Friday, November 22, 2013

Colorado releases draft rules that may make it the first state to regulate methane from oil and gas drilling.

On November 18, Colorado released proposed rules that would directly regulate the detection and reduction of methane emissions associated with oil and gas drilling.  The rules are basically expanding the current provisions for reducing emissions that apply only in "non-attainment areas" to all areas that have been shown to have air quality worse than the national average.

The Air Quality Control Commission will be seeking additional input as the process continues but it appears that they already have the support of petroleum companies in the state.  Several petroleum companies operating in Colorado released a joint statement in support the proposal, saying that it is a “The process and increased accountability established by the proposal will provide transparency and build public trust.”

Click here for the Colorado Governor’s announcement of the rules.

Click here for the proposal and related information. 

Written by Joseph Negaard 
November 22, 2013

Thursday, November 21, 2013

Third Circuit affirms summary judgment order finding well operator did not surrender non-unitized lease acreage

On Nobermber 18, 2013, the United States Court of Appeals for the Third Circuit affirmed the United States District Court for the Middle District of Pennsylvania’s decision to grant summary judgment in favor of a well operator, finding that a belated delay rental payment for non-unitized acreage was an immaterial breach insufficient for the well operator to forfeit the lease. Linder v. SWEPI, LP, 2013 WL 6052135 (3d. Cir. Nov. 18, 2013). The Third Circuit agreed with the district court holding that the lease remained in effect as to non-unitized acreage after the well operator was late in making a delay rental payment. The Third Circuit reasoned that the late payment was not detrimental to the lessor lessee relationship because the lease did not contain a “time is of the essence clause.” Further, the circuit court reasoned the late payment was not immaterial because the lease contained a sixty-day curative period that allowed the lessee to correct any incorrect or failed payments. The purpose of that clause, the court found, was to increase the chances an out-of-court resolution would occur given a breach. Therefore, it did not act as a substitute for a time is of the essence clause to establish materiality. Finally, the Third Circuit found the well operator never surrendered the non-unitized acreage because it did not file a Surrender of Lease as required by the lease’s surrender clause.

Written by: Garrett Lent, Research Assistant
Agricultural Law Resource and Reference Center
Nov. 2013

Tuesday, November 19, 2013

California Proposes New Well Stimulation Regulations

On November 18, 2013, California's Department of Conservation released proposed hydraulic fracturing regulations, which include requiring oil and gas producers to have permits in order to stimulate wells by hydraulic fracturing or acid treatment.  Under the proposed regulations, a producer must disclose the date of stimulation, the location of the well, and the types of chemicals and amount of water used.  In addition to those disclosures, the proposed regulations require producers to notify neighboring owners and tenants before stimulating a well and provide them an opportunity to have their water tested by a third party.  The regulation further provides that producers must monitor well pressures before, during, and after well stimulation.

The proposed regulations are available here: Proposed Regulations

Written by: Tom Panighetti
November 19, 2013

Friday, November 15, 2013

The Alaska Oil and Gas Conservation Commission Opens the Comment Period for new Proposed Hydraulic Fracturing Regulations.

On November 1st, The Alaska Oil and Gas Conservation Commission (AOGCC) announced a public comment period for the third draft of proposed regulations that will change the way hydraulic fracturing is regulated in the state.  The AOGCC’s new regulations will require the notification of landowners, surface owners, and operators within one-half mile of the wellbore, the sampling and analysis of water wells before and after hydraulic fracturing, the disclosure of the chemicals in the hydrolic fracturing fluids, the requirements for wellbore integrity and cementing, and require the containment of hydraulic fracturing fluids.

Comments on the proposed regulation changes can be set by fax to (907) 276-7542, by email, or by submitting written comments by mail to:
Alaska Oil and Gas Conservation Commission
333 West 7th Avenue, Suite 100
Anchorage, Alaska 9950

All written comments must be received by 4:30 p.m. on January 10, 2014. Oral or written comments may also be submitted on January 15, 2014 at the public hearing in Anchorage.

Click here for a copy of the proposed regulation changes.
Click here for more information on submitting public comments.

Written by Joseph Negaard - Research Assistant
The Agricultural Law Resource and Reference Center
November 15, 2013

Thursday, November 14, 2013

Court denies summary judgment in tortious interference action brought by a field services employee owning leased land

On November 4, 2013, the United States District Court for the Western District of Pennsylvania adopted the report and recommendation of a magistrate judge to deny a well operator’s motion for summary judgment. Mason v. Range Resources-Appalachia, LLC, 2013 WL 5890725 (W.D. Pa. Nov. 4, 2013). The plaintiff landowner owns land that subject to a lease between previous owners and the Manufacturers Light and Heat Company, which is currently sub-leased by Range Resources (defendant well-operator). The lease provided for the use of the subsurface for the storage of gas, and the right to produce. The landowner refused to modify the lease in negotiations with the operator and encouraged other landowners to do the same. Throughout this time, the landowner was employed with an oil field services company employed by the well operator. The well operator allegedly ordered the field service company to disallow the landowner from the well operator’s sites, which resulted in a significant demotion to the landowner. The landowner refused to accept the demotion and was terminated. As a result, the landowner brought suit against the well operator for tortious interference with contractual relations. The court denied the well operator’s motion for summary judgment because demonstration of the intent of the well operator is determined by a trier of fact and not as a matter of law. The court explained that the intent of the operator was a genuine issue of material fact because the operator did not submit any evidence of its actual motive in directing the actions of the field services company. As the movant, the operator failed to demonstrate the non-existence of a genuine issue of material fact because it did not provide any justification for directing the operator’s actions.

Written by: Garrett Lent, Research Assistant
Agricultural Law Resource and Reference Center
November 11, 2013

Wednesday, November 13, 2013

OH and CO Localities Vote on Hydraulic Fracturing Bans

Several localities in Colorado and Ohio voted last Tuesday on ballot measures that would result in hydraulic fracturing bans, and half of the ballot measures succeeded. In Colorado, two cities, Lafayette and Boulder passed bans, but the ban failed in Broomfield, a suburb of Denver, by an extremely narrow margin of 49.97% voting for the 5-year moratorium and 50.03% against (currently unofficial). In Ohio, the ban initiatives failed in Bowling Green and Youngstown, but passed in Oberlin.  The ballot measures were proposed as either community rights bills or hydraulic fracturing moratoriums.  According to the New York Times, both Ohio and Colorado state officials argue that only state officials, not city officials, may regulate oil and gas drilling.

Written by: Tom Panighetti
November 13, 2013

Tuesday, November 12, 2013

IEA releases its 2013 World Energy Outlook

On November 12, 2013, the International Energy Agency released its 2013 World Energy Outlook.  The annual report predicted that recent growth in oil and natural gas production in both the United States and Brazil will reduce energy and electricity costs in both countries.  The report further stated that the reduction in U.S. energy costs will fuel energy-intensive industries and increase exports, therein providing the U.S. a significant trade advantage over Europe, Japan, and China, where energy costs at least double the cost in the U.S.  While the report noted the oil production growth in the U.S. and Brazil, it also predicts that OPEC countries will continue to grow their production to satisfy increased demand from India and Southeast Asia.  In addition to discussing oil and natural gas production, the report discussed the potential impact of fossil fuel usage on global warming and the predicted increase of renewable energy subsidies from $101 billion in 2012 to $220 billion by 2035.

An IEA Press Release regarding the 2013 World Energy Outlook is available here:,44368,en.html

Written by: Tom Panighetti
November 12, 2013