Tuesday, November 22, 2016

Shale Law Weekly Review - November 22, 2016

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

Court Awards York County Property Owner $6,000 for Pipeline Easement Compensation
On November 17, 2016, the U.S. Middle District Court awarded a property owner in York County $6,000 as compensation for a pipeline easement, according to PennLive. The article explains that the property owner, Elizabeth Herr, had originally been offered $5,647 by Columbia Gas Transmission to use the easement. PennLive reports that Herr’s attorney was seeking $900,000 due to the reduction in property value as a result of the pipeline’s presence. This case was originally filed in 2013 by Columbia Gas when they were unable to negotiate easements with several property owners, including Elizabeth Herr. (Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Twp., No. 4:13-cv-00778).

W.Va. Supreme Court Rules Pipeline Surveying is Permitted Only for Public Use
On November 15, 2016, the Supreme Court of Appeals of West Virginia affirmed the Circuit Court of Monroe County’s holding in a case regarding whether a pipeline company may enter a landowner’s property to survey the area. (Mountain Valley Pipeline, LLC. v. McCurdy, 15-C-19)  The court held that the Mountain Valley Pipeline (MVP) company could only enter the land if the MVP was for a public use. Because the MVP is not being constructed for public use, the company has no right to enter private property for survey purposes.

Railroad Commission of Texas Releases Statement on Induced Seismicity
On November 15, 2016, the Texas Railroad Commissioner issued a press release with comments from the Commissioner, Ryan Sitton, regarding seismicity in Texas. Sitton stated that “The science is clear that it is physically possible for injection wells that dispose of fluids deep underground to cause earthquakes in certain rare cases, given the right set of conditions.” The commissioner also announced collaboration with the Bureau of Economic Geology and Center, a research center which studies naturally occurring and induced seismic activities as well as the associated risks. This collaboration is intended to provide research and studies that will assist regulators in improving standards of practice.

Army Corps of Engineers Refuses to Grant Easement for Dakota Access Pipeline
On November 14, 2016, the Army Corps of Engineers (Army) released a statement announcing the completion of the review launched in September regarding the Dakota Access Pipeline. The Army determined “that additional discussion and analysis are warranted…” The Army stated that it welcomes discussion with the Standing Rock Sioux Tribe over potential conditions resulting from the pipeline. Until the Army makes a decision on whether they will grant the pipeline easement, construction on Army land surrounding Lake Oahe is prohibited.

Department of Interior Faces Lawsuit Over New Methane and Waste Prevention Rule
On November 18, 2016, the Bureau of Land Management posted new regulations entitled “Waste Prevention, Production Subject to Royalties, and Resource Conservation.” According to the Interior Department’s press release, the new rule will “reduce the wasteful release of natural gas into the atmosphere from oil and gas operations on public and Indian lands.” In response to the regulations, Western Energy Alliance and the Independent Petroleum Association of America filed suit against the Department of the Interior. (Western Energy Alliance and the Independent Petroleum Ass’n of America v. Jewell) The suit alleges that the Department’s action is unlawful and unconstitutional because they do not have regulatory authority to make this rule. The companies argue that the Clean Air Act gives the EPA and state governments exclusive authority to promulgate air quality regulations.

Environmental Groups Bring Suit Over Hydraulic Fracturing in the Pacific Ocean
According to EnergyWire, on November 11, 2016, the Environmental Defense Center and the Santa Barbara Channelkeeper sued the U.S. Department of the Interior for failing to protect wildlife in the Pacific Ocean. (Environmental Defense Center et al. v. Bureau of Ocean Energy Management et al, 2:2016-cv-08418) Reportedly, the two environmental groups stated that the government failed to properly assess the impact of offshore hydraulic fracturing on ocean wildlife. EnergyWire explains that “The suit asks the U.S. District Court for the Center District of California to compel Interior’s Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement to perform a comprehensive environmental impact statement…”  

BLM Cancels Old, Unused, Oil and Gas Leases in Montana
On November 16, 2016, the Bureau of Land Management canceled 15 oil and gas leases for land considered sacred by the Blackfeet Tribe in Montana. According to the U.S. Department of the Interior press release, the leases located in the Badger-Two Medicine area were issued in the 1980s and never developed. The press release explains that the lease was owned by Devon Energy who worked with the Interior Department to make this change. As compensation for the lease cancellation, Devon Energy was refunded $200,000 by the Interior Department.

Study Finds that Abandoned Oil Wells have Lower Emissions than Abandoned Gas Wells
On November 14, 2016, a study examining methane emissions from abandoned oil and gas wells was published in the Proceedings of the National Academy of Sciences. The study, entitled Identification and Characterization of High Methane-Emitting Oil and Gas Wells, was led by Mary Kang, a professor at Stanford University. The study analyzed emissions from 88 wells in Pennsylvania and found that “[a]bandoned oil wells have consistently lower emissions compared with abandoned gas wells.”

EIA Releases Drilling Productivity Report for Largest U.S. Shale Plays
On November 14, 2016, the U.S. Energy Information Administration (EIA) released this month’s Drilling Productivity Report. According to the EIA, total oil production from shale regions is expected to decrease in December going from 4.518 million b/d in November to 4.498 million b/d. The greatest decrease in oil production is estimated to be from the Eagle Ford region will see a change of 33 thousand barrels/day while the Permian play is expected to increase by 27 thousand barrels/day. Total gas production should decrease significantly overall by 94 million cubic feet/day. The greatest decrease will be the Eagle Ford with a change of 196 million cubic feet/day. The Marcellus shale is expected to have the greatest increase in gas production and may increase by 130 million cubic feet/day.

U.S. Geological Survey Publishes Wolfcamp Shale Assessment
On November 15, 2016, the U.S. Geological Survey (USGS) released an assessment of the Wolfcamp Shale Formation located in the Permian Basin in Texas. The assessment focused on undiscovered, technically recoverable continuous oil and gas resources. According to the report,  the Wolfcamp shale contains 20 billion barrels of oil, 16 trillion cubic feet of associated gas, and 1.596 billion barrels of natural gas liquids. Currently, “more than 3,000 horizontal wells have been drilled and completed in the Midland Basin Wolfcamp section.”

International Energy Agency Releases World Energy Outlook 2016
On November 16, 2016, the International Energy Agency (IEA) published their World Energy Outlook 2016. According to the IEA press release, coal consumption is not expected to grow much in the next 25 years due to a decrease in demand from China. In addition, it is projected that until 2040 oil demand will continue to grow because of a lack of alternatives “in road freight, aviation, and petrochemicals…” Oil and gas will remain significant but as many countries invest in renewable energy, overall demand will decrease.

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Written by Jacqueline Schweichler - Education Programs Coordinator

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