West Virginia Proximity Detection Rule Remains Open for Comment

by Mike Addair

The following was originally posted in Huddleston Bolen's Safety & Health law blog, Safety & Health Connection.

On January 27, 2014 the West Virginia Board of Coal Mine Health and Safety filed for public comment a rule entitled Haulage Safety Generally, which would require, among other things, the installation of proximity detection devices on certain underground mining equipment to prevent injuries resulting from being struck by mobile equipment.  The period for public comment was initially set to expire on February 28, 2014, but was recently extended to March 11, 2014.  More ...

West Virginia Chemical Spill Leaves 300,000 without Water

by Todd Bergstrom

 

The release of an unknown amount of 4-methylcyclohexanemethanol from the Freedom Industries chemical storage facility along the Elk River in Kanawha County has led to the declaration of a state of emergency and left roughly 300,000 West Virginians without water in 9 counties. WVDEP officials estimate that between 2,000 and 5,000 gallons of the chemical, used in the coal treatment process, was released into the river. The West Virginia American Water treatment plant – roughly 1.5 miles downriver from the Freedom Industries site – became overwhelmed by the chemical, leading to contamination of the finished water product. Customers in the affected areas can use their tap water only for flushing and firefighting. No timeline has been announced for water restoration.

Here are links to some of the best resources to date to learn more about what can only be described as a crisis for area residents. All content and opinions are of the respective authors.

·         A story from the Charleston Gazette detailing more about the particular chemical released.

 

·         Here is the patent for the chemical, along with its MSDS sheet.

 

·         At least eight class-action lawsuits have already been filed in the Circuit Court of Kanawha County just one day after the leak.

 

·         After a rush by residents to stores for water and supplies, and reports of price gouging, the West Virginia Attorney General issued a warning for price inflation.

 

·         Filmmaker Elaine McMillion Sheldon’s take.

 

·         An account from the Charleston Gazette regarding the WVDEP’s actions thus far.

 

·         Hundreds of residents reporting symptoms of exposure, with “up to 10” having been hospitalized.

WVDEP Issues Cease Operation Order in Response to Drilling Site Explosion

by Todd Bergstrom

According to multiple media sources, the West Virginia Department of Environmental Protection has issued a notice of violation and a cease operation order to Jay-Bee Oil & Gas in response to a tank rupture that occurred on January 2 at the company’s Lisby Marcellus Shale well pad in Tyler County.

According to the Charleston Gazette, one Baker Hughes worker was injured in the explosion. Though the cause of the explosion remains under investigation, a DEP spokesman informed media that investigators suspect that vapors inside the tank ignited, leading to the tank rupture and an escape of ground contaminants. The Wheeling Intelligencer reports that the rupture occurred during the flushing of frack lines, and that the ruptured tank was included in a battery of tanks holding fracking fluids.

According to a DEP spokesman, most of the fluid remained in a dike area, and an initial inspection found no fluid in a nearby stream. Jay-Bee suspended operations as cleanup continued.

The DEP stop work order requires Jay-Bee to submit a report to the Office of Oil & Gas by January 14 regarding the cause of the rupture and future preventative measures. Jay-Bee is also required to provide an analysis of the fluids leaked, a proposal for soil and water sampling, as well as a detailed contamination remediation plan.

West Virginia Legislative Lookahead Highlights Future Fund

by Todd Bergstrom

From 2011 to 2012, West Virginia recorded the second largest increase in natural gas production of any state during that period (behind only Pennsylvania), with an increase of 37%. That boom doesn’t appear to be trending towards bust any time soon. According to the early release of the U.S. Energy Information Administration’s Annual Energy Outlook for 2014, electricity generation from natural gas will surpass coal by the year 2035.

With an eye towards the future, West Virginia’s leaders are looking for ways to prudently manage the economic assets derived from this thriving industry, in an attempt to mitigate the cyclical boom and bust nature of natural resource extraction.

At yesterday’s Legislative Lookahead in Charleston, WV, West Virginia Senate President Jeff Kessler and several industry professionals touted the proposed West Virginia Future Fund as a way to do just that. According to its website, the fund is similar to those created by other mineral extracting states (including Alaska, Montana, New Mexico, North Dakota, Utah, and Wyoming), and would be “created from a portion of natural resources severance taxes and will turn a one-time source of revenue into a permanent source of wealth for our state.” The income gained from the fund “will provide an ongoing stream of revenue to meet the challenges of the future and help build a more prosperous and secure economy.”

The common theme among the panelists at the Lookahead event – such a fund should have been created years ago. With the first day of the 2014 legislative session beginning on January 8, we shall see if there is similar enthusiasm for the idea when proposed to the full legislature.

PHMSA Issues Safety Alert for Crude Oil Shipment Classification

In a recent post to Huddleston Bolen's transportation industry blog, Transportation Law Today, Paul Loftus reported that the USDOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Safety Alert on January 2, 2014 following recent crude oil fires from train accidents where Bakken crude oil was involved. The Agency states that initial tests from the recent North Dakota accident involving two BSNF trains, and Lac Megantic Quebec in June 2013, indicate Bakken crude "may be more flammable than traditional heavy crude oil." Click here for a link to the complete blog post.

OSHA Considering Revisions to Process Safety Management Standard that Would Affect Oil and Gas Industry

On August 1, 2013, President Barack Obama issued Executive Order No. 13650 in the aftermath of an April 17, 2013 ammonium nitrate explosion that killed 15 people at a West Fertilizer Company facility in West, Texas.  Executive Order No. 13650 is aimed at improving safety and security at chemical facilities across the nation.  As part of that objective, the Executive Order requires the Secretary of Labor to review and suggest improvements to OSHA’s Process Safety Management (“PSM”) standard (29 C.F.R. §1910.119), which prescribes a comprehensive management program for hazardous chemicals in the workplace.

In compliance with Executive Order No. 13650, OSHA has announced a Request for Information (RFI) seeking public comment on potential revisions and/or updates to its PSM standard and other related standards such as its Explosives and Blasting Agents standard (29 C.F.R. §1910.109), Flammable Liquids Standard (29 C.F.R. §1910.106), and Spray Finishing Standard (29 C.F.R. §1910.107).   

The potential revisions/updates identified by OSHA in the RFI focus primarily upon increasing the coverage of the standards.  Two of the most significant actions being considered by OSHA would bring the oil and gas industry within the purview of the PSM standard when it is currently not subject to the same.  

Specifically, OSHA is seeking comment on whether to strike or retain the exemption contained within §1910.119(a)(2)(ii) for oil and gas well drilling and servicing operations.  

Additionally, OSHA is considering completion of a proper economic analysis of PSM standard coverage of oil and gas production facilities so that enforcement of the PSM standard can be resumed for these facilities.  Although oil and gas productions facilities have never been exempted from the PSM standard like oil and gas well drilling and servicing operations have, OSHA was forced to suspend enforcement of the PSM standard as to those facilities after objections from the American Petroleum Institute and a subsequent concession by OSHA that the original economic analysis for the PSM standard did not include oil and gas productions facilities.

Oil and gas firms are urged to consult Executive Order No. 13650 and OSHA’s RFI to develop a more complete understanding of the potential changes to the PSM standard and related standards under consideration by OSHA that could affect the inductry.  Those who wish to comment on the RFI can do so at www.regulations.gov when the RFI is published in the Federal Register.

Are Confidential Fracking Ingredients at Risk of Disclosure?

On April 12, 2013, the West Virginia Legislature passed Senate Bill 243 which promulgated the West Virginia Department of Environmental Protection’s (“DEP”) Rules Governing Horizontal Well Development (the “Rules,” codified at W.Va. C.S.R. § 35-8-1 et seq.). While the DEP’s Rules require well operators to report a list of all chemicals and additives used in the hydraulic fracturing process, a legislative amendment was added to the Rules which allowed the well operator to “designate the information regarding the specific identity or concentration or both of a chemical as a confidential trade secret not to be disclosed to the agency or anyone else except in the event of an investigation by the office, medical emergency, or for diagnostic or treatment purposes involving the designated chemical.” See W.Va.C.S.R. § 35-8-10.1.a. This amendment allows well operators to protect confidential trade secrets related to their fracking ingredients, even from the DEP under most circumstances.

A similar confidentiality provision is under attack in Wyoming. In November 2011, several environmental groups made a public records request for the identity of fracking ingredients which were designated as confidential by the oil service companies operating in Wyoming. Those requests were denied, and after several appeals, the issue is now before the Wyoming Supreme Court, which is set to hear argument on November 20, 2013. This blog post further describes the debate in Wyoming and links to the briefs filed by the parties and the live stream of the oral argument before the Wyoming Supreme Court.

The Wyoming Supreme Court’s ultimate decision will set a precedent on this issue which will undoubtedly be heard in the courtrooms of many other gas producing states, including West Virginia. This is one case worthy of some attention for the hydraulic fracturing industry operating in West Virginia.