Monday, November 20, 2017

Shale Law Weekly Review - November 20, 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: FERC Denies New York’s Request for Rehearing on Millennium Pipeline Water Quality Certification
On November 15, 2017, the U.S. Federal Energy Regulatory Commission (FERC) issued an order denying the New York State Department of Environmental Conservation’s (New York DEC) request for rehearing and stay of FERC’s September 2017 Declaratory Order.  In November 2016, FERC granted Millennium Pipeline Company, LLC’s request for a certificate of public convenience and necessity for the Valley Lateral Project in Orange County, New York. Millennium then applied for a water quality certification from the New York DEC. In September 2017, FERC issued a Declaratory Order finding that New York DEC waived its authority to issue a water quality certification by failing to act within the one-year deadline. New York DEC requested a rehearing, arguing that the one-year deadline did not begin until the application was complete, however, FERC concluded here that the waiver period began as soon as the certification application was received.
Local Regulation: Richmond County Votes to Ban Oil and Gas Drilling
On November 9, 2017, the Richmond County (Virginia) Board of Supervisors voted unanimously to ban oil and gas drilling in the county, according to the Free Lance-Star.  The Planning Commission had met in early October to discuss possible changes to the Zoning Ordinance regarding hydraulic fracturing. These amendments were presented to the Board at the November Public Meeting.   According to the article, the board expressed concern that any drilling would negatively affect the Rappanhannock River, the county’s water supply. In addition, board members stated that no land in the county had been leased for oil and gas development through hydraulic fracturing operations.
Pipelines: Sierra Club Files Emergency Petition to Stay FERC Certificate for Pipeline
On November 13, 2017, the Sierra Club filed an emergency petition for a temporary writ staying the Federal Energy Regulatory Commission (FERC) order granting NEXUS Gas Transmission LLC’s Certificate of Convenience and Necessity. FERC issued the order in August 2017, and the Sierra Club filed a timely request for rehearing. FERC issued a Notice to Proceed for the NEXUS pipeline and then postponed ruling on the rehearing request indefinitely. In response, the Sierra Club filed this complaint with the Court of Appeals requesting a stay of the FERC order until FERC has decided on the merits of the rehearing request.
Pipelines: Transco Requests FERC Approval for Gateway Expansion Project
On November 15, 2017, Transcontinental Gas Pipe Line Company, LLC (Transco) filed an application with the Federal Energy Regulatory Commission (FERC) requesting an order for a Certificate of Public Convenience and Necessity for the Gateway Expansion Project. If approved, the project will provide up to 65,000 dekatherms of natural gas per day to consumers in the northeast. The expansion will add more horsepower to the existing Transco electric motor driven compressor in Essex County, New Jersey.
LNG Exports: FERC Grants Permission to Dominion Energy for LNG Export from Cove Point Facility
On November 13, 2017, the Federal Energy Regulatory Commission (FERC) granted Dominion Energy permission to export by vessels liquefied natural gas (LNG) at Cove Point, the proposed liquefaction plant located on the Chesapeake Bay in Lusby, Maryland. The natural gas will be sourced from the Marcellus and Utica shale plays, and the facility will process an average of 750 million cubic feet of inlet feed gas per day. FERC notes in the approval letter that the authorization does not also grant approval for commencement of service.
Pipelines: Forest Service Issues Special Use Permit for Atlantic Coast Pipeline
On November 17, 2017, the U.S. Forest Service issued a final Record of Decision to issue a special use permit for the Atlantic Coast Pipeline Project. The decision authorizes Atlantic Coast Pipeline LLC to construct, operate, and maintain a natural gas pipeline that will cross National Forest System lands, including the Monongahela National Forest and the George Washington National Forest. The Atlantic Coast Pipeline will include over 600 miles of interstate natural gas pipeline with 21 miles of pipeline located on national forestland.  The Forest Service states that this decision supports federal policy emphasizing energy infrastructure and economic growth.
Economic Development: Ohio Releases Report Showing Increased Production Value of Oil and Gas
On November 8, 2017, the Ohio Department of Natural Resources announced the release of their 2016 Report on Ohio Mineral Industries: An Annual Summary of the State’s Economic Geology which shows that Ohio produced more than $1.6 billion in geologic commodities in 2016. The value of oil and natural gas produced in 2016 was over $4.2 billion, compared to $2.9 billion in 2015. Ohio produced 1.4 billion MCF natural gas which is a 71.4% increase from 2015. Conversely, Ohio produced 14.6% less oil than they did in 2015, with only 21.4 million barrels of oil.
Pipelines: Analysis Group Publishes Report Analyzing Production and Consumption of Natural Gas
On November 6, 2017, the Analysis Group published a report on Natural Gas Pipeline Certification Policy, which reviews the current production and consumption of natural gas in the United States and analyzes the potential policy impact on pipeline development. The report states that in the past eighteen years, FERC has approved pipeline applications for an additional pipeline capacity of 180 Bcf per day. The report also notes that the average daily consumption of natural gas in 2017 is only 93.1 Bcf/d, and the highest peak was 137 Bcf/d during the 2014 Polar Vortex. The report recommends that FERC “undertake a structured and collaborative review of its pipeline certification guidance and policy.”

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