Shale Oil and Gas

Question 1

The Shale Boom
(2)

Answer 1

1. United State’s production more than doubled between 2010 and 2019.
2. Places like the Utica Shale

Question 2

Mechanics of Hydraulic Fracturing
(4)

Answer 2

(1) Not a new thing, been around since midcentury. In 1980’s technology developed to turn drill bit and horizonatally frack.
(2) A lot of shale is very narrow, only 30-50 ft.
(3) Fracking needs: 1. Pressurized water 2. Surfactants (slippery soap) 3. Proppants (sand or ground up golf ball).
(4) Need hundreds of water trucks to crack the rock.

Question 3

Environmental Risks
(6)

Answer 3

(1) Big Point: We know very little. United States is eagerly fracking and other countries are approaching with more caution (wait and see approach). USA has profitted from their caution.
(2) Groundwater Contamination: Can say with confidence that this is not a huge deal. Sometimes happens, but not a widespread problem.
(3) Water Use: It takes millions of gallons of water to frack one time and comes back up filled with nasty stuff. A. States have to figure out what to do with this B. Oil and Gas try to say that they only take 4-5% of the water in the state.
(4) Wastewater Management: every fracking operationn requires a lot of energy to clean up the water, can’t just take it to a wastewater treatment plant.
(5) Seismic Activity: small scale earthquakes are often, but not real property damage. More of public policy decisions.
(6) Land & Post-production Cleanup: Companies have little to no incentive to clean up well-heads. Oil and Gas companies uniquely poorly structured to clean them up. A lot of areas with many uncapped well-heads.

Question 4

Fracking and Subsurface Trespass

Answer 4

1. Garza:

• Rule: Subsurface hydraulic fracturing that extends into another’s property is not a trespass (ad coelum doesn’t extend that far), and the rule of capture bars recovery.
• But, not every state has gone this direction.
• But, if a wellbore crosses into someone else’s property, that is a trespass.

Question 5

Federal Regulation & Fracking
(6)

Answer 5

Most comes from the state level. Major federal environmental statutes are largely inapplicable.

NEPA: needs a “major federal action” hook; don’t need NEPA for fracking on private lands.

• Even on public lands, NEPA has “categorical exclusions” (Cat Exes) wherein an agency says that “no significant harm” rises from repeated certain kinds of activities
• Cat Exes – a way to make the process more efficient when certain repeated activity does not pass the threshhold.

CAA: fracking is a “minor” source, and CAA only regulates “major” sources of pollution (250 tons). Historically the CAA has not applied to fracking.

CWA – applies to “Waters of the United States,” so little reservoirs of fracking water does not apply

(RCRA) Resource Conservation and Recovery Act – toxic waste statute. Waste associated w/ O&G industry are simply exempt from RCRA.

CERCLA: created a “superfund” of money via tort liability for toxic waste cleanup, but oil and gas is exempt, except for 1 penny per barrel, but that has been taken away.

SDWA (Safe Drinking Water Act): regulates underground injection wells that leave things inside (rather than taking it out) so expected to have some teeth on wellbores

• BUT, Energy Policy Act had the text amend the SDWA that excluded the fracking fluids
• “Halliburton Loophole”

Question 6

Wells on Public Lands

Answer 6

Wyoming v. DOI: The Bureau of Land Management exceeds its statutory authority by promulgating air-emissions regulations with global implications that cannot be independently justified as mineral-waste-prevention measures.

(1) Congressional Review Act (CRA)– allows Congress to undo by simple majority to void regulations that were promulgated within 180 days, presidential approval is likely required. Really held to be a nuclear option, but Trump administration came in and wiped a lot of Obama era regulations away.
(2) Case: Wyoming looks at the flaring regulations and says that this looks more like a clean air act thing and not a mineral capture issue.
(3) Takeaway: (1) When drilling occurs on public land, the legal structure looks quite different. Federal authority over fracking on public land remains. (2) The clean air act preempts a lot of other agency from regulating air quality, a pretty clever argument.

Question 7

EQT Prod. Co v. Crowder (W.VA)

Answer 7

Rule: Even though a mineral owner has an implied right to use the surface of a tract in any way reasonable and necessary to the development of minerals underlying the tract, it cannot use the the surface to access mining or drilling on other lands without an express agreement.