Province of Mendoza establishes procedures for expoitation and exploration of unconventional reservoirs
Further to the public hearing held on December 28th, 2017, on March 5th, 2018, the Province of Mendoza issued Decree No. 248/2018 (the “Decree”) setting out rules and procedures to prevent, mitigate and minimize environmental impacts resulting from the exploration and exploitation of unconventional fields and reservoirs. The Decree bears some similarities with Decree 1483/2012 of the Province of Neuquen.
Section 4 of the Decree states that all unconventional exploration and exploitation projects must obtain an environmental license before execution.
Additionally, the permit or concession holders must submit a sworn statement including the water source and an estimate volume of the water to be used.
The use of groundwater that may be suitable for human consumption or other productive uses is prohibited during drilling, exploitation and termination of unconventional wells.
Furthermore, section 8 sets forth that during fracking activities, a closed-loop "dry location" system must be used for fluid processing.
The Decree also bans the discharge of flowback from fracking into surface water and the storage of flowback into open-air pits before and during treatment.
The regulatory authority may declare buffer zones and areas excluded from unconventional hydrocarbon activities depending on the existence of urban centers, towns, industrial or agricultural concerns, protected natural areas or special areas, ecological conditions, water courses, glaciers and periglacial zones or activities and resources that may be negatively affected.
Before beginning operations, the concessionaires, permit holders and / or operators, must take out adequate insurance for civil liability or financial guaranties to ensure remediation of any environmental damage in accordance with the terms of Section 22 of Federal Law No. 25,675.
The enforcement authority must also implement a consultation procedure for thosee indigenous communities that could be affected by the project and are duly registered and recognized by the Instituto Nacional de Asuntos Indígenas (INAI).
Federal Supreme Court of Argentina interim decision in environmental case against the Province of Jujuy and oil and gas concessionaires
On February 6th, 2018, in the case styled “Saavedra, Silvia G. et al v. National Administration of National Parks, Federal Government of Argentina et al on Environmental Injunction (amparo)”, the Federal Supreme Court of Argentina (the “FSCA”) decided to request more information on the allegation of environmental damage and water contamination brought originally as a collective action by the plaintiffs at the Federal Court of First Instance No. 2 of the Province of Jujuy (the “Court”).
The action seeks to stop oil operations in the Caimancito field, which overlies and surrounds the Calilegua National Park, and moves the Court to order respondents to remediate all damage and obtain environmental insurance per the National
Environmental Law. The case comes to the FSCA after the declaration of lack of jurisdiction by the Court to hear the case, on the basis that the legal action is against a Province and, therefore, subject to the original jurisdiction of the FSCA. Notwithstanding the pending decision of the FSCA regarding jurisdiction, which will come at a later stage, the FSCA ordered the Federal Government and the Province to submit to the FSCA all administrative authorizations and permits on the Caimancito area, including all environmental aspects and any mitigation plans within the National Park.
Supreme Court of Neuquén declares municipal ban on fracking unconstitutional
On December 22nd, 2017, in the case styled ‘Attorney General of the Province of Neuquén v. Municipality of Vista Alegre’ the Supreme Court of the Province of Neuquén (the “Court”) declared the Municipality of Vista Alegre ban on fracking operations (Municipal Ordinance No. 783/16, hereinafter the “Ordinance”) unconstitutional. The Court found the ban violates the Neuquen Constitution because municipalities do not have jurisdiction to legislate on hydrocarbons matters inconsistently with provincial regulations. According to the Court’s ruling, the Ordinance interferes with the provincial powers to regulate conventional and unconventional hydrocarbons as established in the National Constitution, the Provincial Constitution and Federal Law No. 26,197. Municipalities have concurrent powers of regulation within their boundaries as established by Section 92 of the Provincial Constitution, but those municipal regulations must always be consistent with provincial rules and regulations. In this particular case, the provincial regulation is Decree 1483 of August 13, 2012, which allows fracking activities subject to certain requirements aimed at preventing environmental damages during the exploration and exploitation of unconventional resources. The municipal ban is not consistent with provincial policy.
This decision reinforces the existing precedents of the Supreme Court of the Province of Neuquén (“YPF v Municipality of Rincon de los Sauces” of May 13th, 2009) and Rio Negro (“Province of Rio Negro v Municipality of Allen” of November 26th, 2013). |
