Tuesday, August 1, 2017

Shale Law Weekly Review - August 1, 2017

Written by Richard Neal - Research Assistant

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

Pipelines: Atlantic Sunrise Pipeline Seeking Emission Reduction Credits from PA DEP
On July 22, 2017, the Pennsylvania Department of Environmental Protection (DEP) posted on the Pennsylvania Bulletin a notice of intent to issue Air Quality Plan Approval 36-001GC, for the Atlantic Sunrise Pipeline project. On July 22, 2017, the DEP also opened a public comment period to receive feedback on the plans approval, which will end August 21, 2017. Air Quality Plan Approval 36-001GC would transfer 106 tons of nitrogen oxide Emission Reduction Credits (ERC) from Harford County Resource Recovery Facility located in Harford County, MD to Transcontinental Gas Pipeline Company, LLC for the construction of the pipeline project in Lancaster County, PA. A public hearing will be held on the matter on August 14, 2017 at 6:30 P.M. at the Lancaster Farm and Home Center.

Impact Fee: Pennsylvania Independent Fiscal Office Releases Annual Impact Fee Outlook
On July 20, 2017, The Pennsylvania Independent Fiscal Office (IFO) released a report with the impact fee update and 2017 outlook. The Pennsylvania impact fee is a annual fee imposed on unconventional gas wells that were drilled or operating in the prior year. The fee is not measured on a volumetric basis, instead the fee is calculated using a multi-year schedule based on the average annual price of natural gas on the New York Mercantile Exchange (NYMEX), which is based on the Henry Hub spot price. The IFO report, forecasts the Henry Hub average spot price to be $3.32 for the remainder of 2017. If the Henry Hub spot price does average above $3.00, then the fee will increase by $5,000 per well. The number of horizontal wells spud in Pennsylvania has increased 118% year over year in 2017 compared to 2016. The report estimates that with the continuance of these two scenarios for the remainder of 2017, impact fee revenues would increase by approximately $36 million to $44.7 million.

Pipelines: FERC Releases Environmental Impact Statement for Atlantic Coast Pipeline
On July 21, 2017, the Federal Energy Regulatory Commission (FERC) issued a final environmental impact statement for the Atlantic Coast Pipeline. The Atlantic Coast Pipeline will have facilities in Pennsylvania, West Virginia, Virginia, and North Carolina and span 600 miles. The report concludes that the project could have adverse effects on select species, certain habitats and vegetation, but that these effects could be mitigated. According to a media report by Greenwire, some environmental groups were not pleased with the report and believe the report to be an inadequate analysis of the project. The Atlantic Coast project is still waiting for final approval from FERC.

Pipelines: Developments in case between Ohio Landowners v. Rover Pipeline, LLC
On July 26, 2017, Rover Pipeline, LLC (Defendant) and Ohio landowners (Plaintiffs) in the Rover Pipeline LLC v. Bartter et al case, had a teleconference continuing mediation efforts between the parties. The case is in the US District Court for the Northern District of Ohio, and the complaint was filed on February 6, 2017. The plaintiffs’ complaint asserts a civil class action against Rover Pipeline, LLC for the taking of property under eminent domain powers to gain easements for the construction of the pipeline. On July 20, 2017, Rover Pipeline, LLC, filed an unopposed motion to continue mediation between the parties, which was approved, and the mediation has been rescheduled to the week of August 28, 2017.

Public Lands: BLM Plans to Rescind the Rule Governing Hydraulic Fracturing on Federal Lands
On July 25, 2017, the Bureau of Land Management (BLM) proposed a rescission of the 2015 rule: Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands. The 2015 rule provided that oil and gas companies publicly disclose chemicals used in hydraulic fracturing fluids as well as clarified and strengthened other regulations on well construction for oil and gas operations on federal lands. The 2015 rule has not been implemented yet, and the BLM says therefore, the proposed rescission will cause no change to current regulations. The BLM is now accepting public comment until September 25, 2017, for the proposed rule rescission.

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