On May 9, 2014, the U.S. EPA issued a pre-publication copy of an Advance Notice of Proposed Rulemaking (ANPR) requesting public comment on regulatory and voluntary mechanisms for obtaining information on chemical substances and mixtures used in hydraulic fracturing (HF) operations. EPA intends to rely for this purpose upon its Toxic Substances Control Act (TSCA) authority – namely, TSCA Section 8(a), which authorizes EPA to require chemical manufacturers and processors to maintain records and submit information to the Agency, and TSCA Section 8(d), which authorizes EPA to require the submission of health and safety studies from chemical manufacturers, processors, and distributors.
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A Sweet or Sour Development? EPA’s Reduction of Sulfur Content in Gasoline Under the Tier 3 Program
Gasoline sulfur levels have already been reduced by up to 90 percent as a result of the United States Environmental Protection Agency’s (EPA’s) Tier 2 Gasoline Sulfur Program. On March 3, 2014, EPA issued a pre-publication notice finalizing its newest fuels program (the Tier 3 Program) intended to further reduce gasoline sulfur content, as well as exhaust and evaporative emissions from vehicle engines. This Client Alert focuses on the sulfur content reduction component of the Tier 3 Program and the impact that it will have on crude oil refiners. Specifically, on January 1, 2017, the majority of refineries will need to produce gasoline and/or ethanol-gasoline blends that contain, on annual average, no more than 10 parts per million (ppm) sulfur. The impact of the new Tier 3 Program may not be as onerous for those refiners working primarily with low-sulfur (or sweet) crude oil, as sulfur levels in sweet crude are markedly lower than “sour” crude (of which sulfur content is generally greater than 0.5 percent).
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Energy Industry Faces Increased Exposure to Claims by Patent Trolls
A patent-assertion entity (PAE) or non-practicing entity (NPE) is an entity that enforces patent rights against others, but does not itself use the patents for any productive purpose. A perennial adversary of high-tech companies and startups, recent studies looking at the rise in patent litigation reveal that these “patent trolls” are turning their sights increasingly on less traditional technology innovators – including those in the energy industry.
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Troubled Waters Ahead! New Proposed Rule Defines Areas Regulated by Clean Water Act
On March 25, 2014, EPA and the Army Corps of Engineers issued a pre-publication release of the much-anticipated proposed rule to define the jurisdictional “Waters of the United States” that are regulated under the Clean Water Act (CWA). The proposed rule is aimed at providing clarity and certainty to “jurisdictional water” determinations in the wake of the uncertainty resulting from the 2006 U.S. Supreme Court ruling in Rapanos v. U.S. To that end, the rule proposes to minimize the number of case-specific determinations that will be required by codifying specific categories of waters that will automatically be included or excluded as jurisdictional “waters of the United States.”
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New Fund Available for the Investigation and Cleanup of Petroleum-Impacted Properties
Effective January 31, 2014, the Colorado Division of Oil and Public Safety (Division) promulgated regulations implementing Colorado Revised Statute § 8-20.5-103(9) which established the new Petroleum Cleanup and Redevelopment Fund (Fund). The Fund was created using money the State received in settlement of certain claims related to the Petroleum Storage Tank Fund.
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EPA to Hold Public Hearing in Denver on Proposed General Permits and Permits by Rule for Minor Source NSR Permitting in Indian Country
On March 12, 2014, the Environmental Protection Agency (EPA) will hold a public hearing in Denver, Colorado on the proposed “General Permits and Permits by Rule for the Federal Minor New Source Review Program in Indian Country,” which the agency initially released on December 12, 2013, and published in the Federal Register on January 14, 2014 (79 Fed. Reg. 2546). The proposal is intended to further implement and amend the Indian Country Minor New Source Review (NSR) Rule issued by EPA in July 2011, which authorized but did not specifically include any general permits or permits by rule for minor sources operating in Indian Country.
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New Colorado Policy for Conditional Closure of “Low-Threat” Sites with Groundwater Contamination – A Long-Awaited Exit From Remediation Limbo?
On January 8, 2014, the Colorado Department of Public Health and Environment’s (CDPHE) Hazardous Materials and Waste Management Division published a new policy which provides a roadmap for closing “low-threat” sites where groundwater contamination concentrations exceed Colorado’s groundwater standards.
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Colorado’s Greenhouse Gas Inventory Update: A Work in Progress
On December 11, 2013, the Colorado Department of Public Health (CDPHE) issued its Draft Colorado Greenhouse Gas Inventory – 2013 Update (the GHG Update); a report required every five years. The GHG Update summarizes all of Colorado’s GHG emissions and sinks from 1990 to 2030. To generate the GHG Update, CDPHE used the Environmental Protection Agency’s (EPA’s) model for assigning emission factors and making emission projections. EPA’s model contains Colorado-specific default values, but still relies on numerous assumptions and uncertainties that affect the accuracy of the projections. For example, CDPHE states that for the final inventory, it “will consider how to customize values to more accurately reflect Colorado GHG emissions.” For affected industry participants wishing to comment on the GHG Update, comments on the report are due January 31, 2014.
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The Winds of Climate Change are Blowing
The winds of legal, regulatory, and policy responses to climate change are blowing perhaps more than ever before. The consequences for all stakeholders, and particularly those companies operating in the energy sector, are significant.
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For Ohio Assignments, Beware the
A recent decision from the Ohio Court of Appeals clarifies that a prohibited assignment of an oil and gas agreement (including an oil and gas lease) containing a “soft consent” may be invalidated in the same manner as if the oil and gas agreement contained a “hard consent.”