a proposal could be agreed to before the end of the year, but differences in the versions still need to be ironed out among both chambers and Pennsylvania Governor Corbett’s office.” Read more»

Zoning over Pooling for Drillers in Fall Legislative Session (Duane Morris LLP):

“One of the key goals for drillers during the fall legislative session in Harrisburg is gaining approval of a measure preventing local governments from using zoning ordinances to shut them out, according to an official with a prominent driller in the Marcellus Shale. Pooling of land—where a landowner with no contract is paid the same lease and royalty rates as adjacent landowners with contracts—is of less importance.” Read more»

Literally, A Million Dollar Question (Poyner Spruill LLP):

“The debate over the benefits and risks associated with hydraulic fracturing (‘fracking’), a method of drilling for natural gas, continues to rage in North Carolina. Research shows that several North Carolina counties are sitting on a large amount of natural gas as a result of the large amount of shale rock in the region… The question that continues to loom in the minds of local governments and energy companies alike, is whether any future legislation in North Carolina allowing and/or regulating fracking would permit local governments to restrict fracking in their respective jurisdictions through the use of their zoning and/or police power.” Read more»

New EPA air regulations proposed for oil and natural gas industry (McAfee & Taft):

“…the EPA proposed new regulations governing the oil and natural gas production industry sector (to be codified at 40 CFR Parts 60 and 63)… The EPA is also proposing to add to the source category list any oil and gas operation not covered by the current listing and not previously subject to federal regulation.” Read more»

EPA Reaches for the Air Emissions of Hydraulically Fractured Wells and Beyond (Dinsmore & Shohl LLP):

“To date, much of the regulatory focus for oil and gas activities – the subject of increased media attention because of the shale resources in Pennsylvania, West Virginia and Ohio – has been on water concerns. That focus has broadened significantly to include air issues. In particular, the U.S. Environmental Protection Agency recently issued a proposed rule that would subject several parts of the oil and natural gas production, transmission and storage processes to air emission limitations.” Read more»

Drilling into Hydraulic Fracturing and Shale Gas Development (Michael Goldman)

“With the expansion of hydraulic fracturing, there have been increasing concerns voiced by the public about potential impacts on drinking water resources, public health, and the environment… The development and production of oil and gas in the U.S., including shale gas, are regulated under a complex set of federal, state, and local laws that address exploration and operation.” Read more»

New York “Light Years” Behind Pennsylvania in Reaping Marcellus Shale Benefits (Duane Morris LLP):

“Officials in New York’s natural gas drilling industry say it will likely be 2013 before drilling is permitted in the Marcellus Shale. Drilling in New York is banned while officials there finalize an environmental regulatory scheme. Drilling in the Marcellus Shale began in 2008 in Pennsylvania. ‘We’re looking at three rules from three different regulatory bodies,’ said John Holko, president of Lenape Resources, Inc., a natural gas driller based in New York. ‘One is over 1,500 pages long. They say they’ll get through all this by 2012, but realistically, we’re into 2013 before we can actually begin drilling.’” Read more»

Integrated Production Services to Pay $162,000 after Pleading Guilty to Violating the Clean Water Act (Warner Norcross & Judd – White Collar):

“The Department of Justice announced … that Texas-based Integrated Productions Services, LLC, (‘IPS’), a natural gas and oil drilling contractor, pleaded guilty to charges that it negligently violated the Clean Water Act. According to the government, in 2007, IPS was performing hydraulic fracturing operations in Oklahoma when a tank filled with hydrochloric acid leaked. The hydrochloric acid mixed with a pool of rainwater in the bermed surface of the well. Instead of properly removing the rainwater-acid mix from the site, a company supervisor drove his pickup truck through the berm to release the pooled mixture. As a result, an estimated 400 to 700 gallons of the hydrochloric acid ran into a nearby creek.” Read more»

Mortgage Lenders Are Becoming Increasingly Concerned With Gas and Oil Leases Associated With Hydraulic Fracturing (Sedgwick LLP):

“Recent reports indicate that mortgage lenders are becoming increasingly concerned with the growing number of gas and oil leases on mortgaged land. In most instances, a mortgage is secured by both the ‘surface’ and ‘subsurface’ rights to the land. As a result, the terms of the mortgage generally include the requirement that the landowner: (1) obtain prior permission from the lender before entering into a lease; (2) protect the property from damage, and (3) prohibit the storage of hazardous materials on the land. Some mortgages also include a rider specifically prohibiting the landowner from leasing mineral, oil or gas rights.” Read more»

Who Owns Shale Gas? PA Superior Court Decision Creates Uncertainty (McNees Wallace & Nurick LLC):

“As many property owners throughout Pennsylvania Marcellus Shale counties have learned in recent years, ownership of the surface does not necessarily include ownership of what lies below. Title to the surface and subsurface can be ‘severed’; that is, owned by different parties. In fact, it is not uncommon to now find different parties owning the mineral, coal, oil, gas and surface rights to the same property. A recent decision by the Pennsylvania Superior Court raises, but does not resolve, significant questions about that historic ownership model.” Read more»

How Recent Oil and Gas Discoveries Will Impact Ohio Businesses and Landowners (International Lawyers Network):

“It was announced recently that the Utica Shale formation in Ohio is not only a source of natural gas, but oil as well. New technological advancements — especially in horizontal drilling techniques and the hydraulic fracturing of the shale (‘fracking’) — along with the fact that the oil appears to be of high quality, is bringing drilling to Ohio a lot faster than originally thought.” Read more»

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