Molybdenum: An Essential Element in America’s Future

Minerals Make Life – an initiative created by the National Mining Association – has recently developed an infographic detailing the importance of the super element molybdenum. Few elements have a higher melting point than molybdenum, making it an extremely tough metal.

A small amount of molybdenum in a product can make a significant contribution to its performance. Molybdenum contributes to sustainable development by improving strength, hardness, corrosion resistance, and high temperature strength of end products we rely on every day. In alloy steels, molybdenum improves strength and hardness, making it vital in the production of lighter but stronger steel.

To meet the ever increasing demand for this super metal, in 2014, the U.S. produced more than 65,000 tons of molybdenum, valued at approximately $1.8 million. However, the current state of the complex U.S. mining permit process has caused unnecessary delays in further developing our nation’s natural resources. It is not unusual for proposed mining projects to languish for decades in bureaucratic red tape while awaiting a permit. By comparison, it takes about two years to receive a mine permit in Australia and Canada.

Despite permit inefficiencies, global demand for molybdenum is expected to grow by 4.6% per year for the foreseeable future.

For more information regarding the importance of molybdenum and domestic mineral production, visit Minerals Make Life.

Pipeline Operators Take Heed – Threatened Enviro Lawsuit May Lead to Greater Regulatory Requirements

On July 28, 2015, the National Wildlife Federation (“NWF”) filed an intent to sue notice against the Department of Transportation (“DOT”), arguing the DOT has not properly approved pipeline projects for more than 20 years.

The legal action carries nationwide implications: Every U.S. oil pipeline that intersects a navigable water may soon be subject to additional regulations.

Specifically, NWF contends that DOT has failed to issue regulations under section 311(j) of the Clean Water Act (“CWA”), requiring an owner or operator of a pipeline to prepare and submit a facility response plan (“FRP”) detailing response actions to be taken in the event of a worst-case discharge of oil or hazardous substances into waters of the United States. Continue Reading

Activists Threaten to Sue if EPA doesn’t Update RCRA Regs to Cover Oil & Gas Industry

On Wednesday, August 26, a coalition of environmental groups threatened to sue the U.S. Environmental Protection Agency (“EPA”) if the regulations under the Resource Conservation and Recovery Act (“RCRA”) are not updated to restrict the disposal of waste associated with oil and gas production.

The coalition specifically asked the EPA to review and revise the RCRA regulations pursuant to the statutory mandate found in sections 2002(b) and 4002(b) of RCRA. Under these sections, the EPA must review and revise RCRA regulations and guidelines “no less frequently than every three years.” (42 U.S.C. §§ 6912(b), 6942(b).)

RCRA was enacted in 1976 to govern the disposal of solid waste. Solid waste is broken down into (1) hazardous solid waste and (2) non-hazardous solid waste. The most notable provisions of RCRA are included in Subtitle C, which directs the EPA to establish controls on the management of hazardous wastes from their point of generation, through their transportation and treatment, storage and/or disposal. Continue Reading

U.S. EPA Proposes New Rules to Curb Methane Emissions from Oil and Gas Sector

On August 18, 2015, the U.S. Environmental Protection Agency released proposed regulations aimed at cutting greenhouse gas emissions and volatile organic compounds (VOCs) from oil and gas facilities. These first-ever proposed standards are a key part of a broader strategy, under the President’s Climate Action Plan, to cut methane emissions in the sector by 40% to 45% below 2012 levels in the next decade.

Building on its 2012 New Source Performance Standards (NSPS) for VOC emissions for the oil and natural gas industry, EPA’s proposed updates would require that the industry also reduce methane emissions. Sources already subject to the 2012 NSPS requirements for VOC reductions, which would also be covered by the proposed 2015 methane requirements, would not have to install additional controls, because the controls to reduce VOCs reduce both pollutants. Although the three-year-old mandates targeted VOCs at the sites, the approach cut methane emissions as a side benefit.

The new proposal would go further, requiring methane and VOC reductions from hydraulically fractured oil wells, too. And, the new plan would extend those emission-cutting requirements further downstream to natural gas transmission and processing equipment. Continue Reading

Struggling U.S. Rare Earth Industry is Vital to a Stable Global Economy

Rare earth elements are found in nearly every aspect of our lives. Televisions, smartphones, tablets, computers, stereos, and cars all contain rare earth elements. Our national security also relies on rare earths in precision-guided missiles, radar, night-vision goggles, lasers, satellites, fighter jets, and submarines. Virtually every aspect of modern society relies in part on rare earth elements.

Not long ago, the U.S. led the world in the rare earth industry and pioneered many of its common applications. However, due to burdensome regulations and strategic foreign investment, many U.S. mines were shut down or struggled to compete with foreign competition. Today, China has a virtual monopoly, roughly 95 percent of the mining, refining, and processing of rare earths occurs there. This dominance causes the U.S. and other nations to depend on China for the natural resources needed in a modern society.

This dependence on China is not lost on the Director of National Intelligence, General James Clapper, who discussed it in congressional testimony, as part of an annual “Worldwide Threat Assessment.”

Many are concerned that China will flex its muscles and disrupt the rare earth supply chain for strategic reasons. This occurred previously when China temporarily cut off rare earth exports to Japan over a territorial dispute.

The only producing U.S. domestic rare earths mine is located in Mountain Pass, California and is operated by Molycorp, Inc. On a recent 60 Minutes episode, Constantine Karayannopoulos, chairman of Molycorp, stated that regulators and the industry need to “take a long-term view” on how to bring more of the rare earth industry back to the U.S. “And it’s probably going to take us 10, 15 years, if we execute, for some of these supply chains to start coming back.”

BLM Responds To Ute Indian Tribe’s Injunction Motion In Fracking Rule Litigation

Following a court hearing and order temporarily delaying the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on federal public lands, the BLM submitted its response brief opposing the Ute Indian Tribe’s preliminary injunction motion on July 1.  Among the BLM’s arguments, it asserted four primary points:

  • First, the BLM contends that the Indian Mineral Leasing Act and Indian Mineral Development Act grant the BLM authority to exercise regulatory jurisdiction over hydraulic fracturing on Indian lands.
  • The BLM maintains that its final fracking rule is consistent with the Secretary of the Interior’s statutory trust obligations to Indian tribes.
  • In response to the Ute Indian Tribe’s economic arguments, the BLM asserts that associated costs are reasonable in light of the need for the final rule, and will not cause irreparable economic injury.
  • Lastly, the BLM contends that the Ute Indian Tribe is unlikely to succeed on the merits of its claim that the BLM failed to properly consult with it, since the Secretary of the Interior engaged in tribal consultation before publishing the final rule.

The Ute Indian Tribe submitted its reply brief on July 8.  Pursuant to the Wyoming federal court’s order on June 23, these arguments will be taken under advisement until after the BLM has lodged its administrative record, at which point all of the parties who have submitted preliminary injunction motions will have an opportunity to supplement their positions.  The court is expected to rule on the preliminary injunction motions later this summer.

BREAKING: Wyoming Federal Court Delays Implementation Of BLM’s Final Fracking Rule

On the heels of yesterday’s day-long hearing on several preliminary injunction motions in litigation challenging the Bureau of Land Management’s (“BLM”) new final rule regulating hydraulic fracturing on federal public lands, the Wyoming district court has temporarily ordered a delay of the rule’s implementation for at least several weeks. (See our prior coverage of the preliminary injunction briefing here.) According to official minutes from the proceedings, the court will stay the final rule’s effective date—originally set for today, June 24—in order to give the BLM more time to file its administrative record. Following that, the parties will have seven days to submit citations to those parts of the record that support their arguments. The court will then re-review the motions and issue its ruling within two weeks after receiving the supplemental filings.

Several news outlets have discussed this recent development:

UPDATE: The Wyoming federal district court issued its order postponing the effective date of the BLM’s final rule and it is available here.

Mineral Law Blog will continue to monitor and report on these legal challenges to the BLM’s new public lands hydraulic fracturing rule as they move forward.

More Injunction Arguments In BLM Fracking Rule Litigation Prior To Major Court Hearing Tomorrow

Several more key filings have come into the federal litigation challenging the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands in advance of the June 23 consolidated preliminary injunction hearing. These briefs are summarized below:

BLM’s Opposition To The Preliminary Injunction Motions Filed By The States Of Wyoming And Colorado And By The State Of North Dakota

In responding to a preliminary injunction motion filed by the states of Wyoming and Colorado, the BLM argued three main points.

First, the BLM contends that the states failed to demonstrate its likelihood of succeeding on the argument that it exceeded its statutory authority, since Congress delegated the BLM authority over federal public lands and minerals through various statutes, including the Mineral Leasing Act of 1920 (MLA). The BLM further maintains that the Safe Drinking Water Act (SDWA)—cited by the states governments—does not displace its authority under the MLA.

The BLM also submits that the states failed to demonstrate irreparable harm, particularly because federal public lands are within the federal agency’s power to regulate. According to the BLM’s opposition arguments, the final fracking rule does not harm the states’ sovereign authority, but, instead, preserves that sovereignty.

Finally, the BLM argues that the balance of harms and public interest weigh against an injunction, because the BLM’s final rule covers all public lands in the United States, whereas the states’ regulatory authority does not extend beyond their borders.

The BLM largely echoed these arguments in its response opposing the State of North Dakota’s separate preliminary injunction motion, adding that economic harm is not a basis for granting a preliminary injunction, even if North Dakota were to suffer some economic harm in terms of reduced tax income.

Opposition To State Governments’ Preliminary Injunction Motions By Environmental Groups

Sierra Club and the other intervening environmental groups also filed arguments opposing the preliminary injunction motions by Wyoming, Colorado, and by North Dakota. Those arguments largely parroted ones set forth by the BLM in its opposition briefs. Specifically, the environmental groups argued that the BLM has broad statutory authority to regulate oil and gas development on federal lands; the states failed to show that they will suffer lost mineral or tax revenue due to the final rule; and that the public interest weighs against a preliminary injunction, since the BLM’s final rule will prevent drilling of new oil and gas wells using environmentally inadequate methods.

State Of Utah Joins The Fray

In addition, the State of Utah—which previously indicated its intent to intervene in the litigation—filed papers formally joining in the preliminary injunction arguments set forth by Wyoming, Colorado, and North Dakota.

UPDATE (June 23): On June 22, the Ute Indian Tribe of the Uintah and Ouray Reservation in Utah filed an unopposed motion to intervene in the lawsuit challenging the BLM’s final fracking rule, as well as its own motion for a preliminary injunction.  Among its arguments, the tribe contends that the BLM’s final rule is contrary to the federal government’s fiduciary obligations to manage Indian trust lands in a way that’s profitable for Indians, citing the Indian Mineral Leasing Act (IMLA).  Those obligations are distinguishable from the federal mandate for overseeing non-Indian public lands, according to the tribe.  Arguing that the final rule will hinder the Ute Indian Tribe’s economic development and reduce job opportunities in its sovereign territory, the tribe maintains the rule as promulgated is inconsistent with lawfully managing those two different types of public lands, and that a separate rule is necessary for Indian trust land.  The Ute Indian Tribe also submits that the BLM did not properly consult with its tribal government in developing the final rule, contrary to Department of Interior policies and procedures, and that the BLM’s final rule exceeds its authority in light of the IMLA and other federal authority concerning Indian trust lands.

Mineral Law Blog will continue to monitor and report on these legal developments as they progress.

By Andrew Pieper (andrew.pieper@stoel.com) and Jenny Suh.  Ms. Suh is a Summer Associate with Stoel Rives LLP and is not currently licensed to practice law.

Preliminary Injunction Arguments Pour Into Litigation Against BLM’s Final Fracking Rule

Since our last update on federal litigation in Wyoming challenging the Bureau of Land Management’s (BLM) final rule to regulate hydraulic fracturing on public lands, the flurry of activity continues in advance of the June 23 preliminary injunction hearing. We’ve summarized several key filings below:

BLM’s Opposition To Preliminary Injunction

On June 1, the BLM filed its brief opposing the preliminary injunction motion entered by the two industry group plaintiffs—the Independent Petroleum Association of America and the Western Energy Alliance. The BLM primarily focuses on two arguments.

First, the BLM contends the industry groups are unlikely to succeed on the merits of their litigation against the rule, and, as a result, a preliminary injunction is unwarranted. In support of its position, the BLM argues:

  • It developed the final rule in accordance with appropriate statutes, including the Federal Land Policy and Management Act, which grants the BLM authority to administer public lands and resources.
  • The industry can comply with certification requirements, such as the temporary recovered fluid storage requirement, by invoking trade secret protection under the BLM’s existing regulations.
  • The final rule is justified and necessary to address modern technological advances and changes in hydraulic fracturing industry.
  • The industry groups failed to demonstrate irreparable harm, since there is no imminent risk of disclosure of confidential information.

The BLM also maintained that the public interest would not favor a preliminary injunction, because entering one would deny the BLM tools to prevent environmental harm, including putative groundwater contamination. And, according to the BLM’s arguments, an injunction would detrimentally affect the orderly administration of federal energy policy, causing confusion among the public and the industry as to whether and when its final fracking rule would become effective.

Continue Reading

Status of Oil and Gas-related Bills Proposed in California’s 2015-2016 Legislative Session

June 5, 2015 marked the deadline for lawmakers to pass bills out of their house to the opposite house. Bills that did not pass in their house of origin by that date have effectively died (unless such bill has been identified as a 2-year bill). Below is the status and summary of the oil and gas related bills Stoel Rives is monitoring. Stoel’s Oil & Gas Team will continue to monitor these bills, among other environmental related legislation, throughout the 2015-2016 Legislative Session and provide periodic updates as the bills move through the legislative process.

SENATE BILLS

SB-13 (Pavley): Groundwater

UPDATE: This bill passed the Senate on April 30, 2015, and is pending in the Assembly Committee on Water, Parks and Wildlife.

If passed by the legislature and signed into law, this bill would:

  • specify that the State Water Resources Control Board is authorized to designate a high- or medium-priority basin as a probationary basin;
  • provide a local agency or groundwater sustainability agency 90 or 180 days, as prescribed, to remedy certain deficiencies that caused the board to designate the basin as a probationary basin; and,
  • authorize the State Water Resources Control Board to develop an interim plan for certain probationary basins one year after the designation of the basin as a probationary basin.

In addition, if the Department of Water Resources determines that all or part of a basin or subbasin is not being monitored, this bill would require the Department of Water Resources to determine whether there is sufficient interest in establishing a groundwater sustainability plan.

Finally, SB-13 would eliminate the provisions requiring a local agency or combination of local agencies that elect to be a groundwater sustainability agency for a basin to submit a prescribed notice of intent to the Department of Water Resources.

Continue Reading

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