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timhowardlaw

Scottish Independence Weighs in on Hydraulic Fracturing Debate

Now the debate is getting serious:  the integrity of Scotch Whiskey is at stake.  Or so says a recent article in “The National”, a newspaper that asserts for an independent Scotland.  As part of a wide-ranging criticism of hydraulic fracturing as a whole, and the recent decision of the North Yorkshire County Council to allow a well near the village of Kirby Misperton, the author raises the specter of water contamination by “released gas”.  The water contaminated thus is the very water used to make whisky and the article notes the concern for “distilleries”, thereby implicating not just the public safety but the entirety of Scottish heritage.  All blame laid on the Tories, who are in control nationally, and to the great regret of Scotland and Scots who, though they adopted their own moratorium on well drilling are still part of the nation so sadly controlled, and greater regret still because they had the opportunity in 2014 to take control of their own destiny but would not.

The National’s concerns are very real of course, and this article shows the tremendous global reach of the debate about hydraulic fracturing, a debate that flashes even before the first exploratory well is drilled.

timhowardlaw

Oklahoma Corporation Commission Restricts Disposal Wells

The Oklahoma Corporation Commission has regulatory jurisdiction over oil and gas activities in Oklahoma.  The Commission has been challenged to regulate “fracking” wells but has declined.  On Monday, March  7, however, the Commission restricted the disposal of wastes (primarily salt water) produced as a result or byproduct of drilling and production activities.  The restriction covers two significant sized areas of the state.  The Commission did not ban oil or gas production nor the disposal process; but the restrictions are significant enough that production activity will be curtailed.

Parties dispute whether “fracking” itself or the production of hydrocarbons cause earthquakes.  The best evidence says that production does not cause, but also indicates that the deep injection of waste may migrate to the fault lines between geologic plates and increase the possibility that those plates slip against each other, causing earthquakes.

Regulating injection disposal wells will reduce the amount of production from fracking activities because fracking involves large amounts of water.  Oklahoma’s economy is significantly dependent on oil and gas, but political and social pressure about earthquake activities has been mounting.  Oklahoma is seismically active, even without fracking or disposal wells.  If the earthquakes continue the political pressure will increase.

timhowardlaw

Construction Law – Termination for Convenience clauses are enforceable

Construction contracts often contain a clause allowing the owner to terminate “for convenience”, meaning without citing a particular reason.  Contractors challenge “Termination for convenience” clauses and commentators and analysts cast doubt on validity and enforceability.  Last year the Washington Court of Appeals upheld such a clause (SAK & Associates, Inc. v. Ferguson Construction, Inc., No. 72258-1-1, 2015 WL 4726912 (Wash. Ct. App. Aug. 10, 2015)).  The contractor challenged the termination as lacking consideration; and as violating an implied covenant of fair dealing.  The Court of Appeals rejected both arguments.

Owners are glad to have this precedent, even though the question is one of state law.  Contract drafters must take great care in drafting these clauses nonetheless, especially in stipulating the settle-up consideration to be paid to the contractor.

timhowardlaw

Texas: permit survives a fracking challenge

The Texas Railroad Commission examined evidence of local seismic activity and issued a proposal for decision on September 10 stating that the evidence did not support a conclusion of causation of the seismic events by Enervest Operating Company Briar Lease Well No. 1. The proposed decision is similar to a one issued August 31 for West Lake SWD Well No. 1 which concerned a wastewater injection well. At least in the context of a decision to revoke a well permit the Railroad Commission will examine specific evidence about specific wells rather than broader “study” conclusions or scholarly data collections. No doubt there will be more contests on the issue of causation and what must be shown to support the charges that link fracking to seismic events. The finding for Enervest in the recommendation was that the evidence to date is “not sufficient to reach a conclusion”. Enervest keeps its permit.

timhowardlaw

The Frontier of Family and Estate Law

Caveat:  the title is a misnomer.

The June ruling by the United States Supreme Court holding unconstitutional state bans on same sex marriage created another validation:  same sex divorce.

Thirty-seven states and the District of Columbia recognized same sex marriage prior to the Supreme Court decision.  Same sex couples validly married in those states sometimes moved to states which did not recognize or even specifically outlawed same sex unions.  In those states they lived in legal limbo.  The state of residence would not recognize the marriage, and neither would the state accept US Constitutional responsibility to give legal effect to a marriage contracted under the laws of another state.

The validity of same sex marriage – marriage in every legal sense of the word – is now established under the US Constitution.  The frontier may be all the follow on issues.  The first and most prominent is same sex divorce.

The first issue, but perhaps already resolved:  even those legal subdivisions (usually counties) that still refuse to issue marriage licenses appear willing to dissolve marriages legally performed under the laws of another state.  The sound and the fury surrounding same sex marriage vanishes when the request is for a same sex divorce.

Freedom to Marry, a LGBT lobbying organization, tracks those jurisdictions that do not grant same sex marriage licenses.  Apparently with same same sex divorce, there will be no residual refusal jurisdictions to track.  One study shows that the rate of same sex divorce may be about the same as the rate for oppose-sex marriages, although the amount of data is obviously not the same.

Regarding the caveat:  this does not seem to be a frontier.  These are cases of marriage validly done under the laws of another state, dissolved under the laws of a recently-recognizing state.  If every state must grant same-sex marriages equal status with all marriages, then it seems to follow that the rules, statutes, procedures and results of divorce must apply as well.

Is there a frontier?  Yes, but I suggest these are the frontier areas:  same sex “common law” marriages; the precise applicability of opposite-sex precedent to same sex cases; community property rules (in states where applicable); conflict of law questions; and rules of heirship.

timhowardlaw

Bakken Crude Draws DOT Emergency Order

The eastbound crude petroleum carrying train collided with a derailed westbound grain train with thunderous results for Casselton, North Dakota.  Ruptured rail cars belched 400,000 gallons of crude which the shattered rail cars ignited to explosion lighting the late December night.  More than a month before that 2013 day, the rural landscape near Aliceville, Alabama similarly erupted when a train derailed and released an undetermined amount of crude from punctured tank cars.  The crude fouled wetlands near the site of the wreck, although thankfully no one was hurt.

The US Department of Transportation responded on February 25, 2014 with an Emergency Restriction/Prohibition applicable to shipments of Bakken crude.  Based on evidence that shows Bakken crude to have Reid Vapor Pressure readings as high a 9.7 psi, the DOT now requires Bakken to be tested frequently enough to ensure that the crude is classified properly according to DOT classes; and with respect to crude with Bakken characteristics, require it to be handled as hazardous material in Packing Group I or II.  The rule applies to those who provide the crude to the railroad carrier.  The consequences of violation?  Civil penalties of up to $175,000 for each violation or for each day of violation, in addition to criminal fines and imprisonment of up to ten years.

What about the trains?  The Department of Transportation issued no new rules or advisories regarding the integrity of tank cars or the safe operation of the rail system.  Trains are not supposed to derail and tank cars puncture.

Effective new rules?  The classification and hazardous material packing group may not fully account for the types of vapor emitted by Bakken crude.  The new rules of course address nothing concerning tank cars or railroad movements.  Perhaps the real issue is capital cost:  who will bear the cost of modifying and upgrading infrastructure and rolling stock as needed to improve protection.  More to come.

 

timhowardlaw

Sentimental Interlude

Ernie Harwell, the broadcast voice of the Detroit Tigers, died on May 4, 2010.  His death was remarked in columns on sports and to a slight extent in the general media.  So passed away without lament my youthful world.  The Wall Street Journal printed a brief remembrance.  The summary was succinct and accurate and well suited to the occasion.  One offhand observation capatured the passing of an era.  In describing his common touch, the articles noted that “his voice became a summer soundtrack for people fishing for perch on Lake St. Clair, working in their garages, and driving to and from weekend cottages.”  For many broadcast years his voice was almost universal.  I remember walking our street on a weekend summer afternoon and never being out of earshot of his voice, coming from every open door and window and backyard radio.  His voice was the hallmark of a time of unity among entire communities.  We shared a common experience and the sharing was significant.  With regret we say goodby to a representative of another era and time in our history, all the more poignant because shared by so many.  Never intending, he became the image of much more than baseball.  He is the voice of a vanished world, a world of secure and properous ordinary workers, safe neighborhoods for roaming on a bicycle and languid summer days and evenings spent at lakes or in backyards with family.  Ernie Harwell will be deeply missed.

There was no byline to the Wall Street Journal article.  It was compiled from the Associated Press wire.

timhowardlaw

Public Hearings on EPA Proposals to Expand GHG Mandatory Reporting Rule

The US Environmental Protection Agency (EPA) announced public meetings to  discuss the proposed rule that would amend the Mandatory Reporting of Greenhouse Gases Rule.  The amendment would include emissions in the petroleum and natural gas sectors, and also facilities that inject or geologically sequester carbon dioxide (“carbon capture and storage”).  The public hearings will be held on April 19, 2010 in Arlington, Virginia. 

The EPA also announced public hearings concerning five new subparts of the Greenhouse Gases Rule that would cover flourinated gases.  These hearings will be held on April 20, 2010 in Washington, D.C.  The amended rule would cover manufacturers or importers, in the electronics industry, and the electric transmission and distribution equipment business.

timhowardlaw

Additional EPA Rule on Reporting of Greenhouse Gas Emissions

The US Environmetnal Protection Agency (EPA) proposed on March 22, 2010 additional rules on the reporting of greenhouse gas emissions.  The EPA proposal modifies the Mandatory Greenhouse Gas Reporting Rule (MRR) to extend the data gathering and reporting requirements to oil and gas installations and equipment not previously covered.  Onshore and offshore petroleum and natural gas production, onshore natural gas processing plants, onshore natural gas transmission compression and underground storage, natural gas distribution and liquefied natural gas storage will be subject to the reporting requirements.  This means that any facility that emits 25,000 metric tons of CO2 equivalent must gather data as prescribed in the rules and submit reports to the EPA.  If the rules become final, the first reporting period would be calendar year 2011, with the report due March 31, 2012.  Significantly, the EPA proposes that all facilites that inject and sequester CO2 become subject to the reporting requirements.  All businesses that inject CO2 must report irrespective of the amount of CO2 involved.  The facilities affected by the proposed rules must collect data starting on January 1, 2011, if the EPA adopts the proposed rules.

timhowardlaw

Carbon Cap and Trade: Interest Waning?

The Economist magazine reported that cap and trade suffers reduced importance in new US legislative proposals to combat climate change (March 20, 2010).  Cap and trade will apply to fewer industries, and in fewer ways.  Three reasons account for the change in approach:  the economic downturn reduces the ability of industry to bear the increased cost; the financial crisis undermines support for market mechanisms like cap and trade; public interest shifts away from climate change to other worries.  Recent polls show that younger people place significant emphasis on the climate and environmental issues.  Climate change takes a back seat for the moment; probably not for long.