Wednesday, November 14, 2018

Shale Law in the Spotlight – Overview of Statewide Ballot Initiatives Relevant to Oil and Gas Development


Written by Chloe Marie – Research Specialist

This article will provide an overview of several statewide ballot initiatives that were voted upon during the recent November 6 general election.

Colorado

Initiative 97 – Setback Requirement for Oil and Gas Development

Result: Initiative 97 failed to pass with 42% of Colorado voters voting yes.

On August 29, 2018, Colorado Secretary of State Wayne Williams announced in a News Release that a ballot initiative – identified as Initiative 97 – had received enough signatures to be placed on the November ballot.  The initiative sought to restrict the location of new oil and gas operations in Colorado by imposing increased buffer zones between oil and gas wells and certain types of buildings and land uses.  The petition proposing this initiative was submitted to the Colorado Department of State on August 6, 2018, by Designated Representatives Anne Lee Foster and Suzanne Spiegel from the environmental group Colorado Rising.  Advocates for the initiative collected a total of 172,834 signatures in support of the petition.  When placed upon the November ballot, it was referenced as Proposition 112.

Initiative 97 proposed new setback requirements that would have increased the mandated setback distances and also would have expanded the range of land uses and geographical features from which oil and gas operations would need to be set back.  Under the requirements of Initiative 97, new oil and gas wells would have needed to be operated with a minimum setback distance of 2,500 feet from occupied buildings, such as homes, schools and hospitals, as well as “vulnerable” areas, including playgrounds, permanent sport fields, amphitheaters, public parks, public open space, drinking water sources, irrigation canals, reservoirs, lakes, rivers, perennial or intermittent streams, and creeks. These proposed setback requirements would not have applied to oil and gas development located on federal lands.

Amendment 74 – Just Compensation for Reduction in Fair Market Value by Government Law or Regulation

Result: Amendment 74 failed to pass with 47% of Colorado voters voting yes.

Under proposed amendment 74, Colorado landowners who suffered a loss in the fair value of their private property due to “government law or regulation” would have received just compensation. The proposed amendment provided that such compensation would be determined by a board of at least commissioners or by a jury.

Despite not being directly linked to oil and gas development, proposed amendment 74 may have had a potential impact upon development if passed.  Where governmental restrictions prevented oil and gas operations from occurring on land, Amendment 74 may have required compensation.  Indeed, if the setback requirements contemplated in Initiative 97 had been instituted, landowners affected by these setbacks may have been owed compensation if the fair market value of their property declined as a result of the new setback requirements.

Oklahoma

State Question 800 – Oil and Gas Development Tax Revenue Investment Fund Amendment

Result: State Question 800 failed to pass with 43% of Oklahoma voters voting yes.

State Question 800 – also known as the Oil and Gas Development Tax Revenue Investment Amendment – appeared on the November 6 Oklahoma general election ballot and represented a further attempt by the Oklahoma legislature to amend the state Constitution. More specifically, State Question 800 reproduced the wording of Senate Joint Resolution (SJR) No. 35, which initially proposed to establish a third budget reserve fund – called the Oklahoma Vision Fund – and introduced a new tax on oil and gas production that would have been deposited into the Fund. SJR 35 passed both the House and Senate on May 3, 2018 but was later vetoed by Governor Mary Fallin.

State Question 800 would have created new section 44 to Article X regarding Oklahoma Revenue and Taxation and, in addition to creating the Oklahoma Vision Fund, would have introduced a 5% gross production tax on all oil and natural gas as of July 1, 2020 and for each fiscal year thereafter. After that fiscal year, it was specified that the tax rate would be increased by two-tenths percentage points each year thereafter. The revenue collected from the tax would have been remitted directly into the Oklahoma Vision Fund.

Washington

Advisory Question No. 19 on Oil Spill Taxes

Result: Advisory Question No. 19 received a favorable vote with 53% of Washington voters voting in favor of the oil spill response and administration taxes.

On November 6, 2018, registered voters in Washington state voted on Advisory Question No. 19 deciding whether oil spill response and administration taxes to crude oil or petroleum products received through pipelines – imposed by the state legislature in June 2018 – should be repealed or maintained. Advisory questions do not create any legal, valid or binding obligations upon the state legislature and merely provide Washington voters with the opportunity to express their views on a specific topic.

As a bit of background, Washington Governor Jay Inslee signed into law Senate Bill No. 6269 on March 23, 2018, which was introduced to the state Senate in January 2018. SB 6269 became effective on June 7, 2018 and requires additional tax payments on transportation of crude oil and petroleum products to the state. More precisely, the legislation states that “while oil transported into the state by rail and tank vessels is taxed to fund the oil spill program’s oil spill prevention and preparedness activities, a third method of transport, pipelines, currently is not taxed, despite it generating a sizeable oil spill risk;” thus the legislature decided to request payment of two additional taxes on crude oil and petroleum products received from either interstate or intrastate pipelines.

According to the law, any pipeline terminal operator is now subject to the payment of the oil spill response tax at a rate of 1 cent per barrel of crude oil or petroleum products received from pipelines as well as the oil spill administration tax at a rate of 4 cents per barrel of crude oil or petroleum products received from pipelines. All revenue collected from the oil spill response tax must be deposited into the Washington state oil spill response account while revenue generated from the oil spill administration tax is remitted to the oil spill prevention account.

Initiative 1631 Reducing Pollution

Result: Initiative 1631 failed to pass with 44% of Washington voters voting yes.

State Secretary Kim Wyman approved the placement upon the November general election ballot of Initiative 1631 – known as An Act Relating to reducing pollution by investing in clean air, clean energy, clean water, healthy forests, and healthy communities by imposing a fee on large emitters based on their pollution. This initiative would have created a pollution fee on large emitters of fossil fuels at a rate of $15 per metric ton of carbon content as of January 1, 2020. The pollution fee rate would have increased by $2 per metric ton each year thereafter until the state of Washington met its greenhouse gas reduction targets for 2035 and was on target to meet its reduction goals for 2050. All revenue collected from this pollution fee would been deposited into the Clean Up Pollution Fund.

Florida

Florida Amendment 9 – Ban Offshore Drilling

Result: Amendment 9 passed with 68% of Florida voters voting yes.

On April 16, 2018, the Constitution Revision Commission of Florida approved the placement of Proposal 6004 (P 6004) – prohibiting offshore oil and gas drilling in specified coastal waters – on the general election ballot. P 6004 would amend Section 7 of Article II of the State Constitution and specifically provides that drilling for exploration or extraction of oil or natural gas is prohibited in state coastal waters that lie between the mean high-water line and the outermost boundaries of the territorial seas of Florida. P 6004 clarifies that this prohibition would not apply to the transportation of oil and gas products outside of such waters. In addition, the Proposal states that such measure is aimed at protecting the people of Florida from the degradation of their environment.

Section 377.242 of the Florida Statutes currently prohibits issuing permits for oil and gas exploration and production in state coastal waters; however, the enactment of P 6004 would permanently ban oil and gas drilling along the Florida coastline.

This proposal comes in response to the U.S. Interior Department’s draft version of the National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program) for 2019-2024 released in January 2018. The draft National OCS Program would make available for oil and gas leasing approximately 90% of the total OCS acreage in Federal offshore areas and proposes one sale in the Straits of Florida. Interestingly, Interior Secretary Ryan Zinke announced in a tweet dated January 9, 2018, that the U.S. Interior Department is “removing Florida from consideration for any new oil and gas platforms;” however, no formal declaration has yet been made.

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

Monday, November 12, 2018

Shale Law Weekly Review - November 12, 2018

Written by:
Brennan Weintraub - 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.

State Regulation: Colorado Proposition for Increased Oil & Gas Setbacks Fails
On November 6, 2018, the voters of Colorado rejected Proposition 112 which, if adopted, would have required that all new oil and gas drilling operations in the state be at least 2,500 feet away from all occupied structures and vulnerable areas. Vulnerable areas, according to the text of the measure, included public parks, playgrounds, sources of drinking water, and other water bodies across the state. The initiative ultimately failed by roughly twelve points, despite an October poll that found 52% support for the measure.

Pipelines: West Virginia’s Rover Pipeline Has Been Completed
On November 1, 2018, the Federal Energy Regulatory Commission granted Energy Transfer LP permission to put into service the final two segments of its Rover Pipeline project in West Virginia. With the approval of the Sherwood and CGT Laterals, as well as a compressor station and two metering stations, the entire 713-mile natural gas pipeline is now fully operational.  The Rover Pipeline will transport roughly 3.25 billion cubic feet of natural gas per day from the Marcellus and Utica Shales to northern Ohio and Michigan for distribution. The pipeline is also connected to the company’s storage hub in Ontario, where natural gas is stored for later distribution to North American markets.

LNG Exports: DOE Approves Short-Term LNG Exports from Corpus Christi
On November 1, 2018, the U.S. Department of Energy issued an order expanding export authorization for the Corpus Christi Liquefaction Project (Corpus Christi).  The Department of Energy previously granted Corpus Christi short-term authorization on September 28, 2018, to export liquefied natural gas (LNG) to countries with which the U.S. has a free trade agreement (FTA).  The recent order will allow Corpus Christi to also export to non-FTA countries so long as trade with that country is not prohibited by U.S. law or policy.  The order provides for a two-year period beginning either on December 31, 2018, or the date of the Project’s first export - whichever comes first.  Additionally, Corpus Christi is limited to exporting 767 Bcf of natural gas to FTA countries and 767 Bcf to non-FTA countries in a twelve-month period.

GHG Emissions: Washington State Voters Reject Proposed Carbon Fee
On November 6, 2018, voters in the state of Washington voted down Initiative 1631 by roughly a thirteen-point margin. The measure proposed to institute fees on large emitters of greenhouse gas pollutants such as carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, and other gases.  The fee would have been based on the carbon content in the released fossil fuels and would have been collected from natural gas public utilities or entities.  Proceeds from these fees were to have been used to promote green energy sources and address the impacts of climate change.  The Washington Office of Financial Management estimated that the measure would have raised roughly 2.3 billion dollars during the first five fiscal years after adoption.  The program would have also set aside $50 million for a program to support workers transitioning from fossil fuel work.

Pipelines: Fourth Circuit Stays Atlantic Coast Pipeline’s Water-Crossing Permit
On November 7, 2018, the United States Court of Appeals for the Fourth Circuit granted a motion to stay the water-crossing permit for the Atlantic Coast Pipeline in West Virginia. The West Virginia Department of Environmental Protection requires that stream crossings must be completed within 72 hours and that any structures built cannot impede the ability of fish to swim in the stream. Sierra Club, one of the plaintiffs, said in a press release that the project’s plans involve temporarily damming the Greenbrier River for three days, which would make it impossible for fish to navigate the river.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (November 11, 2018)

Charles Sartain, Asserting a Losing Title Claim Isn't (Always) Tortious, Gray Reed (November 7, 2018)

John McFarland, Seeligson v. Devon - Plaintiffs (Almost) Get Class Certification, Oil and Gas Lawyer Blog (November 7, 2018)

Pennsylvania Notices
DEP Grants: $2.6 million in funding to municipalities and businesses for 16 clean energy vehicle projects for air quality and public health (November 8, 2018)
DEP Grants: $610,000 in funding granted to school districts for clean energy vehicle projects (November 9, 2018)

Public Hearings regarding: Air Quality Plan Approvals for Proposed Compressor Stations in Delaware, Bucks Counties (December 4, 2018)

Meeting Cancellation: Environmental Quality Board meeting for November 13, 2018 is cancelled. The next meeting is scheduled for December 18, 2018.

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 November 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, November 5, 2018

Shale Law Weekly Review - November 5, 2018

Written by:
Brennan Weintraub - 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: Catholic Sisters Petition the Supreme Court in Lawsuit Against Atlantic Sunrise Pipeline
On October 19, 2018, the Adorers of the Blood of Christ, a Catholic sisterhood in Pennsylvania, have submitted a petition for Writ of Certiorari to the Supreme Court of the United States in their case against the Atlantic Sunrise Pipeline. The group alleges that the Federal Energy Regulatory Commission (FERC), in allowing the pipeline to be built on their land, has obstructed their free exercise of religion as guaranteed by the Religious Freedom Restoration Act. A Pennsylvania federal court and the Third Circuit Court of Appeals have both dismissed the lawsuit, finding that the group should have taken their complaint to FERC before raising it in federal court.   The Atlantic Sunrise project will add 1.7 dth/day of pipeline capacity to the Williams Transcontinental pipeline.

Pipelines: Pennsylvania DEP Prohibits Continued Construction on Revolution Pipeline
On October 30, 2018, the Pennsylvania Department of Environmental Protection (DEP) issued a Field Order to ETC Northeast Pipeline LLC (ETC) regarding their Revolution Pipeline.  DEP’s order requires ETC to repair erosion control features and stabilize disturbed areas.  The order also “prohibits additional construction and field work without DEP approval.” DEP issued this order in light of the September 10, 2018, explosion that occurred in Center Township, Beaver County.  In the ongoing investigation, DEP found unreported landslides, impacts to water resources, construction in unapproved areas, and other violations.

Pipelines: FERC Issues Draft Guidance for Horizontal Drilling Plans
On October 26, 2018, the Federal Energy Regulatory Commission (FERC) issued draft guidance to help operators develop Horizontal Directional Drilling Plans (HDD Plans) in the construction of pipelines.  The guidance was issued to assist industry operators in improving their HDD Plans and make FERC’s environmental review process more efficient and effective.  FERC will be accepting public comments on the draft guidance until December 28, 2018.  The guidance is entitled, Guidance for Horizontal Directional Drilling Monitoring, Inadvertent Return Response, and Contingency Plans and was published in the Federal Register on November 2, 2018.

LNG Exports: FERC Issues Draft EIS for Texas LNG Project
On October 26, 2018, the Federal Energy Regulatory Commission (FERC) issued a draft environmental impact statement (EIS) for the Texas LNG Project.  The project would include a liquefied natural gas (LNG) export terminal in Brownsville, Texas.  Texas LNG plans to begin construction in 2019 and to complete Phase 1 of the project by 2023.  The project, once completed, would have a total production capacity of four million metric tons of LNG per year.  In the draft EIS, FERC determined that the project will “result in adverse impacts to the environment,” but that these impacts would not be significant if appropriate mitigation measures recommended by FERC are implemented.  Additionally, FERC noted that this project, in combination with the other LNG projects in the area, would result in significant sediment and shoreline erosions, ocelot and jaguarundi habitat loss, and loss of visual resources.  According to FERC, however, these environmental impacts are mostly temporary or short-term in nature.

Methane Emissions: CSU Study Seeks to Explain Disparity in Methane Emissions Measurements
On October 29, 2018, researchers at Colorado State University published a study examining the reasons for disparate methane emissions estimates from natural gas production.  The study, published in Proceedings of the National Academy of Sciences, found that releases of methane during daytime maintenance of natural gas facilities might be a contributing factor for contrasting estimates.  These activities, which can result in the atmospheric venting of some methane, often occur during the times when research aircraft measuring emissions would fly over the sites.  According to the researchers, methane emissions taken with different timescales can result in widely varying estimates.  (Temporal variability largely explains top-down/bottom-up difference in methane emission estimates from a natural gas production region)

From the National Oil & Gas Law Experts:
Tiffany Challe, New Book: Climate Change, Public Health, and the Law, Climate Law Blog (October 25, 2018)

Pennsylvania Notices
Public Hearings regarding: Air Quality Plan Approvals for Proposed Compressor Stations in Delaware, Bucks Counties(December 4, 2018)

Meeting CancellationEnvironmental Quality Board meeting for November 13, 2018 is cancelled. The next meeting is scheduled for December 18, 2018.

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 October 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!

Thursday, November 1, 2018

Shale Law in the Spotlight – Ohio Supreme Court Denies Ballot Proposition to Prohibit Oil and Gas Extraction Within the City of Columbus

Written by Chloe Marie – Research Specialist

Last week, we wrote about a Colorado ballot Proposition that will be considered by voters on November 6, 2018. In this article, we will discuss a ballot initiative that was proposed in the state of Ohio, but was ultimately not placed on the ballot. In our next Shale Law in the Spotlight article, we plan to address the results of oil and gas-related November ballot initiatives across the United States.

On June 26, 2018, the Columbus Bill of Rights – a group of volunteers comprised of Columbus residents – submitted to the Franklin County Board of Elections an initiative to establish a “Community Bill of Rights for Water, Soil, and Air Protection” for the City of Columbus, Ohio. This proposed initiative sought to amend the Columbus Bill of Rights Charter and would have resulted in the prohibition of any new oil and gas extraction activity or technology within the City of Columbus. It also sought to revoke any existing permit or license granted for the extraction of oil and gas within the city limits. The proposed initiative stated that anyone violating the prohibitions of the Columbus Community Bill of Rights committed a first-degree misdemeanor criminal offense and was subject to a fine and imprisonment to the extent allowed by applicable law.  

On July 9, 2018, the Franklin County Board of Elections (BOE) approved and certified 12,134 signatures to the initiative petition from Columbus voters, which qualified the initiative for the ballot. Consequently, the Columbus City Council voted unanimously on July 30, 2018, to place the proposed initiative on the ballot for the November 6, 2018, general election. Subsequently, however, Columbus citizens Loretta A. Settlemeyer and Robert J. Wall filed a protest with the BOE challenging the proposed initiative. On August 24, 2018, after hearing their arguments, the BOE chose to withdraw the initiative from the November 6 ballot concluding that “the Proposed Ordinance contains provisions that are purportedly beyond the power of the City of Columbus to legislate, per O.R.C. § 3501.38(M)(1) and that the Proposed Ordinance appeared to impose local regulations on drilling for oil and gas.”

As a result, on August 28, 2018, supporters of the proposed initiative filed a verified complaint for writ of mandamus before the Ohio Supreme Court challenging the BOE decision to withdraw the Columbus Community Bill of Rights initiative from the ballot. These Columbus residents requested the Supreme Court to order that the initiative be “immediately” put back on the November 6 general election ballot. Among their arguments, the initiative’s proponents argued that the BOE exceeded its powers in deciding whether the initiative should appear on the November 6 ballot. By doing so, the BOE violated the City of Columbus’s home rule powers under Article XVIII of the Ohio Constitution, Section 3 and 7. The Columbus residents also alleged that the City was well within its rights to enact the Community Bill of Rights initiative stating that the Columbus Charter should be interpreted as allowing the consideration of any initiative that is presented in the proper format with an adequate number of signatures.

On September 14, 2018, the Ohio Supreme Court issued an opinion denying the request of the Columbus residents for a writ of mandamus and held that “the board members did not abuse their discretion in finding that the proposed ballot measure is beyond the scope of Columbus’s legislative power.”  Supporter of the proposed initiative filed a motion of reconsideration in the Supreme Court of Ohio on September 17, 2018. These Columbus residents requested a review because the Supreme Court, in rendering their opinion, had relied on case law that predated legislation (House Bill 463) addressing the authority of the BOE to decide when a citizen initiative should be place on the ballot.

On October 5, 2018, the Ohio Supreme Court rejected this request for reconsideration and upheld its prior decision not to place the Community Bill of Rights initiative on the November 6 ballot. 




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