Death Knell for Lawsuit Targeting 97 Oil Companies in Louisiana
May 30, 2014 § 1 Comment
Legislation that will kill the controversial lawsuit filed by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) last summer against 97 oil companies for historic coastal damage is headed for final approval. The Louisiana House voted 59-39 to approve Senate Bill 469, a measure aimed at killing the lawsuit that Governor Bobby Jindal strongly opposed on the basis that it was as an illegal measure that overstepped the authority of SLPA-E. The legislation will block SLFPA-E and similar entities from filing future lawsuits of this kind and retroactively kill the pending lawsuit. The bill now goes back to the Senate for final review of the retroactive amendment and then on to Governor Jindal for signature.
Background
The SLFPA-E lawsuit claims the loss of wetlands in its jurisdiction means levees and floodwalls must be built higher, resulting in a dramatic increase in their costs for building and maintaining levees and floodwalls.The lawsuit alleges that 97 companies should be liable for repairing the damage and helping to defray the cost of flood protection now and in the future.
SLFPA-E claims that most of the drilling and dredging that led to the loss of wetlands was performed under permits that required the companies to repair any environmental damage, and alleges that this was never done. (Arguably if this were true, action to enforce such permit conditions against the permitted company at the time would have been available, more effective and more protective of the environment).
SLFPA-E also claims that the companies violated the federal Rivers and Harbors Act by putting more stress on flood protection levees. The lawsuit also alleges that because the projects turned marsh into open water, the work increased the amount of storm surge that moves into the metro area during tropical storms and hurricanes. The suit claims that violates a principle of civil law called “servitude of drainage,” which prohibits one person from increasing the flow of water onto someone else’s property. In addition to coastal erosion, the lawsuit also alleges other oil industry impacts, including road dumps, watercraft navigation and impoundments.
SLFPA-E is a political subdivision created through amendment to the Louisiana Constitution in the aftermath of Katrina to provide flood protection for St. Bernard, Orleans and Jefferson parishes.
Attempts to amend or scuttle SB 469 were soundly defeated and the bill advanced with solid support.
White House Unveils Regulatory Agenda Including Hot Items for Pipelines, Oil and Gas
May 27, 2014 § Leave a comment
On Friday, May 23, 2014, leading into the Memorial Holiday weekend, the White House published its semiannual regulatory agenda (Unified Agenda) describing its plans for approximately 60 departments, agencies, and commissions across the federal government. Marking the fourth consecutive time the Obama administration has decided to slide its regulatory agenda under the door on the eve of a major federal holiday, the approach is becoming predictable.
According to the published agenda the following items impacting natural gas and oil transportation by pipelines and oil by rail are slated for this summer:
- A proposed rule by PHMSA to require excess flow valves on natural gas pipelines running through buildings beside single-family homes is slated for August 2014. The excess flow valve issue has been a focus of NTSB and Congress since the 2010 San Bruno explosion.
- PHMSA is scheduled to release a broad reassessment of hazardous liquid pipeline safety regulation, including rules regarding leak detection in July 2014. This was called for in the Pipeline Safety Act reauthorization in 2011.
- PHMSA plans to formally propose new crude-by-rail safety standards in July 2014. It is no surprise that new rules for tank cars are coming; how strict the standards advanced by the administration is yet to be revealed. Look for more information here when the rulemaking process begins.
A complete list from the Unified Agenda for the Department of Transportation can be found here:
UK Government Considering Proposals to Simplify Access for Shale Gas
May 27, 2014 § Leave a comment
In the midst of escalating controversy in the U.S. and competing federal and state regulatory schemes, there is movement across the pond to clear the way for shale gas and oil extraction. The UK is launching a consultation on proposals to simplify the existing procedure for shale gas and oil and deep geothermal underground drilling access. The new proposals would simplify procedures to lessen the administrative burden and stimulate business. These include:
• Underground right of access for shale gas and deep geothermal operations only below 300m (nearly 1000ft);
• A voluntary community payment of £20,000 per lateral well; and
• A clear notification system to alert local people
Read more in this article from PennEnergy: http://www.pennenergy.com/articles/pennenergy/2014/05/uk-proposals-to-simplify-access-for-shale-gas-geothermal-energy.html
Minnesota Judge Rejects Claim of Tribal Right to Pipeline Siting Decision
May 25, 2014 § Leave a comment
Good decision by Minnesota ALJ Eric Lipman rejecting claims that the Chippewa Tribe should have power over pipeline siting decisions based on a 19th Century treaty. The Judge ruled that the treaty ceding Chippewa lands in Minnesota to the U.S. government does not bar later acquisition of a route. The Order states, “The treaty does not forbid creation of new rights of way on the land that was sold in 1855,” See article by David Shaffer, Star Tribune. This will be one to watch as it will likely head to federal court.
Hearing on the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011
May 25, 2014 § Leave a comment
The Subcommittee on Railroads, Pipelines, and Hazardous Materials held a hearing on May 20, 2014 to review the 2011 Act. The hearing was opened with remarks by Chairman Jeff Denham (R-CA), who stressed the importance of a risk-based approach to pipeline safety driven by private investment. “We believe in a risk-based, data-driven approach to pipeline safety that focuses private investment in pipeline safety on those areas of higher risk. As PHMSA develops rules to implement the mandates contained in the 2011 act, it is critically important that we must provide regulatory certainly necessary for pipeline owners and operators to plan infrastructure investments, and do so with input from the safety community and industry.”
Ohio Measure to Double Penalties for Pipeline Safety Violations Scuttled
May 24, 2014 § Leave a comment
A proposed provision to double penalties for pipeline safety violations failed to advance with Ohio Mid-Biennium Budget legislation. Ohio House Bill 483 had a provision to double penalties for safety violations when introduced in March. However, the version passed by the Ohio House of Representatives last month eliminated that section. Under current law, fines for each violation can range up to $100,000 per day, with a $1 million cap. The Ohio Senate passed the bill on May 21, 2014.
Between a Rock and a Hard Place for Louisiana Pipeline Operators?
May 24, 2014 § Leave a comment
Legislators in Louisiana are pushing for state control of interstate pipeline
s once abandonment is approved by the Federal Energy Regulatory Commission (FERC). If Senate Bill 525 becomes law, the intrastate pipeline then would be subject to the Louisiana Public Service Commission, which would have the final say in whether the pipeline could be abandoned.
It is unclear how the bill’s sponsors intend to deal with the issue of effectively usurping federal jurisdiction over interstate pipeline safety by PHMSA, if the Commission does not approve abandonment. Under the bill, if the Commission does approve abandonment, the pipeline’s operators then would have to cover the costs of providing customers with alternate means to get natural gas. The bill would place an undue burden on pipeline companies who would be forced to continue to operate aging infrastructure under an uncertain regulatory structure with conflicting demands. The bill was drafted in response to Midla pipeline’s application for abandonment of an 87-year old pipeline, which supplies natural gas to residents in eastern parishes, and may have operated past the end of its useful life.
The bill also appears to ignore the safety issues central to abandonment. American Midstream Partners LP filed its request with the FERC to abandon its 1920’s vintage Midla Pipeline in order to ensure the safety of people and property along its route. In its application, Midla outlined compelling reasons for abandonment including the inability to use modern technology to detect and predict leaks on the pipeline. Despite the company’s efforts to maintain the pipeline, at some point the aging infrastructure has been irreparably impacted by time. Cultivation and erosion has whittled away depth of cover; floods on the Mississippi River have destroyed six of eight river crossings; and development, including two schools, a prison and a planned housing community, has encroached on the right-of-way.
Reports indicate that at the point the company made the decision to retire the Midla mainlines for safety reasons, efforts began in earnest to engage stakeholders in the process. American Midstream identified several alternatives for assuring that impacted customers would continue to receive gas service post pipeline abandonment. Rather than engage in this process, lawmakers want to force American Midstream’s hand, and in the process may be creating more serious problems than they hoped to solve.
Colorado Initiative 75: It’s not just about drilling.
May 24, 2014 § 2 Comments
A Colorado Supreme Court ruling gives a green-light for petitions to circulate on Initiative 75. If approved by voters in November, the initiative would enable cities and counties to set their own rules for oil-and-gas drilling, regardless of existing state and federal laws.
Recall that in February, Colorado health and environment officials already approved new rules to limit air pollution from oil and gas drilling in the state, including a plan to detect and reduce methane emissions.
Initiative 75, as currently written, would reach beyond oil and gas companies and give local governments the right to prohibit many other business. This could create interesting bedfellows as the political opposition to the controversial measure grows.
Charlene Wright
Line of Sight: Pipeline Law Alerts and Analysis 