Written by Torin Miller - Research Assistant
The following information is an update of recent local, state, national, and international legal developments relevant to shale gas.
Pipelines: Sunoco Challenged Over Constitutionality Of Eminent Domain For Mariner East 2 Pipeline
According to a media report, on May 25, 2017, the Philadelphia County Court of Common Pleas denied Sunoco Logistics’ (Sunoco) motion to dismiss a complaint by the Clean Air Council arguing that Sunoco’s use of eminent domain for the Mariner East 2 pipeline project was unconstitutional. The Clean Air Council raised three primary arguments: eminent domain in this instance violates the U.S. and Pennsylvania constitutions because the use is private and not public; the exercise of eminent domain violates the Environmental Rights Amendment of the Pennsylvania constitution; and the exercise of eminent domain violates due process at both the state and federal levels.
Production Data: Susquehanna County Leads Pennsylvania In Natural Gas Production
On May 22, 2017, the Pennsylvania Independent Fiscal Office released the state’s first-quarter Natural Gas Production Report. Susquehanna County led the state in production with 313 billion cubic feet (Bcf) of natural gas coming from 1,068 wells. The county’s production comprises 24% of the state’s overall natural gas production. Washington, Bradford, Greene and Lycoming counties rounded out the state’s top five producers, respectively.
Pipelines: Pennsylvania DEP Schedules Public Hearings On Atlantic Sunrise Pipeline
On May 25, 2017, the Pennsylvania Department of Environmental Protection (DEP) issued a press release announcing both a public comment period and public hearings concerning the Atlantic Sunrise Pipeline project and permit applications. The public comment period opened on May 27, 2017, and four public hearings are scheduled beginning on June 12, 2017. The hearings focus on earth disturbance as well as waterway and wetland encroachment permit applications submitted by Transcontinental Gas Pipe Line Company, LLC for the project. DEP Secretary Patrick McDonnell noted, “We want to provide the public, especially those living near the pipeline route, with the opportunity to review permit applications and provide thoughtful, critical, and constructive feedback to aid in our technical review.”
Wastewater Disposal: Tioga County Wastewater Leak Results in $1.1 Million Fine for EQT Corp.
On May 26, 2017, the Pennsylvania Environmental Hearing Board issued a $1.1 million fine for EQT Corp. (EQT) for a Marcellus Shale wastewater pit leak that occurred in Tioga County in 2012. In a 4-1 decision, the Board concluded that EQT “failed to take necessary measures to prevent polluting substances in its impoundment from directly and indirectly reaching waters of the Commonwealth.” Further, the Board concluded that EQT “caused severe harm to the waters of the Commonwealth.” The Pennsylvania Department of Environmental Protection was seeking a $4.5 million fine, but the Board has the sole discretion in determining civil penalties.
Wastewater Disposal: Underground Injection Well Approved By Pennsylvania DEP
On May 30, 2017, the Pennsylvania Department of Environmental Protection (DEP) issued a press release stating that an underground injection well was approved in Huston Township, Clearfield County. The well will be used “for disposal of wastewater associated with oil and natural gas production.” DEP Deputy Secretary for Oil and Gas Management Scott Perry noted, “DEP’s review process included a thorough evaluation of the application, plans, and public feedback. The department ultimately concluded that the well would comply with all regulations and include adequate safeguards.”
Post-Production Costs: West Virginia Supreme Court Rules Post-Production Costs Can Be Deducted From Royalties
On May 26, 2017, the West Virginia Supreme Court of Appeals ruled in a 4-1 decision that post-production costs may be deducted from royalties paid to landowners. This decision reverses a November decision favoring landowners in the suit. In the decision, Chief Justice Allen Loughry wrote, “[W]e conclude that both the legislative intent and language utilized in West Virginia Code § 22-6-8 permits allocation or deduction of reasonable post-production expenses actually incurred by the lessee and more specifically permits use of the ‘net-back’ or ‘work-back’ method of royalty calculation.”
Methane Emissions: U.S. EPA Stalls Methane Emission Rules Amid Policy Changes
On May 31, 2017, The United States Environmental Protection Agency (EPA) issued a press release stating that the EPA would issue a 90-day stay on certification requirements for 2016 New Source Performance Standards for the oil and gas industry. “EPA’s action is in line with President Trump’s Energy Independence Executive Order, which directed the agency to review the oil and gas rules,” the press release states. The release also states the the EPA expects to propose a new rule to replace the 2016 New Source Performance Standards, and the proposal will be open for public comment when completed.
GHG Emissions: Natural Gas As Fuel Cuts Greenhouse Gas Emissions By Nearly A Quarter
According to a media report, a recent study by the Natural Gas Vehicle Association shows that vehicles operating on natural or biogas reduce greenhouse gas emissions by 23% compared with petrol. The reduction in emissions of natural or biogas is 7% compared with diesel. In heavy transit vehicles, the reductions seen with liquefied natural gas and compressed natural gas are 15% compared with diesel. A similar comparison yields a 21% reduction in greenhouse gas emissions in the marine sector.
Methane Emissions: New Controls Will Limit Oil And Gas Methane Emissions In Canada
According to a media report, regulations proposed by the Canadian government on May 25, 2017, are aimed at reducing methane emissions from oil and gas operations. The goal is to cut back emissions by “40-45% of 2012 levels by 2025.” The regulations only apply to operations producing methane at a level of at least 60,000 cu m/year. Specifically, the regulations are aimed at five main sources: fugitive equipment leaks, well completions by hydraulic fracturing, compressors, facility production venting and pneumatic devices.
Water Quality: Study Shows Many Below-Ground Natural Gas Storage Wells Are At Risk For Leaking
On May 24, 2017, the T.H. Chan School of Public Health at Harvard published a study finding that over 20% of underground natural gas storage wells in the United States are at risk for leaks. The risk is a result of obsolete well designs. According to the study, 13% of the United States’ processed natural gas is stored underground. Additionally, the study cites that Ohio, Pennsylvania, New York, Michigan and West Virginia wells are most at risk for leaking due to their age.
Water Quality: USGS Study Shows Hydraulic Fracturing Hasn’t Polluted Groundwater In Shale Plays
A United States Geological Survey (USGS) study published in May 2017 found that hydraulic fracturing in Arkansas, Louisiana and Texas did not significantly contribute to groundwater pollution in those areas. The study tested well-sites in the Fayetteville, Haynesville and Eagle Ford shales. While there is not currently any indication that unconventional drilling has contaminated drinking water, the study noted that "decades or longer may be needed to fully assess the effects of unconventional oil and gas production activities on the quality of groundwater used for drinking water.”
“How Liquefied Natural Gas Will Transform Global Energy Markets” - Climate Nexus
“Canada to limit oil, gas methane emissions” - Oil and Gas Journal
“Many Allegheny County cities, municipalities unprepared for shale gas drilling rebound” - The Stream
“OPEC ponders how to co-exist with U.S. shale oil” - Shale SmartBrief
“Pennsylvania groups fight court ruling on pollution fine” - Shale Gas Reporter
“The Oil Play That Could Flood the Natural-Gas Market” - API SmartBrief
“Shale drillers gift to Memorial Day drivers—some of the cheapest gasoline in years” - API SmartBrief
“As Trump considers Paris withdrawal, oil and gas industry divided” - API SmartBrief
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Check out this week’s Shale Law in the Spotlight: Shale Law in the Spotlight: Changes in Energy and Environmental Policy During First 100 Days of Trump Administration