The following information is an update of recent,
local, state, national, and international legal developments relevant to shale
gas:
Another Royalty
Lawsuit Filed Against Chesapeake Energy Corp.
On March 8, 2015, a family who owns mineral rights in
the Eagle Ford Shale Play brought an action against Chesapeake Energy Corp. for
breach of contract in the Texas 343rd District Court. Plaintiffs
argued that Chesapeake Energy Corp. violated specific lease terms by failing to
pay adequate royalties. More information on the case Dilworth v. Chesapeake Operating, LLC, et al. is available at
docket no. M-16-0011-CV-C.
Pennsylvania
Auditor General is Performing an Impact Fee Audit
On March 9, 2016, Pennsylvania Auditor General Eugene
DePasquale announced that he would perform an audit of the Pennsylvania Public
Utility Commission (PUC)’s administration and distribution of the impact fee
revenue provided under Act 13 of 2012. In a news release, PA Auditor Eugene DePasquale declared that one of
the audit’s main objectives is to determine whether the counties and
municipalities have properly spent the money allocated under Act 13. The audit
period started on February 14, 2012.
New Mexico Oil
Conservation Division Orders the Closure of Disposal Wells in Southeast New
Mexico
On March 9, 2016, the New Mexico State Land Office issued a Cease and Desist Order against Texas-based Company
Siana Operating LLC alleging that the company’s drilling activities in Lea
County caused environmental damages on state trust lands near the town of
Eunice. In the meantime, the New Mexico Oil Conservation Division ordered Siana
Operating LLC to shut down multiple wastewater injection wells close to the
accident site until a hearing scheduled on March 31.
U.S. Army Corps
of Engineers Announces Natural Gas Drilling Exclusion Zone in Northern Texas
On March 15, 2016, the U.S. Army Corps of Engineers announced that it decided to extend the natural gas drilling
exclusion zone at Joe Pool Dam located in northern Texas. The Army Corps
previously agreed on a 3,000-foot exclusion zone based on a study results but finally adopted a 4,000-foot exclusion
zone after the release of an independent external peer review. The Army Corps
added that they also would be working on mitigating the effects of induced
seismicity “by limiting injection wells within five miles of Joe Pool Dam.”
COGCC Orders
the Closure of 40 Operating Wells in Southwest Colorado
On February 23, 2015, the Colorado Oil and Gas
Conservation Commission (COGCC) issued a Cease and Desist Order against Hoshi Energy, LLC
and Atom Petroleum, LLC, alleging that the companies illegally operated certain
wells located in La Plata County, Colorado, by failing to pay insurance fees.
This failure led to multiple surface operations, pumping and venting
violations. As a result, an estimated 40 wells have been shut down.
U.S. Department
of Interior Cancels Oil and Gas Lease on Montana Tribal Lands
On March 17, 2015, Secretary of the Interior Sally
Jewell announced that the Bureau of Land Management (BLM) has cancelled Solenex
LLC’s right to develop oil and gas resources in the Badge-Two Medicine area
located in the Lewis and Clark National Forest, Montana. In a Press Release, the U.S. Department of Interior declared that “the
Solenex lease was improperly issued in violation of the National Environmental
Policy Act and the National Historical Preservation Act.” The decision taken by
Sally Jewell comes after approximately two years of litigation between Solenex
LLC and the U.S. Department of Interior. More information on the case Solenex LLC v. Jewell et al. can be
found at docket no. 1:13-cv-00993.
Canadian Study
Finds Significant Unconventional Gas Reserves in the Liard Basin
In March 2016, five Canadian organizational entities
released a study entitled “the Unconventional Gas Resources of
Mississippian-Devonian Shales in the Liard Basin of British Columbia, the
Northwest Territories, and Yukon.” The researchers found that “the ultimate
potential for marketable unconventional gas in the Liard Basin is estimated to
be very large, with expected volumes of 6 196 billion m³ (219 Tcf).”
Written by Chloe Marie - Research Fellow
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