Monday, May 2, 2011

Lawyers to Gas Industry: More Regulations to Come

At a recent Oil and Gas gathering in Green Tree Pennsylvania, a pair of lawyers put the industry on notice that understanding federal regulations should be among its top concerns.

K&L Gates Government Affairs Lawyer Cliff Rothenstein said scrutinity of Marcellus Shale drillers at the federal level will only grow. “There’s going to be increased EPA oversight, The Corp of Engineers will be considering 404 permits (permits to work in and around waterways and wetlands) other [Department of Interior] regulations, additional hearings, rifle shot amendments… so there is a lot on the plate that folks are going to have to pay attention to,” said Rothenstein. He also believes there will be increased state regulations in the moths and years to come.

K&L Gates partner Tim Weston told the crowd that lawyers and administrators are still hashing out issues over how existing federal regulations should be applied to the Marcellus Shale gas industry. He says regulations governing hazardous materials may apply in places drillers do not expect. “Virtually any material present at, used in, or generated by natural gas exploration and production operations may come under one or more reporting requirements,” said Weston.

Weston opined that drillers could even be classified as chemical producers, “You have to go to the definition, it is ‘an employer with a workplace where chemicals are produced for use or distribution,’ where produced includes, ‘the generation, processing, or admitting of a chemical.’” The EPA says that includes the material that flows back after a well is fracked.

Weston warned that other hazardous materials laws kick in when a site holds more than 10-thousand pounds of hazardous material. He says that may sound like a lot but it is quickly reached when sand and diesel fuel are added into the total. He said racing that number becomes a “spreadsheet nightmare” when multiple contractors come and go from a drill pad with their own sets of materials.

Weston went on to warn that although the EPA has not started to put several wells in one area into an aggregate like it does with air pollution emissions, the law is worded vaguely enough that such a standard could be applied.

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