As the oil and gas industry emerges from the previous two-year slump, producers have begun to green-light exploration of new  fields and the development of existing projects. While this news is encouraging, the industry must contend with a wave of regulatory announcements from the outgoing presidential administration.

In the last weeks of his administration President Obama announced the sweeping exclusion of large portions of the Atlantic and Arctic oceans from the 2017-2022 Oil and Gas Leasing Program. Following that decision, the administration announced denial of all pending permits for exploratory seismic surveys in the Atlantic. Similarly, onshore producers faced a wave of announcements, including the designation of the Bears Ears National Monument in Utah and cancellation of oil and gas lease sales throughout the western states.

There is little doubt that calls from anti-energy nongovernmental organizations (NGOs) for President Obama to cement his environmental legacy by ending E&P on public lands and waters had a significant impact in these recent decisions. These NGOs have pivoted their attention to President Trump. It is expected that the incoming administration will overturn a number of these regulatory and executive actions. The anti-energy NGOs have vowed to use litigation, lobbying, research studies and global affiliates to apply pressure and halt any rule reversals.

Below is a list of specific regulatory actions impacting onshore E&P at the federal, state and local levels.

Federal actions

Bears Ears National Monument. President Obama designated the Bears Ears region in southeastern Utah as a national monument under the Antiquities Act of 1906. Critics of the decision are calling on Trump to reverse the designation.

Oil shale management regulations  finalized. In early January the U.S. Bureau of Land Management (BLM) released its  final rule amending regulations to allow the Interior Secretary to impose a higher royalty rate for development on federal lands. It also requires oil and gas developers to include plans for protection of air, water and other natural resources.

U.S. Environmental Protection Agency (EPA) to review rules on drilling waste. The EPA recently settled a suit brought by environmental groups claiming the agency hasn’t revised its rules for management of oil and gas drilling waste since 1988. In a consent decree approved Dec. 28, 2016, the EPA agreed to review the regulations and either propose new rules or determine that new rules aren’t necessary by March 2019.

Proposed rule to add natural gas processing facilities to the Toxics Release Inventory. The EPA proposed a rule in early January that would require gas processors to report chemical discharges on the agency’s Toxic Release Inventory. The EPA estimates the rule would impact at least 282 facilities.

Montana lease sale cancelled. The BLM announced the cancellation of the  final oil and gas leases in the Lewis and Clark National Forest. The agency stated that the cancellation is a “significant milestone in protecting [the] area from impacts of energy development.”

State/local actions

Colorado

  • At its meeting Jan. 10, the Broomfield City Council delayed its decision on the proposed  five-month moratorium until the end of February. A community forum will be held during the interim and will include input from state regulators.

Maryland

  • The General Assembly of Maryland opened its legislative session Jan. 11. Lawmakers issued a temporary restriction to prohibit the Department of Environment from implementing new hydraulic fracturing rules while the General Assembly considers a statewide ban.
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