Fracking Insider Readers: We are pleased to bring you Volume 26 of our State Regulatory Roundup, including updates in California, Colorado, and Wyoming. As we explained in earlier volumes, we designed the Roundup to provide quick overviews on state regulatory activity. If you have any questions on any of these summaries, please do not hesitate to ask.

california.jpgCalifornia – The Center for Biological Diversity filed a complaint on July 10th in the California Superior Court against San Benito County, alleging that county officials did not adequately evaluate environmental impacts from a proposed oil exploration project before approving a conditional use permit. The permit was issued to Citadel Exploration Inc. to drill fifteen test oil wells on agricultural rangeland, nine miles south of Pinnacles National Park. The test wells would utilize cyclic steam injection to open and enlarge fractures in the shale formation to loosen heavy crude oil, but would not utilize hydraulic fracturing.

colorado.jpgColorado – The Colorado Court of Appeals decided in a July 3rd opinion in Strudley v. Antero Resources that a lower court should not have required landowners to present sufficient evidence for all elements of their claims related to water, air, and soil pollution allegedly caused by natural gas drilling before discovery in the case. Plaintiffs William G. Strudley and Beth E. Strudley had alleged pollutant contamination from drilling activities had caused physical and property injuries that forced them to leave their home. The defendant companies asked the lower court to issue an order similar to that of the 1986 toxic tort suit, Lore v. Lone Pine Corp., in which a New Jersey court required homeowners to provide sufficient facts pre-discovery to support their claims, and dismissed the claims when the homeowners failed to do so. The trial court granted this request, and found that the Strudleys failed to provide expert opinion indicating that their injuries were directly attributable to the companies, and the case was dismissed with prejudice. The Strudleys appealed the ruling, and the appeals court sided with the family, ruling that Colorado law does not give trial courts the discretion to grant Lone Pine orders. The court further noted that this case was different from the Lone Pine case in the smaller number of parties and limited issues involved, and ruled that the companies failed to demonstrate how this case was more complex or costly than the average toxic tort claim.

wyoming.jpgWyoming – On July 16th, the Wyoming Oil and Gas Conservation Commission voted to proceed with a formal rulemaking process to establish a groundwater baseline sampling and monitoring program. The proposed rules would require oil and gas operators to sample and test at least four springs or existing water wells within a half mile of a planned drilling site, obtaining approval from landowners when water sources are on privately-owned land. Energy-funded quality analyses would screen for numerous contaminants, such as bacteria, dissolved gases, and toxic chemicals, and would evaluate pH values, color, and smell. Industry has been supportive of the general concept of baseline testing, but argued that water quality testing after drilling completion is ineffective and burdensome. Instead, industry has argued for a four well limit on water sources required to be tested, and offered submission of a “master sampling plan” for testing over large areas as an efficient solution. The Commission is now accepting comments on the proposed rules, and could establish a baseline sampling and monitoring program by year’s end.

With assistance from Andrew McNamee