Monday, October 2, 2017

Shale Law Weekly Review - October 2, 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.

International: Quebec Publishes Draft of New Oil and Gas Regulations
On September 20, 2017, the Quebec Ministry of Energy and Natural Resources published proposed regulations for oil and natural gas development. The proposal contains a revocation of the prior Mining Act and introduces draft regulations for the Petroleum Resources Act. The new regulations govern petroleum exploration, production and storage, licenses, pipeline construction, use authorization, storage on land, and storage in a body of water. Oil and gas operators will need to obtain authorization for activities previously unregulated, such as stratigraphic surveys, fracturing, and reconditioning.

Air Quality: ExxonMobil Announces Expansion to Methane Emissions Reduction Plan
On September 25, 2017, ExxonMobil announced in a press release their plan to reduce methane emissions from oil and gas production in the United States. Exxon stated that their plan prioritizes sites operated by XTO Energy by implementing “enhanced leak detection and repair program.” Part of the methane reduction program involves extensive training, research and technology improvement. In addition, ExxonMobil Upstream Research Company is researching development of equipment that can be used to detect and reduce methane leaks.

Pipelines: Canada Halts Kinder Morgan’s Construction of the Trans Mountain Pipeline
On September 22, 2017, The National Energy Board (Energy Board) sent a letter to Kinder Morgan Canada (Kinder Morgan) ordering them to halt construction on the Trans Mountain pipeline project. Energy Board declared that Kinder Morgan is in violation of the National Energy Board Act due to installation of fish spawning deterrent mats in waterways to be crossed by the pipeline. Before the Trans Mountain pipeline may be continued, Kinder Morgan must obtain additional approvals for the fish spawning deterrent mats.

Infrastructure: PA DEP Announces Grant for Alternative Fuel Projects in PA
On September 29, 2017, The Pennsylvania Department of Environmental Protection  (DEP) announced $1 million in grants for the installation of alternative fuel infrastructure projects. The funding is available under the Fixing America’s Surface Transportation Act (FAST Act) and is available to municipalities, nonprofits, corporations, limited liability companies, and political subdivisions. To be eligible for the grant the project must be publicly accessible, use proper signage, offer a common payment system, and use standard equipment. Examples of possible projects include electric vehicle charging stations, hydrogen and propane refueling stations, and compressed natural gas refueling stations. More details are available in the PA Bulletin notice.

Crude Oil by Rail: Study Finds that Cost and Flexibility of Rail Transportation Affects Pipeline Usage
On September 25, 2017, the Energy Policy Institute at the University of Chicago (EPIC) published a paper researching the transportation for crude oil by rail versus transportation by pipeline. The paper, entitled Crude by Rail, Option Value, and Pipeline Investment, found that the cost and flexibility of transportation by rail affects the incentive to invest in pipelines. The study found that if the cost of rail transport increased by $1 per barrel there would have been increased use of pipelines. In addition, the study states that if rail transportation could not reach so many destinations, the Dakota Access Pipeline capacity would have been much larger.

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