The following
information is an update of recent, local, state, national, and international
legal developments relevant to shale gas.
Army Corps Decides to
Refuse Easement for Dakota Access Pipeline
On December 4, 2016, the
United States Army Corps of Engineers (USACE) announced they will not grant an
easement to allow the Dakota Access Pipeline to cross under Lake Oahe.
According to the U.S. Army website,
the Army’s Assistant Secretary, Jo-Ellen Darcy says there is a need to explore
alternate routes for the pipeline. The Assistant Secretary says alternate
routes will probably be considered by way of an Environmental Impact Statement.
Stone Energy Corporation
Faces Royalty Violation Lawsuits
According to the West Virginia Record,
Stone Energy Corporation now faces two lawsuits for contract violation claims.
The article states that the plaintiff landowners entered into oil and gas
leases for their properties in Wetzel County. These landowners claim the leases
are invalid because the leases “do not state with particularity the specific
deductions the lessee intends to take from the lessor’s royalty…” In addition,
the article shows that the plaintiffs protest the post-production costs taken
from the royalty payments, allegedly in violation of West Virginia law.
Environmental Protection
Agency Releases Drinking Water Action Plan
On November 30, 2016,
the Environmental Protection Agency (EPA) released a report entitled “Drinking Water Action Plan.” The plan “is a national call to action, urging all levels
of government, utilities and other key stakeholders to work together - to
reinvigorate the safe drinking water enterprise…” The number one priority area
is promoting and building capacity for drinking water infrastructure financing
and management. The other five priority areas include next generation
oversight, strengthening source water protection, addressing unregulated
contaminants, improving transparency for drinking water safety and reducing
lead risks.
Accountability Office
Says Biofuel Production Insufficient for RFS Program
On November 28, 2016,
the U.S. Government Accountability Office published a study on the Renewable
Fuel Standard (RFS) program titled “Program
Unlikely to Meet Its Targets for Reducing Greenhouse Gas Emissions.” According to the study, “[l]ess than 5% of the 3 billion
cellulosic biofuel RFS target was produced in 2015, and additional investments
for commercialization seem unlikely.” The study says that advanced biofuels
greatly decrease the amount of greenhouse gas released and with the current
limited production of biofuels, reduction goals for greenhouse gas are unlikely
to be achieved.
EPA and Slawson
Exploration Co. Agree on Consent Decree for Clean Air Act Violations
On December 1, 2016, a consent decree was
proposed between Slawson Exploration Co. and the U.S. Environmental Protection
Agency (EPA). According to an EPA press release, the
claims were based on Slawson’s alleged Clean Air Act violations for oil and gas
production in North Dakota. EPA inspectors had discovered volatile organic
compound (VOC) emissions visually and with optical gas imaging infrared
cameras. Additionally, inspections uncovered impermissible pit flares, visible
emissions from pit flares, open thief hatches, and other violations. The
settlement requires the company to perform system upgrades with better
monitoring and inspections. Also, “Slawson will spend at least an estimated $2
million to fund environmental mitigation projects and pay a $2.1 million civil
penalty.”
EIA Reports on Increase
in Natural Gas Pipeline Exports to Mexico
On December 1, 2016, the
U.S. Energy Information Administration (EIA) released a report on increasing
shale gas exports to Mexico. According to the report, U.S.has a natural gas
pipeline capacity of 7.3 billion cubic feet per day (Bcf/d) for gas traveling
to Mexico. They estimate that the current pipeline capacity will double by
2019. At present, four pipelines to Mexico are under construction and two more
will be built by the end of 2018. The EIA suggests this increase in natural gas
exports by pipeline is due to “strong growth in Mexico’s natural gas demand in
the power sector, declining domestic production, and the lower prices of U.S.
pipeline gas compared with more expensive liquefied natural gas (LNG) imports.”
Study Examines Induced
Seismicity Effects of Hydraulic Fracturing in Canada
On November 17, 2016, a study was published
by the American Association for the Advancement of Science in Science
magazine online. The study examines induced seismicity in western Canada
resulting from hydraulic fracturing. The study notes that “[h]ydraulic
fracturing has been inferred to trigger the majority of injection induced
earthquakes in western Canada, in contrast to the midwestern United States
where massive saltwater disposal is the dominant triggering mechanism.” The
study is called “Fault Activation by Hydraulic Fracturing in Western Canada”
and was written by geophysics professor David Eaton and Xuwei Bao at the
University of Calgary.
Australia Finds
Underpaid Royalties in North West Shelf Venture
On November 28, 2016,
the Australian National Audit Office released a report on deficiency
in royalty revenue collected from the North West Shelf joint venture. The
report had been prepared to determine “whether the Department of Industry
Innovation and Science has effectively and efficiently administered the
collection” of revenues. Deductions were claimed for operating costs and
depreciations in capital assets, which reduced royalty payments. These errors
in deductions were due to limited oversight. In the 18 month period leading to
December 2015, over $5 billion in deductions were claimed for petroleum
revenues. Overall, at least “$8.6 million in royalties has been underpaid.”
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Recent ShaleLaw HotLinks
include:
Kelly Mitchell announced as candidate for Energy
Department - Governors Wind & Solar
Coalition
China to receive more U.S. shale gas - Bloomberg
Eurogas supports gas over coal for less carbon emissions - NaturalGasWorld
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Written by Jacqueline Schweichler - Education Programs Coordinator
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