Challenge

The New Mexico Supreme Court on Friday sided with a challenge from ConocoPhillips and Burlington Resources Oil and Gas Co. regarding royalties they allegedly owed from past oil and natural gas production on state lands.

Facing an ongoing challenge of flaring up to almost a third of its associated natural gas supplies in the oil-rich Bakken Shale, North Dakota is considering a proposal to use mobile equipment to turn some of the flared supplies into much-needed fertilizer for the state’s agricultural industry. Another proposal calls for a $1 billion farmer-owned fertilizer plant using natural gas currently being flared.

Facing an ongoing challenge of flaring up to almost a third of its associated natural gas supplies in the oil-rich Bakken Shale, North Dakota is considering a proposal to use mobile equipment to turn some of the flared supplies into much-needed fertilizer for the state’s agricultural industry. Another proposal calls for a $1 billion farmer-owned fertilizer plant using natural gas currently being flared.

The Colorado Mining Association (CMA) has asked the U.S. Supreme Court to consider its challenge to the Clinton-era “roadless rule,” which places restrictions on road-building to carry out energy exploration and production, logging and other commercial activities on forest lands. The CMA petition comes only days after the State of Wyoming petitioned the high court to review the October 2011 decision of the U.S. Court of Appeals for the Tenth Circuit, which had overturned a 2008 U.S. District Court ruling permanently enjoining the enforcement of the roadless rule (see Daily GPI, Oct. 25, 2011). Because the roadless rule violated the National Environmental Policy Act and Wilderness Act. it “must be set aside,” U.S. District Judge Clarence Brimmer of Wyoming wrote in his 2008 decision (see Daily GPI, Aug. 14, 2008). “If allowed to stand, the roadless rule will effectively prevent future mining operations on roadless lands lead to a decrease in mineral and coal production, job losses and sharp decreases in taxes and revenues,” said attorney Paul Seby, who filed the CMA’s petition with the high court.

A legislator in the Pennsylvania General Assembly has introduced a bill designed to encourage the use of natural gas vehicles (NGVs) and the construction of fueling stations to support them within the state that his home to the heart of the Marcellus Shale.

Being in the middle is not so much a challenge as an opportunity for DCP Midstream LLC, the Denver-based infrastructure and natural gas liquids (NGL) operator that has an eye on moving into the Bakken, Utica and Marcellus shale plays, according to DCP President Bill Waldheim. He told NGIShale Daily that those are about the only shale plays that fall outside DCP’s reach these days.

Wyoming is preparing a petition to the U.S. Supreme Court seeking a hearing of the state’s challenge to the federal “roadless rule,” which potentially has an impact on oil, gas and future mineral development on federal lands (see Daily GPI, Dec. 7, 2011). Gov. Matt Mead said he decided to seek high court review following the Tenth Circuit Court of Appeals denial of Wyoming’s petition for an en banc court rehearing in the case, which Mead has maintained “raises legal questions of exceptional importance.” The Tenth Circuit reversed of an earlier Wyoming federal district court injunction against the U.S. Forestry Service’s designation of additional wilderness areas through the roadless rule, and the state continues to argue that the federal forestry agency’s actions circumvented Congress, which is the only legitimate source of wilderness designations. “The roadless rule has seriously impacted Wyoming, our people, our industries and the health of our forests,” Mead said. “Given the consequences, it is important to ask the Supreme Court to hear this case.”

North America’s natural gas producers lately have been taking a licking but Encana Corp. is succeeding by continuing to optimize its portfolio and its operations, an executive said this week.

An American Petroleum Institute (API) official did not rule out the possibility that the group would challenge in court the Environmental Protection Agency’s (EPA) proposed rules to reduce air pollution from oil and natural gas drilling operations if its recommended improvements to the rule are ignored.