Monday, December 12, 2016

Shale Law Weekly Review - December 12, 2016

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

Penn Township Approves Agreement to Resolve Apex Drilling Lawsuit
On December 5, 2016, the Penn Township commissioners approved an agreement with Apex Energy LLC for oil and gas operations. According to an article by Trib Live, the three hundred million dollar lawsuit was brought by Apex against Penn Township for rejecting its applications to drill. The agreement will allow Apex to commence drilling operations subject to several conditions. The conditions include the installation of sound walls, the creation of a 24 hour emergency hotline, air quality monitoring, as well as other safety and environmental protections.

DEP Files Appeal in Drilling Regulations Case
On December 6, 2016, the Pennsylvania Department of Environmental Protection filed an appeal to the Pennsylvania Supreme Court in a drilling regulations lawsuit, according the the DEP Newsroom. The DEP is appealing the decision of the Commonwealth Court to enjoin certain provisions of the new Chapter 78a drilling regulations.  The lawsuit was initially filed by the Marcellus Shale Coalition to protest the new rules The rules set standards for the oil and gas industry to increase safety and protect the environment.

PA Auditor General Questions Impact Fee Spending
On December 6, 2016, the Pennsylvania Auditor General released a report on their audit of the impact fees given to local governments. The audit covers a four year period and was conducted to determine whether the Public Utility Commission appropriately distributed funds and to determine that counties used the funds in accordance with Act 13. The report suggests that Act 13 needs to be more specific and found that funds were being “spent on questionable costs such as balancing budget deficits, salaries and operational expenses, legal fees, and holiday celebrations.”

EIA Reports on Pipeline Capacity Increase in New England
On December 6, 2016, the U.S. Energy Information Administration released a report on the increase in natural gas pipeline capacity in New England. Since 2010, there have been no new pipeline projects in New England. Currently, two different projects by Spectra Energy Corporation will be completed; one will be finished by the end of December and the other will be complete in June 2017. The two projects cost $972 million and $63 million and will carry natural gas from the Appalachian Basin.

Study Estimates Effects of Closed Injection Wells on Induced Seismicity
On November 30, 2016, a study was published estimating how the decrease of wastewater injection in Oklahoma will affect induced seismicity. According to the study, Oklahoma has reduced the number of injection wells in operation by 40 percent. The study predicts that the number of earthquakes in the area should “significantly decrease by the end of 2016 and approach historic levels within a few years.” The rate of earthquake decrease will be slower in larger magnitude earthquake areas due to some continued aftershocks. The article entitled “How will induced seismicity in Oklahoma respond to decreased saltwater injection rates?” was published in Science magazine.

DOE Laboratories Awarded Funding for Shale Research
On December 5, 2016, the National Energy Technology Laboratory announced the awarding of six shale research projects to be given to the U.S. Department of Energy (DOE) laboratories.  The projects are intended to “investigate the processes associated with hydrocarbon extraction from unconventional shale reservoirs and lead to a better understanding of factors affecting prudent resource development.” The projects are to consist of two year investigations and will receive $4.8 million in funding. Some of the laboratory investigations will look at the permeability of fractures in shale, how water is absorbed by shale, and flow in shale pores.

Class Action Lawsuit Against Oil and Gas Companies For Oklahoma Earthquakes
On December 5, 2016, a class action lawsuit was filed in the District Court of Payne County, Oklahoma against oil and gas companies alleging those companies were the source of the recent earthquakes. The suit was filed by several residents of Cushing, Oklahoma and they seek property damages, market value losses to real property, punitive damages, and damages for emotional distress. The plaintiffs’ claim states that “By disposing of fracking wastewater deep into the earth, Defendants introduced contaminants into the natural environment that caused an adverse change to it in the form of unnatural seismic activity.” (David and Myra Reid, et al. v. White Star Petroleum LLC, et al., CJ-2016-543)

Australia to Begin Hydraulic Fracturing Inquiry
On December 5, 2016, the Northern Territory government in Australia released a statement announcing the start of a planned hydraulic fracturing inquiry. The inquiry will examine onshore unconventional reservoirs as well as other activities associated with hydraulic fracturing. Because of comments from the public, the scope was increased to include “water acquisition and treatment of wastewater.”  During the inquiry, hydraulic fracturing will continue to be prohibited. The first meeting will be December 8th and will determine a schedule and timeline.

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Written by Jacqueline Schweichler - Education Programs Coordinator

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