Monday, May 22, 2017

Shale Law Weekly Review - May 22, 2017

Written by Jacqueline Schweichler - Education Programs Coordinator

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

Natural Gas Storage: Underground Gas Storage Project Abandoned by Arlington Storage Company
On May 9, 2017, Arlington Storage Company (Arlingon) reported they will no longer be expanding their underground gas storage facility in New York. Arlington had filed an application for authorization to expand the Seneca Lake Storage Project in Schuyler County. The expansion, the Gallery 2 Expansion Project, would have increased working capacity from 1.45 Bcf to 2.00 Bcf.  Arlington reported that they have “not been successful in securing long-term contractual commitments from customers…”

Case Law: Texas Court Rules in Favor of Landowner in Contamination Case
On April 28, 2017, The Supreme Court of Texas affirmed a lower court ruling that held the Railroad Commission does not have exclusive jurisdiction over claims for environmental contamination (Forest Oil v. El Rucio Land & Cattle Co.). The case was brought by rancher James McAllen against Forest Oil Corporation who produces natural gas on McAllen’s ranch. McAllen sued Forest for property contamination when it was discovered oilfield tubing donated to McAllen was contaminated with naturally occurring radioactive material.

Pipelines: Court of Appeals Affirms Dismissal of Case Where Plaintiffs Did Not Qualify for Class Action Suit
On May 11, 2017, the United States Court of Appeals for the Eighth Circuit ruled affirmed the district court’s ruling dismissing a class action lawsuit against Exxon Mobil Corporation (Webb, Harper, Harber, et al. v. Exxon Mobil Co.). Exxon owns the Pegasus Pipeline which travels between Corsicana, Texas and Pakota, Illinois. A group of plaintiffs brought this suit arguing that the operation of the pipeline was unreasonable and unsafe. The lawsuit was dismissed because the plaintiffs did not qualify for a class action through “commonality, typicality, or adequacy under Rule 23(a), as the nature of the claims were more “nuanced” than the district court had initially considered.”

Pipelines: FERC Tells Rover Pipeline No Horizontal Drilling Until Requirements are Met
On May 10, 2017, the Federal Energy Regulatory Commission (FERC) sent a letter to Rover Pipeline LLC (Rover) forbidding horizontal drilling activities where drilling activity has not yet commenced. FERC is implementing these measures after a spill earlier this year of approximately 2 million gallons of drilling fluid into wetland areas.  According to FERC, the delay is meant to “ensure the protection of all environmental resources during construction of the project…” The Rover pipeline consists of over 500 miles of pipe and will transport 3.25 Bcf/day of natural gas from the Appalachian supply area to Michigan.

Federal Lands: Environmental Groups File Suit for Leases Granted in Ohio National Forest
On May 2, 2017, The Ohio Environmental Council (OEC), the Center for Biological Diversity, and the Sierra Club filed suit against the U.S. Forest Service and the Bureau of Land Management (BLM) (Center for Biological Diversity, et al. v. U.S. Forest Service, et al.).  The environmental groups allege that the BLM and U.S. Forest Service failed to comply with the National Environmental Policy Act when they authorized oil and gas leases in Ohio’s Wayne National Forest. According to a press release by the OEC, pipelines in the 40,000 acres of land to be leased will be a “major disruptive presence in the forest.”

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