Energy & Resources Notes Winter 2016

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  • New Mexico’s Mancos Shale Development: “Go Ahead” to BLM on Oil and Gas Well Approvals is Affirmed by the U.S. Court of Appeals
    On October 27, 2016, the U.S. Court of Appeals for the Tenth Circuit issued its opinion in Dine’ Citizens Against Ruining Our Environment et al. v. Jewell, Tenth Circuit Cause No. 15-2130, affirming the decision of the Honorable James Browning which rejected the environmental non-government organizations’ (“NGOs”) claims that the U.S Bureau of Land Management (“BLM”) had violated the National Environmental Policy Act (“NEPA”) when approving certain applications for permits to drill submitted by oil and gas companies seeking to explore and develop the Mancos Shale in the San Juan Basin of northwestern New Mexico. Continue Reading.
  • EPA’s Final Assessment Regarding the Impact of Hydraulic Fracturing on Drinking Water Resources
    In December 2016, the Environmental Protection Agency (“EPA”) released its final assessment analyzing the potential impacts of hydraulic fracturing (“fracking”) on drinking water resources. The draft assessment, issued in June of 2015, was summarized in our Fall 2015 issue. Overall, this final report does not differ much in substance from the prior draft. The final assessment’s takeaway is essentially the same: EPA cannot point to any widespread, systemic impacts on drinking water resources caused by fracking. Yet, EPA removed its statement to that effect from the final assessment, which has allowed many to report that EPA has backtracked on its prior conclusion. Continue Reading.
  • The BLM’s New Venting and Flaring Rule: Potential Future Developments
    As noted in our Spring 2016 issue, the Bureau of Land Management (“BLM”) published a proposed rule concerning Waste Prevention, Production Subject to Royalties, and Resource Conservation in the Federal Register on February 8, 2016, commonly referred to as the BLM’s “Venting and Flaring Rule.” This rule has now been finalized and is set to go into effect on January 17, 2017, just before the Trump administration takes office. One major goal of the rule is to increase the capture of gas associated with oil development. The rule prohibits venting of natural gas, with certain exceptions, and requires operators to reduce flaring of gas and increase capture percentages over time. Pursuant to the rule, beginning in 2018, operators will be required to capture 85% of their adjusted total volume of gas produced each month. Continue Reading.
  • Considerations with Renewable Energy Development and Severed Mineral Estates
    Renewable energy developments include hundreds of millions of dollars of capital investment and rely on micro-siting of generation equipment to ensure optimal performance. Therefore, these developments are particularly sensitive to any possibility of surface use for mineral exploration and development that could require removal or relocation of the renewable generation equipment. New Mexico’s recognition of the dominance of the mineral estate, its prevalence of severed mineral estates, and its title insurance regulations for surface damage from mineral development create challenges to assuring non-disturbance of the renewable energy development. Continue Reading.
  • EPA Publishes Final Resource Conservation and Recovery Act Hazardous Waste Generator Improvements Rule
    On November 28, 2016, the Environmental Protection Agency (“EPA”) published the final RCRA Hazardous Waste Generator Improvements Rule (“HWGI Rule”). See 81 FR 85732, November 28, 2016. The HWGI Rule is one of the most significant and comprehensive hazardous waste rulemakings that EPA has promulgated since the mid-1980s. This regulation affects all hazardous waste generators regardless of size, industry or location in the United States. The rule is over 300 pages and includes a number of changes to 40 C.F.R. parts 260-265, 268, 270 and 279. Continue Reading.
  • Mineral Reservation Clause Allowing Mining Did Not Constrain Surface Owner’s Public Opposition
    A New Mexico state court judge has rejected a mineral estate owner’s attempt to constrain a surface owner from publicly opposing its mining project on the basis of a strongly worded mineral reservation that expressly reserved mining rights and attendant surface rights. See Lone Mountain Ranch, LLC, et al. v. Santa Fe Gold Corp., et al., First Jud. Dist. Ct. Case No. D-101-CV-2013-02581 (Summary Judgment Order of Sept. 20, 2016) (no appeal taken). According to the court’s Order, to prohibit a surface owner from participating in public processes and expressing objections or opposition to mining on split estate lands resulting from a mineral reservation, “the reservation itself must include specific covenantal language prohibiting such conduct.” Id., p. 4. Continue Reading.