Tuesday, January 3, 2017

Shale Law Weekly Review - January 3, 2017

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

EQT Requests New Hearing in West Virginia After Losing Royalty Payment Case
On December 19, 2016, EQT Production Co. petitioned the West Virginia Supreme Court to reconsider their ruling on royalty payments, according to The State Journal. The ruling would prohibit gas companies from taking production cost deductions from royalty payments. The landowners bringing the case argued state law requires that their royalty payments should be at least 12.5 percent. They argued that current post production deductions reduced landowner royalty payments to far less than the state law minimum. (1:16-cv-00085)

Pennsylvania DEP Will Approve Injection Wells with Conditions
According to PowerSource, Pennsylvania regulators will soon approve oil and gas disposal wells provided they comply with several conditions. The Department of Environmental Protection will be granting these permits to Pennsylvania General Energy Co. and Seneca Resources Corp. for Indiana and Elk County. The permits will require injection well operators to close wells that cause earthquakes of magnitude 2.0 or higher. In addition, the companies must conduct seismic monitoring and provide this data to the public.

Oklahoma Issues Injection Well Guidelines
On December 20, 2016, the Oklahoma Corporation Commission issued a news release with seismicity guidelines for voluntary adoption by operators of wastewater injection wells. The guidelines state that for earthquakes greater than or equal to magnitude 2.5, a representative will be contacted and the operator should implement their own internal mitigation practices. For earthquakes above magnitude 3, the well operator should stop the operation for at least 6 hours and participate in a conference call to discuss ways to mitigate the problem. If there is a report of a 3.5 magnitude earthquake, the well operation should be stopped completely and there should be an in-person conference to determine what changes need to be done to allow continued operation.

University Study Examines Local Economic Impact of Hydraulic Fracturing
On December 21, 2016, the University of Chicago released a study that examines the local economic benefits and problems associated with hydraulic fracturing. The study found that counties with high hydraulic fracturing production have an increase in total income, employment, and salaries. In addition, local governments experience revenue increases greater than the increase in expenditures. These same counties also experience a decrease in quality of life with notably higher violent crime rates. The study is entitled “The Local Economic and Welfare Consequences of Hydraulic Fracturing.”

New BLM Policy to Mitigate Development Impact on Federal Lands
On December 22, 2016, the United States Bureau of Land Management issued a new policy for mitigation of development impact on federal lands. These guidelines will “implement consistent principles and procedures for mitigation...” as well as “apply mitigation to address reasonably foreseeable impacts to resources…” These policies follow a hierarchy where the first priority will be to avoid public land damage, minimize unavoidable damage second, and lastly, will compensate for any impact to public lands. The new policy will go into effect January 30, 2017.

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Written by Jacqueline Schweichler - Education Programs Coordinator

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