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The Oregon Legislature’s 2017 session officially kicked off last week. A variety of mineral-related bills have been introduced.  Here are some of the ones to follow:

Mining

SB 3 – SB 3 is primarily focused on suction dredge mining.  It would build on the 2013 enactment of a moratorium, currently in effect until 2021, on the use of motorized equipment engaged in small-scale precious metal mining of placer deposits (i) within and upstream of spawning habitat for salmon and bull trout, and (ii) 100 yards upland from such areas if water quality could be impacted.  SB 3 would wrap Pacific lamprey spawning habitat into the moratorium, but would eliminate the prohibition on upland use of such equipment starting in 2019.  Instead, the use of such equipment, regardless of the size of the operation, within 100 yards upland of any river’s ordinary high water line would be subject to the Department of Geology and Mineral Industries’ (“DOGAMI”) existing exploration and operating permit programs, including the associated reclamation requirements.  Starting in 2021, suction dredge mining would be permanently prohibited in a wide variety of locations unless the mining concerned a federal mining claim and the prohibition would violate federal law.  In those areas where suction dredge mining was allowed, it would require a removal-fill permit issued by the Department of Environmental Quality (“DEQ”) rather than the Department of State Lands.  SB 3 would also provide that the surface mining exclusion certificate required under ORS 517.753 only applies to commercial sand, gravel, and crushed stone operations.
Continue Reading Mineral-Related Bills Pending Before Oregon Legislature

On January 6, 2017, the federal Bureau of Land Management (“BLM”) issued a notice of Draft Resource Management Plan Amendment (“DRMP Amendment”) and Draft Environmental Impact Statement (“DEIS”) for oil and gas leasing and development on federal lands administered by the BLM, Central Coast Field Office (“Planning Area”).  82 Fed. Reg. 1754 (Jan. 6, 2017).  The DRMP Amendment and DEIS describe and analyze alternatives for the planning and management of leasing and development in the Planning Area, as required by the National Environmental Policy Act and the Federal Land Policy and Management Act.  The BLM administers approximately 284,000 acres of surface estate and 793,000 acres of federal mineral estate within the Planning Area.
Continue Reading Draft Resource Management Plan Amendment Released for Central California Federal Lands

UPDATE: Quickly following on the heels of the Wyoming federal district court’s order striking down the Bureau of Land Management’s (BLM) hydraulic fracturing rules, the state governments of North Dakota, Wyoming, Colorado, and Utah have now moved to dismiss the pending Tenth Circuit appeal of the district court’s preliminary injunction order.  Those state government indicated in their brief that they had unsuccessfully attempted to reach out to counsel for the BLM and the environmental groups who filed that appeal, but expected those parties will oppose the dismissal motion.

Separately, the BLM and the intervening environmental groups each filed notices seeking to directly appeal the district court’s June 21 order and judgment striking the BLM’s rules to the Tenth Circuit.  While it remains unclear exactly how this matter will now proceed on appeal, it seems likely that the Tenth Circuit will combine or consolidate all of these appeal issues in one way or another.

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As we’ve previously reported, a Wyoming federal court issued a preliminary injunction order last year that temporarily halted the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands.  Since that time, the case has split into two proceedings: the Wyoming court moved forward with conducting a full legal analysis of the BLM’s final rule, while several environmental groups who had intervened in the lawsuit appealed the preliminary injunction order to the Tenth Circuit Court of Appeals.  This week we received some clarity on one of those proceedings, while the other remains pending.

District Court Strikes Down BLM Final Rule

On June 21, the Wyoming court struck down the BLM’s final rule, finding the agency lacked the legal authority to promulgate those regulations.

In his order, Judge Scott Skavdahl premised his opinion on whether Congress delegated requisite authority to the BLM to regulate hydraulic fracturing on public lands, and “not whether hydraulic fracturing is good or bad for the environment or the citizens of the United States.”  Ultimately, Judge Skavdahl held, a federal agency “may not exercise its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law.”Continue Reading Wyoming Court Strikes Down BLM Hydraulic Fracturing Rule; Existing Appeal Remains Pending (For Now)

On May 2, 2016, the Colorado Supreme Court issued opinions in two separate cases challenging local bans on hydraulic fracturing (“fracking”).  A win for the oil and gas industry in the state, the Supreme Court held that the challenged fracking bans were preempted by state law in both cases.  These decisions highlight the legal principle or doctrine of “preemption” – if  state law allows a process, like fracking, a local government is not permitted to ban or outlaw it.

In City of Fort Collins v. Colorado Oil and Gas Association (No. 15SC668, 2016), the Colorado Oil and Gas Association, an industry trade association, sued the City of Fort Collins seeking a declaratory judgment that Fort Collins’ moratorium on fracking was preempted by state law.  In November 2013, the citizens of Fort Collins approved a citizen-initiated ordinance that placed a moratorium on “hydraulic fracturing and the storage of its waste products within the City of Fort Collins or on lands under its jurisdiction for a period of five years, without exemption or exception, in order to fully study the impacts of this process . . .”  Opinion, at 5.  In finding that the State of Colorado has an interest in regulating fracking, the court held that Fort Collins’ fracking moratorium “renders the state’s statutory and regulatory scheme superfluous” because it prevents oil and gas operators from complying with state law that permits and regulates fracking.  “In doing so, the moratorium materially impedes the effectuation of the state’s interest in the efficient and responsible development of oil and gas resources.”  Id. at 14.Continue Reading Colorado Court Strikes Down Local Fracking Bans that Conflict with State Law

The Bureau of Land Management (“BLM”) recently filed a Motion for Summary Judgment in a lawsuit brought by a coalition of environmental activists who have challenged the BLM’s Resource Management Plan (“RMP”) for public lands and minerals in California managed by the Bakersfield Field Office.  The activists asked a California federal judge to strike down the BLM’s RMP, claiming that the BLM never considered the effect of “unconventional drilling methods,” such as hydraulic fracturing on the land.

The BLM responded by pointing out that hydraulic fracturing is not a new, unproven technology and has been routinely used in California for over 50 years. It is estimated that only 25% of new wells in the Bakersfield planning area are expected to undergo hydraulic fracturing.  Furthermore, the BLM noted that 98% of new wells on federal mineral lands in the planning area are projected to be drilled on existing leases that have been producing for over 30 years and not on pristine, undisturbed lands.

The activists claimed that the BLM failed to take a “hard look” at the environmental impacts associated with fracking as required by the National Environmental Policy Act (“NEPA”). However, any claim that the BLM did not comply with NEPA in developing the RMP is particularly weak under these facts.  The BLM developed a comprehensive, 1,000-page environmental impact statement (“EIS”).  Additionally, before issuing a final decision, BLM commissioned an independent review of well stimulation technologies in California to ensure that its EIS accurately reflected the potential impacts of fracking.  And finally, the independent review concluded that overall, the direct environmental impacts of well stimulation practice are relatively limited in California.
Continue Reading BLM Fights Back Against Activists’ Criticisms of CA Resource Management Plan

Two lawsuits were filed within days of each other in Oklahoma, claiming that energy companies engaged in hydraulic fracturing and underground disposal of produced water are causing earthquakes throughout the state. These lawsuits probably come as no surprise to the industry after the Sierra Club recently threatened to sue four oil companies for contributing to increased earthquakes in Oklahoma and southern Kansas.

A pair of Oklahoma residents, in a class-action lawsuit, have accused four energy companies of causing “a dramatic increase” in earthquakes throughout the state during the last five years. The lawsuit names Sandridge Exploration and Production, Chesapeake Operating, Devon Energy Production Company, and New Dominion as the defendants.

The plaintiffs claim that hydraulic fracturing and underground disposal of produced water are causing earthquakes across the state by increasing the pore pressure within faults making the fault more prone to slip.

The lawsuit alleges that the companies are liable to the plaintiffs and the class for nuisance, trespass, negligence, and engaging in an ultra-hazardous activity. The plaintiffs are seeking not only compensatory damages, but also punitive damages and attorneys’ fees.
Continue Reading Two Frackquake Lawsuits Filed in Oklahoma

Before leaving Washington, D.C. for the holidays, President Obama signed H.R. 2029 (Consolidated Appropriations Act, 2016), which repealed the ban on U.S. exports of crude oil.  The repeal occurred just few days before today’s 40th anniversary of President Ford signing the ban into law.  According to historical data from the U.S. Energy Information Administration,…

Following a Wyoming federal court’s order temporarily halting the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands, Sierra Club and several other environmental groups requested the court enter final judgment and delay proceedings while they pursue an appeal through the Tenth Circuit Court of Appeals.  (Our complete coverage of this…

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.”Continue Reading Sierra Club Issues Notice of Intent to Sue over Frackquakes in Oklahoma

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…

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…

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Here Stoel Rives shares insight and analysis about key mineral law developments. Drawing on a very active natural resources practice, we aim to keep readers informed about the legal aspects of news that impacts exploration and development of all things mineral.