Shale Gas Weekly Review – June 10, 2016

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

Colorado State University Publishes a Study Addressing Spills on Agricultural Soil

On May 12, 2016, Colorado State University published a study in the American Chemical Society’s Environmental Science & Technology journal. The study, entitled “Spills of Hydraulic Fracturing Chemicals on Agricultural Topsoil: Biodegradation, Sorption, and Co-contaminant Interactions,” explores the potential impact of chemicals contained in hydraulic fracturing fluids on agricultural soils.

Butler County Court of Common Pleas Dismisses Landowner Lawsuit Against Delaware Riverkeeper Network and the Clean Air Council

On May, 25, 2016, Judge Yeager dismissed “in its entirety, with prejudice” a lawsuit by Dewey Home and Investment Properties, LLC and 12 other Middlesex Township shale, oil, and gas leaseholders. The plaintiffs claimed personal injury against Delaware Riverkeeper Network and the Clean Air Council for efforts opposing oil and gas development, including an appeal filed against Middlesex Township Zoning Hearing Board for modifying an ordinance that allowed drilling in most of the township. This lawsuit was originally brought before the Butler County Court of Common Pleas in 2015, however, Judge Horan dismissed the claim in September 2015 for failure to cite specifics and allowed the suit to be amended and refiled. In this ruling, Judge Yeager ruled that Delaware Riverkeeper Network and the Clean Air Council engaged in constitutionally protected activity and therefore dismissed the claim.

Shell Announces Decision to Build a Cracker Plant in Beaver County

On June, 7, 2016, Shell announced its decision to build a multibillion-dollar ethane cracker with polyethylene derivatives unit on the site of the former Horsehead zinc smelter in Beaver County, Pennsylvania. Main construction on the site is expected to begin in approximately 18 months. Additionally, Shell’s project is expected to bring new growth and jobs into the region, including an additional 6,000 workers to create the site and 600 permanent employees once construction is completed. More information is available here.

IEA Medium-Term Gas Market Report Suggests Gas Surplus to Continue

On June 8, 2016, the IEA released its Medium-Term Gas Market Report. The Report indicates that it may be the end of the decade before rebalancing begins for global natural gas markets, while global oil markets are expected to begin rebalancing by 2017. According to the IEA, “[s]lower generation growth, rock-bottom coal prices and robust deployment of renewables constrain gas’s ability to grow faster in today’s low-price environment. Reversing a long-standing trend, gas usage in power is projected to grow more slowly than total demand; its share of incremental demand falls to one-third compared with almost half between 2009 and 2015.”

BLM Postpones Oil and Gas Leases in San Juan Basin

In a statement released on June 6, 2016, the Bureau of Land Management announced that it would not be auctioning oil and gas leases on  “3 parcels totaling 2,122 acres in the San Juan Basin near Farmington, New Mexico” at the October 19, 2016 sale. Pending the completion of “the NEPA and tribal consultation process,” BLM will consider auctioning the parcels at a later sale.

South Carolina House of Representatives Votes to Ban Private Oil Companies From Seizing Private Property For Pipelines

On June 1, 2016, the South Carolina House of Representatives voted 89-3 to bar private oil companies from condemning private land to build pipelines. This bill was proposed following Kinder Morgan Company’s plan to run a 360-mile petroleum pipeline from northwest South Carolina to north Florida. The proposed legislation “disallows the use of eminent domain by private, for-profit pipeline companies . . . that are not defined as public utility.” The Senate concurred with the amendments to the bill and subsequently enrolled the bill for ratification. Additionally, the bill has a sunset provision so that these provisions are set to expire on June 30, 2019, unless the General Assembly makes other arrangements. More information is available here.

The Greek Ministry of Environment and Energy gives Trans Adriatic Pipeline Installation Permit

In a report on June 8, 2016, TAP announced that, thanks to the Installation Permit, in conjunction with the Installation Act issued in January, pipeline construction activities should be able to begin on schedule. According to TAP, the pipeline will “transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The approximately 878 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.”

New Brunswick’s Imposed Moratorium on Hydraulic Fracturing will Remain in Place Indefinitely

On May 27, 2016, Energy and Mines Minister, Donald Arseneault, announced that New Brunswick’s moratorium on hydraulic fracturing, imposed in December 2014, would continue indefinitely. The New Brunswick Commission on Hydraulic Fracturing created a three-volume document that details the recommended procedure that New Brunswick should follow if the moratorium on hydraulic fracturing was lifted. However, based on this study, the moratorium on hydraulic fracturing was indefinitely extended  because Arseneault found that it was clear that the industry had not met the following five conditions required to lift the moratorium on hydraulic fracturing: “social license” that companies have earned the public’s trust in keeping them safe; a process to consult with First Nations; a plan that mitigates and addresses wastewater disposal; credible information regarding the impacts of hydraulic fracturing; and development of a royalty structure.

The Scottish Parliament Votes 32-29 to Ban Hydraulic Fracturing

On June 1, 2016, the Scottish Parliament voted to ban hydraulic fracturing by a vote of 32-29; the Scottish National Party abstained from the vote. Earlier this year, the SNP placed a moratorium on hydraulic fracturing that ceased all hydraulic fracturing in Scotland while research was conducted on environmental impacts with planned public consultation. Angus MacDonald, a member of the SNP, stated during the Parliament meeting that discussed the bill, “unless it can be proven beyond doubt that there is no risk to health, communities or the environment, there will be no fracking . . . in Scotland. That is a much more sensible approach to take than  . . . calling for an immediate outright ban that could result in a judicial review and a judge deciding whether fracking would go ahead in Scotland.” Conversely, bill supporters in the Scottish Parliament believe SNP’s moratorium on hydraulic fracturing is not enough, and a permanent ban is the best way to meet Scotland’s climate change goals and protect the environment. This Scottish Parliament vote is not binding on the SNP’s moratorium.

Written by Chelsea Wilson and Jessica Deyoe - Research Assistants