Showing posts with label Marcellus Shale. Show all posts
Showing posts with label Marcellus Shale. Show all posts

Federal court in Pennsylvania grants summary judgment in favor of exploration and production company on claims of strict liability, nuisance, and negligence

On March 25, 2015, the United States District Court for the Middle District of Pennsylvania entered summary judgment in favor of an exploration and production company on claims of strict liability, nuisance, and negligence, by a Tioga County landowner related to drilling activity near his property.  Chief Magistrate Judge Carlson found that the uncontroverted evidence offered by the E&P company demonstrated that “defendants are entitled to summary judgment in their favor on the merits.”  The case is Kamuck v. Shell Energy Holdings GP, LLC, No. 4:11-CV-1425, 2015 U.S. Dist. LEXIS 37538 (M.D. Pa. Mar. 25, 2015).

A crucial factor in the Court’s decision was that the plaintiff failed to produce any evidence to support many of the factual allegations made in his complaint. 

For example, [plaintiff] has never identified the time, date, location, or extent [of] any toxic chemical release that he alleges took place on any part of the [plaintiff’s] Property or adjoining properties.  Neither has [plaintiff] identified any toxic substances that were allegedly released on his property.  [Plaintiff] has also failed to produce any evidence identifying specific environmental contamination, fire, explosion or any other hydro-carbon production mishap that affected his well-being or property.  Nor has he presented any competent proof supporting his nuisance claims relating to vehicle traffic and the alleged spraying of toxic chemicals on the roadway adjoining his land.

Turning to the merits of the individual causes of action, the Court first addressed plaintiff’s strict liability claim.  The Court accepted the E&P company’s uncontroverted “evidence and argument that support [its] position that natural gas drilling activities, including hydraulic fracturing, do not constitute abnormally dangerous activities under Pennsylvania law giving rise to strict liability.”  The Court noted that its decision “is in line with precedent in this field within Pennsylvania,” “with legal authority in other jurisdictions,” and “follows the prior precedent of this Court.”

With respect to plaintiff’s private nuisance claim, the Court found that the lack of evidence compelled entry of summary judgment.  Plaintiff “presented nothing to support this private nuisance claim beyond his subjective upset at the volume of road traffic he has experienced periodically outside his home on a public thoroughfare.”  Under Pennsylvania law, “mere roadside noise and dust do not constitute private nuisance.” 

Finally, the Court addressed plaintiff’s failure to support his negligence claim.  “[D]ue to [plaintiff’s] inaction, and a complete failure of competent proof, we are unable to identify any duty breached by the defendants; any causal relationship between that duty and injuries to the plaintiff; and any ascertainable damages resulting from that injury” and, consequently, “this claim also now fails as a matter of law.”

In addition to finding the E&P company was entitled to summary judgment on the merits, the Court also found that plaintiff’s failure to prosecute his case and to obey court orders with respect to discovery obligations offered an independently adequate ground upon which to dismiss the case.  Despite plaintiff’s pro se status, “courts have directly spoken to the type of willful avoidance of litigation responsibilities which has marked [plaintiff’s] approach to this lawsuit over the past two years, condemning the practice of avoiding depositions and generally ‘playing possum’ when instructed to fulfill their litigation responsibilities.”  “The plaintiff cannot refuse to address the merits of his claims, and then assert the untested merits of these claims as grounds for denying a motion to sanction him.”

Read the Court’s complete opinion.


This post was written by Jeremy Mercer (jeremy.mercer@nortonrosefulbright.com or 724 416 0440) and Michael Gaetani (michael.gaetani@nortonrosefulbright.com or 724 416 0429) from Norton Rose Fulbright's Energy Practice Group.

Marcellus operator unable to stay administrative proceeding regarding alleged water pollution

On October 7, 2014, the Pennsylvania Department of Environmental Protection (“DEP”) filed a complaint against a Marcellus operator with the Pennsylvania Environmental Hearing Board (“the Board”), alleging that the operator had violated Pennsylvania’s Clean Streams laws.  Prior to the complaint, the operator had filed a declaratory judgment action in Pennsylvania state court.  In the declaratory judgment action, the operator sought to establish the number of days that alleged violations occurred.  The operator alleged that an offer of settlement by the DEP, which the operator said miscalculated the number of days, constituted sufficient grounds to find that a controversy existed such that a declaratory judgment action was appropriate.

In response to the DEP’s October 7 complaint, the operator filed a motion to stay the administrative proceedings relating to the complaint.  The operator argued that resolving parts of the dispute before the Board will be a waste of time because any finding will be appealed to the court in which the declaratory judgment action is pending.  In response, the DEP noted that it has filed a motion to dismiss the operator’s declaratory judgment action on the grounds that the operator had failed to exhaust administrative remedies and was simply forum shopping.

On October 28, 2014, the Board denied the operator’s motion to stay.  The Board said that the “case is precisely the sort of case that is the raison d’ĂȘtre for the [Board],” and noted that a stay of Board proceedings is “an extraordinary measure that should only be granted for compelling reasons.”  The Board then opined that there was “significant value and efficiency in allowing . . . discovery [in the Board proceedings] because that factual development will eventually be needed one way or the other.”  Ultimately, the Board was skeptical that that motion to stay was anything other than a dilatory tactic and refused to grant a stay that, in the Board’s opinion, would have little benefit to the administration of justice.


US Coast Guard proposes rules allowing fracking waste water to be transported by barge

The disposal of large volumes of wastewater produced during shale gas extraction has posed challenges for companies, regulators, and communities, especially in the Marcellus Shale region.

In 2012, the U.S. Coast Guard received two requests for approval for the bulk shipment of wastewater resulting from hydraulic fracturing operations in Pennsylvania and the northern Appalachia area. 

On October 30, 2013, in the Federal Register, the Coast Guard published proposed rules to allow barges to transport wastewater in bulk; thus, providing companies an alternative to storing the waste at the drilling site or transporting it by rail or truck to remote facilities.

The Coast Guard regulates the shipment of hazardous materials on the nation’s rivers and classifies cargoes for bulk shipment. 
[U]nder certain circumstances a bulk liquid hazardous material may be transported by a tank vessel if it is a ‘listed cargo’ (listed in any of several specified tables in Coast Guard regulations, [wastewater], however, cannot be treated as a ‘listed cargo’ because the specific chemical composition of [wastewater] varies from one consignment load to another and may contain one or more hazardous materials . . . , including radioactive isotopes such as radium-226 and radium-228.
Under the proposed rules, in order to carry wastewater, a barge owner must request approval from the Coast Guard prior to shipping, provide additional information and comply with new policies. 

To address concerns about the shipment of wastewater, the Coast Guard has issued a proposed policy letter entitled “Carriage of Conditionally Permitted Shale Gas Extraction Waste Water in Bulk,” which specifies the conditions under which a barge owner may request and be granted a Certificate of Inspection endorsement in order to transport wastewater. 

This proposed policy letter will be open for public comment through November 29, 2013. The Coast Guard specifically requests information about disclosing proprietary information to the government and testing the wastewater for radioactive material.


This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.

New York advocacy group sues Department of Health for disclosure of documents related to hydraulic fracturing

On September 13, 2013, the Seneca Lake Pure Waters Association, an advocacy group based in Finger Lakes, New York, sued the New York Department of Health (NYDOH), seeking the disclosure of documents related to the state’s review of hydraulic fracturing, which has been banned in New York since 2008.

The NYDOH is conducting an ongoing review of the state’s Supplemental Generic Environmental Impact Statement, which addresses permit conditions required for gas drilling in the Marcellus Shale and other areas of New York, to determine whether those guidelines would adequately protect public health.

In its filing, the group, which is critical of natural gas drilling and hydraulic fracturing, requested the disclosure of any factual documents or statistics that were used in the state’s decision-making process for banning hydraulic fracturing in the state.

The request was filed under Article 78 of New York’s Civil Practice Law, under which interested persons may challenge the decision of a state governmental body, agency, or official.

The Seneca Lake Pure Waters Association has previously filed requests under the Freedom of Information Law, seeking NYDOH documents used in the state Department of Environmental Conservation’s draft environmental review of large-scale hydraulic fracturing and the Health Commissioner’s assessment of that review.


This article was prepared by Lauren Brogdon (lauren.brogdon@nortonrosefulbright.com or 713 651 5375) from Norton Rose Fulbright's energy practice.

Pennsylvania Legislators Propose New Statutes Relating to Forced Pooling and Royalty Payments

Since it was signed by the Governor in July 2013, Pennsylvania’s new law allowing drillers 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, has met with much criticism. See prior blog dated September 10, 2013, “Pennsylvania State Representative wants to repeal new gas pooling law.”

 Representative Jesse White (D-Washington) has now introduced House Bill 1700 which would ban the “forced pooling” of natural gas leases. Rep. White refers to forced pooling as “eminent domain for drillers” because it would allow operators to drill under property even if the landowner does not want to lease his land.

He wants to ensure that lessors who agreed to shallow drilling are not inadvertently drawn into having deeper, Marcellus Shale wells drilled on or under their property. The proposed statute provides that the “rule of capture” still applies, and a driller is not precluded “from extracting gas that has seeped onto an adjacent property, for which a valid lease exists.”

House Bill 1684 and House Bill 1650 both would limit what can be deducted from royalty payments. H.B. 1684 provides that a lease cannot allow any deductions for “severance or other production taxes or costs associated with producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, marketing or other marketing enhancements to be deducted from any royalty payable to a lessor if such deductions result in a royalty of less than one-eighth calculated under the first marketable product doctrine.”

Under H.B. 1650, the “lessee shall compute and pay oil and gas royalties…on the gross proceeds received by the seller based on the fair market value at the point of sale.” The lessee cannot deduct severance taxes, impact fees, and post-production costs (gathering, dehydration, compression, treatment, processing, marketing and transportation costs).

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.

Methane in water wells in Franklin Township, Pennsylvania not from natural gas drilling activity

The Pennsylvania Department of Environmental Protection (DEP) announced the results of its 16-month investigation into the alleged methane contamination of three private water wells in Franklin Township, Susquehanna County, where the Marcellus Shale formation is being developed by hydraulic fracturing. The DEP tested water from the three water wells and compared it with the chemical make-up of natural gas samples taken from the nearby drilling rigs and also with samples from water wells in the nearby Salt Springs State Park. The testing showed that the methane in the water from the private wells contained a similar isotopic make-up to the samples from the State Park, indicating that the methane in the wells is naturally occurring shallow gas. The DEP concluded that the methane in the private water wells was not production gas from the nearby gas wells being drilled by WPX Energy Inc. WPX has been paying for delivery of replacement water to the owners of the three water wells and has not yet determined if the deliveries will continue. Despite the DEP’s conclusion, the water well owners continue to believe that gas drilling is responsible for the contamination and will move forward with their lawsuit. Manning v. WPX Energy Inc. and The Williams Companies, Inc., No. 3:12-cv-00646 (M.D. Pa. April 9, 2012).


This article was prepared by Barclay Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice Group.

Scientists rebut study linking hydraulic fracturing and groundwater contamination


Last year, hydrologic geologist Tom Myers’ conclusion that hydraulic fracturing of deep shale gas wells can be expected to impact shallow groundwater aquifers in less than ten years received much publicity, especially among environmental groups who had funded the work. Myers' findings appeared in an article entitled, “Potential Contaminant Pathways from Hydraulically Fractured Shale to Aquifers,” which appeared in the November/December 2012 issue of Groundwater, the journal of the National Groundwater Association. In response, a group of scientists from the Pennsylvania Geological Survey and the Pennsylvania Council of Professional Geologists have published a rebuttal of Myers’ work.

These scientists found many deficiencies with Myers’ modeling simulation, including a lack of objectivity and a” lack of understanding how to develop a credible hydrogeological conceptual site model.” They questioned Myers’ conceptual site model as not comprising the following (1) an accurate representation of the study area’s geology; (2) how hydraulic fracturing can be expected to modify the shale reservoir’s natural fracture characteristics; and (3) proper insight into the hydrodynamic and pore conditions of the rocks through which the water and hydrocarbons flow. As a result of their findings, the scientists have determined that Myers’ is fatally flawed with misinformation. Some examples include:

  • The geology overlying the Marcellus Shale formation is an alternating series of sandstones, siltstones, shales, and carbonate rocks that vary in thickness, extent, and rock physical properties depending on location. Myers incorrectly based his model on “predominantly sandstone” overlying the formation. 
  • Fracture orientations in rock vary with both depth and lithography and cannot be presumed to be vertical throughout an entire sequence of sedimentary rock. Unsupported by empirical data, Myers assumed a continuous 19.7 ft. wide, vertical, high-permeability fault extending from the Marcellus Shale formation at depth to ground surface.
  • Myers’ assumption of continuous upward flow from the Marcellus Shale to shallow groundwater aquifers would require that the sedimentary sequence between the shale and the aquifers be completely saturated with water. Extensive oil and gas drilling and production as well as geological studies have demonstrated that the shale is highly under-saturated with water. “There is no evidence to suggest that upward fluid migration has been continually occurring in the Appalachian basin. In fact, were this an active process throughout geologic time, the fresh groundwater aquifers currently sourcing more than one million private water supplies in Pennsylvania alone would not be fresh – instead, they would be unpotable.”



This article was prepared by Barclay Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice Group.

Flowback fluid recycling regulation in the Marcellus Shale

This is the second article in a series of blog posts evaluating the current status of flowback and produced water recycling regulations in the major shale play states. These waters are generated through the hydraulic fracturing process, and this blog post continues the discussion of the manner in which these waters are disposed. The Marcellus Shale, the largest in the country by geographic area, extends throughout much of the Appalachian Basin, under Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia. However, this post will focus on flowback and produced water recycling regulation in the most active hydraulic fracturing states, specifically, Ohio, Pennsylvania, and West Virginia. Recycling of flowback and produced waters is a growing trend in the Marcellus Shale, as off-site disposal facilities are not often available in close proximity to oil and gas wells.

Ohio

Ohio’s Department of Natural Resources (“ODNR”) regulates the disposal of flowback and produced water from oil and gas drilling. ODNR also regulates the design and operation of lagoons/pits and tanks that are used at the drill site to temporarily store fluids that are either being recycled or collected. Long-term storage of these fluids in on-site pits is not authorized in Ohio. Ohio prohibits the discharge of any produced and flowback waters directly to waters of the state and also prohibits disposal of brine at any location other than an ODNR-permitted Class II injection well. However, the state strongly encourages recycling of flowback water.

Currently, Ohio’s regulations pertaining to the recycling of flowback and produced waters from hydraulic fracturing activity fall in the context of permitting the surface application of brine collected during the production of a well to roads, streets, highways, and other land surfaces owned or controlled by a county, township, or municipal corporation. Such application would be utilized to control surface dust or ice. However, flowback water and other fluids from well stimulation may not be applied to roadways or the land surface.

Pennsylvania

In April 2011, the Pennsylvania Department of Environmental Protection (“PADEP”) instructed 15 Publicly Owned Treatment Works (“POTWs”) to stop handling flowback fluids from the Marcellus Shale. At the time of the order, around two-thirds of flowback and produced waters were recycled in Pennsylvania.

The reuse of produced water is managed by the PADEP’s Residual Waste Division. This division has developed general permits for the beneficial use of residual waste, including WMGR123, a 2012 consolidation of General Permits WMGR119 and WMGR 121, that permits the processing, transfer and beneficial use of oil and gas liquid waste to develop or hydraulically fracture an oil or gas well. Oil and gas liquid waste is defined to include liquid wastes from the drilling, development and operation of oil and gas wells and includes contaminated water from well sites.

Pennsylvania also sets forth wastewater treatment requirements specifically for the handling of flowback and produced water from fracturing and other natural gas well operations. Under the requirements, well operators must develop a wastewater source reduction strategy and submit it to the PADEP upon request. Within the strategy, the operator must identify the methods and procedures that will be utilized to maximize the recycling and reuse of flowback and production fluids either to (1) fracture other natural gas wells or (2) for other beneficial uses approved under the regulations. According to a May 2012, NRDC study, the recycling of flowback and produced waters for use in additional hydraulic fracturing has increased by 10% between 2011 and 2012.

West Virginia

A recent study in West Virginia found that 81 percent of recovered flowback water was able to be recycled and re-used. A 2010 Memorandum of Agreement between the West Virginia Division of Highways and the West Virginia Department of Environmental Protection allowed for the beneficial use of natural gas well brines for roadway pre-wetting, anti-icing, and deicing. Such use is limited to natural gas well brines that fall within certain allowable levels.

West Virginia’s oil and gas regulations do set forth construction and maintenance requirements for flowback and produced water pits and freshwater impoundments. However, they do not contain any specific rules governing recycling of that water.


This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) and Kristen Hulbert (khulbert@fulbright.com or 713 651 5303) from Fulbright's Environmental Law Practice Group.

Pennsylvania's Proposed Emergency Drinking Water Support Fund

Pennsylvania State Senator Jay Costa (Democrat, Forest Hills) has proposed a bill which would place a $10 surcharge on permits issued by the state’s Department of Environmental Protection (DEP) for hydraulic fracturing activities in the Marcellus Shale.

This surcharge would be transferred to the bill-created Emergency Drinking Water Support Fund. 

The fund would be “used for testing of well water” by a DEP approved testing laboratory and the purchasing of clean water for residents and businesses if needed. Residents and businesses who “have reason to believe their well water is contaminated from either an accidental spill of fracking water or chemicals, seepage of chemicals and fracking water or seepage of natural gas dislodged by the fracking process” can request that their water be tested. 

If the test determines that the water contains chemicals or natural gas higher than DEP or EPA recommended levels and the DEP determines that the contamination probably resulted from Marcellus Shale drilling activity, then the DEP will purchase water for the affected household or business until a final determination of the source of the contamination is made and the responsible driller begins to provide water to the household or business. 

The bill has been sent to the Senate’s Environmental Resources and Energy Committee for consideration. 

A similar bill that had been introduced during the 2011-2012 legislative never came out of committee.

See a copy of the bill.


This article was prepared by Barclay Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Litigation Practice Group.

NYDEC Publishes Revised Proposed High-Volume Fracking Regulations

On Thursday, November 29, 2012, the New York Department of Environmental Conservation (NYDEC) published revised proposed regulations relating to high-volume hydraulic fracturing (wells using more than 300,000 gallons of water as the base fluid).

The NYDEC developed these revisions and additions after receiving more than 66,000 public comments (most against hydraulic fracturing) on the original proposals that were released on September 28, 2011.

The 30-day public comment period on the revised proposed regulations begins on December 12, 2012, and allows a 90-day extension for completion of the New York Commissioner of Health’s review of the draft Supplemental Generic Environmental Impact Statement.

The NYDEC advised that it would not take any final action or make any final decision regarding hydraulic fracturing until after the health review and the work from three outside experts—Colorado School of Public Health professor John Adgate, George Washington University School of Public Health and Health Services professor Lynn Goldman, and University of California Los Angeles Fielding School of Public Health professor Richard Jackson—is completed.

According to the NYDEC, “the proposed regulations are to apply to the use [of fracking] statewide,” with the initial targets being the Marcellus and Utica shale formations.

The revised proposals include additional reporting requirements for drillers who want to re-fracture an existing well and allow for public and private water treatment plants to accept fracking waste water.

The proposed revised regulations for high-volume hydraulic fracturing include requirements for blow-out preventer use and testing plans, detailed mapping, enhanced disclosure of chemical additives, and well pad siting setbacks.

The chemical disclosure must identify each chemical constituent intentionally added to the base fluid and its proposed concentration. 

There are also new well construction, site preparation, operational, and maintenance requirements.

This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.

Niagara Falls, NY Issues Ban on Hydraulic Fracturing

On March 5, 2012, the City Council of Niagara Falls, New York, unanimously approved an ordinance banning hydraulic fracturing in Niagara Falls and the storage, transfer, treatment or disposal of water generated from natural gas exploration and production activities in the city’s wastewater treatment plant.

Ironically, the Marcellus Shale does not extend under the City of Niagara Falls.

Therefore, the ban on hydraulic fracturing likely will have little or no impact on natural gas drilling in the area.

However, the Niagara Falls Water Board previously had hoped to increase revenues by treating flowback and produced water generated in the Marcellus Shale region in the city’s wastewater treatment plant.

The City Council also unanimously passed a resolution titled “Dangers of Hydraulic Fracturing in New York State," which supports a ban on hydraulic fracturing throughout the State of New York.

The resolution will be sent to New York Governor Cuomo for consideration.  The City of Buffalo, New York is expected to approve a similar resolution today.

This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group and Shale and Hydraulic Fracturing Task Force.