Monday, November 13, 2017

Shale Law Weekly Review - November 13, 2017

Written by Jacqueline Schweichler - Education Programs Coordinator

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

Pipelines: Ohio Files Lawsuit Against Rover Pipeline for Illegal Discharge of Drilling Fluid
On November 3, 2017, Ohio Attorney General Mike DeWine filed suit on behalf of the Ohio Environmental Protection Agency against Rover Pipeline LLC for allegedly polluting waters of the state during construction of the Rover Pipeline. The complaint alleges that Rover illegally discharged millions of gallons of drilling fluids on multiple occasions across various counties, including in the protected wetlands of Stark County. The complaint adds that Rover had no permits for these discharges. The Rover Pipeline is a 713-mile natural gas pipeline designed to stretch from the Marcellus and Utica shale areas to Ohio, Michigan, and areas across the U.S.

Local Regulation: Bowling Green Rejects Ballot Initiative that Would Ban More Pipelines
On November 7, 2017, the citizens of Bowling Green, Ohio, voted against a ballot initiative that would have banned new infrastructure for fossil fuel transportation. The ballot initiative noted that the continued extraction of fossil fuels is causing increased greenhouse gas concentrations leading to climate destabilization and human suffering. The purpose of the initiative was to protect “community rights to a healthy environment and livable climate.” The ballot initiative, Community Rights to a Healthy Environment and Livable Climate, lost by a vote of 3,408 against, and 2,145 in favor.

State Regulation: Drilling Company Requests Revocation of their own Hydraulic Fracturing Permit in Illinois
On November 1, 2017, the Illinois Department of Natural Resources, upon request, cancelled Woolsey Operating Company’s high volume horizontal hydraulic fracturing permit. The permit was vacated after Woolsey requested on October 30 that their application be withdrawn. According to the Chicago Tribune, Woolsey stated that they declined to use the permit due to market conditions and the “burdensome and costly” state regulations.

Pipelines: Federal Court Refuses to Halt Construction of Atlantic Sunrise Pipeline
On November 8, 2017, the U.S. Court of Appeals for the District of Columbia issued a court order denying a request by several environmental groups to halt construction of the Atlantic Sunrise Pipeline, according to Law 360 (Allegheny Defense Project et al. v. Federal Energy Regulatory Commission, 17-1098). The news comes immediately after a temporary stay had been issued just two days prior. The purpose of the temporary stay was to give the court opportunity to consider the emergency motion to halt construction of the pipeline.

National Policy: EPA Requests Comment on Three Month Stay for Emission Standards Rule
On November 8, 2017, the U.S. Environmental Protection Agency (EPA) published two notices of data availability relating to the EPA’s proposed stay of the rule, Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources.  The purpose of the notice, Stay of Certain Requirements, is to provide additional information on requirements in the rule for stakeholder clarification and requests comment on this information. The rule requirements in question include “implementing the fugitive emissions requirements, well site pneumatic pump standards, and the requirements for certification of closed vent systems by a professional engineer.” The other notice, “Three Month Stay of Certain Requirements,” provides data in support of a three month stay of the above requirements.

Pipelines: FERC Grants Permission to NEXUS Pipeline for Horizontal Drilling Locations
On November 6, 2017, the Federal Energy Regulatory Commission granted permission to NEXUS Gas Transmission LLC to proceed with construction at five additional horizontal drilling locations. FERC stated that the Implementation Plan and all supplemental filings comply with Environmental Conditions and the Commission’s Order Issuing Certificates and Granting Abandonment. Furthermore, FERC wrote that NEXUS must comply with all applicable terms and conditions during construction.

Climate Change: Federal Report Analyzes Fossil Fuel Use to Determine Human Impact on Climate Change
On November 3, 2017, the U.S. Global Change Research Program released the Fourth National Climate Assessment (NCA4) which is a report mandated by the Global Change Research Act of 1990.  The purpose of the NCA4 report is to provide a scientific assessment on climate change, focusing on the United States, in order to assess risks for informed decision-making responses. The report analyzes the increase of greenhouse gases, including the increase in CO2 emissions from fossil fuel combustion.  Additionally, the report found an increased frequency of climate-related extreme weather events that has cost the U.S. over $1.1 trillion since 1980. The report concludes “that it is extremely likely that human activities, especially emissions of greenhouse gases, are the dominant cause of the observed warming since the mid-20th century.”

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See our Global Shale Law Compendium and this week’s article, Shale Governance in Pennsylvania (2013 to 2016).

Check out this week’s Shale Law in the Spotlight: UPDATE - Dakota Access Pipeline and its Current Legal Developments

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Friday, November 10, 2017

Global Shale Law Compendium: Shale Law Governance in Pennsylvania – Legislation from 2013 to 2016

Written by Chloe Marie – Research Fellow

The Global Shale Law Compendium series addresses legal developments and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will focus on the legal, policy, and governance issues related to shale gas development in the United States, and more specifically in the state of Pennsylvania.

Given the long history of oil and gas development in Pennsylvania, the state already had extensive legislation in place governing oil and gas exploration and production prior to the onset of shale development. As this type of unconventional development became of great significance for Pennsylvania, the state General Assembly passed several laws to address issues that had arisen. In a prior article, we set out all statutes applicable to unconventional oil and gas development that were enacted in Pennsylvania during the time period from 2010 through 2012. This article will address the statutes enacted from 2013 through 2016.

Statutes enacted during the 2013-2014 legislative session:

·       Act 66 of July 9, 2013 – Oil and Gas Lease Act (2013 PA S.B. 259)

The Pennsylvania General Assembly signed into law the Oil and Gas Lease Act amending the Guaranteed Minimum Royalty Act of 1979. The Oil and Gas Lease Act provides for further disclosure of payment information to be included into periodic financial statements or check stubs sent to royalty owners. Furthermore, the Act allows the joint operation of contiguous parcels for horizontal drilling unless explicitly prohibited in the oil and gas leases as well as accumulated payment when production proceeds for the year total less than $100.

·       Act 152 of October 22, 2014 – Recording of Surrender Documents from Oil and Natural Gas Lease Act (2014 PA H.B. 402)

The Recording of Surrender Documents from Oil and Natural Gas Lease Act requires a lessee to deliver a recordable surrender document to the lessor within 30 days following the termination, expiration or cancellation of a lease. The purpose of this formal release process is to increase the efficiency of leasing oil and natural gas rights in Pennsylvania.

·       Act 173 of October 22, 2014 – Unconventional Well Report Act (2014 PA H.B. 2278)

The Pennsylvania General Assembly enacted the Unconventional Well Report Act requiring unconventional well operators to submit to the Pennsylvania DEP monthly reports specifying well-specific production amounts. These reports are publicly available on DEP’s Internet website in an effort to ensure that landowners or royalty owners receive proper compensation for the produced oil and gas under their leases. The Unconventional Well Report Act also repealed 58 Pa.C.S. § 3222(a.1) requiring biannual reporting requirements.

Statutes enacted during the 2015-2016 legislative session:

·       Act 47 of October 8, 2015 – Treated Mine Water Act (2015 PA S.B. 875)

The Pennsylvania General Assembly enacted the Treated Mine Water Act specifically addressing the use of treated mine water for oil and gas development. The Treated Mine Water Act gives immunity from legal actions to mine operators who provide treated mine water from a permitted mining activity in case of harm resulting from the use of the water.  This immunity is provided so long as the water is used for oil and gas development outside the boundaries of the permitting mining activity and the mine operator is not the one using the water.

The Treated Mine Water Act also provides legal immunity to the person who acquires treated mine water from a mine operator for the treatment or abatement of the mine drainage or mine pool water. Neither party, however, is immune from liability in the event of unlawful spills or releases of the water.

·       Act 47 of June 23, 2016 – Amendments to Title 66 Public Utilities Code (2016 PA H.B. 57)

The Pennsylvania General Assembly amended certain provisions of Title 66 of the Public Utilities Code and altered the method of calculating interest rates associated with the recovery of purchased gas costs. The legislation also eliminated migration charge for consumers who select a different gas supplier and allowed distribution companies to recover all reasonable costs for establishing a consumer choice program.

·       Act 52 of June 23, 2016 – Pennsylvania Grade Crude Development Act (2016 PA S.B. 279)

The Pennsylvania Grade Crude Development Act created the Pennsylvania Grade Crude Development Advisory Council. The Advisory Council, among other things, is responsible to make recommendations for technical regulatory requirements, but also review and comment on all technical regulations proposed under 58 Pa. C.S., and “explore development” of the regulatory system that is specifically applicable to conventional development. Furthermore, the Advisory Council is required to submit an annual report addressing the Council’s activities and recommendations to the state Governor, House and Senate leadership, the chairpersons of the House and Senate Environmental Resources and Energy Committees and the DEP secretary.

In addition, this Act requires DEP to consult with the council on “all policies and technical regulations” promulgated under 58 Pa. C.S. as well as requiring EQB to undertake rulemaking for conventional wells “separately and independently” from that of unconventional wells.

Wednesday, November 8, 2017

Shale Law in the Spotlight: UPDATE – Dakota Access Pipeline and its Current Legal Developments

Written by Chloe Marie – Research Fellow

This article provides an update on the latest legal developments related to the Dakota Access Pipeline. This article supplements the update that was posted to this blog in November 2016.

U.S. Army Corps of Engineers

On July 25, 2016, the U.S. Army Corps of Engineers granted Section 408 permission allowing the proposed Dakota Access pipeline project to cross federal lands administered by the Corps near Lake Oahe, North Dakota. This decision was accompanied by a Finding of No Significant Impact (FONSI) based on an Environmental Assessment (EA) issued on the same day. The Corps concluded that the proposed pipeline project “is not injurious to the public interest” and stated that it had “coordinated closely with Dakota Access to avoid, mitigate and minimize potential impacts of the [proposed project] so that the pipeline would not impair the usefulness of the projects and the impacts to the environment would be temporary and not significant.” The Corps thus “determined that preparation of an Environmental Impact Statement is not required.”

On September 9, 2016, however, the U.S. Department of Justice, together with the U.S. Department of Army and the Department of the Interior issued a joint statement declaring that, because of the importance of the legal issues, “the Army will not authorize constructing the Dakota Access Pipeline on Corps land bordering or under Lake Oahe until it can determine whether it will need to reconsider any of its previous decisions regarding the Lake Oahe site under the National Environmental Policy Act (NEPA) or other federal laws.” On November 14, 2016, the Corps issued a statement indicating that “additional discussion and analysis” is needed to better understand whether to grant Dakota Access with an easement to access Corps-managed land near Lake Oahe.

Following this statement, on December 4, 2016, the Corps denied the grant of such easement in order to explore alternative routes for the Dakota Access pipeline crossing. Consequently, the Corps issued on January 18, 2017, a Notice of Intent to prepare an Environmental Impact Statement (EIS) in connection with Dakota Access, LLC’s request for an easement to cross Lake Oahe. The Notice of Intent informs that the Corps intends to prepare an Environmental Impact Statement (EIS) in order to identify the potential impacts of the easement on the environment and consider alternative routes.

President Donald Trump released on January 24, 2017, a Presidential Memorandum directing the Corps to consider whether to withdraw the Notice of Intent to prepare an EIS. As a result, on February 8, 2017, the Corps granted an easement to Dakota Access to install a portion of the pipeline below the Lake Oahe. The Press Release issued at that time states that “the granting of this easement follows the February 7th Secretary of the Army decision to terminate the Notice of Intent to Perform an Environmental Impact Statement and notification to Congress of the Army’s intent to grant an easement to Dakota Access for the Lake Oahe crossing.”

The Yankton Sioux Tribe and Oglala Sioux Tribe lawsuits

On September 8, 2016, the Yankton Sioux Tribe filed a complaint for injunctive and declaratory relief against the U.S. Army Corps of Engineers and the U.S. Fish and Wildlife Service challenging, among other things, the Corps’ July 2016 EA and FONSI as well as the March 2012 Nationwide Permits. The complaint states that “of particular importance to [the Yankton Sioux Tribe] is the location where DAPL crosses the James River” before adding that “from time immemorial, the Yankton camped up and down the banks of the James River and as a consequence, burial, cultural, and historical sites remain along the James River that are at immediate risk of irreparable injury as a result of Defendants’ actions and Dakota Access, LLP’s planned activities.”

Later on, the Oglala Sioux Tribe also brought an action against the U.S. Army Corps of Engineers on February 11, 2017, alleging that the pipeline crossing at Lake Oahe would impair the Tribe’s water supply, part of the Mni Wiconi water pipeline. In addition, the Tribe asked the Court for a declaration that “the EA/FONSI are inadequate and that the Corps must complete an EIS that analyzes impacts to the Tribe’s Treaty rights and its rights in the Mni Wiconi Project as required by NEPA and the Mineral Leasing Act …”

On March 16, 2017, the U.S. District Court granted the Corps’ motion to consolidate Yankton Sioux Tribe v. U.S. Army Corps of Engineer, docket 1:16-cv-01796 and Oglala Sioux Tribe v. U.S. Army Corps of Engineers, docket no. 1:17-cv-00267 with Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, docket 1:16-cv-01534. All filings in these consolidated cases are now only made in the Standing Rock docket.

The Standing Rock Sioux Tribe and Cheyenne River Sioux Tribe lawsuit

On August 10, 2016, the Cheyenne River Sioux Tribe filed a motion to intervene in support of the Standing Rock Sioux Tribe pointing out that the pipeline construction will take place on ancestral lands of the Cheyenne River Sioux Tribe, and thus the Corps should have consulted the Tribe. The U.S. District Court later granted such motion allowing the Cheyenne River to participate as a party in this ongoing litigation.

Since our last article dated November 2016 addressing the status of the Dakota Access pipeline project, Dakota Access filed a motion for summary judgment on December 5, 2016, seeking a declaration under the Declaratory Judgment Act that the Corps granted the company an easement to construct, operate and maintain the Dakota Access pipeline. Dakota Access argued that the Corps already received such easement on July 25, 2016, through Section 408 permission to cross federal lands at Lake Oahe and “that decision … is the grant of a right-of-way.” Dakota Access added that “nothing authorizes the Corps to invoke good policy after the process is complete, especially where the Corps agrees that every legal requirement was satisfied in reaching an earlier final decision.”

On January 6, 2017, the Standing Rock Sioux Tribe, together with the Cheyenne River Sioux Tribe and the Corps, filed motions to dismiss Dakota Access’ November 2016 cross-claim for failure to state a claim upon which relief can be granted. The Corps pointed out that the administrative decision-making process to grant an easement had yet to be completed under the Mineral Leasing Act. Both Tribes alleged that the Corps did not render a final decision as to the easement.

The Corps also opposed Dakota Access’ motion for summary judgment and both Tribes cross-moved for summary judgment. The Standing Rock Tribe essentially asked whether Dakota Access already obtained the right to construct the pipeline on Corps-managed lands near Lake Oahe under Section 185 of the Mineral Leasing Act while the Cheyenne River Tribe alleged that there was no genuine issue of material fact and that the Tribes were entitled to judgment as a matter of law.  The court subsequently denied this motion for summary for summary judgment as well as the cross-motions.

The Cheyenne River Sioux Tribe filed a motion for preliminary injunction and a temporary restraining order barring Dakota Access from construction and drilling under Lake Oahe following the easement issued by the Corps on February 8, 2017. The U.S. District Court, however, denied the Tribe’s motion for preliminary injunction on March 7, 2017, holding that “the extraordinary relief requested is not appropriate in light of both the equitable doctrine of laches and the Tribe’s unlikelihood of success on the merits.”

On February 14, 2017, the Standing Rock Tribe filed a motion for partial summary judgment requesting the Court to “hold unlawful and set aside” the granting of the easement and related permit decisions on the grounds that the Corps failed to prepare an EIS and thus violated the National Environmental Policy Act (NEPA), that such granting is “arbitrary, capricious, and contrary to law,” and that the Oahe crossing does not qualify for streamlined nationwide permit 12. A few days later, the Cheyenne River Tribe also filed a motion for partial summary judgment on February 22, 2017, asking the Court to declare that issuance of section 408 permission was made in violation of the Flood Control Act and Mineral Leasing Act, and that the Corps did not fulfill its duty to consult with the Tribe “in a meaningful way pre-decisionally on any action that has the potential to substantially affect trust resources or treaty rights.”

On June 14, 2017, the U.S. District Court granted in part and denied in part the Standing Rock Tribe’s Motion for Partial Summary Judgment, and granted in part and denied in part the Corps’ corresponding Cross-Motion for Partial Summary Judgment. In addition, the Court denied in part the Cheyenne River Tribe’s Motion for Partial Summary Judgment and granted in part the Corps’ and Dakota Access’ Cross-Motion for Partial Summary Judgment. The Court explained that the Corps failed to fully follow the NEPA process when it determined that the pipeline project would not have a significant environmental impact and asked parties to submit further briefing on the question whether or not the Corps’ EA should be vacated.

To this question, the U.S. District Court answered it in the negative in an Order & Memorandum Opinion dated October 11, 2017. The Court refused to halt further construction of the pipeline finding that the Corps’ would be able to justify its previous decision not to conduct a full environmental review. The Court, however, declared that “compliance with NEPA cannot be reduced to a bureaucratic formality, and the Court expects the Corps not to treat remand as an exercise in filling out the proper paperwork post hoc.

Stay tuned for further legal developments!