American Oil and Gas Reporter - May 2015 - 16

IndustryDigest
North Dakota, Colorado
Join Wyoming Lawsuit
On BLM Fracture Rules

BISMARCK, N.D.-A federal judge
is allowing North Dakota and Colorado
to join a lawsuit filed by Wyoming that
seeks to block the Bureau of Land
Management's hydraulic fracturing
regulations, state officials say.
The state action parallels a petition
filed by the Independent Petroleum
Association of America and Western
Energy Alliance that assert the new
regulations have no factual, scientific or
engineering basis (AOGR, April 2015,
pg. 58).
The White House announced the
new regulations in March. Under the
revised rules, companies drilling on
federal lands must disclose publically
what chemicals are being used in
fracturing, use new standards in well
construction, and use aboveground
tanks in lieu of lined storage pits. The
rules take effect in June, BLM says.
In filing Wyoming's petition for
review, Governor Matt Mead says the
BLM proposal is troubling from both
legal and policy standpoints.
"Wyoming has fracturing rules.
These rules have been in place for years
and provide for safe development of
minerals," he says. "I am hopeful that
whatever happens in the case, there is
recognition that states such as Wyoming
should be rewarded for their leadership,
not punished by having additional
layers of regulation."
Two members of the North Dakota
Industrial Commission-Governor Jack
Dalrymple and Attorney General
Wayne Stenehjem-approved joining
Wyoming, the North Dakota Petroleum
Council says. The third NDIC member,
Doug Goehring, the agricultural
commissioner, was in China on a trade
mission.
Colorado Attorney General Cynthia
Coffman says the state's regulations and
regulators provide sufficient protection.
"It is important to test BLM's novel
assertion of regulatory authority in an
area that has been traditionally, and in
this case, expressly, reserved for the
states," she says.
The NDPC adds the lawsuit alleges
BLM exceeded its authority in issuing
new regulations when North Dakota has
primacy over its underground injection
control program.
16 THE AMERICAN OIL & GAS REPORTER

Each state has the option of applying
to the Department of the Interior for a
variance under the new law if state
regulations meet or exceed federal ones,
or enter into a memorandum of
understanding over regulations, media
sources say.
"I think the position that the
industry has held is that this essentially
duplicates what the states already do,"
says NDPC President Ron Ness. "The
agencies already have substantial delays
in the workload that the currently have;
they struggle to keep up. This is just an
additional burden on staff resources to
duplicate what the states are doing." Ì

Louisiana Court Rejects
Parish's Zoning Rules
That Stopped Oil Well

BATON ROUGE, LA.-A Louisiana
district judge has rejected St. Tammany
Parish's plans to use its zoning code to
stop drilling and fracturing of an oil
well, ruling the state Office of
Conservation is the sole regulator of oil
and gas drilling.
Helis Oil & Gas proposed in 2014 to
drill the well in a remote area in south
St. Tammany Parish, targeting the
Tuscaloosa Marine Shale. According to
media reports, the company's plans to
drill horizontally and fracture the well
drew opposition from anti-development
activists, and led to lawsuits filed by the
parish council and the town of Abita
Springs. The parish lawsuit cites St.
Tammany's zoning laws as its reason
for opposing Helis. The hearing was
held Feb. 2 before Judge William
Morvant of the 19th Judicial District
Court in Baton Rouge.
Donald Briggs, president of the
Louisiana Oil & Gas Association, says
Morvant strongly asserted the parish did
not have the authority to regulate the oil
and gas industry.
"Other courts have ruled on this
issue many times before. That local
governments are trying to regulate oil
and gas activities is nothing new to
LOGA," Briggs says. "This is just one
of many rulings that has upheld the
Office of Conservation's authority to
regulate the industry. The activists
picked the most conservative parish in
the entire state to take the stand. I don't
know where they go from here."

Helis points out more than 15
exploratory wells already have been
drilled within 15 miles of the proposed
well site, and two pipelines cross the
property. More than 50 wells have been
drilled in St. Tammany Parish, it adds.
The well, to be drilled to 12,000 feet,
will have three casing strings, one more
than state law requires, to increase
protection of the aquifer, the company
says.
"We will move forward in that
parish and Helis will drill the well, and
hopefully it will be a producer," Briggs
says. "This really is not about the well,
but it is about MoveOn.org, the group
that is funding this effort. All the other
parishes in Louisiana are inviting
industry in to drill wells. There is just
one little parish that did not want
anyone drilling there because of the
activist movement." Ì

New Setback Rules
Reasonable, PAW Says

CHEYNNE, WY.-The Petroleum
Association of Wyoming is satisfied
with the Wyoming Oil and Gas
Conservation Commission's final rule
governing the minimum setback
distance between well sites and
occupied structures, indicates PAW
Vice President John Robitaille. The
rules, which were released in mid-April,
take effect immediately after they
receive the governor's signature.
According to Robitaille, that may be as
soon as mid-summer.
When WOGCC proposed
amendments to its setback rules in
November 2014, PAW raised a number
of concerns about the extent to which
they threatened to interfere with
resource recovery (AOGR, December
2014, pg. 18). Robitaille says the final
rule differs from the proposal in a
number of ways, including:
* The rule maintains the proposal's
500-foot setback as measured from the
center of the wellbore. The distance
now includes production facilities,
which are urged to be placed more than
500 feet away where technically
feasible.
* The WOGCC supervisor has
discretion to increase or decrease
setback distances. In some
circumstances, certain parties seeking a
variance may request a commission
American Oil and Gas Reporter - May 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - May 2015
