Mineral Web » News http://www.mineralweb.com Oil and Gas Mineral Services Tue, 29 Aug 2017 21:15:49 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.2 North Dakota’s Complex Mineral Rights Issues http://www.mineralweb.com/news/north-dakotas-complex-mineral-rights-issues/ http://www.mineralweb.com/news/north-dakotas-complex-mineral-rights-issues/#comments Tue, 29 Aug 2017 02:37:18 +0000 http://www.mineralweb.com/?p=10956

A controversial oil and gas drilling project in North Dakota highlights the complex mix of private, state and federal mineral rights on tribal lands.

Related: North Dakota Fighting for Millions in Royalties

Within one week’s time, the federal government halted and then allowed drilling on a series of wells near Lake Sakakawea in Mountrail County, North Dakota. The Bureau of Land Management granted permits in 2011 for Slawson Exploration to drill multiple horizontal wells from a single well pad beneath the lake, but they were quickly challenged by local tribes.

The Three Affiliated Tribes  - the Mandan, Hidatsa & Arikara Nation – have asked the Interior Board of Land Appeals to stop Slawson from drilling. They claim the location of the well pad conflicts with a tribal resolution imposing a 1,000 foot setback from the lake, but Slawson contends that the tribe’s setback should not apply to privately owned property.

Slawson’s ‘Torpedo Federal Project’ is now embroiled in litigation involving several jurisdictions and will likely be a test case for the boundary issues that have never been tried.

U.S. District Judge Daniel L. Hovland is allowing drilling to continue through October while the challenge is being argued. He indicated that the MHA Nation does not have civil jurisdiction over Slawson or the BLM.

“The issuance of a temporary restraining order would simply vacate the order dated August 9, 2017; however, normal board procedures would continue to apply. To the contrary, if the temporary restraining order is not granted, Slawson asserts it will likely move the drilling rig off of the well pad to a different [site], in order to mitigate injury, and still incur substantial costs in doing so.” –  U.S. District Judge Daniel L. Hovland

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Pennsylvania Tries Again to Clarify Royalty Deductions http://www.mineralweb.com/news/pennsylvania-tries-again-to-clarify-royalty-deductions/ http://www.mineralweb.com/news/pennsylvania-tries-again-to-clarify-royalty-deductions/#comments Sat, 12 Aug 2017 01:51:46 +0000 http://www.mineralweb.com/?p=10970

Pennsylvania legislator introduces legislation aimed at increasing fairness and transparency for landowners who receive natural gas royalties.

Pennsylvania Considers Minimum Royalties

Rep. Jason Ortitay (R-Washington/Allegheny) introduced House Bill 1708 today that defines post-production costs and acceptable deductions allowed by oil and gas producers. The bill is the latest attempt by lawmakers to amend the Oil and Gas Lease Act of 1979 to provide better definitions and clarity for royalty payments.

“It is critical that the legislature take action to protect landowners and make sure companies live up to their end of the agreements. Lessors should have peace of mind knowing they never owe a company money for royalties, as this was something brought to my attention that we are going to clear up in this legislation once and for all. My office has received numerous calls regarding concerns with gas royalty payments. While my proposal – or any legislation – cannot change existing leases, if approved, it would put in place important protections to make sure landowners receive the royalties to which they are entitled.” - Rep. Jason Ortitay

Primarily, the bill defines what is considered to be an acceptable deduction. Other highlights include:

  • Landowners receive a written summary of deductions and can review records to confirm the authenticity of deductions
  • All sales take place as an arms-length transaction ensure appropriate business practices that do not jeopardize royalty owners
  • Prohibits the issuance of negative balance royalty checks

Representative Garth Everett [R] tried three times to amend the Oil and Gas Lease Act from 1979. Everett’s first attempt was during the 2013-2014 session, where HB 1648 would have guaranteed that Pennsylvania landowners would get minimum royalty payments of 12.5%–regardless of post-production expenses. When that attempt failed, Everett re-introduced a similar bill it during the 2015-2016 session, however, that one also failed. In February, Everett tried again, by introducing House Bill 557.

Read more at www.legis.state.pa.us

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Louisiana Fights to Keep Royalties http://www.mineralweb.com/news/lousiana-fight-to-keep-royalties/ http://www.mineralweb.com/news/lousiana-fight-to-keep-royalties/#comments Mon, 31 Jul 2017 12:39:34 +0000 http://www.mineralweb.com/?p=10945

Louisiana pushes back against a Trump initiative to take away more of the state’s oil and gas royalties.

Royalty Payments: Who’s Getting Rich?

In his 2018 federal budget, President Trump is proposing to eliminate the Gulf of Mexico Energy Security Act, which provides critical funding for Louisiana’s coastal restoration. These funds come from the state’s energy revenues including over $47 billion per year from oil and gas production.

Hundreds of business, government leaders sent a letter to the President last week asking him to reconsider killing the bill.

“The Gulf of Mexico Energy Security Act will soon provide the only consistent source of federal funds dedicated to combat Louisiana’s land loss crisis. This predictable source of revenue — constitutionally committed to implementation of the State’s 2017 Coastal Master Plan for a Sustainable Coast — is critical for the communities and businesses that rely on a stable Louisiana coastline to survive and grow. The GOMESA funds, drawn from energy revenues generated here in the waters off our coast, have been a cornerstone for coastal planning since passage of the Act in 2006.”

Louisiana has been in a long fight to gain the oil and gas royalties it deserves. Before 2006, the federal government kept approximately $160 billion in royalties from offshore drilling, before U.S. Sen. Mary Landrieu persuaded Congress to share. Since then, the royalties have trickled in but the government still took a big chunk for environmental projects. If the act is appealed, an estimated $100 million will be lost annually

Read more at gonoinc.org

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Royalty Payments: Who’s Getting Rich? http://www.mineralweb.com/news/royalty-payments-whos-getting-rich/ http://www.mineralweb.com/news/royalty-payments-whos-getting-rich/#comments Mon, 24 Jul 2017 17:33:09 +0000 http://www.mineralweb.com/?p=10931

Lots of people are getting rich from oil and gas royalties and Washington is getting its share.

Related: North Dakota Fighting for Millions in Royalties

Receiving royalties from oil and gas activity can be lucrative. An estimated $22 billion was paid out in royalties to private mineral rights owners in 2013.

A new study by the Government Accountability Office reports that the federal government is also making a nice payback from oil and gas activity. In 2016, the government collected $2.5 billion in revenue from onshore oil, gas, and coal production on federal lands. The amount includes about $2 billion from royalty payments.

The study explored the impact of possibly raising federal royalty rates. Currently, the federal royalty rate is 12.5 percent but if increased, could raise revenue significantly.

One of the studies suggested that raising the royalty rate to 17 percent or 29 percent might increase federal revenue by up to $365 million per year after 2025. The other study suggested that increasing the effective rate could bring in an additional $141 million per year in royalty revenue. Stakeholders GAO interviewed cited other factors that could influence the extent to which raising federal royalty rates could increase revenues—in particular, how bonus bids, another revenue source, could be affected. Some of the stakeholders stated that companies would be more likely to offer lower bids to obtain a lease for the rights to extract resources if they had to pay higher royalties.

Just days before President Obama left office, he released new shale regulations establishing minimum royalty rates and giving the Secretary of the Interior discretion for increases. The ruling is designed to protect the environment and ensure that taxpayers are fairly compensated, should shale on federal lands ever be drilling commercially.

Read more at gao.gov.

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Tennessee Weighs Executive Order on Oil and Gas Activity http://www.mineralweb.com/news/tennessee-weighs-executive-order-on-oil-and-gas-activity/ http://www.mineralweb.com/news/tennessee-weighs-executive-order-on-oil-and-gas-activity/#comments Thu, 20 Jul 2017 20:17:12 +0000 http://www.mineralweb.com/?p=10943

Tennesee is paying close attention to a new executive order that paves the way for more oil and oil and gas extraction in the state’s National Parks.

North Dakota Fighting for Millions in Royalties

In March, President Trump signed an order that required federal agencies to review or rescind policies that ‘burdened’ the development of oil and gas development, including the 9B rules that set standards and regulate the relationship between the park service and operators.

Tennessee is one of many states that are keeping a close eye on the recent executive rollbacks affecting energy policy. Currently, Tennessee’s National Park Service oversees 326 oil and gas sites in the Big South Fork National River and Recreation Area, including 150 that are currently operating. It is still unclear exactly what impact the order will have, but many feel this is a step backward that could deregulate oil and gas activity inside the parks.

In the following video, the Chief of Resource Management for Big South Fork talks about oil and gas operations in the area and the balance between private rights and preserving public lands.


President Donald Trump’s Executive Order is entitled “Promoting Energy Independence and Economic Growth” and is part of a larger push to roll back Obama-era policies that limited energy initiatives


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North Dakota Fighting for Millions in Royalties http://www.mineralweb.com/news/north-dakota-owed-millions-in-royalties/ http://www.mineralweb.com/news/north-dakota-owed-millions-in-royalties/#comments Sat, 15 Jul 2017 16:56:54 +0000 http://www.mineralweb.com/?p=10933

Oil and gas companies and industry leaders are in a dispute with North Dakota officials over improper deductions on royalties owed to the state.

Who Owns Mineral Rights Under North Dakota Lake?

The North Dakota Department of Trust Lands wants to collect millions of dollars in oil and gas royalties that it believes were improperly withheld by oil and gas companies that do business with the state.  The agency found the discrepancy during a recent audit of 19 companies from 2012 through 2014. 10 of those audited were found to have errors, according to Bismark Tribune.

“The bottom line is the companies would like to be able to take deductions because that helps them collect a smaller royalty. But my responsibility and the board’s is to ensure that the lease terms are followed and that we collect for the Common Schools Trust Fund and the other trust funds what they’re entitled.” - Land Commissioner Lance Gaebe

Getting to the bottom of the issue is being hindered because oil companies are hesitant to provide the necessary information. Industry leaders such as The North Dakota Petroleum Council are also pushing back through comments to the board and backing legislative action.

Read more at Bismark Tribune

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Oklahoma Law to Add Jobs & Generate Royalties http://www.mineralweb.com/news/oklahoma-law-to-add-jobs-and-generate-royalties/ http://www.mineralweb.com/news/oklahoma-law-to-add-jobs-and-generate-royalties/#comments Wed, 28 Jun 2017 12:04:45 +0000 http://www.mineralweb.com/?p=10897

A new Oklahoma law means more money for royalty payments and greater protection for oil and gas producers in the state.

Own mineral rights in Oklahoma? Join the discussion.

Last month, Oklahoma Governor Mary Fallin signed Senate Bill 867 into law, which expands laws for horizontal drilling.  Also known as the Oklahoma Energy Jobs Act of 2017, the law adds rights for vertical well owners and creates protections for mineral rights owners.

Retired President of the Oklahoma Independent Petroleum Association (OIPA), Mike Terry, hails the bill as a way to keep up with the advancement in the oil and gas industry over the last 10 years. He says that in its first year, the bill will:

  • Generate about $490 million in new royalty payments
  • Raise more than $229 million in new state and local revenues
  • Create nearly 6,000 new jobs in the oil and gas sector
  • Spur nearly $6 billion in investment from oil and natural gas producers

Previously, companies with leases in non-shale rock formations weren’t able to drill horizontal wells more than a mile long. Senate Bill 867  allows for long-lateral drilling in all rock formations in the state.

“Senate Bill 867 is a prime example of government and industry joining together to ensure future success. The legislation signed by Gov. Mary Fallin allows for expanded drilling in all geologic formations in the state. The new law puts Oklahoma on par with all other energy-producing states and gives active Oklahoma drillers the ability to drill more effectively and efficiently.” - Mike Terry - Retired President, OIPA

Read the full text of SB 867 here.

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Mineral Owners Win Against ConocoPhillips http://www.mineralweb.com/news/mineral-owners-win-against-conocophillips/ http://www.mineralweb.com/news/mineral-owners-win-against-conocophillips/#comments Wed, 21 Jun 2017 14:31:43 +0000 http://www.mineralweb.com/?p=10924

Texas mineral owners win a huge judgment against ConocoPhillips for lost mineral royalties.

Related: Mineral Rights Litigation Swells Across Country

Leon and Minerva Ramirez have been fighting for their rightful share of the mineral royalties from their family land for over seven years. ConocoPhillips had been extracting oil and gas from the family’s land since 1995 and had paid royalties to some family members, but not to Leon and Minerva. The pair filed a lawsuit and a trial court found that the Leon and Minerva had an interest in the mineral rights and ordered ConocoPhillips to pay roughly $11.7 million. After numerous appeals, The Fourth Court of Appeals in San Antonio ruled in favor of the brother and sister earlier this month, overruling the issues raised by ConocoPhillips.

“Based on the plain language of the face of the documents in the chain of title, we hold the trial court properly granted summary judgment for the grandchildren on their claim to the disputed ¼ mineral interest in Las Piedras Ranch, and properly denied summary judgment for ConocoPhillips on the issue of title.”  - Justice Rebeca C. Martinez

The court affirmed that the pair is entitled to the original $11.7 million in damages from the oil and gas company.

Read more here

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Methane Rules Stand http://www.mineralweb.com/news/methane-rules-stand/ http://www.mineralweb.com/news/methane-rules-stand/#comments Fri, 16 Jun 2017 13:11:37 +0000 http://www.mineralweb.com/?p=10908

In a surprise move, the United States Senate has voted to keep Obama’s methane ruling.

Related: EPA: Tougher Methane Emissions Approved

Last month, key Republicans joined Democrats to uphold the power granted to the Bureau of Land Management (BLM) during the Obama Administration to regulate some the oil and gas activity. The BLM had been granted the authority to set requirements to restrict methane leaks and excessive flaring.

“Improving the control of methane emissions is an important public health and air quality issue, which is why some states are moving forward with their own regulations requiring greater investment in recapture technology. I join the call for strong action to reduce pollution from venting, flaring, and leaks associated with oil and gas production operations on public and Indian land.” – Rep. Senator John McCain

John McCain (R-Ariz.), Susan Collins (R-Maine), and Lindsey Graham (R-S.C.) joined the entire body of Democrats to uphold the provision.

The methane rule was part a plan designed by former President Obama to cut greenhouse gas emissions 40 – 45 percent by 2025. It included:

  • Allowing the BLM to set standards to prevent methane leaks and excessive flaring
  • Allowed the BLM to inspect drilling operations for leaks of methane
  • Oil and gas companies must pay royalties on natural gas extracted from operations on federal and tribal lands
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Ohio Counties Benefit from Oil and Gas Lease Sales http://www.mineralweb.com/news/ohio-counties-benefit-from-oil-and-gas-lease-sales/ http://www.mineralweb.com/news/ohio-counties-benefit-from-oil-and-gas-lease-sales/#comments Sun, 21 May 2017 13:03:44 +0000 http://www.mineralweb.com/?p=10902

Ohio counties are reaping the benefits from the controversial sale of oil and gas leasing rights.

Related: Anti-fracking campaigns in Wayne National Forest

At the end of 2016, the Federal Bureau of Land Management (BLM) auctioned off acreage in the Wayne National Forest for future gas exploration and production. The $1.7 million deal included more than 700 acres sold to 22 companies.

The sale came after many months of protests and debate pitting environmentalists against mineral rights owners in the state. After conducting numerous environmental impact studies, the BLM determined there would be no significant impact to the forest.

The state of Ohio received $425,000 form the sale and plans to distribute a share to each county according to the amount of acreage sold.

“The money goes to the county to be divided. The school district gets 68 percent, and the rest is to be divided between the townships, local governments and levies. This is only initial sales, not royalties.” – Commissioner Mick Schumacher, Monroe County

The BLM plans to continue these sales with many believing that the proceeds will benefit landowners as well as low-income families in the Appalachian foothills.

A total of 38,000 acres of national forest land is potentially available for oil and gas drilling through these federal auctions.

The Bureau has tentatively scheduled the next auction for June 22.

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Colorado Attempts to Limit Forced Pooling http://www.mineralweb.com/news/colorado-attempts-to-limit-forced-pooling/ http://www.mineralweb.com/news/colorado-attempts-to-limit-forced-pooling/#comments Wed, 19 Apr 2017 15:09:52 +0000 http://www.mineralweb.com/?p=10894

Colorado lawmakers introduce a bill hoping to limit forced pooling of mineral rights in the state.

Related: Colorado’s Setback Rule is a Game Changer

Current law authorizes forced pooling in Colorado, and House HB17-1336 would bring additional restrictions on the practice. It will require that at least a majority of the royalty interest owners must join in the application before the commission can enter a forced pooling order.  Other restrictions include:

  • Operators will be required to give the mineral interest owners a clearly stated, concise, neutral explanation of the laws governing forced pooling
  • Operators must file an electronic report with the Colorado Oil and Gas Conservation Commission showing the number of owners who were forced pooled and the percentage of land that was forced pooled in the given area.
  •  Notice of the hearing must be given at least 90 days before the hearing is to take place.

The bill is being sponsored by Rep. Mike Foote, D-Lafayette and Rep. Dave Young, D-Greeley.

Read more leg.colorado.gov 



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Pennsylvania Considers Minimum Royalties http://www.mineralweb.com/news/pennsylvania-considers-minimum-royalties/ http://www.mineralweb.com/news/pennsylvania-considers-minimum-royalties/#comments Wed, 12 Apr 2017 15:12:37 +0000 http://www.mineralweb.com/?p=10890

Pennsylvania lawmakers try for a third time to pass legislation that would provide minimum royalties for unconventional oil and gas well production.

Own minerals in Pennsylvania? Join the discussion here.

Representative Garth Everett [R] has re-introduced a bill that will amend the Oil and Gas Lease Act from 1979. This is the third time that the legislator has attempted to provide a remedy for mineral and landowners to receive a minimum royalty on unconventional oil or gas wells.

Everett’s first attempt was during the 2013-2014 session, where HB 1648 would have guaranteed that Pennsylvania landowners would get minimum royalty payments of 12.5%–regardless of post-production expenses. When that attempt failed, Everett re-introduced a similar bill it during the 2015-2016 session, however that one also failed. In February, Everett tried again, by introducing House Bill 557.

The bill defines the minimum royalty to be paid to hydrocarbon production from unconventional oil or gas wells.

“The minimum royalty paid to a lessor for unconventional oil or gas well production may not be less than one-eighth of the gross proceeds received by the lessee for the production. No deduction or allocation of costs, expenses or other adjustments may result in a royalty less than the one eighth as provided in this section.”

The bill also says that treble damages may be awarded if a lessee acted willfully in failing to pay the minimum royalty or where a lessee has been previously found to have failed to pay the minimum royalty.

Read more at legis.state.pa.us 

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West Virginia Kills Pooling Bill http://www.mineralweb.com/news/west-virginia-kills-pooling-bill/ http://www.mineralweb.com/news/west-virginia-kills-pooling-bill/#comments Sun, 09 Apr 2017 15:50:44 +0000 http://www.mineralweb.com/?p=10876

West Virginia lawmakers have killed a bill that would have forced pooling in the state.

Related: West Virginia Oil and Gas Lease Basics

Senate Bill 576, had been the top priority this session for the state’s natural gas industry. The bill would allow drilling over the objections of a co-owner of mineral rights. Through “co-tenancy”, companies could force adjacent gas reserves into pools for modern horizontal drilling through older leases.

The bill passed the Senate last week, but House leaders felt that there was too little time to build a consensus of support for the legislation. The so they didn’t introduce it into the agenda, effectively killing it for the remainder of the session.

Sen. Mike Romano, D-Harrison, voted against the bill and offered several amendments, which were all rejected.

“We’re making it easier for corporations to take people’s property than it is for the government.” Romano said after passage by the Senate. “We’ve made billions of dollars for oil and gas companies today — nothing for our citizens, nothing for our state.”

Supporters believe  pooling legislation is needed to encourage more oil and gas development in the state.

In January the West Virginia Mineral Owners Coalition met to strategize how it would mobilize forces to protect landowner rights. The coalition has been actively lobbying legislators in this session to maintain and continue those protections they won in 2016.


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Idaho: Landowner Bill of Rights Considered http://www.mineralweb.com/news/idaho-landowner-bill-of-rights-considered/ http://www.mineralweb.com/news/idaho-landowner-bill-of-rights-considered/#comments Thu, 09 Mar 2017 20:26:45 +0000 http://www.mineralweb.com/?p=10862

Proposed legislation in Idaho would represent a total overhaul of the state’s oil and gas regulations.

Own mineral rights in Idaho? Join the conversation here.

Rep. Judy Boyle introduced HB 232 last week, a 45-page bill would require oil and gas producers to submit monthly reports for every operating well. This information would then be made available to the public.

“This bill would introduce more uncertainty and risk for those deciding where to deploy their limited capital, including the companies who have partnered to make discoveries in the Willow Hamilton Field who have current plans to invest millions in Idaho this year.” Alta Mesa spokesman John Foster.

HB 232 Highlights

  • - Establishes default sizes for well spacing units: 40 acres for oil wells and 160 acres for gas wells
  • - Reconfigures the Oil and Gas Conservation Commission to include the Idaho governor, director of the Department of Lands, two people appointed by the governor and a county commissioner from a county where oil or gas has been produced within the past 10 years
  • - – Invests the board with discretionary authority to review and set the final sales price for oil and gas if it determines that tax and royalty payments do not reflect daily market prices
  • Requires the Idaho Department of Lands to post the records on its website

In 2016, Idaho Governor Butch Otter signed Senate Bill 1339, making it easier to force mineral-right holders into a pool with other owners. Pooling is the controversial process where operators deal with a collection of mineral owners of a specific deposit of resources instead of one-by-one. With pooling in place, the operator only needs an agreement of 55% of the owners for them to force all to comply.

The bill is co-sponsored by Rep. Ryan Kerby, R-New Plymouth, and Sen. Abby Lee, R-Fruitland, along with District 8 Rep. Terry Gestrin, R-Donnelly, District 32 Rep. Marc Gibbs, R-Grace, and District 31 Sen. Steve Bair, R-Blackfoot.

Read more at legislature.idaho.gov

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Texas Royalties & Taxes Drop Dramatically http://www.mineralweb.com/news/texas-royalties-taxes-drop-dramatically/ http://www.mineralweb.com/news/texas-royalties-taxes-drop-dramatically/#comments Tue, 21 Feb 2017 13:24:07 +0000 http://www.mineralweb.com/?p=10849

Oil and natural gas revenues in Texas has declined steadily since the bust two years ago, with The Texas Oil and Gas Association (TXOGA) reporting a 40% decline since 2014.

Related: Texas Schools Fight to Survive

The Texas budget relies on sales taxes, which account for 58% of all statewide tax collections. As the shale boom subsided, the decrease in spending in the oil and gas sector has affected the state budget.

Oil & Gas Revenues

2014: $15.7 billion
2016: 13.8 billion
2016: $9.4 billion

The state comptroller reports that oil production and regulation tax revenue for 2016 was $1.7 billion with  natural gas tax revenue was $579 million, 33.6 percent below the CRE projection of $871 million.

“Even in a down market during fiscal year 2016, the Texas oil and natural gas industry contributed an average of $26 million a day to state and local revenue.  The oil and natural gas industry has paid $108 billion in state and local property taxes and state royalties since 2007– a figure that would finance the current annual state budgets for the University of Texas-Austin and Texas A&M University, combined, for well over 100 years.” - Todd Staples, president of TXOGA

Read more at txoga.org

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Devon Faces Thousands of Unhappy Mineral Owners http://www.mineralweb.com/news/devon-faces-thousands-of-unhappy-mineral-owners/ http://www.mineralweb.com/news/devon-faces-thousands-of-unhappy-mineral-owners/#comments Fri, 17 Feb 2017 01:49:31 +0000 http://www.mineralweb.com/?p=10847

Devon Energy lost another round in its fight against a lawsuit brought by thousands in North Texas who claim they were cheated out of royalties.

Related: Landowners Lose Negligence Battle in Texas

A Dallas federal judge sided with Denton County property owners last month, when he allowed a class-action lawsuit against Devon to move forward. U.S. District Judge Ed Kinkeade granted the class-action status and affirmed that the benefits of litigating the case as a class action outweigh the costs of litigating thousands of individual cases.

Devon has appealed the decision, claiming that Kinkeade’s ruling would force the company to face an unfair situation.

“In certifying a class, the district court failed to conduct the mandatory rigorous analysis” and “made clearly erroneous findings of fact, and failed to properly apply Texas law,” according to court documents filed in late January. The court’s ruling exposes Devon “to potentially ruinous liability.”

The lawsuit claims that Devon Energy sold natural gas at a low price to its affiliate, Devon Gas Services and then deducted an “unreasonable and lucrative 17.5 percent processing fee” from the royalty checks. The lawsuit goes on to call the transactions a sham.

Read more at law360.c0m

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Mineral Estate Conservation Easements Provide Flexibility http://www.mineralweb.com/news/mineral-estate-conservation-easements-provide-flexibility/ http://www.mineralweb.com/news/mineral-estate-conservation-easements-provide-flexibility/#comments Wed, 01 Feb 2017 23:40:40 +0000 http://www.mineralweb.com/?p=10855

A Stanford professor is touting a new way for private landowners to limit fracking on their land without government regulation.

Related: EPA Releases Fracking Assessment

Rob Jackson, professor of Earth system science at Stanford University, leads a team of legal scholars who have assessed how a conservation easement could enable individual landowners to restrict fracking on their property.

“The mineral estate conservation easement (MECE) is a conservation easement underground that provides landowners with legal flexibility to restrict hydraulic fracturing and other subsurface activities on their land in perpetuity.” 

Landowners could use the MECE to restrict mineral extraction under their property and gives mineral rights owners a new choice for setting aside those rights. The MECE would also allow landowners who own both the aboveground and below ground parts of their land to conserve what’s underneath the property while retaining the right to develop on the surface with houses or other structures.

As concern over fracking has increased, states, local governments and communities have turned to the courts to set regulations over oil and gas activities. The MECE would offer an alternative outside of additional governmental regulations.

One of the legal battles has been who gets to control oil and gas activity. In one famous case from in 2015, the Texas House of Representatives gave its overwhelming approval to preempt city laws concerning oil and gas activity, including hydraulic fracking. The Denton Fracking Bill allows the state to eliminate local rules that are not deemed “commercially reasonable.”

Read the full analysis in the Environmental Law Reporter

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New Minimum Royalty Rates http://www.mineralweb.com/news/new-minimum-royalty-rates/ http://www.mineralweb.com/news/new-minimum-royalty-rates/#comments Thu, 19 Jan 2017 03:27:55 +0000 http://www.mineralweb.com/?p=10833

Just days before President Obama is set to leave office, he released new shale regulations establishing minimum royalty rates and giving the Secretary of the Interior discretion for increases.

Related: BLM: New Rules Will Ensure Accurate Royalties

The ruling is designed to protect the environment and ensure that taxpayers are fairly compensated, should shale on federal lands ever be drilling commercially.

“This approach allows the Secretary to consider all relevant factors, including geology, technology, costs, and market prices for oil and gas. Until there is a domestic commercial oil shale industry, we can only speculate about what royalty rates those factors would support. (…) These regulations also strengthen environmental protections by requiring additional environmental information and planning to be included in an oil shale development plan, including a plan to protect water resources, an airshed review, an integrated waste management plan, and an environmental protection plan.” – BLM statement

The new amendments add flexibility to the royalty rates that were set in 2008. The BLM rejected a call for a minimum 12.5 percent rate as an alternative, which is what is imposed on conventional oil and gas leases. In a statement, the agency noted there the “significant differences” between oil shale mineral deposits and conventional crude oil reservoirs. They called the effects of any uncertainty about flexible royalties small compared to the financial and technical challenges of producing fuel from shale at prices competitive with conventional oil production.

Read more at blm.gov

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West Virginia Mineral Owners Coalition http://www.mineralweb.com/news/west-virginia-mineral-owners-coalition/ http://www.mineralweb.com/news/west-virginia-mineral-owners-coalition/#comments Thu, 12 Jan 2017 03:28:16 +0000 http://www.mineralweb.com/?p=10831

The West Virginia Mineral Owners Coalition is mobilizing forces to protect landowner rights.

Related: Clarity Needed for West Virginia Royalties

The 2017 legislative session in West Virginia is under way and being closely watched by mineral rights owners in the state. At the beginning of the month, the West Virginia Mineral Owners Coalition gathered its members to strategize how they would protect their rights.

“We are trying to keep the industries in this state from stealing our property rights,” said Wayne Johnson, a mineral owner in Ritchie County. “Taking from our statutorily protected royalty payments is theft.”

The coalition exists to mobilize and support property owners and they plan to lobby legislators in 2017 to maintain and continue those protections they won in 2016. Two West Virginia Supreme Court cases upheld mineral and landowner rights:

  • Mountain Valley Pipeline vs. McCurdy: the Supreme Court supported a lower court’s decision that pipeline companies cannot trespass onto your land, without your permission, to survey for interstate projects that have not yet been granted eminent domain.
  • Leggett vs. EQT Production Company: the court held that the state’s minimum royalty payment of 12.5 percent must be paid without the deduction of post-production costs. This decision upheld statutory protections put in place to protect the interests of mineral owners who have leased their minerals. EQT has asked the court to rehear their case on this issue.

For more information check out the Coalition’s Facebook page or contact Elise Keaton at 304-207-1150 or email wvmineralowners@gmail.com.

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2016 Year in Review for Oil & Gas http://www.mineralweb.com/news/2016-year-in-review/ http://www.mineralweb.com/news/2016-year-in-review/#comments Mon, 02 Jan 2017 15:43:54 +0000 http://www.mineralweb.com/?p=10828

Looking back over 2016, it seems that some relief may be in sight for the oil and gas industry after over two years of riding out low oil prices. Some highlights of the last year include:
  • - Oil prices hit a 13-year low of $26 a barrel in February 2016 and ended the year over $50 a barrel.
  • - Dealmaking in the U.S. oil and gas sector rebounded strongly in 2016 as mergers and acquisitions activity hit $69 billion, more than doubling the total of 2015.
  • -  Major oil and gas operators eliminated over 16,000 jobs between April and June, but by the second half of 2016, industry job postings were on the rise.
  • - U.S. rig count totals bottomed out at 404 in May and ended the year near 600.
  • - A February report by the International Energy Agency (IEA) says that shale will be back on top by 2021.
  • - There were 70 E&P bankruptcy filings for 2016, totaling $56,823,737,743.
  • - OPEC members and some non-OPEC producers agreed to cut production.
While things may be looking up, the road to recovery for the industry will likely be slow. Mineral owners must continue to stay stay informed and educated in order to protect their interests.
Do you own oil and gas minerals? Join the conversation in Mineral Rights Forum
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Clarity Needed for Royalty Deductions in West Virginia http://www.mineralweb.com/news/clarity-needed-for-royalty-deductions-in-west-virginia/ http://www.mineralweb.com/news/clarity-needed-for-royalty-deductions-in-west-virginia/#comments Tue, 27 Dec 2016 00:25:33 +0000 http://www.mineralweb.com/?p=10820

The fight over whether post-production fees can be deducted from royalty statements continues to play out in West Virginia Courts.

Related: West Virginia Bill Seeks Transparency for Mineral Owners

Royalty statements can be confusing, with owners not always knowing why they are being charged. Gas companies might deduct money for transportation, loss of gas and even marketing the gas.

In a 2006 lawsuit, a group of mineral owners claimed Columbia Natural Resources “fraudulently, intentionally and knowingly” underpaid royalties by deducting post-production costs. The West Virginia Supreme Court ruled for the plaintiffs, saying the gas company had incorrectly calculated the payments. The court awarded the royalty owners $134.3 million in compensatory damages and $270 million in punitive damages.

However the central question over deductions wasn’t settled and when a suit was recently file against EQT Production Co, the District Court asked the state’s Supreme Court to rule on what the state law allows.

In November, the court decided that the lessee could “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.”

Earlier this year, the Oil and Gas Royalty Payment and Transparency Act (HB 4500) passed the West Virginia House of Representatives, which would amend an old 1931 code in order to ensure transparency in determining the amount paid to a royalty interest owner. The bill is currently being reviewed in the Senate.

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North Dakota Tackles Confusing Royalty Statements http://www.mineralweb.com/news/north-dakota-tackles-confusing-royalty-statements/ http://www.mineralweb.com/news/north-dakota-tackles-confusing-royalty-statements/#comments Mon, 19 Dec 2016 15:30:58 +0000 http://www.mineralweb.com/?p=10813

North Dakota mineral owners who are confused by complicated royalty statements may soon get some relief.

Related: Who Owns Mineral Rights Under North Dakota Lake?

The North Dakota Industrial Commission is moving to strengthen state requirements for royalty statements after a plea from recently retired legislator, Bob Skarphol. Skarphol want to require oil and gas companies to do a better job at explaining deductions and adjustments on royalty statements. He is hoping to replace the ‘convoluted and complex’ language that might confuse the average person.

North Dakota law already states that royalty statements must clearly identify the purpose of each deduction and that companies must provide an explanation of the deductions if the royalty owner asks for an explanation. The Commission is looking at ways to ensure compliance, including potential civil or criminal penalties when companies don’t comply.

Own minerals in North Dakota? Join the conversation here!

Gov. Jack Dalrymple, who chairs the Commission, expressed concern for how challenging it is for royalty owners to dispute deductions..

“They’re relying on the fact that the vast majority of royalty owners are not going to come after them. Somehow, we have to think about how to strengthen the position of the royalty owner in the whole picture to begin with. That would no doubt take some legislation.” – N.D. Governor Jack Dalrymple

If you have questions about whether your statements meets state requirements, you can contact the office of the Governor: (701) 328-8020.

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Landowners Lose Negligence Battle in Texas http://www.mineralweb.com/news/landowners-lose-negligence-battle-in-texas/ http://www.mineralweb.com/news/landowners-lose-negligence-battle-in-texas/#comments Wed, 14 Dec 2016 18:51:48 +0000 http://www.mineralweb.com/?p=10815

The Texas Supreme Court sides favors oil company over landowners in a three year old negligence case.

Related: Texas Mineral Owners Sue Marathon Oil

Michal and Myra Cerny from Karnes County, TX have been fighting for years to gain compensation for the suffering they claim from the oil and gas activity on their property. The couple alleges damages to their home adn health have caused a significantly seriously reduced quality of life.

Their battle made its way to the Texas’ highest court last year, and earlier this month, the justices denied the Cerny’s petition to hear the case. They upheld the lower court’s ruling that the couple couldn’t prove their issues were tied to oil and gas activity.

“In 2013, the Cernys filed suit against Marathon and Plains alleging that their negligent oilfield operations subjected them to toxic chemicals and noxious odors that worsened their existing health problems, caused new health problems, and damaged their property by creating sinkholes and damaging the home’s pier and beam foundation.”- TX 4th Court of Appeals

The original case was dismissed and their first appeal failed when the courts ruled that family didn’t meet the legal standards for nuisance and negligence claims. Now that the Supreme Court is refusing to review the case, the Cherny’s have no other recourse to gain financial restitution.

Own mineral rights in the United States? Join the mineral rights forum for education, guidance and conversation about your specific area.

Some are concerned that the decision may have a broader impact on pending and future litigation where landowners claim health-related personal injury claims.

Read more about Cherny v Marathon Oil Corp

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West Virginia Mineral Owners Sue Stone Energy over Royalties http://www.mineralweb.com/news/west-virginia-mineral-owners-sue-stone-energy-over-royalties/ http://www.mineralweb.com/news/west-virginia-mineral-owners-sue-stone-energy-over-royalties/#comments Wed, 07 Dec 2016 13:03:15 +0000 http://www.mineralweb.com/?p=10817

Mineral owners file suit in West Virginia, claiming Stone Energy Corporation withheld royalty payments.

Related: Texas Mineral Owners Sue Marathon Oil

Two lawsuits were filed earlier this month against Stone Energy Corp in. The plaintiffs, Calvin D. Lechliter and Mary L. Lechliter; and John Jennings and Mollie Toppe, claim their 2009 lease contracts are invalid because Stone fraudulently withheld royalty payments and breached their agreement.

“The 2009 lease contracts do not identify with particularity the specific deductions the lessee intends to take from the lessor’s royalty or indicate the method of calculating the amount to be deducted from the royalty for such post-production costs, as required by the West Virginia Supreme Court of Appeals”

Stone went on to withhold large fees from the plaintiffs for post-production costs. The plaintiffs are seeking full payment of royalty interests; credit/payment for all withheld post-production costs; and compensatory and punitive damages.

UPDATE: On December 14,  Stone Energy Corp. filed for chapter 11 bankruptcy. The Lafayette, La., company reported $1.2 billion in assets and $1.7 billion in debts in its chapter 11 petition, filed with the U.S. Bankruptcy Court in Houston.

Learn what to do when your oil and gas company has filed bankruptcy. 

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Wyoming & Montana Oppose BLM Ruling http://www.mineralweb.com/news/wyoming-montana-oppose-blm-ruling/ http://www.mineralweb.com/news/wyoming-montana-oppose-blm-ruling/#comments Mon, 05 Dec 2016 16:35:39 +0000 http://www.mineralweb.com/?p=10824

More states are pushing back against federal overreach of oil and gas activities by the Bureau of Land Management.

Related: BLM: New Flaring Regulations Proposed

Wyoming and Montana have petitioned for a review of the latest BLM ruling published in November, which imposes air quality regulations and seeks compensation and royalties for any oil and gas lost in these practices. State official believe that the BLM is overstepping its authority and argue oil and gas activity should be regulated by individual state laws.

“I understand why the state is putting regulations on venting and flaring, but it’s just one more restriction on oil companies that ties their hands,” said Randy Taylor, of Baker, Montana, who has been part of the oil production stage for approximately two decades. “With the venting and flaring systems they put on, within 20 to 30 years they are not even making enough gas to flare off our vents. Until that point, the BLM is trying to regulate it so we can only flare so many MCF per day. At that point, we have to slow oil production to limit flaring.”

The Clean Air Act specifically delegates authority to the EPA to control emissions from new and existing oil and gas production facilities. The petition accuses the BLM of trying to impose its own regulations on oil and gas operations under the guise of waste prevention. Congress specifically delegated authority to regulate air pollution to the United States Environmental Protection Agency.

The ruling is set to take effect on January 17, 2017.

Read more about the ruling at federalregister.gov

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Environmentalists Concerns May Halt Oil and Gas Lease Auction in Texas http://www.mineralweb.com/news/environmentalists-concerns-may-halt-oil-and-gas-lease-auction-in-texas/ http://www.mineralweb.com/news/environmentalists-concerns-may-halt-oil-and-gas-lease-auction-in-texas/#comments Thu, 24 Nov 2016 16:55:27 +0000 http://www.mineralweb.com/?p=10796

Concerns over earthquakes might interfere with an upcoming North Texas lease sale if environmentalists have their way.

Related: Texas on Short List for Fracking-Induced Earthquakes

The Bureau of Land Management plans to hold an auction for oil and gas leases on federal land in Texas next spring. But several environmental groups have banded together to ask the agency to withdraw the proposed lease sale of 3,100 acres that are beneath dams storing water supplies for Corpus Christi and Brenham.

The Center for Biological Diversity, Clean Water Action and Sierra Club send a joint letter to the BLM to voice their concerns and demand action. The group cites fears that fracking might trigger earthquakes that could harm the dam infrastructure and threaten the water source for half a million Texans.

“We insist that BLM: (1) cease all new leasing of fossil fuels in the planning area, including oil and natural gas; or, at a minimum (2) withdraw the proposed April 2017 sale pending a programmatic review of all federal fossil fuel leasing which must consider a ‘no leasing’ and ‘no fracking’ plan amendments.”

The group also says that the current Environmental Assessment is “unlawfully deficient” and insist that if the BLM continues with the sale, they should:

  • 1) Initiate formal consultation with the Fish and Wildlife Service, as required by the Endangered Species Act (“ESA”)
  • 2) Prepare a full EIS for the proposed lease sale that considers a full range of alternatives, including an alternative that bans new hydraulic fracturing and other unconventional well stimulation activities, and require strict controls on natural gas emissions and leakage

The topic of fracking and earthquakes in Texas has continued to be controversial, with interests on both sides citing scientific evidence that supports their claims.  In April, The U.S. Geological Survey (USGS) released a forecast for 2016 that include maps identifying potential seismic events from both human-induced and natural earthquakes.

 Read more at biological diversity.com

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Beware of Mineral Royalty Scams http://www.mineralweb.com/news/beware-of-mineral-royalty-scams/ http://www.mineralweb.com/news/beware-of-mineral-royalty-scams/#comments Mon, 21 Nov 2016 11:56:05 +0000 http://www.mineralweb.com/?p=10763

If you are looking to invest in oil and gas leases, keep your eye out for scammers.

Related: $1.5 Million Royalty Judgment Not Enough

Wherever there is is the opportunity for money to be made, there will be crooks and the booming oil and gas sector is no different. There is indeed money to be made, but there are no sure things. Would-be oil and gas investors need to do their homework and watch out for potential scams.

Even savvy and experienced investors are prone.

In Kentucky, one conman and his team of telemarketers solicited money from investors. The group intentionally made false statements about the success of their oil production business. In February, a federal judge sentenced John G. Westine Jr. to 40 years in federal prison, for orchestrating the fraud that cost investors out of more than $3 million. Two other co-defendants we also sentenced; Henry Irving Ramer, 77 and Michael Hicks, 59.

“This is another great success story of the work being done by our Securities Division to help protect Kentucky residents and investors,” said Department of Financial Institutions (DFI) Commissioner Charles Vice. “The lengthy sentences and large restitution imposed show that white collar crime is taken seriously in Kentucky.

The U.S. Postal Service has cautioned people and given some tips to avoid being scammed:

  • Do your due diligence
  • Check the company on the Internet
  • Check with the Better Business Bureau to see if there are any formal complaints
  • Beware of unrealistic promises like guaranteed royalties

“These guys are charming. They somehow seem to be able to befriend people, talk their way into people’s lives, they are good at getting things for nothing or for cheap,” said US Postal Inspector Roberta Bottoms.

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BLM Seeks Public Comments for Colorado Leases http://www.mineralweb.com/news/blm-seeks-public-comments-for-colorado-leases/ http://www.mineralweb.com/news/blm-seeks-public-comments-for-colorado-leases/#comments Tue, 15 Nov 2016 13:59:59 +0000 http://www.mineralweb.com/?p=10787

The Bureau of Land Management (BLM) is seeking public comments for 2017 oil and gas leases in Colorado.

Related: BLM Now Offering Online Auctions

For the next 20 days, the public is invited to send comments to the BLM as they evaluate offering about 100,000 acres of federal minerals in northwestern Colorado for oil and gas leasing. The proposal includes lease sale in May 2017 for the following:

  • Grand County: 20 parcels totaling 27,529 acres
  • Jackson County: 12 parcels totaling 9,155 acres
  • Moffat County: four parcels totaling 1,928 acres
  • Rio Blanco County: 45 parcels totaling 45,159 acres
  • Routt County: 25 parcels totaling 16,885 acres

Revenue from oil and gas leases are big business in Colorado, where the state receives 49% of the proceeds from each mineral lease sale as well as mineral royalties. For 2015, Colorado received about $247 million from royalties, rentals and bonus bid payments for all federal minerals, including oil and gas. The BLM estimates that more than 22,900 Colorado jobs are tied to mineral and energy development on public lands.

“Public involvement is an important part of our evaluation of the proposal,” said Northwest District Manager Andrew Archuleta. “The most effective comments during this comment period will be specific to the proposal and the environmental assessment.”

In October the BLM announced plans to modernize their oil and gas program by utilizing online auctions. The decision comes after a successful 2009 test online auction in Colorado as a way for the agency to streamline operations and save money.

For those wishing to comment, you need to be aware the comments and personal information may be made publicly available at any time. To participate, send comments to the following by December 12, 2016:

  • Email:  blm_co_may_2017_lease_sale@blm.gov
  • Mail: White Riv
er Field Office, Attn: May 2017 Lease Sale, 220 E. Market St., Meeker, CO 81641

Read more at BLM.gov

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Ohio Declines to Set Rule for Post-Production Costs http://www.mineralweb.com/news/ohio-declines-to-set-rule-for-post-production-costs/ http://www.mineralweb.com/news/ohio-declines-to-set-rule-for-post-production-costs/#comments Thu, 10 Nov 2016 14:24:11 +0000 http://www.mineralweb.com/?p=10780

Ohio’s top court declined to establish a ruling on post production costs for mineral owners.

Related: Ohio Supreme Court Sides with Mineral Owners

Last week, the Supreme Court of Ohio published its opinion in Lutz v. Chesapeake Appalachia, L.L.C., a case that has been carefully watched by industry officials and mineral rights groups alike.

At issue was whether the owners of a class action suit were underpaid on their gas royalties under the terms of their individual leases. The case centered around the question of law regarding how operators determine fees and costs that might be deducted from royalties. The “at the well” rule permits the deduction of postproduction costs, while the “marketable product” rule limits the deduction of postproduction costs under certain circumstances.

The court declined to establish a consistent rule and instead said that any postproduction costs that might be deducted from royalties must be decided based on the language used in each individual lease, or based on extrinsic evidence.

Under Ohio law, an oil and gas lease is a contract that is subject to the traditional rules of contract construction. Because the rights and remedies of the parties are controlled by the specific language of their lease agreement, we decline to answer the question of law submitted by the United States District Court for the Northern District of Ohio, Eastern Division and dismiss the cause. 

Legal experts are saying that this could create a potential barrier for future class action lawsuits based on underpayment of gas royalties.


Read more at supremecourt.ohio.gov


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Tougher Standards for Drilling in National Parks http://www.mineralweb.com/news/tougher-standards-for-drilling-in-national-parks/ http://www.mineralweb.com/news/tougher-standards-for-drilling-in-national-parks/#comments Tue, 08 Nov 2016 20:20:28 +0000 http://www.mineralweb.com/?p=10773

The National Park Service (NPS) has updated 37 year old standards for how oil and natural gas drilling may occur on the land it owns.

Related: Fracking Fight Moves to National Parks

The updated ruling, which takes affect on December 6, 2016, enacts stronger protections for private lands within the national parks. Currently there are 42 park sites that have privately held oil, gas, and other mineral rights with a total of 319 wells under NPS regulations.

“We have a fundamental responsibility to conserve park resources and the values for which these parks are created for the enjoyment of future generations. The changes we made to this rule bring more than 300 previously exempt oil and gas operations in parks under NPS regulations. The rule clarifies the process for oil and gas development in the small group of parks where current operations exist, and for parks that may have to manage oil and gas operations in the future.” - NPS Director Jonathan Jarvis

The NPS regulations look to curb activities that might adversely impact the parks:

  • Surface water quality degradation from spills, storm water runoff, erosion, and sedimentation.
  • Soil and ground water contamination from existing drilling mud pits, poorly constructed wells, spills, and leaks
  • Air quality degradation from dust, natural gas flaring, hydrogen sulfide gas, and emissions from production operations and vehicles
  • Noise from seismic operations, blasting, construction, oil and gas drilling and production operations
  • Noise and human presence effects on wildlife behavior, breeding, and habitat utilization
  • Disruption of wildlife migration routes
  • Adverse effects on sensitive and endangered species
  • Viewshed intrusion by roads, traffic, drilling equipment, production equipment, pipelines, etc
  • Night sky intrusion from artificial lighting and gas flares
  • Disturbance to archeological and cultural resources from blasting associated with seismic exploration and road/site preparation, maintenance activities, or by spills
  • Visitor safety hazards from equipment, pressurized vessels and lines, presence of hydrogen sulfide gas, and leaking oil and gas that can create explosion and fire hazards

Read more at federalregister.gov

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Are Allocation Wells Veiled Pooling in Texas? http://www.mineralweb.com/news/are-allocation-wells-veiled-pooling-in-texas/ http://www.mineralweb.com/news/are-allocation-wells-veiled-pooling-in-texas/#comments Thu, 27 Oct 2016 11:32:26 +0000 http://www.mineralweb.com/?p=10756

Exploration companies drilling in Texas are looking to the 2017 legislative session for clarity on their ability to continue to drill allocation wells.

Related: Own minerals in Texas? Join the discussion.

In Texas, an allocation well is used to refer to a horizontal well that is drilled across lease lines without pooling the tracts on which the well is located. The Texas Railroad Commission (RRC) originally issued permits on these wells when operators had production sharing agreements with the royalty owners, but many people believe they are a way to force mineral owners into a pooling agreements without requiring permission from the mineral rights holders.

Cory Pomeroy, vice president and general counsel for the Texas Oil & Gas Association told Express News, “We are continuing to study the issue of allocation to find the best solution that benefits operators of oil and natural gas wells and private mineral owners. Clarity on this issue is key to our nation’s energy security and our state’s continued dominance in safe and responsible oil and natural gas production.”

The stakes are high as private property owners are pitted against producers who want to speed up the production process. The RRC has maintained it has the authority to issue permits to drill horizontal wells that cross multiple lease lines without pooling those leases together, but there are still no clear rules defining these arrangements.

Because of the lack of clarity, operators have pressed for legislation that would authorize such wells. In 2015, Representative Tom Craddick  introduced HB 1552 that has strong language in favor of operators.

“…An operator or lessee with the right to drill an oil or gas well on or produce or develop oil or gas from each tract independently may, under a permit issued by the commission, drill,operate, and produce oil or gas from an oil or gas well that traverses multiple tracts in order to prevent waste, promote conservation, or protect correlative rights. If there is not an agreement among any of the affected owners of royalty or mineral interests in the tracts regarding the manner in which production from the well shall be allocated among the tracts, the production shall be allocated to each tract in the proportion that the operator or lessee reasonably determines reflects the amount produced from each tract.”

The 2015 bill died in committee but many expect similar legislation will be filed in the upcoming session.


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BLM: New Rules Will Ensure Accurate Royalties http://www.mineralweb.com/news/blm-new-rules-will-ensure-accurate-royalties/ http://www.mineralweb.com/news/blm-new-rules-will-ensure-accurate-royalties/#comments Mon, 24 Oct 2016 17:50:38 +0000 http://www.mineralweb.com/?p=10767

The Bureau of Land Management announced last week it has finalized new rules to ensure for accurate accounting for oil and gas activity on federal lands.

Related: Fracking Rule for Federal Lands Ruled Unlawful

The ruling updates three sections of the BLM Onshore Oil and Gas Orders and is the first comprehensive update of measurement rules in over 25 years. The rules ensure that proper royalties can be paid from any oil and gas produced from Federal and Indian leases due to more accurate measurement and record keeping.

“The conclusion of this rulemaking effort is a significant milestone in the BLM’s effort to modernize its oil and gas program,” said Janice Schneider, Assistant Secretary for Land and Minerals Management. “The updates made by these rules create a durable framework for the future that will support the responsible development and management of the nation’s oil and gas resources and ensure that both the American public and tribes receive a fair return for these resources.” 

The new rules call for the incorporation of the “latest industry standards,” measurement technology and practices. The financial considerations include:

  • Changes will reduce the total one-time compliance costs of the rules by nearly $100 million
  • Costs have decreased by about $32 million relative to the proposed rules
  • Rules will cost $12,856 per operator per year for the first 3 years, and then $7,654 thereafter

BLM’s oil and gas program is big business with the total value of production last year at nearly $20 billion. They estimate that more than $2 billion in royalty revenue is generated annually from federal leases and nearly $600 million in royalty revenue from tribal and allotted leases. Indian tribes and individual Indian allotment owners keep 100 percent of the royalties collected from leases on their lands.

Read more at blm.gov

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Who Owns Mineral Rights Under North Dakota Lake? http://www.mineralweb.com/news/who-owns-mineral-rights-under-north-dakota-lake/ http://www.mineralweb.com/news/who-owns-mineral-rights-under-north-dakota-lake/#comments Wed, 19 Oct 2016 21:54:25 +0000 http://www.mineralweb.com/?p=10744

Private mineral owners in North Dakota are concerned that state official trying to claim the rights to minerals under Lake Sakakawea.

Own minerals in North Dakota? Join the discussion. 

Attorneys representing the state have asserted in recent court documents that the state may have a right to minerals under Lake Sakakawea since there is no distinction between the lake and the Missouri River, where they have already leased for years.

Ron Ness, president of the North Dakota Petroleum Council commented, ”This would lead one to clearly believe they’re attempting to take ownership of the minerals under the lakebed. Families and others have owned and operated these minerals like private property. Leases have been taken, wells have been drilled, royalties have been paid. We’re only 10 years into a very long Bakken play.”" 

Many are concerned that there could be billions of dollars in royalties that will need to be refunded if the state changes its position on who owns minerals under the lake. It is estimated that there is more than $50 million currently being held in escrow at the Bank of North Dakota related to disputes over mineral and property ownership.

Until now the legal case has been built on the argument that the lake is an expansion of the Missouri River instead of a separate body of water. Earlier this month, U.S. Judge Daniel Hovland dismissed one case where the state contends it owns all of the oil and gas under Lake Sakakawea because North Dakota’s title to the beds of navigable waters extends up to the ordinary high water mark.

Another case is being appealed to the North Dakota Supreme Court. William S. Wilkinson v. the Board of University and School Lands involves a dispute over ownership of about 200 mineral acres west of Williston.

On Tuesday, Gov. Jack Dalrymple asked the Land Board to pass a motion clarifying that the board has not changed its position on mineral ownership under the Missouri River. The Board passed the motion unanimously and many hope that this clarity will help curb litigation. The Land Board consists of the governor, secretary of state, superintendent of public instruction, state treasurer and the attorney general.

Read more at land.nd.gov


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BLM Now Offering Online Auctions http://www.mineralweb.com/news/blm-now-offerring-online-auctions/ http://www.mineralweb.com/news/blm-now-offerring-online-auctions/#comments Mon, 17 Oct 2016 12:17:43 +0000 http://www.mineralweb.com/?p=10742

Investors interested in garnering oil and gas leases on federal lands, now have an easier, online option.

Related: Mineral Auction for Public Land Draws Protest

The Bureau of Land Management (BLM) is moving forward with modernizing their oil and gas program by utilizing online auctions. The decision comes after a successful 2009 test online auction in Colorado as a way for the agency to streamline operations and save money.

In 2015, Congress gave the BLM authority to conduct online sales through the National Defense Authorization Act (NDAA), which amended the Mineral Leasing Act to allow the BLM allowing for both internet-based an oral auctions.

In a press release, the BLM estimates that “internet-based auctions could increase aggregate lease sale revenues by about $2 million a year. The BLM believes that online sales have the potential to generate greater competition by making participation easier, which has the potential to increase bonus bids.”

Official are also hoping that online auctions will relieve some of the tension seen in recent months as groups opposed to fossil fuel development try to disrupt proceedings. In November, dozens of protestors attempted to block a mineral auction in Lakewood Colorado where the BLM was auctioning oil and gas rights on 90,000 acres of Colorado’s public land.

The first online auction took place in September and included about 4,214 acres in Mississippi and Kentucky. The BLM said that the proceeds of $80,223.50 will be split between the U.S. Treasury and the state where the lease is located.

The BLM manages more than 245 million acres of public land and generated $4.1 billion in receipts from activities on those lands in 2015.

Read more at blm.gov

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Texas Couple Sues Talisman Energy for Unpaid Royalties http://www.mineralweb.com/news/texas-couple-sues-talisman-energy-for-unpaid-royalties/ http://www.mineralweb.com/news/texas-couple-sues-talisman-energy-for-unpaid-royalties/#comments Thu, 13 Oct 2016 13:23:54 +0000 http://www.mineralweb.com/?p=10738

Texas couple sues Talisman Energy for unpaid royalties on their property in the Eagle Ford Shale.

Related:Ohio Supreme Court Sides with Mineral Owners

Eugene and Kimberly Cran, filed suit last week against Talisman Energy (Repsol). The couple claims they were underpaid for their royalties for oil wells on their land in DeWitt County.

In 2013, the Crans entered into a lease agreement with both Talisman and StatOil USA, who would each share responsibility for drilling and operating the wells. Each would also pay a 50-50 share of the royalties. They became suspicious when their royalty checks from Talisman were consistently lower than those from StatOil. The couple turned to the courts when they could get no reasonable answers from the company.

The suit alleges that Talisman “From at least June 2013, Talisman Energy USA Inc has systematically failed and refused to pay Plaintiff(s) the full royalties due and owing according to their mineral rights and leases.” 

The suit also states that Talisman didn’t understand the complexity of the Texas law related to oil and gas agreements and that they ‘overestimated’ their capability in this case.

The Provost Umphrey Law Firm LLP represents the Crans as well as more that 100 additional royalty owners in the Eagle Ford. The firm plans to file more royalty payment lawsuits again Talisman over the next few weeks.

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PA Mineral Owners Left Waiting on Minimum Royalty Guarantees http://www.mineralweb.com/news/pa-mineral-owners-left-waiting-on-minimum-royalty-guarantees/ http://www.mineralweb.com/news/pa-mineral-owners-left-waiting-on-minimum-royalty-guarantees/#comments Thu, 06 Oct 2016 21:30:41 +0000 http://www.mineralweb.com/?p=10703

Pennsylvania mineral owners suffer a setback as legislators delay a vote on legislation that would increase royalty payments.

Own minerals in Pennsylvania? Join the discussion here.

Last week, Pennsylvania House of representatives tabled House Bill 1391, designed to establish a guaranteed minimum royalty payment. The bill would prohibit the use of post-production costs to reduce royalty payments below the 12.5 percent required by the Guaranteed Minimum Royalty Act of 1979. It allows for mineral owners to file an action against the company for failure to pay the minimum royalty amount and allows for awards of up to three times the damages.

Over 250 Northern Tier residents rallied in Harrisburg to gain support for the bill. Other support included an open letter to House and Senate members urging them to pass the legislation from the Towanda township.

The letter refers to Towanda’s 1,200 residents as the forgotten, vanishing, working middle class. ”We signed those leases believing your written words and the words of those representing you,” the letter states. “Now we are told those words didn’t really mean what they said.

Both chambers are on recess until October 17, creating a tight timetable for supporters to move the bill through during the 2015-16 legislative session which ends in November.
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Chesapeake Called to Account for Dealings with Mineral Owners http://www.mineralweb.com/news/chesapeake-called-to-account-for-dealings-with-mineral-owners/ http://www.mineralweb.com/news/chesapeake-called-to-account-for-dealings-with-mineral-owners/#comments Wed, 05 Oct 2016 12:59:50 +0000 http://www.mineralweb.com/?p=10734

Chesapeake Energy under federal investigation for possible antitrust violations including how it deals with mineral owners.

Related: Chesapeake to Pay Record Royalty Settlement

Last week, the U.S. Department of Justice announced that it has opened an investigation into possible antitrust violations by Chesapeake Energy Corp. The agency has issued subpoenas for documents related to how the Chesapeake pays royalty owners and accounts for oil and gas reserves.

In Chesapeake’s 2015 annual report, the company alluded to ongoing investigations and mounting legal trouble.

“There are ongoing governmental regulatory investigations and inquiries into such matters as our royalty practices and possible antitrust violations. The outcome of any pending or future litigation or governmental regulatory matter is uncertain and may adversely affect our results of operations. In addition, we have incurred substantial legal expenses in the past three years, and such expenses may continue to be significant in the future.”

Chesapeake has been at the forefront of oil and gas litigation across the country including being named in several lawsuits alleging underpayment of royalties in Arkansas, Louisiana, Ohio, Oklahoma, Pennsylvania and Texas.

  • January: the Fort Worth school district was awarded $1 million when Chesapeake improperly deducted expenses from royalties owed to the district and its taxpayers. The suit involved at least 30 leases on land covering at least 1,000 acres.
  • February: the Texas Supreme Court upheld a lower court’s ruling to award at least $1 million in royalties, interest and attorney fees to the Hyder family who had been fighting Chesapeake Energy since 2010.
  • May: Chesapeake agreed to pay Fort Worth $15 million to settle a lawsuit that claimed the company owed $33.5 million in royalty payments from more than 260 leases on about 5,800 acres of city property in Tarrant and Johnson counties.
  • April: the Michigan Attorney General reached an agreement with Chesapeake that included setting up a $25 million fund to pay residents who say they were defrauded by the company.
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Judge Halts Fracking on Public Lands in California http://www.mineralweb.com/news/judge-halts-fracking-on-public-lands-in-california/ http://www.mineralweb.com/news/judge-halts-fracking-on-public-lands-in-california/#comments Mon, 03 Oct 2016 06:47:20 +0000 http://www.mineralweb.com/?p=10728

Fracking in California has suffered its second setback within the last three years.

Related: Lawyers Challenge BLM Ruling

U.S. District Judge Michael Fitzgerald has halted a plan to allow fracking on public lands in central California, as they continue to weigh the potential impact of the process. Previously, the U.S. Bureau of Land Management (BLM) had laid out a plan to allow hydraulic fracturing on about a quarter of new wells drilled on about one million acres in California.

The court ruled that the “Bureau failed to take a ‘hard look’ at the environmental impact of the resource management plan (“RMP”) when, under the RMP, 25% of new wells are expected to use hydraulic fracturing. The Bureau is therefore obligated to prepare a supplemental EIS to analyze the environmental consequences flowing from the use of hydraulic fracturing.”

The judge cited potential threats to water supplies and endangered wildlife and ordered the BLM to analyze the impact of fracking. He chided the BLM for their “obvious flaw” of not even addressing the serious environmental and health concerns of this “controversial” drilling technique.

Own mineral in California? Join the discussion here. 

Bureau of Land Management (BLM) issued new rules in March 2015 to regulate hydraulic oil and gas fracturing on public lands after a four-year investigation that included over 1.5 million public comments. Industry groups quickly fired back and combined their challenges with state lawsuits to form a massive case that was heard in Judge Scott Skavdahl’s court in July.

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Cooperative Management of Mineral Rights Act Passes House http://www.mineralweb.com/news/cooperative-management-of-mineral-rights-act-passes-houst/ http://www.mineralweb.com/news/cooperative-management-of-mineral-rights-act-passes-houst/#comments Mon, 26 Sep 2016 13:00:16 +0000 http://www.mineralweb.com/?p=10723

U.S. House of representatives has upheld the rights of minerals owners in the Allegheny National Forest.

Related: Act Moves Forward

Earlier this month, the U.S. House passed legislation that reaffirms the rights of mineral owners on the Allegheny National Forest. H.R. 3881, authored by U.S. Rep. Glenn Thompson, R-Pa., was approved by a vote of 395 to 3.

This legislation, also known as the Cooperative Management of Mineral Rights Act, would repeal sections of the Mineral Leasing Act and the Energy Policy Act of 1992 that allow the Forest Service to write rules relating to permitting and leasing of mineral rights in the Allegheny.

“I am thankful to the overwhelming bipartisan support for this bill, which reaffirms the importance of private property rights and nearly a century of cooperation between private mineral owners and the federal government,” said Thompson, a member of the House Natural Resources Committee.  “Despite repeated attempts by extreme environmental groups to shut down energy production in the Allegheny National Forest, the Cooperative Management of Mineral Rights Act will once and for all, provide assurances to the future of jobs and the communities that rely upon our abundant natural resources.”

The legislation now moves to the U.S. Senate for approval.

The Allegheny is home to more than 12,000 active gas and oil wells with an additional 100,000 wells that may be abandoned. Of the forest’s active wells, half were hydraulically fractured.

Read more at thompson.house.gov

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Are Dakota Pipeline Protestors Twisting the Facts? http://www.mineralweb.com/news/are-dakota-pipeline-protestors-twisting-the-facts/ http://www.mineralweb.com/news/are-dakota-pipeline-protestors-twisting-the-facts/#comments Wed, 21 Sep 2016 14:07:04 +0000 http://www.mineralweb.com/?p=10709

Conflict surrounding the Dakota Access Pipeline has escalated over the last few weeks as protests have become more aggressive and even violent, causing the federal government to step in.

Related: Dalrymple at Odds with Sioux Tribe Over Pipeline

The debate over the 1,172-mile pipeline has pitted oil and gas with local concerns about the environmental impact of the pipeline, including contamination of the Missouri River, the primary water source for the Standing Rock Sioux. Tribal leaders are also upset that the pipeline will disturb sacred burial grounds. But at least one expert says that the facts are being blurred.

“The protests might also give the false impression that Native American tribes had no input to the project. The public record shows that they did. The U.S. Army Corps of Engineers held 389 meetings with 55 tribes to discuss the Dakota Access Pipeline. The Standing Rock Sioux Tribe met with the corps nearly a dozen times to discuss archaeological issues and to help finalize the pipeline’s route.” – Hill.com

The article goes on to say that the pipeline route does not enter the Standing Rock Sioux Tribe’s reservation. The route was approved by the state Historic Preservation Office, which issued a “no significant sites affected” determination in February. In fact, the author says it is impossible for an ancient burial to even exist in the fill that covers transmission and oil lines.

In July, Dalrymple characterized the protests as ‘significant public safety concerns’ when up to 1500 people  gathered where the pipeline is scheduled to cross the Missouri River, near Cannonball and hundreds more marched on the state capital. At least 29 arrested during recent demonstrations. Currently things are at a stand still after the U.S. Justice Department and other federal agencies intervened to delay construction.

Construction on the 1,172-mile pipeline project came to a halt over the Labor Day weekend when demonstrations turn violent. What had been peaceful gatherings turned ugly after Energy Transfer Partners allegedly used bulldozers to destroy sacred tribal sites.

Even amidst the controversy, Energy Transfer Partners, the company behind the project, has publicly stated they are still committed to completing the pipeline.

“This case has highlighted the need for a serious discussion on whether there should be nationwide reform with respect to considering tribes’ views on these types of infrastructure projects,” the U.S. Departments of Justice, Army and Interior said in a joint statement.”

The pipeline project is designed to transporting more than 470,000 barrels per day of crude oil through four states into Illinois before it hooks up to another pipeline down to Texas.

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Ohio Supreme Court Sides with Mineral Owners http://www.mineralweb.com/news/ohio-supreme-court-sides-with-mineral-owners/ http://www.mineralweb.com/news/ohio-supreme-court-sides-with-mineral-owners/#comments Mon, 19 Sep 2016 13:20:02 +0000 http://www.mineralweb.com/?p=10713

Ohio mineral owners don’t automatically lose their rights during times of inactivity, according to the state’s high court.

Related: New Ohio Law Favors Mineral Owners

The Ohio Supreme Court announced last week that they are siding with mineral rights holders in more than a dozen appeals dealing with the Ohio Dormant Mineral Act (ODMA).  The ruling means that owners of mineral rights don’t automatically abandon their rights without surface owners following specific legal procedures.

In the lead case of Corban v. Chesapeake Exploration LLC, justices ruled that the current surface owner of about 165 acres was not entitled to compensation for minerals extracted by a company despite decades of inactivity at the site. The surface owner argued that the severed mineral interest automatically vested in him under the 1989 ODMA before the 2006 amendments, and therefore the notice requirements do not apply to his claim.  The company countered that the 2006 amendments to the ODMA should apply because they were in effect at the time the surface owner brought suit in 2013.

Details of the ruling include:

  1. The 1989 version of the DMA is not self-executing, and, therefore, did not cause ownership of mineral rights to automatically transfer to the owner of the surface rights;
  2. Because the 1989 DMA is not self-executing, a surface owner must bring a quiet title action to obtain a judicial decree that a mineral interest has been abandoned and is merged with the surface estate pursuant to the 1989 DMA; and
  3. The 2006 DMA, and not the 1989 DMA, applies to all claims asserted after June 30, 2006, the effective date of the 2006 amendments to the statute.

Read more at natlawreview.com

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Fracking & Air Contamination: New Evidence Points to Inefficiencies http://www.mineralweb.com/news/fracking-air-contamination/ http://www.mineralweb.com/news/fracking-air-contamination/#comments Thu, 08 Sep 2016 13:01:12 +0000 http://www.mineralweb.com/?p=10706

A new study released by the University of Texas at Arlington (UTA) suggests that air contamination around fracking sites is more likely due to mechanical inefficiencies than the oil and gas extraction process itself.

Related: State Regulators Join Forces to Oppose Clean Air Act

UTA chemists gathered samples removed from fracking sites in the Eagle Ford during June and November of 2015. In all over 12,821 data points were collected. Researchers found highly variable levels of benzene, toluene, ethyl benzene, and xylene compounds (BTEX), but all within federally mandated acceptable limits for short-term exposure. The study goes on to suggest that these compounds are not inherent in the extraction process, but can be attributed to mechanical inefficiencies.

The findings should be encouraging news to anyone involved in the oil and gas industry and those concerned about the dangers of fracking.

“These results therefore suggest that air contamination events from fracking can be monitored, controlled and reduced. We hope that this research would help producers and other upstream operators improve the efficiency and reduce the environmental impact of unconventional drilling.”  -Kevin Schug, UTA Shimadzu Distinguished Professor of Analytical Chemistry and director of the University’s Collaborative Laboratories for Environmental Analysis

Schug said that their future research will focus on the long-term effects of sporadic contamination on citizens living in impacted areas.

Since the shale boom exploded in 2008, controversy has surrounded the practice of hydraulic fracturing (fracking), with many concerned about the potential environmental and health dangers. In July, officials from several states gathered in Washington to testify before a senate subcommittee about their concerns over the Clean Air Act. The EPA estimates that new regulations might cost the industry somewhere between $420 - $530 million.

Read more at uta.edu

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EPA: New Competition to Increase Air Quality http://www.mineralweb.com/news/epa-new-competition-to-increase-air-quality/ http://www.mineralweb.com/news/epa-new-competition-to-increase-air-quality/#comments Wed, 07 Sep 2016 13:23:35 +0000 http://www.mineralweb.com/?p=10699

The Environmental Protection Agency (EPA) has created a competition designed to encourage greater air quality control.

Related: EPA Approves Tougher Methane Emissions Regulations

Ann Dunkin, Chief Information Officer of the EPA, sent out a memo last week announcing the agency will offer up to two communities $40,000 each to implement a plan to deploy hundreds of air sensors and find ways to manage the data they gather. If successful, the communities might be eligible to receive an additional $10,000.

The ‘Smart City Air Challenge‘  is designed to inspire communities to discover new approaches to managing data for air topics they care about, then develop solutions and share them.

Dunkin wrote, “I came to the EPA with a firm belief that data can make a difference in environmental protection. Since I’ve been here I’ve found that communities are leading the way by using data to understand local conditions and operate efficiently. That’s why I’m excited to announce EPA’s Smart City Air Challenge.”

The EPA is hoping that they will be able to learn how communities collect, store and manage large amounts of data. They also anticipate gaining a better understanding of the quality of data communities collect using sensors for non-regulatory purposes.

The EPA is accepting applications through October, 2016 and will announce winners in December.

In May, the EPA approved new, tougher standards designed to cut greenhouse gas emissions 40 – 45 percent by 2025. Industry leaders are critical of the ruling say they it is unnecessary and too costly. North Dakota’s attorney general filed a lawsuit against the agency in July citing concerns that the new rules are “arbitrary, capricious, an abuse of discretion and not in accordance with law.”

Oil and gas producers are critically fatigued from months of low crude prices and this new regulation will certainly not be sustainable for some. The EPA estimates that the ruling might cost the industry somewhere between $420 - $530 million.

Read more at challenge.gov

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Anti-Fracking Measures Fall Short in Colorado http://www.mineralweb.com/news/anti-fracking-measures-fall-short-in-colorado/ http://www.mineralweb.com/news/anti-fracking-measures-fall-short-in-colorado/#comments Tue, 30 Aug 2016 01:18:04 +0000 http://www.mineralweb.com/?p=10687

Anti-fracking forces in Colorado were dealt a severe blow this morning, when two initiatives couldn’t make the cut for the November ballot.

Related: Activists Push for Ballot Initiatives

Anti-fracking activists had submitted 100,000 signatures to state officials in an attempt to get two initiatives on the November ballot that would limit fracking across the state. After a review, Secretary of State Wayne Williams announced that there were not enough valid signatures to put a plan before voters.

“Colorado voters recognized that these extreme measure would destroy the state’s economy and take away private property rights. The voters read the petitions and declined to sign them because they understood the devastating consequences these initiatives would have on all Coloradans.”  - Karen Crummy of Protect Colorado

State officials raised concern that some signatures may have been forged as part of the setback petition. The state Attorney General Cynthia Coffman will conduct an investigation into these charges.

At issue is who gets to control oil and gas activity in the state. Local governments are fighting to gain back control and to have more say in what happen in their own communities. Industry pushback was swift with the New York Times reporting more than $13 million was raised immediately to halt the initiative, including contributions of millions from Anadarko Petroleum and Noble Energy.

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Dalrymple at Odds with Sioux Tribe Over Pipeline http://www.mineralweb.com/news/dalrymple-at-odds-with-sioux-tribe-over-pipeline/ http://www.mineralweb.com/news/dalrymple-at-odds-with-sioux-tribe-over-pipeline/#comments Wed, 24 Aug 2016 23:09:24 +0000 http://www.mineralweb.com/?p=10691

North Dakota Gov. Jack Dalrymple took action last week against the mounting protests in his state over the Dakota Access Pipeline by issuing an emergency declaration for southwest and south central North Dakota.

Related: Dakota Access Pipeline Concerns

 Standing Rock Sioux Tribal Chairman David Archambault II came out in opposition of the governors actions, saying is will hurt the tribe’s economy.

“I wish he had consulted with the tribe before making (the) declaration, because the tribe has its hand extended in the spirit of partnership and cooperation,” Archambault said. “We look upon this situation as an opportunity to work together.”

Dalrymple characterized the protests as  ’significant public safety concerns’ when up to 1500 people  gathered where the pipeline is scheduled to cross the Missouri River, near Cannonball and hundreds more marched on the state capital. At least 29 arrested during recent demonstrations.

Demonstrators are concerned over the proposed 1,172-mile pipeline designed to connect the Bakken and Three Forks production areas to Patoka, Illinois, transporting approximately 470,000 barrels of crude per day. Concerns range from how the pipeline will degrade topsoil to contamination of the river, which is primary source of water for the Standing Rock Sioux tribe. Supporters believe that more pipelines are needed in order to reduce the high use of rail and truck transportation to move the highly flammable Bakken crude oil.

If protests continue, the resources needed by local officials to provide safety could cost from $750,000 to $1 million.

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Lawyers: Skavdahl Got it Wrong in Fracking Ruling http://www.mineralweb.com/news/lawyers-skavdahl-got-it-wrong-in-fracking-ruling/ http://www.mineralweb.com/news/lawyers-skavdahl-got-it-wrong-in-fracking-ruling/#comments Mon, 22 Aug 2016 22:11:46 +0000 http://www.mineralweb.com/?p=10674

Law professors from around the country claim the courts have it all wrong and push to overturn the recent ban on fracking rules for public lands.

Related: Fracking Rule for Federal Lands Ruled Unlawful

When Judge Scott Skavdahl blocked the federal fracking rules put into place by the Bureau of Land Management (BLM) last year, he used an article by Florida State law professor Hannah Wiseman to support his position. Last week 35 law professors from around the country joined Wiseman to file a court brief claiming the judge was wrong in his interpretation of the article.

This came in the same week that the Obama administration also filed a brief to argue against the ruling, saying that the BLM does have the proper authority to regulate oil and gas activity on public lands.

“The agency clearly has the authority — indeed, a duty — to regulate hydraulic fracturing under several of its enabling statutes.” – Florida Law Professor, Hannah Wiseman

Bureau of Land Management (BLM) issued new rules in March 2015 to regulate hydraulic oil and gas fracturing on public lands after a four-year investigation that included over 1.5 million public comments. Industry groups quickly fired back and combined their challenges with state lawsuits to form a massive case that was heard in Judge Scott Skavdahl’s court in July.

Since 2007, there has been a steady increase in the use of hydraulic fracturing, but the rules to oversee the practice had not been updated in three decades. The BLM began its work to update existing rules in 2010 after growing public concern amidst the shale oil boom that expanded the use of hydraulic fracturing, the technology that extracts oil from the rock.  

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Texas Mineral Owners Sue Marathon Oil http://www.mineralweb.com/news/texas-mineral-owners-sue-marathon-oil/ http://www.mineralweb.com/news/texas-mineral-owners-sue-marathon-oil/#comments Fri, 19 Aug 2016 18:59:42 +0000 http://www.mineralweb.com/?p=10669

One Texas couple is having to sue Marathon Oil to obtain information about drilling activity on their property.

Related: Mineral Owners Race the Clock in Texas

John and Kelly Foster from Karnes County, exemplify how hard mineral owners sometimes have to fight to make sure their royalty payments are correct. Though mineral owners receive monthly statements from their operators, they aren’t always clear and sometimes a problem may not be obvious until it is too late.

This is especially true in Texas, where if an owner waits too long, they may lose their right for compensation. Texas case law has laid a heavy burden on mineral owners to make sure energy companies pay what is owed. The Texas Supreme Court ruled in 2012 that owners are required to do their own exhaustive research to find out if payments are correct. Owners then have a four year time limit to request an audit if they suspect a problem.

The Fosters filed suit on Wednesday in order to obtain records from Marathon Oil that details the activity from their 613 acres in production. The family’s attorney said the couple is currently not seeking damages, but that a lawsuit was the only way to obtain information about how their royalty payments were calculated.

“Not all companies are willing to share information, and not all leases have an audit provision that allows royalty owners to see the books that show how their royalties were calculated.” - Attorney John McFarland

The Fosters’ land have produced nearly 600,000 barrels of oil condensate and more than 4.2 billion cubic feet of natural gas over the past five years according to records by the The Texas Railroad Commission.

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Colorado’s Setback Rule is a Game Changer http://www.mineralweb.com/news/colorados-setback-rule-is-a-game-changer/ http://www.mineralweb.com/news/colorados-setback-rule-is-a-game-changer/#comments Mon, 15 Aug 2016 12:40:22 +0000 http://www.mineralweb.com/?p=10644

Newly appointed members to the Colorado Oil and Gas Conservation Commission (COGCC) are coming in just as the state faces its biggest battle yet to maintain control over oil and gas activity.

Related: Colorado Activists Push Anti-Fracking Ballot Initiatives

Last week, Colorado Gov. John Hickenlooper appointed three new members to the COGCC; Ashley Lowe of Durango, Colorado, Kent Jolley of Glenwood Springs, Colorado, and Winston Perry Pearce of Denver, Colorado. These members resume their duties immediately and will serve until expire July 1, 2020.

The COGCC’s mission is the state’s regulatory body and is responsible for fostering responsible development of Colorado’s oil and gas natural resources, which has gotten tougher as environmentalists wage war on the oil and gas activity throughout the state.

The most recent assault on the industry is the attempt to add two ballot initiatives (#78) to November’s election that would shift control back to local governments and add a buffer zone 2,500 feet around occupied buildings and in open public spaces. Currently the signatures are still being verified, but if these initiatives make it on the ballot and are passed, it would virtually void the need for the COGCC to make and enforce rules.

In May, the COGCC issued a report that outlines the impact of ballot initiative #78. The setback rule alone would make approximately 90% of surface acreage in Colorado unavailable for future oil and gas development or hydraulic fracturing. This report doesn’t attempt to directly analyze the economic impact ot which mineral development would be impacted by the decrease in surface acreage available for new oil and gas development facilities,

85% of surface acreage in Weld County, the state’s largest oil and gas producing county, would be unavailable for new oil and gas development facilities or hydraulic fracturing operations. 

Read the full report here

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Kansas Restricts Waste Disposal to Reduce Earthquakes http://www.mineralweb.com/news/kansas-restricts-waste-disposal-to-reduce-earthquakes/ http://www.mineralweb.com/news/kansas-restricts-waste-disposal-to-reduce-earthquakes/#comments Fri, 12 Aug 2016 00:09:58 +0000 http://www.mineralweb.com/?p=10665

Kansas has tightened restrictions for fracking waste in order to reduce earthquakes.

Related: Texas Earthquakes- The Verdict is Still Out

Yesterday, the Kansas Corporation Commission approved an order putting more limits on the amount of saltwater that oil and gas producers may inject into wells in Harper, Sumner, Kingman, Sedgwick and Barber counties. The change comes on the heels of previous restriction, which proved to reduce the incidence of earthquakes in the state.

“We’ve taken action to see that we don’t have the seismic activity we’ve seen south of Kansas (mostly in Oklahoma),” said Commissioner Pat Apple

The commission added another 16,000-barrel per day limit on top of the 12k that was approved earlier this year and called for continued monitoring of earthquakes and wastewater disposal. Some critics believe that stronger restrictions are necessary.

The Kansas Geological Survey  recently determined that fracking itself wasn’t the cause for earthquakes. Instead, the likely cause is when oilfield wastewater is injected into rock formations underground.  These injection wells have been the focus of recent criticism since a new study presented scientific evidence that they lead to earthquakes. The peer reviewed study led by researchers at SMU concluded that earthquakes in the north Texas communities of Azle and Reno were likely triggered by the wastewater disposal methods used by fracking companies.

The new order also call for steep fines for violations of the disposal limit or record-keeping requirements could result in a $10,000-a-day fine and shutdown and sealing of the well.

Read the full order here

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Colorado Activists Push Anti-Fracking Ballot Initiatives http://www.mineralweb.com/news/colorado-activists-push-anti-fracking-ballot-initiatives/ http://www.mineralweb.com/news/colorado-activists-push-anti-fracking-ballot-initiatives/#comments Mon, 08 Aug 2016 23:24:14 +0000 http://www.mineralweb.com/?p=10639

Environmental activists in Colorado are moving forward to wreak havoc on the state’s oil and gas industry.

Related: Colorado Says NO to Local Control of Oil & Gas

Anti-fracking activists said today they submitted 100,000 signatures to state officials in an attempt to get two initiatives on the November ballot that would limit fracking across the state.

One of the initiatives targets the hotly-contested issue of who gets to control oil and gas activity. If passed, local governments would once again have more say in what happen in their own communities. The other initiative would prohibit drilling in a buffer zone 2,500 feet around occupied buildings and in open public spaces.

The fight over fracking in Colorado has gotten personal as oil and gas drilling operations moved into more populated areas and suburban residents want more control. In April the Colorado House of Representatives said no to House Bill 1355, which sought to give local governments the ability to exercise land use authority over oil and gas development within their jurisdiction.

The industry pushback was swift with the New York Times reporting more than $13 million was raised immediately to halt the initiative, including contributions of millions from Anadarko Petroleum and Noble Energy.

Colorado has 30 days to authenticate the signatures.

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