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)

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 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!

Monday, August 19, 2019

Shale Law Weekly Review - August 19, 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.

GHG Emissions: States, Environmental Groups File Lawsuit Challenging EPA’s Affordable Clean Energy Rule 
On August 13, 2019, several states filed a Petition for Review with the U.S. Court of Appeals for the District of Columbia Circuit regarding the Environmental Protection Agency’s Affordable Clean Energy Rule (State of New York v. EPA, No. 19-1165). Several environmental groups filed a similar Petition the next day on August 14th (Appalachian Mountain Club v. EPA, No. 19-1166). The Affordable Clean Energy Rule, officially titled, Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions From Existing Electric Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations (Rule), was finalized on July 8, 2019.  The Rule replaces the Obama Administration’s Clean Power Plan and instructs states to create standards in order to reduce greenhouse gas emissions for energy development from fossil fuels. According to EPA, heat rate improvement is the “best system of emission reduction” for coal-fired energy units. The States’ Petition requests that the court determine the Rule to be unlawful under section 7607(d)(9) of the Clean Air Act. Both suits follow the American Lung Association’s Petition for Review filed the same day the final Affordable Clean Energy rule was finalized (American Lung Association v. EPA, No. 19-1140). 

Pipelines: Environmental Groups File Petition for Court of Appeals to Review Mountain Valley Pipeline Decision
On August 12, 2019, environmental groups filed a Joint Petition for Review with the United States Court of Appeals for the Fourth Circuit (Wild Virginia v. U.S. Dep’t of the Interior, No. 19-1866). The petition was filed as a request for the court to review the U.S. Fish and Wildlife Service’s Biological Opinion and Incidental Take Statement regarding the Mountain Valley Pipeline. In the Biological Opinion, the Fish and Wildlife Service designated critical habitat areas only for the Indiana bat and stated that pipeline construction was not expected to affect the bat’s habitat. The environmental groups, however, complain that the Fish and Wildlife Service did not set take limits for the amount of endangered bats that could be harmed during construction.  Additionally, the incidental take statement anticipated a small percentage of different species would be harmed or killed during pipeline construction, but it included “reasonable and prudent measures” to be implemented by the pipeline to minimize take. The petitioners, however, claim that the agency failed to measure impacts on other endangered wildlife species. The petitioners request that the Petition be set for “expedited consideration.” 

Municipal Regulation: Activists Request Colorado Court Reinstate Local Hydraulic Fracturing Ban 
On August 13, 2019, the activist group, Our Health, Our Future, Our Longmont (Our Longmont), filed a Motion to Reopen a case which previously found that banning hydraulic fracturing within city limits was not permitted by law (Colorado Oil and Gas Ass’n v. City of Longmont, No. 2013CV63). Our Longmont argues that the case can be revisited due to the adoption of Senate Bill 19-181, which was signed into law on April 16, 2019. SB 19-181 titled, Protect Public Welfare Oil and Gas Operations, gives local governments more authority to regulate oil and gas land use to minimize the effects of oil and gas operations on public safety and the environment. The Motion states that a local hydraulic fracturing ban would no longer be in conflict with Colorado law, allowing the case to be reopened and moved forward. 

Induced Seismicity: Bureau of Ocean Energy Management Issues Permit for Seismic Survey Near Alaskan Coast 
On August 14, 2019, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (Bureau) approved a permit for Hilcorp Alaska, LLC (Hilcorp) to conduct “geophysical exploration operations” in federal waters near Southcentral Alaska. Operations include a seismic survey of the Lower Cook Inlet area covering approximately 969 square kilometers (press release). According to the Bureau’s press release, data gathered from the survey can be used to find “potential offshore oil and gas resources.” The permit approval included several stipulations to be followed by Hilcorp including monitoring ships in the area and reporting birds found on at-sea equipment. The survey is expected to begin August 31, 2019, and be completed by October 31, 2019.

From the National Oil & Gas Law Experts:
Charles Sartain, Water: The Hot Commodity in the Permian and Elsewhere, (August 15, 2019)


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!