Monday, March 12, 2018

Shale Law Weekly Review - March 12, 2018

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: PennEast Pipeline Sues County of Northampton in Eminent Domain Proceeding
On March 5, 2018, the County of Northampton issued a press release announcing that they will be involved in an eminent domain lawsuit with PennEast Pipeline Company, LLC (PennEast). PennEast is suing Northampton County to obtain the right of way for the 36-inch PennEast Pipeline that will carry natural gas from Luzerne County, PA to Mercer County, NJ. The Federal Energy Regulatory Commission approved construction for the PennEast project in January 2018. The parcels of land at issue were preserved under the Open Space program and Northampton County argues that they have the duty to protect the land. Northampton County also disputes that PennEast is offering fair market value for the properties and has requested a jury trial in this lawsuit.

Wastewater Treatment/Disposal: EPA Issues Permit for Injection Well in Plum Borough
On March 7, 2018, the U.S. Environmental Protection Agency (EPA) issued a permit to Penneco Environmental Solutions, LLC for an underground injection well in Plum Borough, Pennsylvania. EPA issued public notice and requested comment on the permit in June 2017. EPA subsequently held a hearing in June 2017 which was attended by 200 people. Over 120 people submitted 400 comments on the proposed issuance of the permit.

Landowner Royalties: West Virginia Senate Passes Bill to Allow Drilling When Majority of Royalty Owners Consent
On March 3, 2018, the West Virginia Senate passed bill 4268 which allows oil and gas companies to drill on property where at least three fourths of the royalty interest owners have consented to development. The law would apply only where there are seven or more royalty owners and the drilling operator has made reasonable efforts to negotiate with all owners. Nonconsenting owners may receive a pro rata share of production royalties while profits for unknown or unlocatable owners will be deposited in a fund in the State Treasury.  The bill was passed in the Senate by a vote of 23 to 11 and the bill now goes to Governor Jim Justice.

Pipelines: Public Utility Commission Orders Halt for Mariner East 1 Pipeline
On March 7, 2018, the Pennsylvania Public Utility Commission (PUC) issued an emergency order against Sunoco Pipeline L.P., ordering a temporary shutdown for the Mariner East 1 pipeline (ME1). PUC issued this order after several sinkholes were discovered along the path of the ME1. The order requires Sunoco to suspend hazardous liquids transportation and run a line inspection through the pipeline. Sunoco must keep operations suspended for 10-14 days in order to conduct geophysical testing and analysis. Once corrective actions have been completed, the PUC will determine whether operation of the pipeline may continue.

LNG Exports: Cove Point Facility Exports First Shipment of LNG
On March 1, 2018, the first shipment of liquefied natural gas (LNG) produced at the Dominion Energy Cove Point LNG terminal was exported from the facility. The Cove Point facility is located on the Chesapeake Bay in Maryland and will operate 24/7 under a 20-year contract. The facility receives natural gas from the Marcellus and Utica shale plays and has a production capacity of 8.3 million gallons of LNG per day. The project began in October 2014, cost $4 billion, and involved more than 10,000 craft workers in construction. The Cove Point facility is one of two large LNG export terminals in the United States, including Cheniere Energy’s Sabine Pass terminal in Louisiana, according to Reuters. On March 5, 2018, the Federal Energy Regulatory Commission (FERC) authorized Dominion Energy to commence service for the Cove Point facility. FERC stated that the project has been satisfactorily stabilized and is in compliance with their prior authorization order.

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See our Global Shale Law Compendium and this week’s article, Shale Governance in Michigan

Check out this week’s Shale Law in the Spotlight: Overview of the U.S. EIA
Annual Report on U.S. Crude Oil and Natural Gas Proved Reserves in 2016.

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