Tuesday, January 16, 2018

Shale Law Weekly Review - January 16, 2018

Written by:
Jacqueline Schweichler - Education Programs Coordinator
Tori Wunder - Research Assistant

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

Municipal Regulation: Sanctions Imposed Against Attorneys in Grant Township Lawsuit 
On January 5, 2018, the United States District Court for the Western District of Pennsylvania
issued an order imposing sanctions against two attorneys defending Grant Township’s Community Bill of Rights. The Pennsylvania General Energy Company, LLC (PGE) received approval for an injection well in May 2014. In June 2014, Grant Township adopted a Community Bill of Rights that prohibits wastewater disposal from oil and gas activities. PGE subsequently filed this lawsuit arguing that the Community Bill of Rights is unconstitutional and invalid.  According to the Pittsburgh Post-Gazette, the $52,000 sanction was imposed for pursuing “frivolous claims and defenses.” The case is entitled Pennsylvania General Electric Company, LLC v. Grant Township. For more information on the timeline of this case, see our Shale Law in the Spotlight article from last fall.

Production and Operation: The Ohio Supreme Court Rules That There is No Implied Covenant for Further Exploration 
On January 3, 2018, the Ohio Supreme Court decided that there is no implied covenant for further exploration contained within oil and gas leases. In Alford v. Collins-McGregor, the court determined that drillers are not required to explore deeper strata for oil and gas under their lease, so long as they “reasonably develop.” In Alford, the landowners requested, and were denied, a partial termination of their leases because the lessee had failed to explore deeper into the formation. Ohio’s rejection of the implied covenant to explore further brings them in line with the Texas and Oklahoma supreme courts, who have also rejected the covenant.

Municipal Regulation: Pennsylvania Appeals Court Rules That Township Residents May Not intervene in Gas Facility Zoning 
On January 11, 2018, the Commonwealth Court of Pennsylvania issued an opinion in the case regarding the proposed MarkWest Energy Partners, LP natural gas compressor station to be built in Cecil Township. Some residents of Cecil Township are attempting to intervene in the zoning approval of the station, raising opposition to its construction. The court upheld the decision of the trial court and ruled against the residents, stating in part that they had waited too long before intervening.

Pipelines: FERC Denies Request to Stay Construction of the NEXUS Pipeline
On January 10, 2018, the Federal Energy Regulatory Commission (FERC) declined to issue a stay of construction for the NEXUS pipeline project. In September 2017, the Sierra Club and several environmental organizations filed requests for rehearing and requested a stay of construction. The environmental groups argued that their request for rehearing raised substantial questions and there would be no remedy to the environmental impact of the pipeline once it has been fully completed. FERC, however, concluded that the environmental groups were unable to establish that they would suffer irreparable harm absent a stay and that delay of the project would be adverse to public interest.

Pipelines: FERC Denies Petition from Constitution Pipeline in Favor of New York DEC 
On January 11, 2018, the Federal Energy Regulatory Commission (FERC) issued an order declining to declare that the New York State Department of Environmental Conservation (New York DEC) waived its authority to issue a water quality certification for the Constitution Pipeline. The Constitution Pipeline Company, LLC (Constitution) first applied for a certificate of public convenience and necessity in June 2013. In April 2016, New York DEC denied Constitution’s application and Constitution filed a petition with FERC requesting an order stating that New York DEC had waived their authority by failing to act within a “reasonable period of time.” In its order, FERC ruled that New York DEC acted appropriately and within the one-year timeframe, given the changes and resubmissions of Constitution’s application.

Climate Change: New York City Sues Fossil Fuel Companies for Climate Change Damages 
On January 9, 2018, New York City filed a lawsuit against several oil and gas companies for contributing to climate change (City of New York v. BP P.L.C., et al. Case No. 18 v. 182). The lawsuit includes charges of public nuisance, private nuisance, and trespass. The complaint alleges that these corporations produced, marketed, and sold fossil fuels with the knowledge that fossil fuels exacerbate global warming. New York City alleges that they have suffered damages including “inundation, erosion, and regular tidal flooding of its property.” According to New York City Mayor Bill de Blasio, the city has experiences billions of dollars of damage as a result of climate change. In addition to the lawsuit, New York City announced plans to divest up to $5 billion in fossil fuel investments.

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See our Global Shale Law Compendium and this week’s article,
Shale Law Governance in Pennsylvania - Legislation from 2013 to 2016.

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