June 2015

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On May 18, 2015, Texas Governor Greg Abbott signed House Bill 40 into law, putting restrictions on the ability of municipalities to regulate the oil and gas industry in their jurisdictions. Because the bill passed both the Texas House and Senate with more than a two-thirds majority, it went into effect immediately. H.B. 40, a/k/a the “Denton fracking bill,” leaves municipalities with limited power to regulate the oil and gas industry, and clearly establishes that Texas municipalities cannot enact and enforce fracking bans. As fracking bans were gaining momentum throughout the United States, with the passage of H.B. 40, Texas became the first state to enact a ban on fracking bans. (more…)

On April 17, 2015, the Bureau of Safety and Environmental Enforcement (BSEE) published proposed amendments to regulations for offshore well operators in the Outer Continental Shelf (OCS). The proposed amendments address numerous issues, including what constitutes a “safe drilling margin.” The proposed amendments may be viewed here. Anyone may submit comments to the BSEE on the proposed amendments by June 16, 2015. (more…)

A lesser known but interesting legal issue regarding the 2010 BP oil spill was whether an operator (BP) could recover insurance proceeds as an additional insured under its driller’s (Transocean) insurance policies for sub-surface pollution. Following the BP oil spill, BP sought to access $750 million for spill costs as an additional insured under Transocean’s insurance policies. BP argued that, because the four corners of the insurance policies did not limit its status as an additional insured, the drilling contract could not supersede the policies despite the drilling contract’s clear language that allocated all sub-surface pollution risk to BP. (more…)