Monday, August 22, 2016

Shale Gas Weekly Review – August 19, 2016

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

EIA Projects the United States to be Net Exporter of Natural Gas
August 9, 2016 - The EIA released their Short-term Energy Outlook report on August 9, 2016 and predicted a 0.6% rise in natural gas production in 2016. The same report predicts a production increase of 2.9% in 2017. Production increases, decreases in natural gas imports, and increases in gross exports lead to expectations that by the second quarter of 2017 the United States will be a net exporter of natural gas.

Whatcom County Approves 60-day Moratorium on New Fossil Fuel Projects
On August 9, 2016 the Whatcom County Council voted for an emergency 60-day moratorium that would prohibit filing and acceptance of any new permits for projects related to “unrefined fossil fuels.” The moratorium is a prohibition on all crude oil projects as well as those involving methane, propane, raw/diluted bitumen, and liquid or gaseous natural gas. The ordinance expresses an intent to reduce risks and damages associated with gas and oil production with the interest of promoting the health and safety of the environment and the residents in Whatcom County.

The EPA Science Advisory Board Responds to EPA Draft Hydraulic Fracturing Study
In a letter dated August 11, 2016, the EPA Science Advisory Board (SAB) responded to the EPA draft “Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources”. The SAB generally requested greater analysis and more facts to support conclusions in different places in the assessment.  They found the EPA’s approach to be “comprehensive but lacking in several areas.” The SAB’s letter includes a thorough list of areas they recommend the EPA should elaborate  upon, including local impacts, risk scenarios and toxicity data.  

Discussions Continue Over Sunoco’s Mariner East 2 Plan
The Pennsylvania Department of Environmental Protection held a public meeting in West Chester on August 10, 2016 to discuss Sunoco’s plan to build two natural gas pipelines. Opposition to the pipelines are reflected in the pending lawsuit against Sunoco by the Clean Air Council.

New Study Shows How to Accurately Pinpoint Methane Emissions to Aid in Leak Prevention
A study published August 15, 2016 in the Proceedings of the National Academy of Sciences concluded that aircraft sensors can be used to find methane leaks coming from various sources, including oil and gas wells. The study took place in New Mexico and Colorado where they discovered 250 methane leaks from fossil fuel sources. More than 50% of the emissions came from only 10% of the observed sources. According to the researchers, this technology could be used to find and  repair major natural gas leaks with more precision.

EIA Projects Decline in Shale Gas Production for September
On August 15, 2016, the EIA released a Drilling Productivity Report for the major shale gas producing regions. According to the report, most shale gas producing regions will likely experience a decrease in production from August to September. The Eagle Ford region is expected to decrease production by 212 million cubic feet/day and the Niobrara shale is predicted to decrease by 69 million cubic feet/day. Meanwhile, the Marcellus and Haynesville production should only decline by 33 and 36 million cubic feet/day, respectively. The only increase in production will be in the Utica shale with an increase of 9 million cubic feet/day.

Injection Well Ordinance Case Settled Between Seneca Resources and Highland Township
A case between Highland Township in Elk County and Seneca Resources Corporation was settled on August 11th. The case concerned Highland Township’s Community Bill of Rights ordinance that prohibited natural gas wastewater injection wells. The EPA had previously approved Seneca’s injection well which led to the enactment of Highland Township’s ordinance. The stipulation and consent decree stated that the ordinance was “an impermissible exercise of Highland’s legislative authority.” Seneca Resources will now be able to proceed with the injection well facility. (Seneca Resources Corporation v. Highland Township, Elk County Pennsylvania C.A. No. 1:15-cv-60-SPB)

District Court Remands Commonwealth of Pennsylvania v. Chesapeake Energy Corp. to State Court
The United States District Court for the Middle District of Pennsylvania issued an order on August 15, 2016, granting the Commonwealth's motion to remand the case back to state court. The court held that the Commonwealth’s references in their complaint to the Sherman Act and Federal Trade Commission Act did not necessarily give rise to a federal claim. However, the court also ruled that Chesapeake’s motion “did not lack an objectively reasonable basis” (Martin v. Franklin Capital Corp.) and therefore court costs and fees were not awarded.

Written by Jacqueline Schweichler - Research Assistant

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