Monday, February 18, 2019

Shale Law Weekly Review - February 18, 2019

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: Pennsylvania DEP Suspends Permit Approvals for Energy Transfer Pipelines
On February 8, 2019, the Pennsylvania Department of Environmental Protection announced that it has suspended all permit reviews and approvals for Energy Transfer pipelines in the state. DEP Secretary Patrick McDonnell stated that this order was due to a lack of compliance with a previous order issued in October 2018 after an explosion along the Revolution pipeline in September of that year. Construction on the Revolution pipeline will remain on hold and additional construction on the Mariner East 2 pipeline has also been suspended.

Pipelines: FERC Allows Valley Crossing Pipeline to Commence Service in Texas
On February 7, 2019, the Federal Energy Regulatory Commission gave its final approval for the Valley Crossing Pipeline to commence service in southern Texas. The pipeline, which is designed to carry natural gas from the Corpus Christi area to the Mexican border, has a capacity of roughly 2.6 billion cubic feet of gas per day. The pipeline turns east from a compressor station in Brownsville and extends roughly thirty miles into the Gulf of Mexico before connecting with another pipeline which carries the natural gas to Mexican markets.

Pipelines: Federal Agencies Petition for Rehearing in Atlantic Coast Pipeline Case
On February 11, 2019, the United States Forest Service and the National Park Service jointly petitioned for en banc and panel rehearing of a case involving the Atlantic Coast Pipeline and its attempted construction on federal land in Virginia and West Virginia (Cowpasture River Preservation Association v. United States Forest Service, No. 18-1144).  The petitioning agencies argued that the U.S. Court of Appeals for the Fourth Circuit should reverse part of the decision, which held that land surrounding the Appalachian National Scenic Trail is “land within the National Park System.” The agencies argue that this would raise issues regarding many of the existing permits for operations on this land, including power transmission lines and grazing areas.  The agencies asked the court to preclude that portion of the holding from having any precedential effect on subsequent cases. 

Landowner Royalties: EQT Agrees to $53.5 Million Settlement With West Virginia Landowners Alleging Nonpayment of Royalties
On February 7, 2019, a group of West Virginia landowners and EQT Production Co. (EQT) released a settlement agreement reached as part of a class-action lawsuit based on nonpayment of royalties (The Kay Company, LLC v. EQT Production Company, No. 1-13-CV-151).  This class action lawsuit was brought by landowners in 2013, who alleged fraud, violation of the flat rate royalty statute, and improper post-production cost deductions from royalty payments.  As part of the agreement, EQT will pay $53.5 million into a settlement fund, to be distributed to the landowners in the class. Additionally, EQT has agreed to stop deducting certain post-production costs from royalty payments in the future.

From the National Oil & Gas Law Experts:
Charles Sartain, The Green New Deal: It’s Not Just About Energy, Energy and the Law (February 13, 2019)

Meghan Nylin, Anti-SLAPP in the Oil Patch, Oil and Gas Update (February 15, 2019)

John McFarland, Big Oil and Climate Change, Oil and Gas Lawyer Blog (February 11, 2019)

Pennsylvania Legislation:
HB 492: would require the PUC to create a toll-free hotline for reporting natural gas pipeline emergencies (Referred to Consumer Affairs - Feb. 12, 2019)

Meetings: Joint public hearing on PA Farm Bill proposal (Agriculture & Rural Affairs - Mar. 20, 2019)

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Wednesday, February 13, 2019

Shale Law in the Spotlight – Atlantic Coast Pipeline – Update of Legal Developments Regarding Pipeline Construction

Written by Chloe Marie – Research Specialist

The Atlantic Coast Pipeline (ACP) project is a 600-mile underground pipeline project designed to carry natural gas from wells located in Harrison County, West Virginia, through Virginia to a terminal facility in Robeson County, North Carolina. On January 9, we posted an article reviewing the timeline of actions taken by various federal and state regulatory entities involved with the construction of the pipeline. We posted three separate articles – on January 11, January 17, and February 1 – addressing legal challenges that have been filed opposing the proposed Atlantic Coast Pipeline (ACP) project. Where relevant, in these articles, we also addressed additional administrative actions taken by governmental entities in response to the legal challenges. In this article, we address legal developments that have taken place since we wrote the previous articles in this series.

Update on Appalachian Voices v. State Water Control Board et al., U.S. Court of Appeals for the Fourth Circuit (Docket no. 18-1077)

In an opinion dated January 14, 2019, the U.S. Court of Appeals for the Fourth Circuit denied a petition for review of the Section 401 Water Quality Certification for the Atlantic Coast Pipeline project issued by the Virginia State Water Control Board on December 20, 2017. In January 2018, Appalachian Voices and twelve other environmental organizations had sought judicial review of the Water Quality Certification alleging that it was “arbitrary and capricious” and questioning the Board’s “reasonable assurance” that activities relating to the pipeline construction would not violate Virginia water quality standards.

The Court of Appeals held that, even though “[g]overnmental agencies can always take additional steps to increase the protection of the environment … [t]here is no indication that the State Agencies did not consider relevant factors or that they clearly made an error of judgment” in issuing the certification.

Sierra Club v. U.S. Dept. of the Interior, U.S. Court of Appeals for the Fourth Circuit (Docket no. 18-2095) and Update on Sierra Club v. National Park Service, U.S. Court of Appeals for the Fourth Circuit (Docket no. 18-1082)

On August 6, 2018, and December 13, 2018, respectively, the U.S. Court of Appeals for the Fourth Circuit issued rulings vacating right-of-way permits – one granted by the National Park Service in December 2017 authorizing construction of the Atlantic Coast Pipeline underneath the Blue Ridge Parkway and another granted by the U.S. Forest Service in January 2018 allowing Atlantic Coast Pipeline, LLC to cross the Appalachian National Scenic Trail (ANST), which is located along the Parkway. The vacation of these right-of-way permits halted all activities relating to the pipeline construction and operation. In both cases – Sierra Club v. National Park Service (Docket no. 18-1082) and Cowpasture River Preservation v. Forest Service (Docket no. 18-1144) – the Court of Appeals ruled that, under the Mineral Leasing Act, neither agency had authority to issue the requested permit.

On September 14, 2018, the National Park Service issued a new right-of-way permit again authorizing the crossing of the Blue Ridge Parkway. This action led Sierra Club and Virginia Wilderness Committee to once again request judicial review of said right-of-way permit by the Court of Appeals. (Sierra Club v. U.S. Dept. of the Interior, Docket no. 18-2095). Petitioners alleged that, in issuing that permit, the National Park Service relied on environmental and cultural impact studies prepared for the earlier vacated permit as well as the mere existence of a valid Forest Service permit approving the crossing of the adjacent George Washington National Forest Land.

On January 16, 2019, the National Park Service filed a motion for remand to vacate and reconsider the Atlantic Coast Pipeline’s second right-of-way permit application for the Blue Ridge Parkway segment. The motion argued that “[i]n light of Cowpasture’s vacatur of the Forest Service’s permit and ruling that the Forest Service lacks authority under the Mineral Leasing Act to issue that permit, the Park Service requests that the Court remand the permits challenged in the present petition.” In the motion, the National Park Service indicated that, upon remand, it would review whether issuance of the 2018 permit was indeed justified in the Parkway area. On January 23, 2019, the U.S. Court of Appeals for the Fourth Circuit granted such motion.

Friends of Buckingham v. State Air Pollution Control, U.S. Court of Appeals for the Fourth Circuit (Docket no. 19-1152)

On February 8, 2019, a group of citizens from Buckingham County, Virginia, filed a lawsuit against both the Virginia Department of Environmental Quality and the Virginia Air Pollution Control Board challenging their decisions to approve the Buckingham Compressor Station minor new source review air permit issued on January 9, 2019. This citizens group – Friends of Buckingham – petitioned the U.S. Court of Appeals for the Fourth Circuit for judicial review of said permit.

According to Friends of Buckingham, “[m]isleading claims by state officials undermine the basis for the Virginia State Air Pollution Control Board’s Jan[uary] 8 decision to approve a permit for a natural gas compressor station in Union Hill …” They further claimed that “state Department of Environmental Quality staff asserted that because local air concentrations of fine particulate matter are now, and will continue to be, much better than in the rest of the state – ‘in top 10 percent of clean air,’ with only ‘marginal’ changes caused by the compressor station – there can be no disproportionate impact.”

Stay tuned for further legal developments!

Please see below for a listing of references that have been relied upon for this article as well as prior Shale Law in the Spotlight articles addressing the Atlantic Coast Pipeline:

Virginia Administrative Documents

West Virginia Administrative Documents

Appalachian Voices et al. v. FERC (Docket no. 18-1114)

Appalachian Voices v. State Water Control Board (Docket no. 18-1077)

Cowpasture River Preservation v. Forest Service (Docket no. 18-1144)

Defenders of Wildlife v. U.S. Dept. of the Interior (Docket no. 18-1083)

Defenders of Wildlife v. U.S. Dept. of the Interior (Docket no. 18-2090)

Friends of Buckingham v. State Air Pollution Control (Docket no. 19-1152)

Sierra Club v. National Park Service (Docket no. 18-1082)

Sierra Club v. U.S. Army Corps of Engineers (Docket no. 18-1743)

Sierra Club v. U.S. Army Corps of Engineers (Docket no. 18-2273)

Additional Resources on this topic from the Center for Agricultural and Shale Law:

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