The recent OPEC/COVID-19-related drop in energy prices may soon set off a tidal wave of energy-related bankruptcies. Funding for exploration and production (“E&P”) companies is much harder to find, and much more expensive, than it was just a few weeks ago. Reserve reports that might have been
On March 14, 2016, Environmental Protection Agency (“EPA”) proposed changes to the Risk Management Plan Program (“RMP”) Rule . On January 13, 2017, the EPA published a new final rule. This a fifth in a planned series that will address five major changes: root cause analysis for…
The Occupational Safety and Health Administration (OSHA) is seeking public comments regarding a proposal for a new online whistleblower complaint form. The form, which would allow whistleblowers to electronically submit whistleblower complaints directly to OSHA, is part of OSHA’s proposal to revise the information collection requirements for handling retaliation complaints filed…
After the 2003 Corbello decision, the Louisiana legislature attempted to enact a workable procedure for recovering environmental damages arising from oil and gas operations known as Act 312. The main goal of Act 312 was to ensure that property contaminated by oilfield operations would be cleaned up to applicable regulatory standards. Since the enactment of Act 312, very few cases have made it through the Act 312 process. Thus, in an attempt to expedite the identification and remediation of contaminated property, the Louisiana legislature recently passed two new measures revising the Act 312 procedure.
Summary of the New Legislation
The first measure (a House bill enacted as Act 754) amends the Louisiana Code of Civil Procedure to provide for:
- The issuance of an environmental management order (EMO) to expedite site inspections and sampling, and
- A limited admission of environmental liability that allows defendants to begin to remediate property before trial (limited to the most feasible plan to remediate the property).
The second measure (a Senate bill enacted as Act 779) provides for a number of amendments to Act 312:
- Allows a plaintiff to provide a notice of intent to investigate potential environmental damage that suspends prescription of the claim for one year upon the notice being provided to LDNR,
- Requires the plaintiff to identify the alleged environmental damage and the results of any environmental testing if a lawsuit is filed after a notice of intent to investigate is filed,
- Permits a defendant to request an early preliminary hearing to determine whether there is good cause for it to remain a defendant in the case,
- Grants subpoena power over agency personnel involved in developing the feasible plan and allows for discovery regarding the development of the plan after a final plan has been submitted,
- Prohibits ex parte communications with agencies, officials, and contractors who are involved in formulating the feasible plan,
- Requires the Departments of Agriculture, Forestry, and Natural Resources, along with the Department of Environmental Quality (DEQ), to comment if LDNR approves or structures a preliminary plan that applies regulations other than those of LDNR, and
- Provides for a waiver of indemnity rights against punitive damages caused by a party who admits limited liability.
By Lou Grossman
The Subsequent Purchaser Doctrine is a judicially created limitation on the rights of a current landowner to sue for pre-acquisition damages. For over 160 years, Louisiana courts have held that a current landowner has no right of action to sue for damages to his/her property occurring prior to the date of sale…
By Lee Vail
On October 15, 2010, the former Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) issued new regulations, incorporating in its entirety and making mandatory the implementation of the American Petroleum Institute’s Recommended Practice 75 (API RP 75). The rule requires development of Safety and Environmental Management Systems (SEMS) plans by “a lessee, the owner or holder of operating rights, a designated operator or agent of the lessee(s), a pipeline right-of-way holder, or a state lessee granted a right-of-use and easement.” 30 C.F.R § 250.105. According to BOEMRE, “the purpose of SEMS is to enhance the safety and cleanliness of operations by reducing the frequency and severity of accidents.” This final rule applies to all Outer Continental Shelf oil and gas and sulphur operations and the facilities under BOEMRE jurisdiction including drilling, production, construction, well workover, well completion, well servicing, and DOI pipeline activities.
Responsibility for developing and implementing a SEMS program lies with the lessee (or owner or holder of an operating right), unless it delegates the responsibility to another (likely the operator). Contractors are not responsible for developing the plan; however if compliant, contractor procedures may be incorporated into the lessee’s/operator’s SEMS plan.
On October 14, 2009, the Louisiana Department of Environmental Quality (DEQ) issued General Permit No. LAG260000 for discharges within the territorial seas of Louisiana from oil and gas exploration, development, and production facilities.
In a lawsuit filed in state district court in Baton Rouge, the Louisiana Environmental Action Network…
Effective today, October 20, 2011, new permitting and disclosure requirements apply to hydraulic fracturing operations in Louisiana. Known as “fracking” in the oil and gas industry, hydraulic fracturing refers to the process of injecting fluid into tight shale or sandstone formations, which creates fractures in the rock through which oil and gas may travel into the wellbore. When combined with horizontal drilling, fracking allows producers to capture oil and gas reserves that were once thought to be out-of-reach.
Pursuant to the newly-implemented amendment to Subpart I of LAC 43:XIX (Statewide Order 29-B), fracking operators must now apply for and obtain a specific permit for “hydraulic fracture stimulation” from the Louisiana Department of Natural Resources’ Office of Conservation before utilizing pressurized fluids to fracture any formation for the purpose of improving its ability to produce hydrocarbons. After obtaining the requisite permit and conducting its fracking operations, the operator must be prepared to publicly disclose (1) the types and volumes of base fluid used during fracking; (2) a detailed list of all additives used in the fluid and the name of the supplier for each type of additive; and (3) a list and concentration of any chemicals contained in the fracking fluid that are regulated by the Occupational Safety and Health Administration (OSHA) and reported on Materials Safety Data Sheets (MSDS). The lone exception to these disclosure requirements permits an operator to withhold trade secrets, but the regulations still require the operator to disclose pertinent chemical characteristics of even proprietary constituents used in fracking operations.
To comply with these disclosure requirements, the operator must utilize the Office of Conservation’s new WH-1 Form to disclose the information about the base fluids (discussed above), together with detailed information about the identities and volumes of water supplies used during each phase of fracking operations. In lieu of submitting the WH-1 Form directly to the Office of Conservation, the operator may elect to satisfy its chemical reporting obligations by publishing the required information to an online database that makes the information available to the public free of charge. If utilizing the online option, the operator must also furnish a written statement to the Office of Conservation certifying that all required information has been published in an online registry. FracFocus is one online database specifically endorsed by the new regulation, but the disclosure requirements can also be met by publishing the required information to any other “similar registry.” It is anticipated that the option to satisfy Louisiana’s new disclosure requirements by publishing information to FracFocus will be heavily utilized, as many oil and gas companies have already become accustomed to using this registry to comply with other states’ disclosure regulations.
By R. Lee Vail
In Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc, 617 F.3d 1296 (Fed. Cir. 2010), the Federal Circuit reversed a district court’s summary judgment decision that no patent infringement occurred when a US company made an offer to sell to another US company when the sale negotiations occurred outside of the US.
Transocean filed suit for infringement of patents related to an improved apparatus for conducting offshore drilling. In order to drill for oil and other offshore resources, drilling rigs must lower several components to the seabed including the drill bit, casings, BOB’s, and the drill string. A conventional offshore drilling rig utilizes a derrick with a single top drive and drawworks that can only lower one element at a time in a time consuming process. Transocean patented a specialized derrick to improve the efficiency of lowering the above components. The specialized derrick included “two stations – a main advancing station and an auxiliary advancing station that can each assemble drill strings and lower components to the seabed.” Id. at 1301. This duel-activity rig could significantly decrease the time required to complete a borehole. Id at 1302. Transocean sued Maersk rig for infringement of the specialized derrick patent.
The recent development of the Haynesville Shale in North Louisiana and other shale formations around the country has generated huge public interest in the hydraulic fracturing process, which is known as “fracking” in the oil and gas industry. Fracking refers to the procedure of injecting fluid into tight shale or sandstone…