Source: http://www.lexology.com, October 7, 2013
By: Ruth S. Kochenderfer and Kate M. Riggs, Steptoe & Johnson LLP
In Lodwick, L.L.C. v. Chevron U.S.A., Inc., No. 48,312-CA, 2013 WL 5477240 (La. Ct. App. Oct. 2, 2013) (applying Louisiana law), the Second Circuit Court of Appeal of Louisiana granted summary judgment in favor of commercial general liability (CGL) and excess insurers, holding that pollution exclusions barred coverage for pollution liability arising from gas and oil exploration and production activities.
The underlying liability arose when a group of land owners sued oil and gas operators for alleged property damage associated with oil and gas activities, including the operation of oil wells and disposal of oil field waste. In particular, plaintiffs allege that predecessors of the policyholder, Oracle, conducted oil and gas activities from 1978 to 1990 that caused pollution that migrated and damaged soil and groundwater underneath plaintiffs’ property. Id. at *1. The policyholder filed third-party claims seeking indemnification and defense from three CGL and excess liability insurers.1 The trial court granted partial summary judgment against two of the three insurers, agreeing with the policyholder that some of the underlying plaintiffs’ causes of action, such as breach of contract and trespass, could be unrelated to pollution damage, thus triggering the duty to defend and not falling within the scope of a pollution exclusion. Id. at *4. The trial court denied the policyholder’s summary judgment motion as to the third insurer on the basis that the insurer’s “other insurance” clause provided that the third insurer did not owe a defense if another insurer has a duty to defend. Id. at *2.…
Source: The Durango Herald, May 26, 2013
By: Jim Mimiaga
Cleanup plan in place, but owner blocks access
A prolonged dispute about land contaminated by fuel at a former gas station on U.S. Highway 160 has reached an impasse.
Wild Wild Rest, between Mancos and Mesa Verde National Park, used to host motorcycle races and other entertainment events. The property also operated as a Sinclair Gas station and convenience store for many years.
But all that is gone now, and what’s left behind is a bitter feud between landowner Ray McCarty and an engineering firm hired by the former gas station operator Fraley & Co. Inc., about cleanup procedures of fuel contamination.
The frustration of living on contaminated land that has yet to be restored caused McCarty to recently install a large orange banner visible from the highway that reads: “Massive Petroleum Spill, Toxic Site.” Skull-and-crossbones graphics bracket the message. Other signs warn of benzene, a toxic petrochemical ingredient in gasoline.
“I put up the banner because nobody was paying attention, I was getting no action from anyone,” McCarty said during an interview at the site. “I feel duped, and I feel that my land and all of its value has been destroyed.”
The details of the case are complicated and accusatory, a saga that played out during a U.S. District Court case that ended in March 2012.
The problem began seven years ago in 2006 with spillage of leftover fuel during tank removal, McCarty said.…
Source: Business Wire, May 15, 2012
Posted on: http://www.marketwatch.com
U.S. Shale Boom Highlights the Intersection between Public Concern and Industry Efforts
The U.S. oil and gas industry is booming under the vast potential of its shale reserves, but it also faces the increased scrutiny and responsibility that comes with drilling in the public’s backyard. An annual report conducted by BDO USA, LLP, a leading accounting and consulting organization, found a striking increase in environmentally-focused risks cited by the most influential U.S. industry players. An analysis of the risk factors listed by these companies in their most recent 10-K filings reveals that regulatory and legislative changes remain the top concern, cited by 100 percent of companies. Yet this year, those regulatory risks are tied directly to public anxiety over the environmental ramifications of shale gas extraction.
Foremost among these concerns is the increasingly contentious issue of hydraulic fracturing. Oil and gas companies are facing the challenge head-on as they develop new technologies to reduce water usage and earthquake risks. This year, 74 percent of oil and gas companies cited hydraulic fracturing regulation as a risk factor, up from 52 percent in 2011. Moreover, risks related to the impact of climate change and greenhouse gas legislation grew by 17 percent (cited by 81 percent of companies in their financial statements, versus 69 percent in 2011). As the industry touts the promise of job opportunities and energy independence, it is also bracing for the complications that accompany a burgeoning industry with decades of development ahead. Liabilities related to pollution jumped 33 percent (59 percent in 2011 to 79 percent in 2012), and litigation risks were cited by 70 percent of respondents, compared to just 48 percent in 2011.…
Source: Dow Jones News Service, April 10, 2012
Posted on: http://envfpn.advisen.com
Despite having unleashed a natural gas supply boom that is transforming the U.S. energy landscape and receiving extensive attention from the media, the practice of hydraulic fracturing is unfamiliar to most consumers, according to a poll conducted by the University of Texas at Austin.
The poll, released Tuesday, showed that 62% of the people surveyed said they weren’t familiar with hydraulic fracturing or “have never heard of it.” The practice, which consists of cracking natural gas-rich rock formations open with high-pressure jets of liquid, has helped create a glut of natural gas in the U.S. but has resulted in controversy, as some environmentalists say that the technique can contaminate acquifers. The oil industry denies that claim.
When asked to describe how they feel about the rules governing “fracking,” as the technique is known, about 38% of the respondents said they favor more regulation. About 14% said there is too much regulation.
The UT survey is a twice-annual survey of energy issues. About 2,371 people responded to the poll. The majority–65%–said that energy issues are important to them, and 61% said they would vote for a candidate who would back increased natural gas development.
A majority of respondents also backed further investment in renewable energy. About half of them said they were in favor of the Keystone XL pipeline expansion, a project that would bring additional Canadian crude to the U.S. Gulf Coast, but that is heavily opposed by environmentalists. The project is currently being reviewed by the U.S. State Department.…
Source: http://www.businessinsurance.com, March 26, 2012
By: Mike Tsikoudakis
Ironshore Inc. said Monday that it has expanded its site pollution liability program with coverage for the oil and gas exploration and production sector.
The expansion of Ironshore’s Site Pollution Incident Legal Liability Select program offered by its environmental insurance unit will cover crude oil and natural gas wells, pipelines, compressor stations, processing facilities and others, the Hamilton, Bermuda-based insurer said in a statement.
Ironshore’s SPILL Oil & Gas program covers remediation of on-site or off-site pollution incidents, as well as bodily injury and property damage associated with various environmental exposures.
The program also covers operators and nonoperators of industry facilities, and exposures associated with hydraulic fracturing to obtain natural gas.
Ironshore said the expansion is in response to increased regulatory oversight of the oil and gas sectors.
Fills in gaps
“Regulatory scrutiny has increased dramatically over the past few years as governmental oversight has resulted in new and expanded environmental regulations that directly impact the bottom line of oil and gas operations,” John O’Brien, CEO of Ironshore’s environmental unit, said in the statement. “The SPILLS Oil & Gas program fills existing coverage gaps to protect against environmental exposures that are rarely covered under general liability or standard insurance products, thereby enabling operators to better manage unforeseen risk.”
The coverage, available nationwide, can be extended to cover water operations through an endorsement.…