President Trump’s recent executive orders have benefited the oil pipeline industry in a number of ways, including most notably, giving the final “okay” to the Dakota Access Pipeline. But some legislative mandates have been out of the reach of the President’s pen. On April 27, the federal Pipeline and Hazardous Materials Safety Administration (“PHMSA”), within the Department of Transportation, released a final rule revising its maximum penalties for violations of pipeline safety laws. The rule titled, Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties, was issued pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires federal agencies to adjust their civil monetary penalties annually to account for changes in inflation. So what’s changed?
Continue Reading Some Not-So-Good News Out of Washington, D.C. for Pipeline Operators – Feds Increase Fines for Pipeline Safety Violations
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Industry Groups Push Back Against Environmental Activists in Suit Over Oil & Gas Waste Disposal Regs.
By Mike Mills & Eric Skanchy on
Posted in Oil & Gas, Regulation
As we discussed earlier, environmental activists have asked the Environmental Protection Agency (“EPA”) to update its oil and gas drilling waste disposal rules under the Resource Conservation and Recovery Act (“RCRA”). The groups sought to force the EPA’s hand by suing the EPA in an attempt to get a court order requiring the EPA to update its regulations.
Under RCRA, non-hazardous solid waste, which includes oil and gas production waste, is governed by Subtitle D. Subtitle D focuses on state and local governments as the primary regulating entities for the management of non-hazardous solid waste. It establishes minimum federal technical standards and guidelines for state solid waste regulations. The EPA is required to review and approve state Subtitle D waste disposal programs to ensure that they meet the minimum standards.
Section 2002(b) of RCRA requires the EPA to review and, if necessary, revise at least once every three years the Subtitle D regulations. The activists have asked the EPA to revise its Subtitle D regulations and set clear requirements to govern the storage and disposal of oil and gas waste amid a “patchwork of [state] requirements with varying protections.”
Continue Reading Industry Groups Push Back Against Environmental Activists in Suit Over Oil & Gas Waste Disposal Regs.
Activists Threaten to Sue if EPA doesn’t Update RCRA Regs to Cover Oil & Gas Industry
By Mike Mills & Eric Skanchy on
Posted in Oil & Gas
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 Activists Threaten to Sue if EPA doesn’t Update RCRA Regs to Cover Oil & Gas Industry
EPA Finds No Systemic Threat to Drinking Water from Fracking
By Mike Mills & Eric Skanchy on
On Thursday, the Environmental Protection Agency (“EPA”) released a long awaited, and congressionally mandated, study detailing the relationship between hydraulic fracturing and drinking water. The EPA found no signs of “widespread, systemic” drinking water pollution from hydraulic fracturing.
“It is the most complete compilation of scientific data to date,” says Dr. Thomas Burke, with the EPA’s Office of Research and Development, “including over 950 sources of information, published papers, numerous technical reports, information from stakeholders and peer-reviewed EPA scientific reports.”
“After more than five years and millions of dollars, the evidence gathered by EPA confirms what the agency has already acknowledged and what the oil and gas industry has known,” said Erik Milito, with the American Petroleum Institute. “Hydraulic fracturing is being done safely under the strong environmental stewardship of state regulators and industry best practices.”
Continue Reading EPA Finds No Systemic Threat to Drinking Water from Fracking
States Show Their True Colors on Fracking – One Enacts a Ban, While Two Others Prohibit All Local Bans
By Mike Mills & Eric Skanchy on
Three states have recently taken a stand for or against controversial bans on hydraulic fracturing. Oklahoma, Texas, and Maryland have all passed laws within the past month relating to hydraulic fracturing bans.
Oklahoma
Last Friday, Oklahoma Governor Mary Fallin signed Senate Bill 809, which prohibits local governments from choosing whether to have oil and gas operations within their jurisdictions. Oklahoma’s law allows exceptions for “reasonable” restrictions for setbacks, noise, traffic issues and fencing. Governor Fallin said “A patchwork of regulations that vary across the state would be inconsistent with the goal of reasonable, easily understood regulations and could damage the state’s economy and environment.” Senate Bill 809 reaffirms that the Oklahoma Corporation Commission is the primary entity charged with establishing a unified regulatory framework for the energy industry. Chad Warmington, president of the Oklahoma Oil and Gas Association, said “This bill was a good compromise for all involved. It maintains the Corporation Commission’s role in regulating oil and gas activities, without limiting cities’ ability to protect their residents.” Senate Bill 809 passed with wide margins in both the House and the Senate.
Continue Reading States Show Their True Colors on Fracking – One Enacts a Ban, While Two Others Prohibit All Local Bans
New Rules on MLPs & Qualifying Income: What Oil Services and Exploration Companies Need to Know
By Mike Mills & Eric Skanchy on
On Tuesday, May 5, 2015, the Internal Revenue Service (“IRS”) released proposed regulations defining qualifying income for Master Limited Partnerships (“MLPs”). MLPs are publicly traded partnerships that are taxed as a partnership rather than a corporation.
Being taxed as a MLP has many advantages. While shareholders in a corporation face double taxation ̶ paying taxes first at the corporate level, and then at the personal level when those earnings are received as dividends ̶ owners of a partnership are taxed only once, when they receive distributions. The absence of taxes at the company level gives MLPs a lower cost of capital than is typically available to corporations, allowing the MLPs to pursue projects that might not be feasible for corporations.
To qualify as a MLP, at least 90% of the entity’s gross income must be “qualifying income.” Previously, there had been no detailed list of what constitutes qualifying income.
These proposed regulations use the term “qualifying activities” to describe activities relating to minerals or natural resources that generate qualifying income. The IRS has now provided an exclusive list of operations that constitute qualifying activities. The activities addressed include exploration, development, mining or production, processing, refining, transportation, and marketing of any natural resource.
Continue Reading New Rules on MLPs & Qualifying Income: What Oil Services and Exploration Companies Need to Know
BLM California State Office Cancels Statutorily-Required Oil & Gas Lease Auctions for 2013
By Mike Mills on
The third Bureau of Land Management auction of oil and gas sales scheduled for the 2013 fiscal year should have been held today for federal lands in California. However, last month the BLM California office issued a short notice stating that it would cancel remaining 2013 oil and gas lease sales planned for May, June…
State of Alaska Extends Certain Oil & Gas Leases
By Ramona Monroe on
The State of Alaska has amended state law to provide for extension of the primary term of oil and gas leases on state lands when such extensions are in the best interests of the state. HB 198 authorizes the Commissioners of the Department of Natural Resources (the “Commissioner”) to extend the primary term of an…
DOE-Commissioned Study Endorses LNG Exports, Says U.S. Economy Will Benefit
By Mike Mills on
Posted in Natural Gas Storage
Via my colleague Erin Anderson:
Liquefied natural gas (“LNG”) exports will benefit the U.S. economy according to a NERA Economic Consulting study commissioned by the U.S. Energy Department (“DOE”). Posted on Wednesday, December 5, the two-part study concluded that the economic benefits of LNG export will outweigh the impact of potentially higher natural gas…
Additional Details On The Removal Of Elena Miller And Derek Chernow
By Tom Henry on
Here is more information on Governor Brown’s removal of Elena Miller as the head of California’s Division of Oil, Gas and Geothermal Resources (DOGGR). Derek Chernow, the head of California’s Department of Conservation was also removed. In addition to supervising DOGGR, Chernow supervised California’s State Mining and Geology Board and the Office of Mine Reclamation. As discussed…