14 states sue EPA over EPA’s oil and gas rules

A coalition of 14 states has sued the Environmental Protection Agency on Tuesday over its far-reaching regulations for the oil and gas sector, calling the rules a “job-killing attack” on the nation’s oil and natural gas workers.

The lawsuit asks the D.C. Circuit Court of Appeals to review the EPA’s rule regulating methane emissions from new, reconstructed and modified oil and gas wells that use fracking, saying that the agency is exceeding its statutory authority.

The states argue that the regulations impose an “unnecessary and burdensome” standard on the oil and natural gas industry, “while setting the stage for further limits on existing oil and gas operations before President Obama leaves office.”

The states argue that the regulations “would raise production and distribution costs and, in turn, force an increase in consumer utility bills” by making fuel costs higher for power plants that are increasingly dependent on low-priced natural gas. “The EPA itself predicts its regulations will cost $530 million in 2025, while other studies project the annual price tag may hit $800 million.

In addition to West Virginia, the lawsuit includes attorneys general from Alabama, Arizona, Kansas, Kentucky, Louisiana, Michigan, Montana, Ohio, Oklahoma, South Carolina and Wisconsin, along with the Kentucky Energy and Environment Cabinet and North Carolina Department of Environmental Quality.

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NJ Lawmakers Pass Resolution Against $1B Pipeline Project

The New Jersey Senate on Monday passed a resolution in opposition to the proposed $1 billion, 178-mile Pilgrim Pipeline set to carry oil from the Bakken Shale through New Jersey and New York, urging permitting agencies to reject the project as currently proposed.

The resolution, proposed by Sens. Richard J. Codey, D-Essex, and Tom Kean Jr., R-Morris, calls on the U.S. Army Corps of Engineers, the New Jersey Highlands Water Protection and Planning Council, and other federal, state and local commissions reviewing the pipeline to reject it as currently proposed, positioning the pipeline as a threat to communities and water sources along its route.

“As proposed, the pipeline passes through densely populated, environmentally sensitive, and preserved lands, and any spill or incident involving this highly explosive fuel would have disastrous consequences to the New Jersey and New York residents, communities and the environment along that route,” Codey said in a statement.

The proposed pipeline, which will cost an estimated $900 million to $1 billion dollars to build, would run two parallel pipelines from Albany, New York, to Linden, New Jersey, according to Pilgrim Pipeline Holdings LLC’s website.

At least part of the 178-mile route would pass through the New Jersey Highlands Region, considered “an exceptionally valuable” area that is protected by the New Jersey Highlands Water Protection and Planning Act and the Highlands Conservation Act, the senators said in a press release.

The resolution will be passed on to the state assembly, according the news release. There, and in the state senate, another bill concerning the Pilgrim Pipeline is still in committee, according to the chief of staff for Assemblyman John F. McKeon, D-Essex. (Credit AP).

McKeon and assembly member Mila Jasey, D-Essex, proposed the bill in February. The bill would make companies like Pilgrim show the New Jersey Board of Public Utilities that pipeline projects are in the public interest before they could exercise eminent domain against a private property.

Current law doesn’t expose private pipeline companies to the same BPU scrutiny as public utility pipelines when they want to access property for its use, according to the lawmakers.

By: Martin J. Milita, Jr. Esq., Sr. Director.

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Congress to seek changes in Fracking Rules

But the Obama administration has maintained that the current rules are outdated after technological innovations that have greatly improved the drilling method’s success and expanded its use. It also maintained that 19 of the 32 states in which the rule would apply lack fracking-specific rules.

“It has been very important to the United States in terms of energy independence and also bringing down the price of oil because of increased supplies. So it has been very important, but it also is out ahead of where regulations have been, and that is why we have chosen to put these regulations in place … where fracking has gone — the pressures, the horizontal drilling — all of that is new and our regulations have not kept pace,” Jewell said.

Litigation is typical for new energy and environmental regulations. But while some rules have questionable legal authority — the section of the Clean Air Act on which the proposed Environmental Protection Agency emissions rule for existing power plants relies, for example, has little case law under it — the fracking regulation is less ambiguous.

“I would agree on that,” Kathleen Sgamma, vice president of government and public affairs with the Western Energy Alliance, told the Washington Examiner. “It is hard to challenge regulation.”

Still, Sgamma said the Interior Department’s case is far from ironclad. Aside from the potential flouting of the Administrative Procedure Act, she noted Indian tribes have found fault with how the Obama administration consulted them during the rule-making process.

The rule would apply to energy development on tribal land as well as federal land. Oil and gas resources are a significant revenue source for tribes, accounting for $1.1 billion in federal royalty disbursements in fiscal 2014, according to Interior. That’s more than double the $534 million tribes received in fiscal 2008, before the U.S. drilling boom took off.

Janice Schneider, Interior’s assistant secretary for land and minerals management, said tribes were very much involved in the process.

“We held two sets of regional meetings [in 2012], which yielded substantive discussions on topics that included the applicability of tribal law, validating water sources, inspection and enforcement, well bore integrity and water management,” Schneider said. “Additional individual consultations and larger meetings with tribal representatives have taken place since that time.”

But Republicans on the House Natural Resources Committee said some tribes have told them that wasn’t the case. Committee staff said they’re reaching out to tribes to see if they have concerns about the final rule.

“Tribes with mineral resources were very unhappy when it was first proposed — especially because they were not consulted and since then they have weighed in. The tribes were also unhappy with the substance of the rule. Probably more than anything, what upsets them is that lands held in trust for Indians were being treated under the rule as if they were publicly owned lands,” committee spokeswoman Julia Bell told the Examiner.