Wyoming members of Congress seek federal fracking rules exemption

In a letter dated August 19, 2013, three members of Wyoming’s congressional delegation (its two U.S. Senators and one Representative, all Republicans) asked the Department of Interior to exempt Wyoming and other states having hydraulic fracturing regulations from the pending Bureau of Land Management’s rule applicable to hydraulic fracturing on public lands.

The lawmakers argue that the proposed BLM rule duplicates “in many aspects, state regulations that already address well-bore integrity and flowback water and require the disclosure of hydraulic fracturing constituents used on Federal public lands. We believe that BLM’s proposed rule will significantly delay oil and gas permitting and in turn discourage oil and gas production on our nation’s public lands.” Indicating “that states are best positioned to regulate hydraulic fracturing,” they questioned whether “BLM’s final rule will provide any meaningful benefits not already provided by public land states…, such as Wyoming, Colorado, Idaho, Montana, New Mexico, and Utah [which] currently enforce their own hydraulic fracturing regulations… [on] private and state lands… [and which] could be applied to Federal public lands with the states’ respective borders.”

Expressing a similar position, in mid-July 2013, Representative Bill Flores (R.-Texas) introduced a bill entitled “Protecting States’ Rights and Preventing Federal Red Tape on American Energy Act” which would bar the DOI from applying its proposed rule in states having their own hydraulic fracturing regulations, regardless of duplication or whether the state rules are more or less restrictive than the proposed rule. See previous blog dated July 25, 2013, “Proposed legislation would allow a state to control hydraulic fracturing on public lands within its borders.”

The proposed BLM rule provides for a variance, deferring to states and tribes that already have regulations in place that meet or exceed the proposed rule. However, the BLM retains the authority to modify the variance, which, according to the Wyoming legislators, would “lead to regulatory uncertainty for oil and gas producers.” The public comment period for the BLM’s proposed rule ends on August 23, 2013.

Pennsylvania Landowners Sued Under New Pooling Law

On July 9, 2013, Pennsylvania Governor Tom Corbett signed a law giving drillers the ability to pool leased properties into one unit for horizontal wells, as long as the oil and gas contracts in effect do not prohibit these combinations.

This pooling provision was attached to legislation obligating natural gas companies operating in the state to standardize all deductions listed on royalty check payment stubs.

The provision does provide for royalty payments: “In determining the royalty where multiple contiguous leases are developed, in the absence of an agreement by all affected royalty owners, the production shall be allocated to each lease in such proportion as the operator reasonably determines to be attributable to each lease.”

This provision is the basis of a complaint filed by EQT Corporation on July 22, 2013 in the Court of Common Pleas against 69 individuals and one golf course in Allegheny County, who hold old oil and gas contracts without pooling provisions.

EQT, who had been negotiating with landowners in the county for access to their properties, accused them of blocking the company from conducting surveys on their land to determine where to drill for shale gas.

EQT wants a declaration and an injunction that it can access the properties and engage in horizontal drilling on the pooled properties.