National Park Service Proposes Sweeping Changes to Oil and Gas Regulations

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The National Park Service (“NPS”) today proposed a major overhaul of its regulations for non-federal oil and gas operations in National Park units.  See 80 Fed. Reg. 65,572 (Oct. 26, 2015). Although the NPS press statement downplayed the significance of the proposal, the new rule would remake a regulatory system that has been in place for almost 40 years. The costs of compliance, particularly to existing oil and gas operations, could be substantial. 

Current NPS regulations only apply when “access is on, across or through federally owned or controlled lands or waters.” The proposal would eliminate this limitation so that current operations located outside NPS units that directionally drill into minerals beneath NPS lands would be subject to the new NPS rules. Perhaps most significantly, the proposal would subject operators currently exempt from NPS regulation to new federal reporting and operational requirements. About half of the 534 non-federal oil and gas operations on NPS lands are currently exempt from direct NPS regulation. Under the new proposal, NPS would subject all of these “grandfathered” operations to a host of new, potentially duplicative or inconsistent federal regulations while leaving them subject to original state controls. Chief among these are enhanced financial assurance (bonding) requirements, and a suite of new hydraulic fracturing regulations similar to those issued by the Bureau of Land Management in March 2015. Those rules were challenged by industry and are currently enjoined nationwide.  

The 60-day public comment period on the NPS proposed rule closes on December 28, 2015.  

Beveridge & Diamond’s Natural Resources and Project Development team advises clients on the complex legal issues impacting development of energy resources on federally-managed lands onshore and the Outer Continental Shelf. To discuss these issues further, please contact the authors or any member of our Natural Resources and Project Development practice group.