Presidential Memo Imparts “Moral Obligation” on Agencies to Mitigate Impacts of Natural Resource Development

On Tuesday, November 3, the White House released a Presidential Memorandum: “Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment” (“Memorandum”).  The Memorandum was sent to the Secretaries of Defense, Interior and Agriculture and the administrators of the Environmental Protection Agency and the National Oceanic and Atmospheric Administration, and purports to establish a general “no net loss” goal for natural resources impacted by federal actions.  The Memorandum recognizes “a moral obligation to the next generation to leave America’s natural resources in better condition than when we inherited them” and establishes the following policies applicable to identified federal departments and agencies (and all bureaus and agencies within them):

  • To avoid and to minimize harmful effects to land, water, wildlife and other ecological resources (natural resources), and to require compensatory mitigation for the projects they approve.
    Agency mitigation policies should establish a net benefit goal or, at a minimum, a no net loss goal for natural resources each agency manages that are important, scarce, sensitive, or “consistent with [an] agency[’s] mission.”
  • For compensatory mitigation, agencies are directed to give preference to advance compensation mechanisms, such as mitigation bank approaches. “Advance compensation” is defined to mean a form of compensatory mitigation for which measurable environmental benefits (defined by performance standards) are achieved before a given project’s harmful impacts to natural resources occur.
  • Agencies are encouraged to use large-scale plans to identify areas where development is most appropriate, where natural resource values are irreplaceable and development policies should require avoidance, and where high natural resources values result in the best locations for protection and restoration.

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Sierra Club Issues Notice of Intent to Sue over Frackquakes in Oklahoma

On Monday, November 2, the Sierra Club issued a Notice of Intent to Sue (“Notice”) four oil companies, alleging ongoing violations of the Resource Conservation and Recovery Act (“RCRA”).  Specifically, the Notice states that the injection and disposal of hydraulic fracturing waste fluids into the ground is a “past and present handling and disposal of Production Wastes in a manner that may present an imminent and substantial endangerment to health and the environment,” in violation of RCRA.  The Notice claims that fluid injection by oil companies, Sandridge Exploration and Production, New Dominion, Devon Energy Production Co. and Chesapeake Operating, is contributing to increased earthquakes in Oklahoma and southern Kansas.

This Notice follows a recent publication by the U.S. Geological Survey (“USGS”).  On October 20, the USGS released a report, A Century of Induced Earthquakes in Oklahoma?, that reviews the increased rate of seismicity in the central and eastern U.S. since 2009.  The report attempts to link industrial activity to the incidence of large earthquakes in the region.  As the Sierra Club Notice points out, the report states that injection of wastewater in deep disposal wells “potentially” induces earthquakes.  Additionally, a research letter published in October 2015 examined the two Cushing, Oklahoma earthquakes that occurred in October 2014, stating that a study of earthquake hazards and “its relationship to wastewater injection is important in order to understand potential damage to critical infrastructure in the region.”

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Activists Make Good on Promise to Sue DOT over Pipeline Regs.

On October 8, the National Wildlife Federation (“NWF”) fulfilled its promise to sue the U.S. Department of Transportation (“DOT”). The lawsuit alleges that for 20 years the DOT has allowed pipelines to operate illegally by failing to issue regulations under section 311(j) of the Clean Water Act (“CWA”), which requires pipeline operators to submit plans detailing response actions to be taken in the event of a worst-case scenario spill. The complaint specifically focuses on pipelines that cross inland navigable waters of the United States. According to the Pipeline and Hazardous Materials Safety Administration, pipelines cross inland bodies of waters at more than 18,000 locations in the United States.

In the complaint, which was filed in the U.S. District Court for the Eastern District of Michigan, the NWF claims that DOT is obligated to issue regulations requiring owners or operators of pipelines, landward of the coast line located in, on, or under any navigable waters of the United States, to prepare and submit to the DOT a facility response plan (“FRP”).

FRPs outline actions to be taken in the event of a worst-case discharge of oil or hazardous substances into waters of the United States.  Owners and operators must ensure that they have sufficient resources to cleanup a “worst case discharge” and to mitigate or prevent a substantial threat of such a discharge.

While the lawsuit has national implications, the NWF’s complaint largely focuses on two buried pipelines that connect Lake Michigan to Lake Huron via the Straits of Mackinac, carrying up to 22.7 million gallons of crude oil or natural gas liquids a day. In the lawsuit, the NWF seeks an order to (1) compel DOT to issue the new FRP regulations and (2) set a schedule for the DOT to obtain and review FRPs.

Mineral Law Blog will continue to monitor and report on this lawsuit as the case evolves.

Mining on 10 Million Acres in Six States Impacted by BLM’s Proposed Withdrawal

On September 24, 2015, the federal Bureau of Land Management (“BLM”) published a Notice of Proposed Withdrawal (“BLM notice”), proposing to withdraw from mineral location and entry federal lands identified as “sagebrush focal areas” in Idaho, Montana, Nevada, Oregon, Utah, and Wyoming. The BLM notice commences a two-year temporary segregation period, prohibiting location and entry of new mining claims on BLM and U.S. Forest Service lands in these sagebrush focal areas. If the BLM decides to withdraw the area at the end of the segregation period, the withdrawal will last up to 20 years, but could be extended in the future. The proposed withdrawal area covers approximately 10 million acres. The map below from the BLM shows the proposed withdrawal area, and an interactive map with more detail is available here. Continue Reading

BREAKING: Wyoming Federal Court Halts Implementation Of Public Lands Hydraulic Fracturing Rule

Late yesterday, Judge Scott Skavdahl of the federal district court in Wyoming issued a much-anticipated order granting a series of preliminary injunction motions filed in litigation challenging the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands.  (Our full coverage of the litigation is available here.)  In a detailed 54-page opinion preceding the order, Judge Skavdahl set out his rationale as follows:

  • Upon examining each of the laws on which the BLM relied to establish its ability to regulate hydraulic fracturing on public lands, the court found the BLM acted outside the scope of its statutory authority by enacting the final rule.  Specifically, Judge Skavdahl found that the explicit exclusion of hydraulic fracturing from the Energy Policy Act of 2005 removed that activity from the realm of federal regulation, and precluded the BLM from issuing its final rule.
  • In addition, Judge Skavdahl evaluated arguments that the BLM’s final rule is “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law.”  After assessing the BLM’s arguments to the contrary, the court found that the BLM did not give due consideration to whether its concerns or the “potential impacts” it cited were substantiated by facts.  As a result, Judge Skavdahl held that the BLM’s explanations failed to satisfy the arbitrary and capricious legal standard.
  • The court also credited arguments by the Ute Indian Tribe that the BLM failed to properly consult with it on a government-to-government basis, as required by the BLM’s own policies and procedures.  Judge Skavdahl found that the BLM did little more for the Ute Indian Tribe than what it offered to the public in general, which runs counter to the Department of Interior’s policies requiring extra, meaningful efforts to include tribes in decision-making processes.
  • Judge Skavdahl further found that the states (Wyoming, Colorado, North Dakota, and Utah), the Ute Indian Tribe, and the industry groups involved in the litigation adequately demonstrated that they would suffer “irreparable injury” if a preliminary injunction were not issued, and that issuance of the injunction would pose little more than an inconvenience to the BLM’s interests.

As a result of this order the BLM’s final rule will not be implemented until after the conclusion of the litigation, unless an appellate court reverses Judge Skavdahl’s decision in the interim.

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.

U.S. Fish and Wildlife Service Determines Protection for Greater Sage-Grouse No Longer Warranted

In a speech at the Rocky Mountain National Wildlife Refuge, Interior Secretary Sally Jewell announced yesterday that the U.S. Fish and Wildlife Service (USFWS) will not list the greater sage-grouse under the Endangered Species Act (ESA). Finding that protection under the ESA is no longer warranted due to an “unprecedented conservation partnership,” the USFWS announced that it was withdrawing the species from the candidate list.   The decision comes roughly a week before a court-ordered deadline for a decision. Continue Reading

With Latest Filings, Decision On Preliminary Injunction Motions In Litigation Against BLM Fracking Rule Expected Soon

In June, a Wyoming federal district court temporarily delayed implementation of the Bureau of Land Management’s (“BLM”) new final rule regulating hydraulic fracturing on federal public lands, while it granted the BLM an extension to lodge its administrative record and permitted the parties more time to file citations to that record in support of their positions.  (See our prior coverage of the preliminary injunction briefing here.)  Last Friday, the following parties submitted their record citations:

The court will now review these record citations and the various preliminary injunction motions.  A ruling is expected sometime within the next two weeks.

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.

Miners and States take Notice, the EPA is Updating its CERCLA Financial Responsibility Requirements

The U.S. Environmental Protection Agency (“EPA”) has recently announced that it would take steps to finalize rules establishing financial responsibility requirements for hard rock mines under section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”).

Section 108(b) gives the EPA the authority to require certain facilities to have some type of financial security mechanism in place – such as a bond or insurance policy – that can be used to pay for spills or cleanups should a mining or mineral processing company declare bankruptcy or be otherwise unable to conduct necessary response activities. CERCLA requires the financial responsibility to be consistent with the degree of risk associated with the production, transportation, treatment, storage or disposal of hazardous substances.

In 2009, the EPA published a notice in the Federal Register designating the hard rock mining industry as its priority for the development of financial responsibility requirements. In making this determination, the EPA cited a heightened “risk” associated with hard rock mining which increase the likelihood of releases of hazardous substances.

The framework for the new regulations assigns financial responsibility amounts based on a facility’s characteristics (i.e., open pits, waste rock, tailings, heap leach, process ponds, water management, and operations, maintenance and monitoring). Natural resources damages and health assessment costs would be separate fixed amounts imposed on each facility. The financial responsibility requirements are intended to be separate and distinct from other federal closure and reclamation bonding requirements imposed under other statutes. Continue Reading

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