Monday, September 11, 2017

Shale Law Weekly Review - September 11, 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.

Pipelines: DEP Issues Approval for Atlantic Sunrise Pipeline Air Quality Plan
On September 8, 2017, the Pennsylvania Department of Environmental Protection (DEP) announced their approval of an Air Quality Plan for the Atlantic Sunrise Pipeline to be constructed by Transcontinental Gas Pipe Line Company, LLC. (Transco). According to DEP Secretary Patrick McDonnell, “DEP thoroughly reviewed the application to ensure that temporary emissions during the construction phase of this project will be minimal and completely offset by reductions elsewhere.” The Air Quality Plan authorizes Transco to transfer 106 tons of nitrogen oxide Emission Reduction Credits from a facility in Maryland for use in Lancaster County. Before construction can begin, Transco will need to acquire approval from the Federal Energy Regulatory Commission.

Eminent Domain: Lawsuit Challenges Eminent Domain Provisions in Natural Gas Act
On September 5, 2017, over 50 landowners filed a lawsuit against the Federal Energy Regulatory Commission (FERC), challenging the eminent domain provisions of the Natural Gas Act (Bold Alliance, et al., v. Federal Energy Regulatory Commission, 1:17-cv-01822). Specifically, the complaint alleges that FERC “does not require companies to demonstrate their projects serve a public use,” and that their “standard of proof for ‘project need’ is so low as to be meaningless.” In addition, the plaintiffs allege that FERC “withholds information from landowners that they could use to refute project need.”

Local Regulation: West Virginia Court Affirms Local Injection Well Ordinance is Preempted by State Law
On August 30, 2017, the U.S. Court of Appeals for the Fourth Circuit affirmed a judgment striking down an ordinance passed in Fayette County, West Virginia. The ordinance was passed in 2016 and banned oil and natural gas wastewater injection wells. EQT Corporation, an oil and gas company that also operations underground wastewater injection wells, challenged the ordinance in court. The court held that the ordinance is preempted by West Virginia laws regulating oil and gas production.

State Regulation: Illinois Approves First Hydraulic Fracturing Permit in Four Years
On August 31, 2017, the Illinois Department of Natural Resources announced the approval of a hydraulic fracturing permit for Woolsey Operating Company, LLC. The permit is a High Volume Horizontal Hydraulic Fracturing permit for a  well to be drilled in White County, Illinois. According to the St. Louis Post-Dispatch, this is the first hydraulic fracturing permit approved by the state following the enactment of the Hydraulic Fracturing Regulatory Act in 2013. For more about shale regulation in Illinois, see our recent Shale Law Compendium article here.  

Natural Gas Storage: Geologic Study Determines Storage Potential for Natural Gas
On August 29, 2017, the Appalachian Oil and Natural Gas Research Consortium published their year-long study entitled A Geologic Study to Determine the Potential to Create an Appalachian Storage Hub for Natural Gas Liquids. The purpose of the study was to “complete a geologic study of all potential options for subsurface storage of NGLs along and adjacent to the Ohio River from southwest Pennsylvania to eastern Kentucky, with a similar study along the Kanawha River in West Virginia.” The researchers examined over 2,700 depleted gas fields and found that 1,5000 occurred at the minimum depth required for liquid storage. Of these fields, the study found 113 had the potential for various types of underground storage. The researchers created a website for their study, which can be accessed here.

Wastewater: New Study Examines Current Chemical Analysis of Drilling Wastewater
A new study published in the journal, Trends in Environmental Analytical Chemistry, suggests that certain assessments of hydraulic fracturing wastewater may not provide an accurate summary of the wastewater composition. The study follows the suggestion that liquids produced from hydraulic fracturing could provide a water source in water scarce areas. However, the authors argue that the various additives must be better categorized before the wastewater could be used in that way. Specifically, the authors state that “many organic chemicals remain yet unidentified: targeted approaches for organic chemical analysis alone will be insufficient for complete organic chemical characterization.” The study is entitled, Emerging Analytical Methods for the Characterization and Quantification of Organic Contaminants in Flowback and Produced Water.

International: France Introduces Bill to Ban Oil and Gas Production by 2040
On September 6, 2017, the French government introduced a draft bill that will stop granting oil and gas exploration permits next year, according to Bloomberg Markets.The article also states that the long-term purpose of the bill will be to ban all oil and gas production in France by 2040. Additionally, the bill is intended to encourage more investment into renewable energy.

International: Western Australia Bans Hydraulic Fracturing, Pending Inquiry
On September 5, 2017, the government of Western Australia announced a moratorium for hydraulic fracturing in the state. According to the media statement, the future of hydraulic fracturing will be decided upon the completion of an independent scientific panel inquiry. The purpose of the inquiry will be “to understand the immediate and long-term impacts of the fracking process on environment, water, agricultural productivity, and community.”

International: Mexico Publishes Water Conservation Rules for Hydraulic Fracturing Companies
On August 30, 2017, the National Water Commission (Conagua) of Mexico published in the official gazette new water conservation rules, according to Natural Gas Intelligence. The article states that the rules implement previously issued regulations on water conservation. These rules apply to exploration and production companies who intend to use hydraulic fracturing, coalbed methane extraction, or enhanced oil recovery. The rules preceed the first exploration and production auction “to feature blocks with unconventional oil and natural gas resources since the energy reforms of 2013.”

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See our Global Shale Law Compendium and this week’s article, Shale Governance in North Carolina.

Check out this week’s Shale Law in the Spotlight: Timeline and Update of Litigation Involving the Federal Methane Emissions Rule.

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