Tuesday, May 19, 2020

Shale Law Weekly Review – May 18, 2020

Written by:

Sara Jenkins – Research Assistant

Jackie Schweichler – Staff Attorney

Kaela Gray – Research Assistant

The following information is an update of recent local, state, national and international legal developments relevant to shale gas.       

National Energy Policy/LNG Exports: Department of Energy Issues Proposed Rule for Changes to NEPA Implementing Procedures

On May 1, 2020, the U.S. Department of Energy (DOE) issued a Notice of Proposed Rulemaking for changes to the Department’s National Environmental Policy Act (NEPA) implementing procedures.  The proposed rule states that DOE intends to amend its policies regarding NEPA review of certain imports and exports under the Natural Gas Act.  DOE is proposing changes to its procedures based on the legal principle found in Pub. Citizen and Sierra Club that NEPA review does not include review of environmental effects that an agency has no discretion over.  See Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752 (2004) and Sierra Club v. Fed. Energy Regulatory Comm’n, 827 F.3d 36 (D.C. Cir. 2016).  DOE stated that section 3 of the Natural Gas Act does not give DOE discretion over authorizing natural gas imports because they have already been determined to be in the public interest.  Further, DOE explained that they do not have discretion over the construction and operation of LNG export facilities.  Therefore, DOE proposes to alter its NEPA review to exclude effects of export facilities and limit its review of environmental effects to “at or after the point of export.”  DOE is accepting public comments on the proposal until June 1, 2020.

 

Pipelines: Federal District Court Amends Ruling on Army Corps NWP 12 Permits

On May 11, 2020, the U.S. District Court for the District of Montana amended a previous summary judgment order regarding the U.S. Army Corps of Engineers (Corps) ability to issue Nationwide Permit 12 (NWP 12).  In the previous order, the court vacated NWP 12 and enjoined the Corps from authorizing any dredge or fill activities under NWP 12 until the Corps complied with the Endangered Species Act and consulted with U.S. Fish and Wildlife Service (FWS).  Following a motion for stay and request to revise the remedy filed by the Corps and TC Energy, the court partially amended its previous order.  The amendment allows the NWP 12 to remain in place for “non-pipeline construction activities and routine maintenance, inspection, and repair activities” on existing projects.  The revised order also allows the Corps to authorize dredge or fill activities for current projects.  However, the NWP 12 remains vacated with regards to new oil and gas pipeline construction pending consultation with FWS and compliance with environmental laws.  The Corps also remains enjoined from authorizing dredge or fill activities on new pipeline construction.

 

Crude Oil by Rail: PHMSA Preempts Washington State’s Vapor Limit for Transportation of Crude Oil by Rail

On May 11, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) preempted the state of Washington’s vapor pressure requirement and Advance Notice of Transfer for transportation of crude oil by rail car.  Montana and North Dakota had previously filed an application asking PHMSA to review Washington’s requirements, alleging that the rules were too burdensome to allow rail transportation of oil from the Bakken region.  PHMSA published a notice of the application in the Federal Register and received over 4,000 comments from a variety of interested groups.  After review, PHMSA found that Washington’s vapor pressure limit created a classifying scheme and handling requirement that was not substantively the same as existing federal regulations.  Further, PHMSA found that the limit was an obstacle to complying with the Federal Hazardous Material Transportation Law and the Hazardous Materials Regulations.  Therefore, PHMSA ruled that Washington’s vapor pressure regulation was preempted.  PHMSA also noted that it could not make a determination regarding preemption of Washington’s Advance Notice of Transfer requirement because the administrative record was insufficient.

 

Municipal Regulation: City Council in Colorado Approves Changes to Zoning for Oil and Gas Development

On May 12, 2020, Broomfield City Council in Colorado approved changes to its zoning code limiting oil and gas development in certain areas.  The city council proposed changes to the zoning code after the Colorado legislature passed SB19-181, authorizing local government to regulate the location and siting of oil and gas facilities.  The approved changes consist of deleting specific language from sections of zoning regulations that permitted oil or gas wells in certain districts.  Other sections have been amended to allow oil and gas wells except on “public or private open lands or . . . a public or private park.”  Further, the approved changes increase the current buffer between oil and gas development and residential neighborhoods from 1,000 feet to 2,000 feet.  More specifically, the 2,000 foot buffer will be required near athletic fields, child care facilities, correctional facilities, dwelling units, hospitals, schools, and undeveloped residential lots among other places.

 

From the National Oil & Gas Law Experts:

George Bibikos, PA Supreme Court Agrees to Hear O+G Lease Expiration Case (May 15, 2020)

 

AGENCY PRESS RELEASES—STATE/FEDERAL

Pennsylvania Department of Energy Press Releases:

No new releases May 11–18, 2020.

 

U.S. Department of Energy

The U.S. Department of Energy today released a Request for Proposals (RFP) to purchase up to one million barrels of sweet crude oil for the SPR (May 14, 2020).

Department of Energy Announces $30 Million for Innovation in Critical Materials Processing Technologies (May 14, 2020).

U.S. Department of Energy Launches $230 Million Advanced Reactor Demonstration Program (May 14, 2020)

 

U.S. Environmental Protection Agency

EPA completes oil spill cleanup at Duck Creek in Toledo, Ohio (May 13, 2020).

 

 

STATE ACTIONS—EXECUTIVE/LEGISLATIVE

Pennsylvania Executive Agencies—Actions and Notices:

No actions May 18, 2020.

 

Pennsylvania Legislature:

HB 1106, Energize PA Legislative Package” Removed from Table (May 13, 2020)

 

 

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE

Federal Executive Agencies—Actions and Notices:

 

Environmental Protection Agency

85 FR 27979 “National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List: Partial Deletion of the Omaha Lead Superfund Site” Proposed Rule (May 13, 2020).

85 FR 29678Air Plan Approval; Massachusetts; Negative Declaration for the Oil and Gas Industry” Proposed Rule (May 18, 2020)

85 FR 29628 “Air Quality State Implementation Plans; APprovals and Promulgations: Massachusetts; Negative Declaration for the Oil and Gas Industry” Rule (May 18, 2020).

 

Federal Energy Regulatory Commission

85 FR 29444 “Dominion Energy Overthrust Pipeline, LLC” Request Under Blanket Authorization (May 15, 2020)

 

Justice Department

85 FR 28984 “Clean Water Act and Oil Pollution Act” Proposed Modification of Consent Decree ─ Notice (May 14, 2020).

 

Pipeline and Hazardous Material Safety Administration

85 FR 29511 “Washington Crude oil by Rail Volatility Requirements” Notice (May 15, 2020)

 

 

House Energy and Commerce Committee Actions:

No new actions May 11-May 18, 2020.

 

Senate Energy and Natural Resources Committee Actions:

S.3711 “A bill to amend the Energy Independence and Security Act of 2007 to reauthorize the Energy Efficiency and Conservation Block Grant Program, and for other purposes.” Referred to the Committee on Energy and Natural Resources (May 13, 2020)

S.3688 “A bill to amend the Federal Power Act to authorize the Federal Energy Regulatory Commission and the Secretary of Energy to offer assistance in securing the assets of the owners and operators of energy infrastructure against threats and increasing the security of the electric grid, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources (May 12, 2020)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:

“Trump administration to buy 1 million barrels of oil for national stockpile,” The Hill

“Energy regulator declines states' request for moratorium on pipeline approvals,” The Hill

“Oil bust takes heavy toll on Texas county,” National Public Radio

“Qatar Has a Lose-Lose Problem in Global Gas Fight,” Rigzone

“Yet Another State Quietly Moves To Criminalize Fossil Fuel Protests Amid Coronavirus,” Huffington Post

“Lawsuit says western Massachusetts pipeline approval ignored climate risk,” Energy News US

“Natural Gas Exports Slow as Pandemic Reduces Global Demand,” New York Times

“Does New York need a new natural gas pipeline? It’s about to decide,” Grist

“10 states ask energy regulators to postpone pipeline approvals amid pandemic,” The Hill

“States ask Trump administration to pay laid off oil workers to plug abandoned wells,” Reuters

Connect with us on Facebook! Every week we will post the CASL Ledger which details all our publications and activities from the week.

Want to get updates, but prefer to listen? Check out the Shale Law Podcast! We can always be found on our Libsyn page, iTunes, Spotify, or Stitcher.

Check out the February Agricultural Law Brief ! Each month we compile the most significant legal developments in agriculture. If you’d like to receive this update via email, check out our website and subscribe!

Tuesday, May 12, 2020

Shale Law Weekly Review - May 12, 2020

Written by:
Sara Jenkins – Research Assistant 
Jackie Schweichler – Staff Attorney
Brennan Weintraub – Research Assistant
The following information is an update of recent local, state, national and international legal developments relevant to shale gas.
Water Quality: Supreme Court Vacates Kinder Morgan Pipeline Spill Case in Light of Recent Clean Water Act Decision 
On May 4, 2020, the U.S. Supreme Court ordered that a Kinder Morgan pipeline leak case be vacated and remanded in light of a recent Clean Water Act decision (Kinder Morgan Energy Partners, L.P. v. Upstate Forever and Savannah Riverkeeper, No. 18-268).  The case was remanded to the U.S. Court of Appeals for the Fourth Circuit following the Supreme Court’s recent decision in County of Maui v. Hawaii Wildlife Fund, 590 U. S. ___ (2020).  In 2014, Kinder Morgan’s Plantation pipeline ruptured and leaked 370,000 gallons of gasoline and diesel into soil, groundwater, and a nearby stream. (Cert Petition p. 9).  Two years after the spill, environmental groups brought suit against Kinder Morgan under the Clean Water Act, which requires a permit for the “discharge of pollutants into navigable waters.”  The district court dismissed the complaint, but the Fourth Circuit reversed, holding that the Clean Water Act covers the spills into navigable waters wherever there is a “direct hydrological connection.”  Kinder Morgan filed their Petition for Writ of Certiorari asking the Supreme Court to determine if the pipeline leak constituted a discharge under the Clean Water Act.  The Supreme Court remanded the case in light of County of Maui, which held that the Clear Water Act requires a permit when there is a direct discharge into navigable waters or the “functional equivalent of a direct discharge.” 

Production and Operation: Texas Railroad Commission Issues Exception for Underground Storage of Liquid Hydrocarbons
On May 5, 2020, the Texas Railroad Commission approved an exception to the Texas Administrative Code for underground storage of liquid hydrocarbons.  The exception allows applicants to store crude oil in underground geological formations other than salt formations.  The need for additional storage capacity is a result of decreased demand caused of COVID-19.  The Commission noted that an applicant will have to demonstrate that the storage facility will be maintained to prevent waste or escape of crude oil, avoid pollution of groundwater, and prevent danger to life or property.  The exception will remain in effect for one year, and any crude oil stored in a facility other than a salt formation will have to be removed within five years.  The open meeting where the exception was discussed and approved is available here.
Infrastructure: Virginia Commission Confirms Process for Certification of Natural Gas Facilities 
On May 5, 2020, the Virginia State Corporation Commission denied a motion from various environmental groups to suspend the procedure schedule and continue the public comment period regarding the certification of natural gas facilities.  The Commission issued a procedural schedule for the case after Virginia Natural Gas filed for approval and certification of natural gas facilities.  According to the Commission, the schedule will continue as planned; the Commission will hear public testimony on May 12, 2020, and hold an evidentiary hearing on May 13, 2020. The Commission stated that they have implemented procedural accommodations to allow public witness testimony while adhering to social distancing requirements. 

Production and Operation: U.S Companies Plan to Curb Oil Production by 616,000 Barrels Per Day in May 
On May 7, 2020, Rystad Energy issued a press release estimating U.S. oil production will be curbed by 616,000 barrels per day (bpd) in May and 655,000 bpd in June.  Rystad Energy Research and Analysis interpreted guidance released from 19 producers to reach the estimations.  Rystad summarized specific cuts in production from various oil producers including Chevron, ExxonMobil, and ConocoPhillips, which plan to cut production by 32-42%.  Several smaller producers will also contribute to cuts through shut-ins of higher-cost wells and reducing output from other wells.  
From the National Oil & Gas Law Experts:
John McFarland, Sitton Drops Motion to Prorate (May 4, 2020)
John McFarland, The State of Crude Oil Inventory (May 7, 2020)

AGENCY PRESS RELEASES—STATE/FEDERAL
Pennsylvania Department of Energy Press Releases:
No new releases May 4–11, 2020.

U.S. Department of Energy
No new releases May 4–11, 2020.

U.S. Environmental Protection Agency
No new releases May 4–11, 2020.

STATE ACTIONS—EXECUTIVE/LEGISLATIVE
Pennsylvania Executive Agencies—Actions and Notices: 
No actions May 11, 2020.

Pennsylvania Legislature:
SB 258, “Pipeline Emergency Notification” Removed from Table (Apr. 28, 2020)

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE
Federal Executive Agencies—Actions and Notices: 
Federal Energy Regulatory Commission 
85 FR 26971 “Rockies Express Pipeline, LLC; Notice of Petition for Declaratory Order” Notice (May 6, 2020).
85 FR 27736 “Jordan Cove Energy Project, LP, Pacific Connector Gas Pipeline, LP; Notice of Petition for Declaratory Order” Notice (May 11, 2020).
85 FR 27737 “Kinetica Energy Express, LLC; Notice of Application” Notice (May 11, 2020).

Foreign-Trade Zones Board
85 FR 27206 “Foreign-Trade Zone (FTZ) 116-Port Arthur, Texas, Notification of Proposed Production Activity, Golden Pass LNG Terminal LLC (Liquified Natural Gas Processing), Port Arthur, Texas” Notice (May 7, 2020).

House Energy and Commerce Committee Actions:
H.B.6707 “To Amend the Mineral Leasing Act and the Outer Continental Shelf Lands Act to Limit the Authority of the Secretary of the Interior to Reduce Certain Royalties, to Amend the CARES Act to Limit the Provision of Assistance to Certain Businesses, to Impose a Moratorium on Certain Oil and Natural Gas Lease Sales, the Issuance of Coal Leases, and Modifications to Certain Regulations, to Extend Certain Public Comment Periods, and for Other Purposes” Introduced in House (May 5, 2020).

Senate Energy and Natural Resources Committee Actions: 
S.3611 “To Amend the Mineral Leasing Act and the Outer Continental Shelf Lands Act to Limit the Authority of the Secretary of the Interior to Reduce Certain Royalties, to Amend the CARES Act to Limit the Provision of Assistance to Certain Businesses, to Impose a Moratorium on Certain Oil and Natural Gas Lease Sales, the Issuance of Coal Leases, and Modifications to Certain Regulations, to Extend Certain Public Comment Periods, and for Other Purposes” Read Twice and Referred to the Committee on Energy and Natural Resources (May 5, 2020)
Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“When the Flames Go Out, the Permian’s Methane Problem Worsens,” Bloomberg
Connect with us on Facebook! Every week we will post the CASL Ledger which details all our publications and activities from the week.
Want to get updates, but prefer to listen? Check out the Shale Law Podcast! We can always be found on our Libsyn page, iTunes, Spotify, Google Podcasts, or Stitcher.
Check out the February Agricultural Law Brief ! Each month we compile the most significant legal developments in agriculture. If you’d like to receive this update via email, check out our website and subscribe!

Monday, May 4, 2020

Shale Law Weekly Review - May 4, 2020

Written by:
Sara Jenkins – Research Assistant 
Jackie Schweichler – Staff Attorney
Brennan Weintraub – Research Assistant
The following information is an update of recent local, state, national and international legal developments relevant to shale gas.
Pipelines: Federal District Court Denies Stay Regarding Keystone XL Pipeline Permit Decision
On April 28, 2020, the U.S. District Court for the District of Montana denied a request to stay an April 15, 2020, order issued by the court to vacate a Nationwide Permit 12 (NWP) for the Keystone XL pipeline. (Northern Plains Resource Council v. U.S. Army Corps of Engineers, No. CV-19-44-GF-BMM).  The U.S. Army Corps of Engineers filed the request for partial stay pending appeal of the case and requested an expedited briefing on the issue. (order p. 1).  The Corps specifically requested that paragraphs five and six of the April 15th order be stayed. (order p. 1).  Paragraph five vacated the NWP 12 pending consultation with the U.S. Fish and Wildlife Service and compliance with all environmental laws. (April 15 order, p. 26).  Paragraph six stops the Corps from allowing any dredge or fill activities under NWP 12, also pending consultation and compliance with environmental laws.  The court denied the request for a stay of paragraphs five and six, but granted an expedited schedule to brief the issue.  All of the parties briefing documents are scheduled to be filed with the court by May 8, 2020.  Read more about the court’s April 15th order here

Wastewater Disposal: Pennsylvania Department of Environmental Protection Approves Underground Wastewater Injection Well 
On April 15, 2020, the Pennsylvania Department of Environmental Protection (DEP) issued a permit for an underground injection control well for disposal of wastewater used in oil and gas production.  Penneco Environmental Solutions, LLC applied for the permit to convert its existing well, Sedat 3A, into a disposal well.  In a news release announcing approval of the well, DEP explained that the well was approved following a public hearing where related comments and testimony were received.  The permit includes several conditions that must be met before disposal activities can begin at the well site.  The permit requires Penneco to create a seismic monitoring and mitigation plan that includes seventeen specific components listed in the permit. (permit, p. 1-3).  Other predisposal conditions require that Penneco obtain a permit to convert their Sedat #1 well into a monitoring well to track the injected fluid levels. (permit p. 3). 

Methane Emissions: Environmental Defense Funds Releases Study on Methane Emissions in the Permian Basin 
On April 29, 2020, the Environmental Defense Fund released data in its Permian Methane Analysis Project (PermianMAP), concluding that flaring activities were one of the largest sources of methane emissions in the Permian Basin. (aerial survey results).  PermianMAP gathered data from helicopter surveys of the Delaware and Midland basins in Texas.  Using data collected with infrared cameras through February and March 2020, the surveys found that 11% of flares were either malfunctioning or unlit within the study area. (helicopter survey map).  Further, the study found that unlit flares were venting “completely uncombusted methane” into the atmosphere. (aerial survey results).  The study ultimately concluded that companies in the region are “emitting 3.5 times more methane than what the Environmental Protection Agency assumes.” (aerial survey results).  In a more detailed publication of the project’s methodology, PermianMAP explained that the project’s data collection and analysis was implemented through a combination of aerial, ground, and flaring surveys.  Penn State researchers were involved in calculating total methane emissions for the region (methodology p. 5).
From the National Oil & Gas Law Experts:

AGENCY PRESS RELEASES—STATE/FEDERAL
Pennsylvania Department of Energy Press Releases:
No new releases Apr. 27–May 4, 2020.

U.S. Department of Energy
No new releases Apr. 27-May 4, 2020.

U.S. Environmental Protection Agency

STATE ACTIONS—EXECUTIVE/LEGISLATIVE
Pennsylvania Executive Agencies—Actions and Notices: 
No actions May 4, 2020. 

Pennsylvania Legislature:
HB 247 “Reducing Surface Impact from Unconventional Gas Wells” Removed from Table (Apr. 20, 2020)
HB 827 “Economic Justice for DRBC Takings” Removed from Table (Apr. 21, 2020)
SB 790 “Conventional Oil and Gas Wells Act” Removed from Table (Apr. 20, 2020)

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE
Federal Executive Agencies—Actions and Notices: 
Energy Department
85 FR 25340 “National Environmental Policy Act Implementing Procedures” Proposed Rule (May 1, 2020)

Environmental Protection Agency
85 FR 23825 “Information Collection Request Submitted to OMB for Review and Approval; Comment Request; NSPS for VOC Emissions From Petroleum Refinery Wastewater Systems (Renewal)” Notice (April 29, 2020)

Federal Energy Regulatory Commission 
85 FR 23512 “Carbon Pricing in FERC-Jurisdictional Organized Regional Wholesale Electric Energy Markets; Notice of Request for Technical Conference or Workshop” Notice (April 28, 2020)
85 FR 23513 “Questar Southern Trails Pipeline Company; Notice of Extension of Time Request” Notice (April 28, 2020)
85 FR 23517 “Golden Pass LNG Terminal LLC and Golden Pass Pipeline LLC; Notice of Application to Amend Section 3 and Section 7 Authorizations” Notice (April 28, 2020)
85 FR 23953 “Transcontinental Gas Pipe Line Company, LLC; Notice of Availability of the Environmental Assessment for the Proposed Northeast Supply Enhancement Project Amendment” Notice (April 30, 2020)
85 FR 26450 “Gulf South Pipeline Company, LLC; Notice of Request Under Blanket Authorization” Notice (May 4, 2020)
85 FR 26453 “Enable Gas Transmission, LLC, Enable Gulf Run Transmission, LLC; Notice of Schedule for Environmental Review of the Gulf Run and Line CP Modifications Project” Notice (May 4, 2020)

House Energy and Commerce Committee Actions:
No new actions Apr. 27-May 4, 2020.

Senate Energy and Natural Resources Committee Actions: 
No new actions Apr. 27-May 4, 2020.
Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“U.S. Natural Gas to Be World’s Priciest Amid Virus Upheaval,” BNN Bloomberg
Connect with us on Facebook! Every week we will post the CASL Ledger which details all our publications and activities from the week.
Want to get updates, but prefer to listen? Check out the Shale Law Podcast! We can always be found on our Libsyn page, iTunes, Spotify, Google Podcasts, or Stitcher.
Check out the February Agricultural Law Brief ! Each month we compile the most significant legal developments in agriculture. If you’d like to receive this update via email, check out our website and subscribe!