Tuesday, September 17, 2019

Shale Law Weekly Review - September 17, 2019

Written by:
Sara Jenkins - Research Assistant
Jackie Schweichler - Staff Attorney

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

Pipelines: Circuit Court Rules PennEast Pipeline Cannot Move Forward on Condemnation Lawsuit Against New Jersey 
On September 10, 2019, the U.S. Court of Appeals for the Third Circuit ruled PennEast Pipeline Company (PennEast) was barred by the Eleventh Amendment from bringing a suit against New Jersey to obtain property under eminent domain (In re: PennEast Pipeline Company, LLC, No. 19-1191). PennEast was granted approval for their pipeline project which required access to several properties owned by the state of New Jersey. PennEast filed suit under § 717f(h) of the Natural Gas Act (NGA), which allows the “necessary right-of-way” to construct a pipeline. The court noted that the power of eminent domain and the power to bring a state into federal court were two separate issues. The Eleventh Amendment to the U.S. Constitution gives states immunity from suit by private parties.  The court ultimately remanded the case back to the district court for dismissal under the grounds that “New Jersey’s sovereign immunity has not been abrogated by the NGA.”

Oil and Gas Leasing: California Legislature Passes Bill Limiting New Oil and Gas Leases for Infrastructure
On September 9, 2019 the California Senate passed Assembly Bill 342 prohibiting new oil and gas leases on public lands used to support production on certain federal lands. More specifically, the bill prevents leases on public lands for oil and gas-related infrastructure that would be used to support oil and gas production on federally protected lands. The bill defines “federally protected land” as “a national monument, park, wilderness area, wildlife refuge, or wilderness study area.” The bill does not prohibit maintaining and repairing current pipelines, and does not prohibit leases for oil and gas infrastructure used to support production on state lands. The bill previously passed the House on May 22, 2019, and was sent to the governor for signature on September 12, 2019. 

State Regulation: New Hampshire Governor Approves Bill Prohibiting Offshore Oil and Natural Gas Exploration
On September 10, 2019, New Hampshire’s governor approved Senate Bill 76, prohibiting offshore oil and natural gas exploration, development, and production in coastal waters of the state. According to the Associated Press, Governor Chris Sununu signed the bill stating that it was “another step in the right direction.”  The bill prevents the Department of Environmental Services from issuing any permits, approvals, or endorsements for “oil or natural gas exploration, development, or production in coastal state waters.”  The bill will take effect on November 10, 2019.

Electricity Generation: Pennsylvania Public Utility Commission Releases Electric Power Outlook Showing Increase in Natural Gas Generation and Alternative Energy Usage
In August 2019, the Pennsylvania Public Utility Commission (PUC) released the Electric Power Outlook for 2018 to 2023. The report shows an increase in natural gas generation as well as increasing usage of alternative energy resources. More specifically, natural gas generation was projected to contribute “greater than 60 percent of on-peak capacity” in some areas.  According to the report, natural gas generation provides important adaptability that is “essential for managing wind and solar variability.”  The report predicts that the amount of electricity supplied by alternative resources will increase to a total of 18 percent by 2021.  Some alternative energy resources include solar, wind, biologically derived methane gas, and coal mine methane. 

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (September 13, 2019)

Ann Navaro, Sara Burgin, & Daniel Pope, EPA Repeals Obama Rule Defining Waters of the U.S., (September 13, 2019)

Nina Howell, Ryan Pereira, Gaffney, Cline & Associates, LNG in Europe: Current Trends, the European LNG Landscape and Country Focus, (September 16, 2019)



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Monday, September 9, 2019

Shale Law Weekly Review - September 9, 2019

Written by:
Sara Jenkins - Research Assistant
Jackie Schweichler - Staff Attorney

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

Municipal Regulation: Adams County, Colorado Approves Changes to Oil and Gas Regulations
On September 3, 2019, the Adams County Board of Commissioners voted to approve changes to the county’s oil and gas regulations.  The new regulations were approved following the implementation of Colorado’s Senate Bill 19-181, which expanded the power of local governments to implement oil and gas regulations that address impacts to public health and the environment.  The new regulations include safety requirements, operational standards, and information on obtaining permits for new oil and gas facilities.  Board Chair Steve O’Dorisio said in a statement, “[O]ur staff has been hard at work creating a set of regulations that is fair to the industry but also provides for the safety of our residents.”  According to the county’s news release, Adams County set out to “establish regulations that allow for reasonable development of oil and gas . . . while ensuring that facilities are sited in appropriate areas.” 

Pipelines: Pennsylvania’s Department of Environmental Protection Issues $319,000 in Penalties Against Mariner East 2 Pipeline
On August 29, 2019, the Pennsylvania Department of Environmental Protection (DEP) issued $319,000 in penalties against Sunoco Pipeline, LP for Mariner East 2 pipeline construction violations.  The first penalty was issued in 2017 for violations concerning “accelerated erosion and sedimentation” at several construction sites.  The second penalty was issued to Sunoco Pipeline, LP for violations of the Clean Streams Law and Dam Safety and Encroachment Act that occurred in 2018. More specifically, the violations stemmed from “unauthorized discharges of drilling fluids” into wetlands and tributaries in several counties.   The Mariner East pipeline project has been issued more than 80 violations and accrued $13 million in penalties.  The project is expected to expand the existing pipeline for transporting natural gas from Ohio to Delaware County, Pennsylvania. 

National Energy Policy: Institute for Energy Research Files Lawsuit Against USDA to Release Documents on the Renewable Fuel Standard Regulatory Process
On September 5, 2019, the Institute for Energy Research (IER) filed a Complaint against the U.S. Department of Agriculture (USDA) to compel the release of documents under the Freedom of Information Act (Institute for Energy Research v. USDA, No. 19-2654).  The Complaint alleges that USDA had 20 working days to respond to a request for records, but it had not responded after five months.  IER’s request letter states the documents sought are to obtain information regarding lobbyist efforts surrounding the “mandate of using food crops as transportation fuel.”  According to IER’s press release, the public has an interest in any efforts by Deputy Secretary of Agriculture Stephen Censky to influence the Renewable Fuel Standard (RFS) regulatory process.  Additionally, IER claims that any involvement in lobbying efforts would “materially benefit” Mr. Censky’s former employer, the American Soybean Association, “[g]iven that soybeans are the second largest source of biofuels used for compliance with RFS.”  

LNG Exports: FERC Formally Accepts Commonwealth LNG’s Permit Application
On September 3, 2019, Commonwealth Projects, LLC, announced that the Federal Energy Regulatory Commission accepted its filing application for a liquified natural gas (LNG) project permit.  The project consists of constructing one LNG plant with six liquefaction trains and facilities.  The trains are expected to have a total liquefaction capacity of 8.4 million metric tonnes per annum.  Further, the project will include a three-mile pipeline that will connect the LNG facility with existing pipelines to transport gas to the project.  The project is located on the U.S. Gulf Coast near Cameron, Louisiana.  Commonwealth LNG expects to begin operations of the new facility in 2024. 

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (August 30, 2019)

Charles Sartain, Cyberspace Saves an Out-of-State Oil Company, (September 5, 2019)

John McFarland, Unit-Line Allocation Wells, (August 30, 2019)

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

Tuesday, September 3, 2019

Shale Law Weekly Review - September 3, 2019

Written by:
Sara Jenkins - Research Assistant
Jackie Schweichler - Staff Attorney

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

Pipelines: Nebraska Supreme Court Rules Keystone XL Pipeline Route is in the Public Interest 
On August 23, 2019, the Nebraska Supreme Court affirmed the Nebraska Public Service Commission’s (NPSC) determination that the Keystone XL pipeline’s alternative route is in the public interest (In re Application No. OP-0003, No. S-17-1331).  Landowners and environmental groups intervened, bringing this appeal after NPSC approved the “mainline alternative route” (MAR) for TransCanada’s Keystone XL pipeline.  Addressing the issues raised by the appellants, the court found that NPSC had jurisdiction to consider TransCanada’s application; that TransCanada “met its burden of proof;” that NPSC “properly considered the MAR;” and that the intervenors were given due process.  The court explained that the legislature gave NPSC the authority to determine which pipeline route was in the public interest.  The court determined that the NPSC provided enough evidence to support its decision and that the intervenors arguments were “without merit.”

State Regulation: Environmental, Citizen Groups Petition New Mexico Supreme Court to Stay New Energy Transition Act 
On August 26, 2019, several environmental and citizen groups filed a Petition asking the Supreme Court of New Mexico to stay the state’s recently-enacted Energy Transition Act (ETA) (New Energy Economy v. New Mexico Public Regulation Comm’n, No. S-1-SC-37875). Petitioners contend that ETA grants the Public Service Company of New Mexico (PNM) excessive discretion to determine what to charge ratepayers when old plants are closed.  The petitioners argue that this discretion undermines the New Mexico Public Regulation Commission’s (Commission) authority to protect consumers from exorbitant rates.  Specifically, Petitioners argue that sections 2H, 2S, 5, 8B, 11C, 22 and 31C of ETA are unconstitutional.  ETA seeks to establish “new minimum requirements for the conversion to renewable energy resources, and adopt[] a mechanism for ‘securitizing’ costs associated with the abandonment of old plants.”  Petitioners are requesting oral arguments to present their case before the court. 

Methane Emissions: EPA Issues Proposed Rule Amending New Source Performance Standards Methane Requirements
On August 28, 2019, the Environmental Protection Agency (EPA) issued a proposed rule amending methane requirements in the 2012 and 2016 New Source Performance Standards (NSPS).  According to EPA’s policy amendments fact sheet, the proposed rule was drafted in response to President Trump’s Executive Order on Promoting Energy Independence and Economic Growth issued March 28, 2017.  The proposal states that the amendments are “intended to continue existing protections from emission sources within the regulated source category, while removing regulatory duplication.”  The proposed rule includes both primary and alternative proposals.  The primary proposal would amend the 2016 NSPS by removing methane requirements for oil and gas production and processing. This proposal would also no longer regulate oil and gas transmission and storage as sources for volatile organic compounds or greenhouse gas emissions.  Alternatively, EPA suggests keeping the same source categories, but instead rescinding requirements for all industry related methane sources. 

Pipelines: FERC Order Allows Constitution Pipeline to Move Forward 
On August 28, 2019, the Federal Energy Regulatory Commission (FERC) issued an order finding that the New York State Department of Environmental Conservation (New York DEC) waived its authority to deny a water quality certification for the Constitution Pipeline.  Constitution Pipeline Co., LLC (Constitution) initially filed a Section 401 water quality certification with New York DEC in April 2015, but the certification was denied in April 2016.  Constitution petitioned FERC, arguing that New York DEC had waived its authority to deny the certification by failing to act within a reasonable period of time.  FERC denied Constitution’s petition, and the U.S. Supreme Court later denied Constitution's petition for writ of Certiorari.  In October 2018, FERC requested that the case be held in abeyance to await the result of the Hoopa case, which posed similar questions of law (Hoopa Valley Tribe v. FERC, D.C. Cir. No. 14-1271). The court in Hoopa issued its decision on January 25, 2019, holding that the state in that case had waived their authority by failing to act within the year. Accordingly, FERC requested that this case be remanded in order to reconsider its orders. 

Production and Operation: Energy Information Administration Data Shows United States as the Global Leader in Petroleum and Natural Gas Production 
On August 20, 2019, the U.S. Energy Information Administration published data showing the United States now leads the globe in petroleum and natural gas production.  U.S. production reached record levels in 2018, with petroleum increasing by 16% and natural gas increasing by 12%.  Petroleum production in 2018 was 80% crude oil and lease condensate with natural gas plant liquids accounting for the other 20%.  Crude oil production set a new record in 2018, reaching 11 million barrels per day.  Dry natural gas production reached record amounts for the second straight year, reaching 28.5 billion cubic feet per day.  The United States has led natural gas production since surpassing Russia’s production in 2011.  The United States exceeded Saudi Arabia’s petroleum production in 2018, after the record production growth.

From the National Oil & Gas Law Experts:
Charles Sartain and Paul Yale, North Dakota: A Different Rule for Post-Production Costs In a State Lease, (August 27, 2019)

John McFarland, Energy – the Big Picture, (August 26, 2019)

Penn State Research: 

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

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

Monday, August 26, 2019

Shale Law Weekly Review - August 26, 2019

Written by:
Sara Jenkins - Research Assistant
Jackie Schweichler - Staff Attorney

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

Pipelines: Court of Appeals Rejects Challenge to Water Discharge Permit for Atlantic Sunrise Pipeline 
On August 15, 2019, the U.S. Court of Appeals for the Third Circuit denied a petition to review Pennsylvania’s Department of Environmental Protection’s approval of a hydrostatic testing permit for the Atlantic Sunrise pipeline (Delaware Riverkeeper Network v. Sec’y Pennsylvania Dep’t of Envtl. Prot., No. 17-3299).  As described by the court, hydrostatic testing is a “process by which water is pumped into pipes to check them for strength or leaks.”  A hydrostatic testing permit was granted to Transcontinental Gas Pipe Line Company, operator of the Atlantic Sunrise pipeline, and allows the company to discharge the water used for testing the pipes.  Petitioners asserted their own petition was not ripe for decision as the DEP action must be first reviewed by the Environmental Hearing Board. Petitioners also argued that the process to obtain the permit violated regulatory and statutory requirements. The court rejected both of these arguments, finding that the petition was ripe for decision, and that it “fail[ed] on the merits.”

Pipelines: Federal Court Dismisses Request by Columbia Gas to Acquire Land for Pipeline Project
On August 22, 2019, the U.S. District Court for the District of Maryland issued a written Order dismissing a Complaint in Condemnation issued by Columbia Gas Transmission, LLC (Columbia) Columbia filed suit on May 16, 2019, against the State of Maryland, Department of Natural Resources (Columbia Gas Transmission, LLC. v. 0.12 Acres of Land, et al., 1:19-cv-01444-GLR). Columbia sought to acquire by condemnation 0.12 acres of land in Washington County, Maryland to construct a portion of pipeline that would stretch from Fulton County, Pennsylvania to Morgan County, West Virginia. Columbia argued that the Federal Energy Regulatory Commission (FERC) had granted a certificate of public convenience and necessity for the project. According to Columbia, the FERC certificate explicitly stated that Columbia could use eminent domain to acquire easements for the project.  The court concluded, however, that the condemnation claim was barred by the Eleventh Amendment to the U.S. Constitution.

LNG Exports: July Sets Record for Natural Gas Deliveries to LNG Export Facilities
On August 19, 2019, the U.S. Energy Information Administration (EIA) released a report detailing the amount of natural gas deliveries to U.S. liquefied natural gas (LNG) facilities. The report showed a record high volume of incoming gas for the month of July 2019, “averaging 6.0 billion cubic feet per day” (Bcf/d). According to the report, natural gas delivered by pipelines to Mexico and to U.S. LNG export facilities was 30% higher from January to July 2019, than it was during the same time period last year. EIA expects LNG exports to continue to rise in June and July 2019, estimating 4.8 Bcf/d and 5.2 Bcf/d. According to the report, the United States has a current LNG export capacity of  5.4 Bcf/d with  four export terminals and nine liquefaction trains.

Taxation / Public Lands: Legislative Revenue Report Shows Increase in New Mexico’s Oil and Gas Rent and Royalties
On August 2, 2019, the State of New Mexico’s Legislative Finance Committee released their General Fund Revenue Tracking Report detailing revenue collected from several areas, including the oil and gas industry. The report, which presents data through April 2019, shows an overall year-over-year growth in both “mineral production taxes” and “rent and royalties.” More specifically, New Mexico saw a 5.9% year-over-year growth in mineral production taxes, including an oil and gas school tax, oil conservation tax, and natural gas processors tax. The largest increase in year-over-year growth was in rent and royalties, increasing by 129.4%, and including a bonus payment for federal land leases. Mineral production taxes rose $23.2 million as compared to the same time in 2018, with rent and royalties increasing by $651.1 million. The report states that for 2019, there is currently $273.5 million over the revenue forecast “due to strong revenues from gross receipts taxes and oil and gas production royalties.”

Water Use: Study Concludes Conventional Oil and Gas Production Has Greater Impact on Water Resources Than Hydraulic Fracturing 
On June 10, 2019, Groundwater published an Issue Paper which concluded that conventional oil and gas production has a greater impact on water resources than unconventional methods of extraction such as hydraulic fracturing. The paper titled, Conventional oil - The Forgotten Part of the Water-Energy Nexus, was conducted by the University of Arizona and the University of Saskatchewan. The paper examines the “volume of produced and injected water, changes to subsurface pressure regimes, and potential contamination pathways of conventional oil production” and compares it to hydraulic fracturing. The paper concluded that a net gain of water in subsurface reservoirs came primarily from enhanced oil recovery and saltwater disposal, with less than 5% coming from hydraulic fracturing. Additionally, large water injections used in enhanced oil recovery and saltwater disposal “will lead to longer distance transport of solutes or contaminants” compared to hydraulic fracturing.

From the National Oil & Gas Law Experts:
Charles Sartain, Bankruptcy Ruling Sides With Oil Field Realities, (August 21, 2019)

Pennsylvania Actions and Notices: 
Board of Coal Mine Safety

Reclamation Committee of the Mining and Reclamation Advisory Board

Pennsylvania Energy Development Authority

Environmental Hearing Board 

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

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