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: PA DEP
Schedules Hearings for Falcon Ethane Pipeline
On March 9, 2018, the
Pennsylvania Department of Environmental Protection (DEP) announced a schedule of public hearings on permits
submitted by Shell Pipeline Company for the Falcon Ethane
Pipeline. The proposed pipeline
will begin in Washington County and travel through Allegheny and Beaver
Counties before ending in Potter Township, Beaver County. DEP will hold
hearings on Shell’s water obstruction and encroachment, and earth disturbance
permit applications. The hearings will be held in Beaver, Washington, and
Allegheny Counties on April 3rd, 4th, and 5th, respectively.
Landowner Royalties:
West Virginia Governor Signs Law Allowing Drilling When Majority of Royalty
Owners Consent
On March 9, 2018, West
Virginia Governor Jim Justice signed into law 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 purpose of the new law is to provide an exception
to trespass in order to encourage development of oil and gas resources. The law
applies 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
law will go into effect on July 1, 2018.
Pipelines: Court of
Appeals Denies New York’s Petition for Review of Millennium Pipeline
On March 12, 2018, the
U.S. Court of Appeals for the Second Circuit denied the New York State Department of Environmental
Conservation’s (New York) petition for review in the lawsuit involving the
Millennium Pipeline. In September 2017, the Federal Energy Regulatory
Commission (FERC) issued a Declaratory Order finding that New York waived its
right to issue a water quality certification by failing to act within the
one-year deadline. New York brought this appeal after FERC denied its request
for rehearing. New York argued that it did not waive its authority for the
water quality certification and that FERC does not have jurisdiction over the
Millennium Pipeline. The Court of Appeals disagreed, holding that New York’s
authority was waived and that FERC has jurisdiction under the Natural Gas Act.
Pipelines: West Virginia
Orders Rover Pipeline to Halt Construction
On March 5, 2018, the
West Virginia Department of Environmental Protection (WVDEP) ordered Rover Pipeline LLC (Rover) to cease and desist
in further construction and development of the Rover Pipeline. Rover Pipeline will transport 3.25 Bcf/day natural gas from
the Marcellus and Utica shales to markets across the United States and Canada,
including the Midwest, East Coast, and Gulf Coast. WVDEP stated that Rover
failed to have all erosion control devices in place and, therefore, it was not
in compliance with the Storm Water Pollution Prevention Plan. In addition,
WVDEP found trash and construction debris partially buried on site. Rover also
failed to take steps to prevent sediment liquid discharge and off-site deposits
were found during inspections. Rover has 20 days to submit a corrective action
plan to achieve compliance.
Pipelines: Bayou Bridge
Pipeline is Permitted to Continue Construction
On March 15, 2018, the
U.S. Court of Appeals for the Fifth Circuit issued a stay of the preliminary injunction that had halted
construction of the Bayou Bridge
Pipeline project (Atchafalaya
Basinkeeper, et al., vs. U.S. Army Corps of Engineers, 18-30257). The court stated that Bayou Bridge
Pipeline, LLC is likely to succeed on the merits of its claim. As such,
construction of the 163 mile pipeline expansion may continue. The Bayou Bridge
Pipeline will carry crude oil from Lake Charles, Louisiana, to St. James,
Louisiana in a 24-inch pipe. Construction of the pipeline was stopped on
February 27, 2018
by the U.S. District Court for the Middle District of Louisiana.
Production and
Operation: Pennsylvania Independent Fiscal Office Releases Natural Gas
Production Report
On March 5, 2018, the
Pennsylvania Independent Fiscal Office (IFO) released the Natural Gas
Production Report
for the fourth quarter of 2017. According to the report, total natural gas
production volume increased from 1,273 Bcf in 2016 to 1,399 Bcf in 2017. The
number of producing wells in 2017 also increased by 9.9%, from 7,180 in 2016 to
7,891 in 2017. Two thirds of production occurred in four counties – Susquehanna,
Washington, Bradford, and Greene. Production in Susquehanna increased from
1,210 Bcf in 2016 to 1,304 Bcf in 2017. Pennsylvania ranked second in gross
production from all well types in 2017 with 5,458 Bcf, following Texas with
7,932 Bcf.
Production and
Operation: Ohio Oil & Gas Association Releases Annual Report
In
March 2018, the Ohio Oil and Gas Association released its annual Debrosse
Memorial Report. The report shows that Ohio produced 1,717 Bcf of unconventional
gas and 52 Bcf conventional gas in 2017, compared to 1,389 Bcf and 52 Bcf in
2016, respectively. Overall, natural gas production in Ohio increased by 23% in
2017. Meanwhile, oil production in Ohio decreased by 6% from 17.5 million
barrels of unconventional oil in 2016 to 16.5 million barrels in 2017. While
the number of permits issued in 2017 increased from 561 to 931, the number of
well completions decreased from 620 to 449. The majority of well completions
were located in Belmont County, with 121 horizontal wells.
Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw
HotLinks
"Washington,
Greene counties lead Pa. natural gas producers" -Shale Gas Reporter
"Corpus
Christi set to become major oil export hub as shale drilling surges" -
Houston Chronicle
"OPEC
Acknowledges the Scale of the Shale Boom" - Bloomberg
"Federal
appeals court lifts stay blocking pipeline construction through Atchafalaya
Basin" - The Advocate
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Every week we will post the CASL Ledger which details all our publications and
activities from the week.
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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