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Legislative Activity Update - Ten Pennsylvania Bills, Including New Severance Tax Bill

noreply@blogger.com (Michael Gaetani) — Mon, 08 Jun 2015 20:44:00 +0000

The following already-introduced bill has been acted upon by the Pennsylvania General Assembly:

PA House Bill 621 Format of documents recording lease assignments
Sponsor:	Sandra Major (Republican – parts of Susquehanna and Wayne Counties [northeast Pennsylvania])
Overview:	Requires that documents presented for recordation that contain or reference multiple leases include an addendum containing (1) the names of the lessor(s), (2) the prior recording information for the leasehold interest, and (3) the property with which each lease is associated. Allows recorder of deeds to refuse, and his/her sole discretion, to record documents incorporating by reference or exhibit more than fifty (50) leases.
Current Status:	Unanimously passed by House of Representatives on May 13, 2015. Referred to Senate Committee on Environmental Resources and Energy on May 28, 2015.

The following bills have been introduced since the last Legislative Activity Update blog post:

PA Senate Bill 116 Natural Gas Severance Tax
Sponsor:	James R. Brewster (Democrat – parts of Allegheny and Westmoreland Counties [outside Pittsburgh])
Overview:	Extensive natural gas severance tax bill imposing a tax of (1) “[f]our and seven tenths cents for each unit of natural gas severed measured at the wellhead meter,” (2) “[f]ive percent of the average market price … of each unit of the dry natural gas derived from the natural gas severed,” and (3) “[f]ive percent of the gross value of the natural gas liquids derived from the natural gas severed as shown by the gross proceeds derived from the sale by the producer.” Sets a price floor of $2.97 per unit for purposes of calculating tax. Prohibits producer from making the tax an obligation of the landowner or leaseholder. Requires every producer to obtain a license from the Department of Revenue (“Department”) “before severing natural gas from this Commonwealth.” Imposes criminal penalties for severing gas without a license from the Department. Does not repeal or alter the Impact Fee, meaning that both the Impact Fee and the Severance Tax are payable by producers. Alters distribution scheme for Impact Fee revenue.
Current Status:	Referred to the Senate Committee on Environmental Resources and Energy on May 14, 2015.

PA Senate Bill 801 Publication of Permits by DEP
Sponsor:	Andrew E. Dinniman (Democrat – part of Chester County [outside Philadelphia])
Overview:	Requires Department of Environmental Protection (“DEP”) to publish, on DEP’s website, the entirety of applications and supporting materials filed with the DEP related to the following permits: Air quality permits under the “Air Pollution Control Act”; Water allocation permits under the “Water Rights Law”; Water obstruction permits under the “Dam Safety and Encroachments Act”; Water quality permits, except those relating to coal mining activities, under the “Clean Streams Law”; and Solid waste and hazardous waste permits under the “Solid Waste Management Act.”
Current Status:	Referred to the Senate Environmental Resources and Energy Committee on May 14, 2015.

PA Senate Bill 802 Notification of pipeline construction
Sponsor:	Andrew E. Dinniman (Democrat – part of Chester County [outside Philadelphia])
Overview:	Requires notice and information to be given to landowners within a half mile from boundary of proposed activity requiring certain permits. Permits for which notice and information must be given include: Air quality permits under the “Air Pollution Control Act”; Water allocation permits under the “Water Rights Law”; Water obstruction permits under the “Dam Safety and Encroachments Act”; and Water quality permits, except those relating to coal mining activities, under the “Clean Streams Law.” Information provided in notice includes the following: A description of the type of permit application; Brief description of activity planned for project; Statement that project activity is anticipated to have one or more impacts on landowner(s); and Brief description of anticipated impact(s). Notice must be given within 30 days of submission of application for permit.
Current Status:	Referred to the Senate Environmental Resources and Energy Committee on May 14, 2015.

PA Senate Bill 803 Protection of Act 43 farmland
Sponsor:	Andrew E. Dinniman (Democrat – part of Chester County [outside Philadelphia])
Overview:	Amends Agricultural Area Security Law to require approval by Agricultural Lands Condemnation Approval Board of pipeline projects that would involve condemnation of land used for “productive agricultural purposes” by Pennsylvania Public Utility Commission and/or Federal Energy Regulatory Commission. Applies only to the following county classes: First Class (Philadelphia County); Second Class and Second Class A (Allegheny, Bucks, Delaware, and Montgomery counties); and Third Class (Berks, Chester, Cumberland, Dauphin, Erie, Lackawanna, Lancaster, Lehigh, Luzerne, Northampton, Westmoreland, and York counties).
Current Status:	Referred to the Senate Environmental Resources and Energy Committee on May 14, 2015.

PA Senate Bill 804 Amends Gas and Hazardous Liquids Pipelines Act
Sponsor:	Andrew E. Dinniman (Democrat – part of Chester County [outside Philadelphia])
Overview:	Pipeline operators purchasing or obtaining an easement for public land, agricultural-easement land, or permanently preserved land for new or expanded pipelines must purchase or grant an easement for an equivalent section of land within the respective county for recreational use. Easement replacement obligation applies only to the following county classes: First Class (Philadelphia County); Second Class and Second Class A (Allegheny, Bucks, Delaware, and Montgomery counties); and Third Class (Berks, Chester, Cumberland, Dauphin, Erie, Lackawanna, Lancaster, Lehigh, Luzerne, Northampton, Westmoreland, and York counties). Pipeline operator engaged in construction or replacement of pipelines involving the alteration or development of land must ensure that post-construction volume and maximum rate of storm water runoff does not exceed pre-construction levels.
Current Status:	Referred to the Senate Environmental Resources and Energy Committee on May 14, 2015.

PA Senate Bill 845 Licensing of Soil Scientists
Sponsor:	Judith L. Schwank (Democrat – part of Berks County)
Overview:	Requires soil scientists to be licensed and provides for qualifications for same.
Current Status:	Referred to the Senate Committee on Consumer Protection and Professional Licensure on May 20, 2015.

PA House Bill 1099 Provides for independent counsel for the Environmental Quality Board
Sponsor:	John Maher (Republican – parts of Allegheny and Washington Counties [outside Pittsburgh])
Overview:	Requires the Department of Environmental Protection to appoint independent counsel for the benefit of the Environmental Quality Board (“EQB”). Independent counsel shall assist EQB on all matters, “including, but not limited to, the review of rulemaking petitions submitted to the [EQB], the drafting and development of amendments to proposed and final rulemaking and advice relating to procedural matters.” Provides that discussions between independent counsel and EQB are privileged.
Current Status:	Reported out of House Committee on Environmental Resources and Energy (18 to 7) on May 12, 2015.

PA House Bill 1253 Professional licensure of engineers, land surveyors, and geologists
Sponsor:	Mark Mustio (Republican – part of Allegheny County [outside Pittsburgh])
Overview:	Removes certain exemptions to the professional licensure requirement for engineers, land surveyors, and geologists. Specifically, the following exemptions from licensure have been eliminated: The practice of engineering, land surveying or geology, not exceeding thirty days in the aggregate in one calendar year, by a nonresident not having a place of business in this Commonwealth; The practice of engineering, land surveying or geology by any person or by any employee of any copartnership, association or corporation upon property owned by such person or such copartnership, association or corporation; and The practice of engineering, land surveying or geology work by a manufacturing, mining, communications common carrier, research and development or other industrial corporation or by employees of such corporation, provided such work is in connection with or incidental to products of, or non-engineering services rendered by, such corporation or its affiliates.
Current Status:	Referred to House Committee on Professional Licensure on May 28, 2015.

PA House Bill 1292 Hydraulic fracturing chemical disclosure requirements
Sponsor:	Dan Frankel (Democrat – Pittsburgh)
Overview:	Amends Oil and Gas Act to clarify obligations of health professionals with respect to disclosure of trade secrets and/or confidential proprietary information. Prohibits health professional from disseminating trade secret and/or confidential proprietary information except in following instances: Disclosure relates to diagnosis or treatment of a patient and is provided to a person whose knowledge the health professional deems important to the diagnosis or treatment of the patient; The disclosure occurs during procurement of payment for services rendered or planned; The disclosure is provided to a public health official or is intended to further public health; or The disclosure is used for the study of any chemical involved. Removes ability of vendor, service provider, or operator to request a statement of need and a confidentiality agreement from health professional.
Current Status:	Referred to House Committee on Environmental Resources and Energy on June 5, 2015.

This post was written by Jeremy Mercer (jeremy.mercer@nortonrosefulbright.com or 724 416 0440) and Michael Gaetani (michael.gaetani@nortonrosefulbright.com or 724 416 0429) from Norton Rose Fulbright's Energy Practice Group.

EPA study confirms that fracking is not responsible for widespread water contamination

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Fri, 05 Jun 2015 11:51:00 +0000

On June 4, 2015, the Environmental Protection Agency (EPA) released its highly anticipated study on the impact of hydraulic fracturing on drinking water. The EPA has been working on this study for a number of years. In the study, the EPA concluded that hydraulic fracturing is not the cause of widespread contamination of drinking water.

The EPA’s report is one of many studies over the past couple of years to conclude that hydraulic fracturing has minimal impact on groundwater. For instance, the United States Department of Energy released a study that tracked hydraulic fracturing fluids over a twelve month period. The report found that the fracking fluid did not contaminate the groundwater. Other studies reaching this conclusion include reports by: the United States Geological Survey, the Government Accountability Office, the Massachusetts Institute of Technology, and the Groundwater Protection Council. According to the EPA, its study is the most comprehensive study conducted on the subject. In fact, the EPA relied on more than 950 different sources.

The EPA’s study acknowledged that there have been some cases of wells leaking fluids; however, the report concluded that this concern could be addressed strengthening wells and ensuring that wastewater is properly disposed.

The EPA’s study will not be finalized until it is reviewed by the Science Advisory Board and the public has had an adequate opportunity to review and comment. Instructions on how to submit commits will be published today.

Read the report.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.

United States Congress weighs the "Frack Pack"

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Thu, 04 Jun 2015 16:46:00 +0000

Currently, the United States Congress is considering a group of bills aimed at extending the ability of the federal government to regulate hydraulic fracturing. The bills, commonly referred to as the “Frack Pack,” have been sponsored by Democrats in the Senate and House of Representatives. In response, Republicans in the Senate and House of Representatives have proposed legislation that would limit the federal government’s authority to regulate hydraulic fracturing.

One of the bills, the Fracturing Responsibility and Awareness of Chemicals Act of 2015 (FRAC), would empower the United States Environmental Protection Agency (EPA) to regulate hydraulic fracturing. Specifically, FRAC would remove the hydraulic fracturing exclusion from the Safe Drinking Water Act (SDWA). Currently, the SDWA does not apply to hydraulic fracturing unless the fluids used in the fracking process include diesel fuels. Additionally, FRAC would impose heightened disclosure requirements. For instance, FRAC would require companies to disclose the types of chemicals used in their fracking process. That said, FRAC contains a provision that would provide the companies with trade secret protection.

Yet another bill currently before Congress is the Safe Hydration is an American Right in Energy Development Act of 2015 (SHARED). This bill would add a provision to the SDWA, mandating that oil and gas operators implement groundwater testing before drilling operations begin. Additionally, SHARED would require operators to conduct monitoring throughout drilling operations. Under SHARED, the test results would be listed on the internet.

Additionally, Congress is considering the Focused Reduction of Effluence and Stormwater runoff through Hydrofracking Environmental Regulation Act of 2015 (FRESR). Under FRESR, oil and gas operations would no longer be exempt from the Clean Water Act’s (CWA) stormwater permitting requirements. If enacted, oil and gas operators would be required to obtain a permit permitting stormwater run-off through each stage of the fracking process.

Congress is also evaluating the Bringing Reductions to Energy’s Airborne Toxic Health Effects (BREATHE) Act of 2015. BREATHE is directed at the Clean Air Act (CAA) and would add hydrogen sulfide as a hazardous air pollutant (HAP). In addition, the bill would add oil and gas wells as a major source of hydrogen sulfide. If oil and gas wells are listed as a major source of hydrogen sulfide, the EPA would have the ability to establish thresholds for the amount of hydrogen sulfide that could be emitted from the wells. Moreover, BREATHE would also repeal the provision of the CAA that prohibits the aggregation of oil and gas wells and compressor stations when determining whether an activity constitutes a major source.

Democrats in the House of Representatives have also sponsored the Protect Our Public Lands Act (POPLA). If enacted, POPLA would ban any hydraulic fracturing operations on land leased by the federal government. However, drilling operations in operation when the bill is enacted would be permitted to continue until the lease expired or was adjusted.

On the other end of the spectrum lies the Fracturing Regulations are Effective in State Hands Act of 2015 (FRESH) and the Protecting States Rights to Promote American Energy Security Act of 2015 (PSRPAES). Under FRESH, states would have sole authority to regulate hydraulic fracturing. In fact, FRESH would authorize states to regulate hydraulic fracturing on federal lands. PSRPAES targets the Mineral Leasing Act and would bar the Department of Interior from regulating hydraulic fracturing if the state in which the drilling operations will occur already has regulates hydraulic fracturing. Indeed, PSRPAES directs the Secretary of the Interior to defer to state regulations irrespective of whether the regulations are less restrictive than federal rules or differ from federal regulations.

North Dakota utilizes tax incentive scheme to encourage oil production

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Mon, 01 Jun 2015 16:07:00 +0000

According to the North Dakota Industrial Commission, the amount of crude oil produced in the state has decreased dramatically. Whereas 1.2 MMb/d of crude oil was produced in the state in December, only 37 Mb/d was produced in January. In addition, the number of wells completed in the state also dropped. Commentators have speculated that the drop in production and well completions is the result of low crude oil prices. However, companies may simply be biding their time until North Dakota tax incentives are triggered.

Two taxes apply to the majority of the crude oil produced in North Dakota. The gross value of crude oil produced in the state is subject to a 5% gross production tax (GPT) and a 6.5% extraction tax. Crude oil produced on American Indian land is exempt from the GPT. During times of low crude oil prices, North Dakota has waived or, at a minimum, lowered the extraction tax applicable to crude oil.

One tax incentive employed by North Dakota is the Small Trigger. The Small Trigger became effective in February 2015. The North Dakota Legislature created the tax incentive to encourage the drilling of new wells and increase crude oil production. The tax break is available whenever the monthly average price for West Texas Intermediate (WTI) crude oil is below $57.50/Bbl. Rather than imposing a 6.5% tax, the extraction tax lowers to 2% for the first $4.5 million or 75 MBbl produced, whichever is first. This tax break continues up until the first eighteen months once a well is completed and only covers wells finished after February 1, 2015. The tax incentive is only available until June 30, 2015. If the average WTI price rises above $72.50/Bbl, however, the tax break would no longer be available.

If crude oil prices remain lower than $55/Bbl, another tax incentive referred to as the Large Trigger would go into effect. Under the Large Trigger, if the price of oil drops below $55.09/Bbl, the 6.5% tax on extraction will be waived. The tax incentive is not triggered until the monthly average WTI price falls below the threshold for at least 5 consecutive months. If triggered, the tax incentive would be available until the average monthly oil price rises above the threshold for five consecutive months. For the first 24 months after the incentive is triggered, the incentive permits oil producers to avoid paying the entire 6.5% extraction tax on old and new producing wells. After the initial 24 month period, the Large Trigger reduces the extraction tax to 4%.

For more information on drilling economics, click here.

EPA releases new "waters of the United States" rule

noreply@blogger.com (Emery Gullickson Richards) — Thu, 28 May 2015 19:47:00 +0000

Yesterday the United States Environmental Protection Agency and the Corps of Engineers released a pre-publication, final version of a new rule defining the scope of “waters of the United States” under the Clean Water Act. This definition is key to the agencies’ jurisdiction under the National Pollutant Discharge Elimination System, Clean Water Act Section 404 permitting for discharge of dredge and fill materials, Oil Pollution Act coverage, and other federal water quality permitting, notification, and liability programs. The rule replaces 2008 guidance and 2011 draft guidance (later withdrawn) issued by the agencies in the aftermath of the U.S. Supreme Court’s plurality opinion in Rapanos v. United States and Carabell v. United States, 547 U.S. 715 (2006), in which Justice Kennedy articulated a “significant nexus” test for defining waters of the U.S. The rule will become effective sixty days after publication in the Federal Register. EPA and the Corps say the rule expands the scope of waters covered by these laws by only about 3%, but industry and development interests claim the expansion is much greater. Industry, development, and environmental interests have all threatened to seek judicial review of the new rule. EPA has posted information on the rule, including the text of the final rule.

This post was written by Janet McQuaid (janet.mcquaid@nortonrosefulbright.com or +1 724 416 0427) from Norton Rose Fulbright's Energy Practice Group.

Senators propose bill to penalize use of older rail cars

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Tue, 19 May 2015 00:06:00 +0000

After the Lac-Mégantic derailment, several groups have advocated for the strengthening of regulations governing the transportation of crude oil by rail. A group of Democrats in the United States Senate have responded by proposing a new bill—the Hazardous Materials Rail Transportation Safety Improvement Act of 2015. The new bill contains a number of measures targeted at reducing the use of older rail cars.

Specifically, the new bill would impose a fee of $175 each time a DOT-111 railcar is used to ship crude oil. In its current form, the fee would escalate each year. The bill would also grant tax credit to parties to upgrade their rail cars to comply with the latest standards promulgated by the United States Department of Transportation (DOT). The bill specifies that money collected from violations would be reserved for the cleanup costs associated with derailments as well as the training of first-responders. In addition, the bill would use the collected funds to hire additional train inspectors and fund the tax credits. Furthermore, the bill contains provisions mandating that the DOT provide first responders with real-time information with respect to the transportation of crude oil by rail and implement more stringent maintenance requirements for tracks. The bill also provides for studies of the methods first responders use when faced with derailments.

The sponsors of the bill are Senators Ron Wyden, Chuck Schumer, Sherrod Brown, Mark Warner, Bob Casey, and Dianne Feinstein. According to Senators Wyden and Brown, the DOT’s attempts to increase the safety of the transportation of crude oil by rail have fallen short of achieving the goal of safe transportation of crude oil by rail. This new bill, in Senator Wyden’s opinion, represents a new approach to convincing companies to switch to safer rail cars.

Read the bill.

Texas Railroad Commission Chair weighs in on induced seismicity

noreply@blogger.com (Emery Gullickson Richards) — Mon, 18 May 2015 23:45:00 +0000

Texas Railroad Commission Chairwoman Christ Craddick criticized finger-pointing at the oil and gas industry for recent Texas tremors in a May 15 interview, noting that the cause of recent seismic events is still not known “for sure.” Chairwoman Craddick commented, “The political rush to judgment and the press rush to judgment that every earthquake’s being caused by oil and gas in this state, particularly in the metroplex, is a bit concerning when the facts haven’t necessarily proven that out.”

Craddick also discussed the importance of preventing delays in the Railroad Commission’s well permitting process, which now includes a seismicity risk review for disposal wells. Craddick criticized the speed of the U.S. Department of Interior’s Bureau of Land Management which takes 290 days under proposed new rules to review a standard drilling permit, remarking “that’s not good and efficient, that’s not good for the economy long-term.”

In addition, Craddick stressed the importance of state-level regulation for hydraulic fracturing, describing the Texas scheme as a “model” in contrast to EPA proposals for fracking on federal lands that “don’t make a lot of sense.” In particular, Craddick highlighted the fact that although the Commission will continue to try to work with the EPA, Texas’ regulatory autonomy has resulted in exemplar regulation, commenting that “the Railroad Commission has some of the best practice rules for well casing.” Craddick’s statements come at a time when state and federal authorities are considering induced seismicity regulations, and experts continue to ponder the effects for the energy industry.

Legislative Activity Update - Two Pennsylvania Bills, Including New Severance Tax Bill

noreply@blogger.com (Michael Gaetani) — Wed, 13 May 2015 19:47:00 +0000

The following already-introduced bill was acted upon by the Pennsylvania General Assembly:

PA House Bill 621 Requirements for recording oil and gas documents
Sponsor:	Sandra Major (Republican – parts of Susquehanna and Wayne Counties [northeast Pennsylvania])
Overview:	Requires that documents presented for recordation that contain or reference multiple leases include an addendum containing (1) the names of the lessor(s), (2) the prior recording information for the leasehold interest, and (3) the property with which each lease is associated. Allows recorder of deeds to refuse, and his/her sole discretion, to record documents incorporating by reference or exhibit more than fifty (50) leases. Defines “oil or gas document” as one which “transfers all or part of the interests of one party to another party in multiple oil or gas leases”
Current Status:	Unanimously reported by House Committee on Commerce on April 20, 2015. Referred to House Committee on Appropriations on May 12, 2015.

The following bill was introduced in the Pennsylvania General Assembly:

PA House Bill 1142 Natural Gas Severance Tax
Sponsor:	Margo L. Davidson (Democrat – part of Delaware County [outside Philadelphia])
Overview:	Extensive natural gas severance tax bill imposing a tax of (1) “[f]our and seven tenths cents for each unit of natural gas severed measured at the wellhead meter,” (2) “[f]ive percent of the average market price … of each unit of the dry natural gas derived from the natural gas severed,” and (3) “[f]ive percent of the gross value of the natural gas liquids derived from the natural gas severed as shown by the gross proceeds derived from the sale by the producer.” Sets a price floor of $2.97 per unit for purposes of calculating tax. Prohibits producer from making the tax an obligation of the landowner or leaseholder. Requires every producer to obtain a license from the Department of Revenue (“Department”) “before severing natural gas from this Commonwealth.” Imposes criminal penalties for severing gas without a license from the Department. Does not repeal or alter the Impact Fee, meaning that both the Impact Fee and the Severance Tax are payable by producers. Alters distribution scheme for Impact Fee revenue.
Current Status:	Referred to the House Committee on Environmental Resources and Energy on May 12, 2015.

Earthquake risks prompt evaluation of wastewater injection

noreply@blogger.com (Anonymous) — Thu, 07 May 2015 21:19:00 +0000

Earthquake risks recently prompted lawmakers and regulators in several oil and gas producing states to evaluate wastewater injection purportedly linked to seismic activity. Key developments include:

4/21: SMU faculty publish geophysical report blaming two wells for Azle, Texas quakes
4/23: US Geological Survey issues report claiming seismic events in 8 states were induced
4/23: Oklahoma Geological Survey issues statement saying seismic events unlikely to be natural
4/24: Texas Railroad Commission issues public statement that it will order show cause hearings for the two Azle wells
5/4: Researchers and Railroad Commission officials testify before Texas House Energy Resources Committee induced seismicity hearing

Review a discussion of legal issues associated with induced seismicity.

We will continue to monitor breaking developments here at The Hydraulic Fracturing Blog.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) from Norton Rose Fulbright's Energy Practice Group and Emery Richards (emery.gullickson.richards@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Antitrust Group.

Legislative Activity Update - Two Pennsylvania Bills

noreply@blogger.com (Michael Gaetani) — Thu, 07 May 2015 14:31:00 +0000

The following bill and resolution were introduced in the Pennsylvania General Assembly:

PA House Bill 1097 Water Well Insurance Fund
Sponsor:	Peter J. Daley (Democrat - parts of Fayette and Washington Counties [south of Pittsburgh])
Overview:	Establishes the Water Well Insurance Board (“Board”) and Water Well Insurance Fund. Water well owners may apply to “become a subscriber to the fund for the purpose of insuring the water well against damages from intrusion or contamination.” Premium rates are set by the Board. The term “contamination” is not defined in the bill. Maximum payout under an insurance policy is capped at “replacement cost of the insured well or the maximum amount of coverage established by the fund, whichever is less.” Bill expressly states that it “shall not be construed to relieve any person, partnership, or corporation otherwise liable from any liability for damages sustained.”
Current Status:	Referred to House Committee on Environmental Resources and Energy on May 4, 2015.

PA House Resolution 316 Study to Expand Availability of Natural Gas in Pennsylvania
Sponsor:	Kevin J. Schreiber (Democrat – part of York County [south-central Pennsylvania])
Overview:	Directs the Legislative Budget and Finance Committee (“Committee”) to conduct a study on the issue of expanding the availability of natural gas to Pennsylvania homes, businesses, nonprofit organizations and units of government. Specifically directs the Committee to consider whether there is a need for particular types of infrastructure to address gaps in the availability of natural gas service.
Current Status:	Referred to House Committee on Environmental Resources and Energy on May 5, 2015.

Department of Transportation publishes heightened standards for railcars transporting crude oil

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Wed, 06 May 2015 12:00:00 +0000

On May 1, 2015, the United States Department of Transportation (DOT) released its final rules governing the transportation of oil by rail. The new rules apply to railcars transporting high-hazard flammable materials and largely correlate with the heightened standards applicable in Canada. The new rules are set to go into effect on October 1, 2015.

The DOT made several changes to the final rules in light of the comments it received in response to the proposed rule. For example, the DOT extended the deadline by which DOT-111 railcars must be retrofitted or replaced to three years rather than two years. As for the CPC-1232 railcars, companies will have five years to retrofit or replace those cars if the railcars do not have insulating jackets that satisfy the heightened requirements.

After October 1, 2015, all new railcars must comply with the DOT-117 standard. To satisfy the DOT-117 standard, railcars must have thicker shells, insulated jackets, updated pressure relief valves, and improved thermal protection. In addition, trains with at least 70 railcars that are carrying Class 3 flammable liquids, the most volatile category, must now have pneumatic braking systems before January 1, 2021. Trains merely transporting other flammable liquids only need to install the braking systems by 2023. The new rules also establish a speed limit of 50 mph. If the railcar doesn’t comply with the updated standards set forth in the rules, the railcar must comply with a 40-mph speed limit in urban areas.

Thus far, the new rules have received a significant amount of criticism. Environmentalists have argued that the rules are not sufficiently stringent. A number of environmental groups advocated for the immediate ban of the older DOT-111 railcars. Members of the oil and gas industry have argued that the cost to comply with the rules is excessive and that the deadline for retrofitting the railcars could result in a shortage of railcars. Others have argued that the new braking systems will not help in reducing accidents. The final rules will certainly be challenged. Some commentators have suggested that the new rules would not withstand judicial scrutiny, despite the favorable standard of review, because the DOT lacks supporting authority for the requirements.

Read the final rules.

Fracking bill approved by Texas Senate committee

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Mon, 04 May 2015 13:44:00 +0000

On Thursday, April 30th, the Texas Senate Natural Resources & Economic Development Committee (Committee) voted to approve H.B. 40. As discussed in a previous post, H.B. 40 is a response to the fracking ban enacted by the city of Denton, Texas during the latter part of last year. The Committee voted unanimously in favor of the bill. If enacted, H.B. 40 would prohibit localities from enacting legislation governing oil and gas operations. In its current form, H.B. 40 would permit localities to adopt legislation regulating “surface activity that is incident to an oil and gas operation, is commercially reasonable, does not effectively prohibit an oil and gas operation, and is [not] otherwise preempted by state or federal law.”

H.B. 40 moved quickly through the Texas House of Representatives. In March, the House Committee on Energy Resources voted to approve the bill. A couple of weeks later, the House of Representatives voted to pass the bill. H.B. 40 appears to be poised to receive a similarly fast-paced approval by the Senate. H.B. 40 is sponsored by Representative Drew Darby.

Several detractors and supporters of the bill testified before the Committee. The detractors argued against the “commercially reasonable” standard of H.B. 40. According to the detractors, the “commercially reasonable” standard is too amorphous. In addition, some detractors suggested that the bill would result in the undoing of a number of environmental ordinances enacted by localities. Supporters for the bill stated that H.B. 40 was necessary because hydraulic fracturing and related activities need to be regulated by one entity.

Read H.B. 40.

Lawsuit challenging fracking disclosure requirements stayed

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Fri, 01 May 2015 14:54:00 +0000

As discussed in a previous post, several environmental groups have sued the United States Environmental Protection Agency (EPA) in the United States District Court for the District of Columbia. The plaintiffs alleged that the EPA failed to properly respond to their 2012 petition that requested that the EPA issue a rule requiring companies engaging in hydraulic fracturing to disclose chemicals used in their drilling operations. According to the plaintiffs, the Administrative Procedure Act required the EPA to respond to their petition within sixty days.

On Friday, April 24th, the parties filed a joint motion to stay the lawsuit, which the district court approved. In the joint motion, the EPA stated that it would respond to the plaintiff’s petition later this year. Specifically, the EPA agreed to respond before October 30, 2015. The district court has scheduled a status hearing on November 13, 2015. The parties initiated settlement negotiations shortly after the lawsuit was filed.

The plaintiffs’ primary dispute with the EPA revolves around the Toxics Release Inventory (TRI) and the Emergency Planning and Community Right-to-Know Act (EPCRA). The EPCRA empowers the EPA to mandate that the oil and gas industry disclose any chemicals used in their drilling operations. Currently, the oil and gas industry is not subject to the TRI’s requirements. In 2011, the EPA released a proposal to increase the number of industries subject to the TRI disclosure requirements but decided to not subject the oil and gas industry to the disclosure requirements.

Read the joint motion to stay the proceedings.

Florida House of Representatives passes bill to strengthen hydraulic fracturing requirements

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Thu, 30 Apr 2015 15:13:00 +0000

Earlier this week, the Florida House of Representatives passed a bill targeted at hydraulic fracturing. The bill, H.B. 1205, would heighten the regulatory requirements on fracking. The bill passed easily with a sizeable majority voting in favor of the bill. 82 members of the House of Representatives voted in favor of passing the bill and 34 members voted against enacting the bill.

Under H.B. 1205, operators would be required to obtain a fracking permit before engaging in fracking operations. Moreover, operators would be required to declare that they intend to use hydraulic fracturing before beginning any drilling operations. In comparison, the current rules only require operators to receive a general drilling permit. The current rules also permit operators to wait until drilling operations have commenced to notify the Florida Department of Environmental Protection (FDEP) that they intend to use hydraulic fracturing.

In addition, H.B. 1205 provides for a stricter permit approval process and additional disclosure requirements. The new bill authorizes the FDEP to examine the history of parties applying for fracking permits. In fact, H.B. 1205 would permit the FDEP to base its decision on an applicant’s actions in other states. The current regulatory scheme does not permit the FDEP to use an applicant’s out-of-state conduct as a basis for approval or denial of a fracking permit. H.B. 1205 would also increase the fines for violations and the bond minimums. Furthermore, H.B. 1205 mandates that companies disclose any chemicals injected into the ground.

The new bill requires the FDEP to conduct a study on hydraulic fracturing. Specifically, the FDEP’s study must address the potential connection between hydraulic fracturing and groundwater and whether recycled water can be used during fracking operations. Additionally, the study must examine the disposal process for fluids.

Thus far, the bill has received mixed reviews. Some observers have championed the bill as a method of preventing violations. Opponents of the bill have argued that the bill should be replaced with a ban against hydraulic fracturing. Other commentators have suggested that H.B. 1205 prioritizes business interests over public health.

Read H.B. 1205.

Opposition to federal fracking rules grows

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Tue, 28 Apr 2015 19:51:00 +0000

Earlier this year, the Department of Interior’s Bureau of Land Management (BLM) released its final version of rules governing hydraulic fracturing on federal land. As discussed in a previous post, these rules will not only impose heightened requirements on drilling operations but also increase the reporting duties for drilling operators. Shortly after the BLM released its proposal, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance (WEA) sued the BLM in Wyoming to challenge the proposed rules. The IPAA and WEA argued that the BLM’s rules are unnecessary because states adequately regulate hydraulic fracturing. The IPAA and WEA have also alleged that the BLM’s final rules are unsubstantiated.

A second lawsuit was later filed by Wyoming against the BLM. In its petition for review of the BLM’s fracking rules, Wyoming stated that the BLM exceeded its authority and its fracking rules would hamper state regulation of hydraulic fracturing. Specifically, Wyoming has argued that the BLM’s authority under the Mineral Leasing Act and the Federal and Policy and Management Act do not authorize the agency to enact the hydraulic fracturing rules. According to Wyoming, the BLM’s rules also conflict with the Safe Water Drinking Act, which grants states the exclusive right to regulate underground injections. North Dakota later joined Wyoming’s petition for review. North Dakota has stated that it is one of the largest oil and gas producers in the United States and the BLM’s rules inhibit the state’s ability to regulate hydraulic fracturing in the state.

The opposition to the United States Bureau of Land Management’s (BLM) rules for hydraulic fracturing is growing. Colorado has also joined the lawsuit challenging the BLM’s new rules for hydraulic fracturing. Cynthia Coffman, the Attorney General for Colorado, describes the BLM’s rules as an encroachment on an area that has historically been regulated by states. Coffman further noted that Colorado has sufficient regulations governing hydraulic fracturing. In addition, Coffman stated that although hydraulic fracturing should be regulated, the BLM lacked the authority to enact the rules.

Read the amended petition for review.

Colorado Supreme Court refuses to authorize Lone Pine orders in fracking cases

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Mon, 27 Apr 2015 15:06:00 +0000

On Monday, April 20th, 2015, the Colorado Supreme Court issued its opinion in Antero Resources v. Strudley, a case closely watched by many in the oil and gas industry. The Supreme Court was confronted with the issue of whether the Colorado Rules of Civil Procedure permit a trial court to issue a Lone Pine order—that is, a modified case management order requiring a plaintiff to submit prima facie evidence in support of the lawsuit before permitting full discovery. Lone Pine orders are used primarily in complex cases to ferret out meritless claims and ensure that litigation progresses expeditiously.

Strudley involved tort claims asserted by the Strudley family against Antero Resources and others involved in drilling operations near the plaintiffs’ home. After the parties exchanged their initial disclosures, the defendants requested that the trial court issue a modified case management order stating that the plaintiffs must provide prima facie evidence supporting their claims before full discovery would be allowed. The plaintiffs argued that they were entitled to discovery before the court ruled on the merits of their claims. The trial court agreed with the defendants and issued a Lone Pine order. Because the plaintiff produced insufficient information, the court dismissed the plaintiffs’ claims.

The plaintiffs appealed to the Colorado Court of Appeals. The Court of Appeals reversed the trial court, reasoning that Colorado law did not recognize Lone Pine orders. The Court of Appeals concluded that the discretion afforded district courts under Federal Rule of Civil Procedure (FRCP) 16 is greater than the discretion given under Colorado Rule of Civil Procedure (CRCP) 16. Trial courts issuing Lone Pine order generally rely on FRCP 16 as authority for issuing the order. The Court of Appeals also held that Colorado case law disfavored requiring a plaintiff to provide evidence in support of a claim before discovery.

The Colorado Supreme Court affirmed the Court of Appeals, reasoning that Lone Pine orders are prohibited under Colorado law. The Supreme Court agreed with the Court of Appeals that FRCP 16 granted trial courts more discretion than CRCP 16. In fact, the Supreme Court concluded that FRCP 16 explicitly authorized trial courts to issue Lone Pine orders. The Supreme Court noted that although there are similarities between FRCP 16 and CRCP 16, Colorado did not adopt the language in FRCP 16 that empowered district courts to reduce potential burdens on defendants in complex litigation. However, the Supreme Court noted that CRCP 16 permits district courts to manage discovery in a manner that ensures litigation moves expeditiously. In addition, the Supreme Court concluded that based on its review of other jurisdictions, this lawsuit was not the type of complex lawsuit that warrants a Lone Pine order.

Justice Boatright dissented, arguing that the trial court was merely using its discretionary authority under CRCP 16 when it issued the Lone Pine order. Justice Boatright also contended that the precedent the majority relied on was inapposite because those cases dealt with an earlier version of CRCP 16. According to Justice Boatright, the majority opinion will unduly constrain a trial court’s ability to manage its docket.

Read the opinion.

State bill prohibiting local fracking bans one step closer to enactment

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Tue, 21 Apr 2015 12:00:00 +0000

After Denton, Texas adopted a ban against hydraulic fracturing, many commentators predicted that the anti-fracking measure would be short-lived. While the lawsuits challenging the local fracking ban are still in the early stages, the Texas Legislature is quickly taking steps to block local fracking bans. On Friday, the Texas House of Representatives passed H.B. 40—one of several bills recently proposed to address anti-fracking measures similar to Denton’s fracking ban.

Under H.B. 40, localities are expressly preempted from adopting legislation concerning oil and gas operations. Localities would, however, have the authority to adopt ordinances that regulate “surface activity that is incident to an oil and gas operation, is commercially reasonable, does not effectively prohibit an oil and gas operation, and is not otherwise preempted by state or federal law.” The bill was proposed by Representative Drew Darby.

H.B. 40 was criticized by some members of the House of Representatives. Approximately ten amendments to the bill were proposed, but they were all rejected. If accepted, the amendments would have ensured that localities retained the authority to regulate some aspects of oil and gas operations. One of the proposed amendments would have created a grandfather clause that local ordinances that have been enacted for at least ten years are not preempted. Now, H.B. 40 advances to the Texas Senate.

Read H.B. 40.

Canada's Northwest territories propose new hydraulic fracturing filing regulations for on shore wells

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Mon, 20 Apr 2015 15:41:00 +0000

The Northwest Territories (NWT) in Canada's north have released for public comment proposed Hydraulic Fracturing Filing Regulations under the NWT's Oil and Gas Operations Act. If brought into force, the proposed Regulations will require an operator who wants to hydraulically fracture a well to submit to the Ministry of Industry, Tourism and Investment, among other things:

a Risk Assessment which identifies the threats and hazards from the proposed hydraulic fracturing operation to safety and the environment and the mitigative measures to manage those threats and hazards;
an Environmental Protection Plan prepared in accordance with the Environmental Protection Plan Guidelines and which demonstrates, among other things, that "green completion techniques" will be used to ensure that 90% of the flow back gas and oil vapour is recovered and that 95% of any gas or oil vapour not recovered is incinerated;
surface and ground water information;
a description of how suspected seismic events will be monitored and reported; and
a list of the chemicals in the hydraulic fracture fluid and their concentration.

An applicant also must indicate to the Ministry if they are willing to publically disclose certain information in their application, including the chemicals to be used. If they are not willing, they have to explain the reasons for that decision. At this point, it is unclear if the Ministry will agree that the chemical composition of fracturing fluids must not be publicly disclosed if it is confidential business information.

This post was written by Alan Harvie (alan.harvie@nortonrosefulbright.com or +1 403.267.9411) from Norton Rose Fulbright's energy practice group.

Canada's Yukon government paves the way for hydraulic fracturing

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Fri, 17 Apr 2015 11:00:00 +0000

The Yukon government has accepted all 21 recommendations made by a Select Committee of the Legislative Assembly Regarding the Rights and Benefits of Hydraulic Fracturing. The Select Committee held public hearings and accepted submissions to help the Yukon Government develop a policy approach to hydraulic fracturing in the Yukon.

The Select Committee's recommendations largely addressed the need to gather more information about fracking and its impact in the Yukon. For instance, it recommended that research be conducted regarding fluid and gas leakage from hydraulic fracturing operations specific to the unique permafrost conditions in the Yukon. It also recommended more baseline data on seismic activity be collected given that parts of the Yukon are seismically active.

The Yukon Government has announced that it is open to shale gas development opportunities in the Yukon but only in the Liard Basin at this time and only if such development has the support of affected First Nations. The Laird Basin borders British Columbia and the B.C. side of the play is considered a world class shale gas deposit containing 176 trillion cubic meters of natural gas.

The Laird Basin is only about 1.3% of the Yukon's land mass, and for now hydraulic fracturing is not being considered in the Peel or Beaufort-Mackenzie Basins, both of which are thought to have high potential for shale oil and gas reserves.

This post was written by Alan Harvie (alan.harvie@nortonrosefulbright.com or +1 403.267.9411) from Norton Rose Fulbright's energy practice group.

Legislative Activity Update - Three Pennsylvania Bills

noreply@blogger.com (Michael Gaetani) — Thu, 16 Apr 2015 18:31:00 +0000

The following bills were introduced in the Pennsylvania General Assembly:

PA Senate Bill 415 - Natural Gas Severance Tax
Sponsor:	Arthur L. Haywood III (Democrat – Philadelphia and part of Montgomery County)
Overview:	Extensive severance tax bill, with rate of “8% of the gross value of units severed at the wellhead during a reporting period.” Repeals sunset provision of Oil & Gas Act that would have terminated the impact fee upon passage of a severance tax, allowing imposition of both an impact fee and severance tax.
Current Status:	Referred to Senate Committee on Environmental Resources and Energy on April 6, 2015.

PA House Bill 855 - Amendments to Gas & Hazardous Liquids Pipelines Act
Sponsor:	Robert W. Godshall (Republican – Part of Montgomery County [outside Philadelphia])
Overview:	Transfers authority over pipeline safety inspections from Public Utility Commission to Department of Environmental Protection (“DEP”). Specifies civil penalty of up to $1,000 per day for violations of Act by pipeline operator. Directs DEP to submit a certification to United States Department of Transportation (“USDOT”) to authorize the DEP to enforce federal pipeline safety laws regarding intrastate pipelines within Pennsylvania. Directs DEP to make an agreement with USDOT to authorize DEP to enforce federal pipeline safety laws regarding interstate pipelines within Pennsylvania.
Current Status:	Referred to House Committee on Consumer Affairs on April 14, 2015.

The following already-introduced bill was acted upon by the Pennsylvania General Assembly:

PA House Bill 33 - Amendments to Municipalities Planning Code
Sponsor:	Glenn Grell (Republican – part of Cumberland County [outside Harrisburg])
Overview:	Amends Municipalities Planning Code (“MPC”) to allow governing body to appoint up to three residents of the municipality to serve as alternate members of the Planning Commission. Alternate members of Planning Commission appointed pursuant to this bill may participate fully in event of absence or recusal of any absent member.
Current Status:	Approved unanimously by the House Appropriations Committee on March 30, 2015. Passed unanimously by the House of Representatives on March 30, 2015. Referred to Senate Committee on Local Government on April 8, 2015.

New York Court of Appeals refuses to extend drilling rights

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Thu, 16 Apr 2015 16:00:00 +0000

The United States Court of Appeals for the Second Circuit (Second Circuit) certified a question to the New York Court of Appeals (Court of Appeals) that could have provided an avenue by which an energy company could have maintained its right to drill in New York. Specifically, the company argued that New York’s decision to halt the issuance of drilling permits during its review of the environmental impact of fracking triggered a force majeure clause in a lease that extended the term of the lease.

The energy company had several oil and gas leases with landowners in Tioga County. The leases contained habendum clauses that would have extended the leases as long as the company used the land for the production of oil and gas. When New York implemented its moratorium on hydraulic fracturing, the company had not yet engaged in oil and gas production on the leased land and the landowners had not received any royalties. The landowners sued in New York federal court, arguing that the leases had expired. The energy company and landowners filed competing motions for summary judgment. The energy company argued that the leases were extended because the force majeure clause was triggered by New York’s moratorium on hydraulic fracturing, and the landowners claimed that the leases were expired.

The district court granted summary judgment in favor of the landowners, reasoning that the leases had expired. The energy company appealed to the Second Circuit. Because of the importance and novelty of the case to state law, the Second Circuit certified two questions to the Court of Appeals: 1) whether New York’s moratorium constituted a force majeure event and 2) whether the leases were extended.

The Court of Appeals answered the second question and refrained from answering the first question. Specifically, the court concluded that the force majeure clause did not affect the term of the habendum clauses and therefore failed to extend the leases. The court based its conclusion on the fact that the habendum clause did not refer to the force majeure clause. Moreover, according to the court, the force majeure clause only applied to the termination of the lease rather than the expiration of the lease.

Read the opinion.

Germany approves bill restricting hydraulic fracturing

noreply@blogger.com (NRF Hydraulic Fracturing Blog) — Wed, 15 Apr 2015 21:31:00 +0000

Hydraulic fracturing operations in the United States have increased dramatically over the past decade. Indeed, hydraulic fracturing is also growing in other countries. Germany, however, appears to be taking a different approach. Recently, Germany’s cabinet approved a draft of a bill that would restrict hydraulic fracturing operations in the country.

Fracking in Germany will be subject to a number of restrictions. For example, hydraulic fracturing is barred in nature parks and water bore areas. Moreover, companies cannot engage in fracking operations above 3,000 meters unless the drilling is for research purposes and an expert panel concludes that the drilling will not cause any harm. Companies engaging in fracking for scientific purposes must also obtain a number of licenses. Hydraulic fracturing for commercial purposes is permitted under the draft law if the expert panel approves it.

The new bill has been the subject of criticism from several politicians, environmental groups, and unions. Some observers have argued that hydraulic fracturing should be further limited depending on the area in which fracking is operated. Like many environmental groups in the United States, some groups in Germany have argued that hydraulic fracturing will result in damage to the environment and pollution. That said, Germany’s federal environment minister has stated that a ban on fracking would contravene the principle tenets of the German constitution.

Some members of the German government have stated that they may reconsider their current position on fracking if future evidence suggests that environmental concerns are reduced. It is estimated that hydraulic fracturing operating in Germany could produce enough gas to satisfy the county’s gas demands for fourteen years. The current draft bill will now proceed to the upper house of parliament for review.

Read the law.

Quarterly Legislative Action Update: Marcellus and Utica Shale Region

noreply@blogger.com (Michael Gaetani) — Mon, 13 Apr 2015 17:46:00 +0000

Our Norton Rose Fulbright Pittsburgh-Southpointe practice tracks legislative activity that we believe may impact oil and gas development within the Marcellus and Utica shale regions (Pennsylvania, West Virginia and Ohio). This Quarterly Update contains all of the relevant legislative activity occurring in Pennsylvania, West Virginia, and Ohio during the first quarter of 2015.

The next issue of the Quarterly Update will be published in early July 2015 and will contain all of the legislative activity occurring through the second quarter of 2015, highlighting changes occurring during that quarter. New legislative activity occurring after publication of this Update will be posted to Norton Rose Fulbright’s Hydraulic Fracking Blog as soon as it is available.

Read the complete Quarterly Update.

Federal court in Pennsylvania grants summary judgment in favor of exploration and production company on claims of strict liability, nuisance, and negligence

noreply@blogger.com (Michael Gaetani) — Thu, 09 Apr 2015 21:04:00 +0000

On March 25, 2015, the United States District Court for the Middle District of Pennsylvania entered summary judgment in favor of an exploration and production company on claims of strict liability, nuisance, and negligence, by a Tioga County landowner related to drilling activity near his property. Chief Magistrate Judge Carlson found that the uncontroverted evidence offered by the E&P company demonstrated that “defendants are entitled to summary judgment in their favor on the merits.” The case is Kamuck v. Shell Energy Holdings GP, LLC, No. 4:11-CV-1425, 2015 U.S. Dist. LEXIS 37538 (M.D. Pa. Mar. 25, 2015).

A crucial factor in the Court’s decision was that the plaintiff failed to produce any evidence to support many of the factual allegations made in his complaint.

For example, [plaintiff] has never identified the time, date, location, or extent [of] any toxic chemical release that he alleges took place on any part of the [plaintiff’s] Property or adjoining properties. Neither has [plaintiff] identified any toxic substances that were allegedly released on his property. [Plaintiff] has also failed to produce any evidence identifying specific environmental contamination, fire, explosion or any other hydro-carbon production mishap that affected his well-being or property. Nor has he presented any competent proof supporting his nuisance claims relating to vehicle traffic and the alleged spraying of toxic chemicals on the roadway adjoining his land.

Turning to the merits of the individual causes of action, the Court first addressed plaintiff’s strict liability claim. The Court accepted the E&P company’s uncontroverted “evidence and argument that support [its] position that natural gas drilling activities, including hydraulic fracturing, do not constitute abnormally dangerous activities under Pennsylvania law giving rise to strict liability.” The Court noted that its decision “is in line with precedent in this field within Pennsylvania,” “with legal authority in other jurisdictions,” and “follows the prior precedent of this Court.”

With respect to plaintiff’s private nuisance claim, the Court found that the lack of evidence compelled entry of summary judgment. Plaintiff “presented nothing to support this private nuisance claim beyond his subjective upset at the volume of road traffic he has experienced periodically outside his home on a public thoroughfare.” Under Pennsylvania law, “mere roadside noise and dust do not constitute private nuisance.”

Finally, the Court addressed plaintiff’s failure to support his negligence claim. “[D]ue to [plaintiff’s] inaction, and a complete failure of competent proof, we are unable to identify any duty breached by the defendants; any causal relationship between that duty and injuries to the plaintiff; and any ascertainable damages resulting from that injury” and, consequently, “this claim also now fails as a matter of law.”

In addition to finding the E&P company was entitled to summary judgment on the merits, the Court also found that plaintiff’s failure to prosecute his case and to obey court orders with respect to discovery obligations offered an independently adequate ground upon which to dismiss the case. Despite plaintiff’s pro se status, “courts have directly spoken to the type of willful avoidance of litigation responsibilities which has marked [plaintiff’s] approach to this lawsuit over the past two years, condemning the practice of avoiding depositions and generally ‘playing possum’ when instructed to fulfill their litigation responsibilities.” “The plaintiff cannot refuse to address the merits of his claims, and then assert the untested merits of these claims as grounds for denying a motion to sanction him.”

Read the Court’s complete opinion.