Friday, September 21, 2018

Shale Law in the Spotlight – UPDATE: Overview and Timeline of Legal Developments Relating to the Keystone XL Pipeline

Written by Chloe Marie – Research Specialist

This article updates a prior article, dated September 12, 2018, that provided information about the Keystone XL Pipeline Project.

On September 10, 2018, Rosebud Sioux Tribe and Fort Belknap Indian Community filed suit against the U.S. Department of State to challenge its approval of a Presidential Permit application on March 23, 2017, allowing the Keystone XL Pipeline Project to start operating.

Before the U.S. District Court for the District of Montana, plaintiffs claimed a lack of public process and environmental review regarding the 2017 permit application. In their complaint, plaintiffs furthermore noted that “only [56] days later and without any public environmental review process, the Department granted TransCanada’s permit application. In comparison, the Department spent 1,216 days reviewing TransCanada’s first permit application and 1,280 days reviewing its second.”

Plaintiffs claim that the Department granted the permit application in 2017 using the “very same record” upon which to base its decision as the prior administration had used to deny such permit application in 2015. Plaintiffs asserted that the Department “did not provide reasoned explanations for why it ignored or countermanded its own previous factual findings, circumstances, and analyses that led to the opposite conclusion.”

The Keystone XL Pipeline would transport tar sands from Canada to the United States. Plaintiffs describe the product to be transported as a “highly toxic and carcinogenic crude oil sludge;” thus, they expressed concerns over the potential impacts that could occur due to the passage of the Keystone XL Pipeline through the Tribes’ sacred sites and ancestral lands. Both Tribes complained that the State Department did not provide reasonable details with respect to the pipeline routing and failed in its obligations to comply with Tribal treaty rights and to protect the Tribes’ cultural resources and historic properties. The Rosebud Sioux Tribe stresses particularly that the pipeline route could adversely affect the Rosebud Sioux Rural Water Supply System, especially in cases of oil spill incidents.

Plaintiffs call the State Department’s decision to grant the 2017 Presidential Permit application “arbitrary, capricious, an abuse of discretion, [and] otherwise not in accordance with law” and thus request the court to rescind, set aside, and declare unlawful the Presidential Permit as well as prohibiting any future activity relating to the construction, connection, operation, and maintenance of the project.

Additional information on Rosebud Tribe et al. v. United States Department of State et al. in the U.S. District Court for the District of Montana (Great Falls Division) is available at docket no. 4:18-cv-00118.

This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.

Wednesday, September 19, 2018

Shale Law in the Spotlight: Pennsylvania Environmental Quality Board Proposes Increase in Unconventional Well Permit Application Fee

Written by Chloe Marie - Research Fellow

On July 14, 2018, the Pennsylvania Environmental Quality Board (EQB) issued a notice of proposed rulemaking that proposes to increase the permit fees for unconventional wells by amending sections of Chapter 78a (25 Pa. Code, Ch. 78a). Currently, the well permit application fees are $5,000 for non-vertical unconventional wells and $4,200 for vertical unconventional wells. Pursuant to the proposed rule, the permit application fees will be increased to $12,500 for all unconventional well permit applications.

According to EQB, the fee increase is justified by the need to “address any disparity between income generated by the well permit application fees and the cost of administering [the Oil and Gas Program]” relating to oil and gas development. The notice of proposed rulemaking specifies that the fee increase does not apply to conventional well permit applications. 

The increase of unconventional well permit fees comes in response to a 3-Year Regulatory Fee and Program Cost Analysis Report prepared by the Pennsylvania Department of Environmental Protection (DEP) and submitted to EQB on April 17, 2018. In this report, DEP found there is a lack of funding to account for the increasing responsibility of the Oil and Gas Program. The agency pointed out that “given the low number of permits received over the past two fiscal years and all indications that permit volumes are not expected to rebound in the near term, the current well permit fee is no longer sufficient to fund DEP’s Oil and Gas Program; even with substantial cost-saving measures that have [already] been implemented.”

DEP anticipates that “approximately 2,000 well permit applications will be received annually following the adoption of this proposed rulemaking, which would result in an additional annual incremental permit application cost of $15 million to the regulated community.”

A comment period on this proposed regulation was open through August 13, 2018. EQB has not yet issued a notice of final rulemaking in the Pennsylvania Bulletin.

This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture. 

Monday, September 17, 2018

Shale Law Weekly Review - September 17, 2018

Written by:
Brennan Weintraub - Research Assistant
Jackie Schweichler - Education Programs Coordinator

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

Pipelines: Native American Tribes Sue U.S State Department Over Keystone XL Pipeline
On September 10, 2018, the Rosebud Sioux and the Fort Belknap tribes in South Dakota and Montana sued the U.S. Department of State (Department) in the U.S. District Court for the District of Montana (Rosebud Sioux Tribe, et al. v. U.S. Department of State).  The tribes argue in the complaint that the agency improperly issued a presidential permit for the Keystone XL pipeline project.  They allege in the complaint that Department failed to consider potential environmental effects and cultural impacts on tribal lands in violation of the National Environmental Policy Act and the National Historic Preservation Act.  In addition, Department originally denied the pipeline permit in 2015, but approved the permit in 2017 with “no new information to support its contrary decision.”  The plaintiffs allege that by not providing an explanation, Department violated the Administrative Procedure Act.

Wastewater Treatment / Disposal: Pennsylvania Commonwealth Court Upholds Fine for Release of Wastewater
On September 10, 2018, the Pennsylvania Commonwealth Court issued an opinion affirming the decision of the Pennsylvania Environmental Hearing Board, which imposed a $1.1 million fine against EQT Corp. (EQT Production Co., v. Dept of Envtl. Protection, 2018 WL 4289310).  The Hearing Board imposed the fine after determining that EQT had violated the Clean Streams Law and related environmental regulations.  From April 30, 2012, to September 27, 2012, EQT was determined to be responsible for widespread contamination from a wastewater pond built on a shale gas drilling site in northern Pennsylvania.  Wastewater was released through a damaged liner and seeped into nearby springs and streams.  The court found that EQT had acted recklessly in the design and construction of the pond and unnecessarily delayed in addressing the problem.

Federal Lands: U.S. Forest Service Announces Plans to Streamline Drilling Permits in National Forests
On August 31, 2018, the U.S. Forest Service provided advance notice that it will be proposing revisions to the current Oil and Gas Resources regulations (36 CFR 228, subpart E).  The purpose of the change will be to streamline the requirements for oil and gas drilling in national forests.  According to the notice, the agency intends to remove redundant language, remove confusing options, and align the permitting process with the Bureau of Land Management.  The purpose of these changes is to decrease permitting times in order to promote domestic oil and gas production.  Comments on the notice will be accepted until October 15, 2018.

Methane Emissions: EPA Proposes Changes to Methane Gas Emissions Regulation
On September 11, 2018, the Environmental Protection Agency (EPA) proposed amendments to its New Source Performance Standards for oil and gas producers.  The changes will affect the 2016 rule, Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources, 40 CFR Part 60.  The proposal includes a number of changes to the 2016 final rule, including reduced monitoring frequency at well sites.  The proposed changes would require producers to conduct monitoring surveys only annually, rather than semi-annually.  In addition, EPA intends to align these regulations more closely to existing state programs.  The agency predicts that these changes could reduce regulatory costs by up to $484 million from 2019 to 2025.

Methane Emissions: Virginia Announces Plan to Reduce Methane Leaks from Natural Gas
On September 12, 2018, the Virginia Governor’s office announced the state’s intention to establish a new set of regulations to reduce methane emissions from natural gas infrastructure in the state. The press release stated that the initiative will be headed by the Virginia Department of Environmental Quality, which will spend the next 120 days consulting with experts and industry to develop a plan. This action follows several initiatives by Governor Northam to address climate issues in the state, including ocean acidification and carbon emissions from the transportation sector.

Production and Operation: EIA Releases September Short-Term Energy Outlook
On September 11, 2018, the U.S. Energy Information Administration (EIA) released its Short-Term Energy Outlook.  The report provides production and inventory estimates for liquid fuels, natural gas, electricity, coal, renewables, and emissions. For the month of August, global crude oil prices fell initially but rose in the second half of the month for an overall increase.  Finished motor gasoline production was higher than the August 2017 average, while consumption declined.  Natural gas markets experienced low inventories due to high residential and commercial consumption, as well as growth in exports for liquefied natural gas and pipelines.

From the National Oil & Gas Law Experts:
Charles Sartain, Choice of Law Matters in an Oilfield Indemnity Suit, Gray Reed (September 13, 2018)

John McFarland, "Royalty Lease" - Lessor Beware, Oil and Gas Lawyer Blog (September 17, 2018)

Pennsylvania Notices
Upcoming Meetings: Senate Environmental Resources & Energy meeting (September 25, 2018)

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This week we published a new Shale Law in the Spotlight article: Overview and Timeline of Legal Developments Relating to the Keystone XL Pipeline.

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Wednesday, September 12, 2018

Shale Law in the Spotlight: Overview and Timeline of Legal Developments Relating to the Keystone XL Pipeline

Written by Chloe Marie - Research Fellow

The Keystone XL pipeline is a long-standing project involving both Canada and the United States that was initially proposed by TransCanada Corporation in 2008. The current project aims to enhance the U.S. pipeline infrastructure grid and upgrade the existing Keystone Pipeline System that went into service in July 2010. The Keystone Pipeline System currently transports approximately 600,000 barrels of crude oil per day from Hardisty, in Alberta, Canada to U.S. refineries located in Illinois, Texas, and Oklahoma. The proposed Keystone XL pipeline will extend and connect with the existing pipeline system in Hardisty, Alberta to deliver oil directly to Steele City, Nebraska through the states of Montana and South Dakota. 

TransCanada Keystone Pipeline L.P. filed an application for a Presidential Permit to construct and operate the proposed Keystone XL pipeline project on September 19, 2008. Subsequently, the U.S. Department of State issued a Draft Environmental Impact Statement (EIS) for public review in April 2010, and a supplemental draft EIS was published in April 2011. The final EIS was issued on August 26, 2011. In a Press Release dated the same day, TransCanada’s president and chief executive officer declared that “the Final Environmental Impact Statement reaffirms the findings of the two previous environmental impact statements that the Keystone XL pipeline will have no significant impact on the environment.” 

Owing to community concerns regarding the impacts of the proposed pipeline route on sand dunes located in north-central Nebraska - also known as the Sand Hills - President Barack Obama denied the Keystone XL pipeline presidential permit in January 2012 as recommended by the U.S. Department of State. The State Department stated that the 60 days allotted to review whether the proposed Keystone XL pipeline project is in the national interest was not enough time in this particular case. 

On May 4, 2012, TransCanada filed another Presidential Permit application for the construction and operation of crude oil transportation facilities from Canada to the United States. Again, the State Department denied the Presidential Permit application on November 23, 2015, stating that such project would not serve the national interest. U.S. Secretary of State John Kerry pointed out that “granting a Presidential Permit for this proposed Project would undermine U.S. climate leadership and thereby have an adverse impact on encouraging other States to combat climate change and work to achieve and implement a robust and meaningful global climate agreement.” 

Following the presidential transition in the United States, the administrative policy towards the pipeline project shifted. TransCanada again submitted a Presidential Permit application to the U.S. Department of State shortly after President Donald Trump signed a Presidential Memorandum on January 24, 2017, “invit[ing] TransCanada Keystone Pipeline, L.P. (TransCanada), to promptly re-submit its application to the Department of State for a Presidential permit for the construction and operation of the Keystone XL Pipeline, a major pipeline for the importation of petroleum from Canada to the United States.” On March 23, 2017, the State Department granted the Presidential Permit application declaring the project to be in the national interest emphasizing that such project has the potential to significantly improve infrastructure and supply of crude oil while creating new jobs and providing increased revenues to local communities.

On March 30, 2017, six environmental groups, including the Northern Plains Resource Council, Center for Biological Diversity, and Sierra Club filed a complaint against the Trump administration challenging the approval of the proposed Keystone XL pipeline project. They alleged that the State Department “ignored significant new information that bears on the project’s threats to the people, environment, and national interests of the United States” and asserted that the administration had relied on “an arbitrary, stale, and incomplete environmental review” to reverse the prior determination that the project was not in the national interest.

On February 9, 2018, plaintiffs filed a motion for summary judgment claiming that the State Department should have prepared a supplemental EIS before approving the Keystone XL pipeline project in 2017, and thus violated the National Environmental Policy Act (NEPA), Endangered Species Act (ESA) and Administrative Procedure Act (APA). On August 15, 2018, the U.S. District Court for the District of Montana ordered the State Department to provide further environmental analysis of the proposed project and, consequently, vacated the Presidential Permit at this time.  

Additional information on Northern Plains Resource Council et al. v. Shannon et al. in the U.S. District Court for the District of Montana (Great Falls Division) is available at Docket no. 4:17-cv-00029.


This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.