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: Pennsylvania Issues Notice of Violations to Mariner East 2
On March 19, 2018, the Pennsylvania Department of Environmental Protection (DEP) issued a notice of violation to Sunoco Pipeline for the discharge of drilling fluids into the Juniata River. According to Sunoco, the overflow was due to drilling activities that caused water to be released into the drill pit at a rate of 500 gallons per minute, exceeding onsite management capacity. Further, on March 15, 2018, DEP issued two additional violation notices for drilling fluid discharge. The notices cited violations for spills occurring in Snitz Creek in West Cornwall Township, Lebanon County, and for discharge of 200 gallons of fluids within a wetland in Frankstown Township, Blair County. Each of these violations were associated with the horizontal directional drilling used for the construction of the Mariner East 2 pipeline project.
Wastewater Treatment/Disposal: Pennsylvania Department of Environmental Protection Approves Injection Well for Clearfield County
On March 22, 2018, the Pennsylvania Department of Environmental Protection (DEP) approved an underground injection well for Brady Township, Clearfield County. The injection well, Windfall Oil & Gas Inc.’s Frank & Susan Zelman #1, will be used for the disposal of wastewater associated with oil and natural gas production. The application for the permit was submitted to DEP in September 2015 and a public hearing was held in March 2016. Permit approval includes conditions relating to seismic monitoring for early detection of seismic events.
Severance Tax: Independent Fiscal Office Releases Report on Proposed Severance Tax
On March 16, 2018, Pennsylvania’s Independent Fiscal Office (IFO) released a report to assess the impact of the proposed severance tax. The report was prepared on behalf of Sen. Lisa Baker who asked how a severance tax could affect post-production costs that are deducted from landowner’s royalty checks. The IFO suggests that the proposed severance tax could generate $210 million in tax revenue during the first fiscal year. In that first year, IFO estimates that $28 million of the tax could be passed back to landowners. The report notes, however, that the proposed tax specifically prohibits oil and gas companies from deducting the severance tax from landowner royalty payments.
Interstate Commissions: Tri-State Shale Coalition Agreement is Extended
On March 21, 2018, Pennsylvania, Ohio, and West Virginia agreed to an extension of the Tri-State Shale Coalition Agreement, according to a press release from Governor Tom Wolf. The purpose of the agreement is for each state to cooperate in shale oil and gas development in order to maximize development opportunities. The agreement highlights four primary areas of cooperation which includes workforce development, marketing and promotion, transportation and infrastructure, and research. The agreement was first signed in 2015 in order to promote tri-state collaboration on development efforts within the Appalachian Basin to achieve the greatest economic success.
Pipelines: FERC Approves Construction of Mountain Valley Pipeline within West Virginia and Virginia
On March 12, 2018, the Federal Energy Regulatory Commission (FERC) granted Mountain Valley Pipeline, LLC’s request to commence construction in West Virginia and Virginia. Specifically, FERC is permitting construction activities within Summers and Webster Counties, West Virginia, and Giles, Roanoke, and Pittsylvania Counties, Virginia. The notice also grants Mountain Valley permission to construct additional workspaces in various counties. FERC determined that the Mountain Valley pipeline satisfies the environmental conditions and confirmed the receipt of all necessary federal authorizations for these areas.
Pipelines: Maryland Approves Application for Pipeline to Cross Potomac River
On March 16, 2018, the Maryland Department of the Environment (MDE) approved Columbia Gas Transmission LLC’s (Columbia) application to construct 3.06 miles of 8-inch pipeline in Maryland. The pipeline, part of the Eastern Panhandle Project, will cross the Potomac River, a tributary to the Potomac, as well as other creeks and tributaries in Washington County. Columbia will use horizontal directional drilling and open-cut trenching in these operations. The purpose of the project is to “increase natural gas supply options and system reliability options, thereby reducing the risk of interruption.” MDE held hearings for the project in December 2017 and January 2018. Hearings were attended by approximately 300 people and MDE received over 2,400 written public comments.
Production and Operation: U.S. Natural Gas Exports Surpass Imports
On March 19, 2018, the U.S. Energy Information Administration (EIA) published information indicating that the United States exported more natural gas than it imported in 2017. This is the first time in the past 60 years that the U.S. has been a net natural gas exporter. According to EIA, this change occurred as a result of a significant increase in natural gas production, especially in the Appalachian region. In addition, the U.S. has decreased pipeline imports from Canada and increased exports by pipeline and liquefied natural gas.
"At Allegheny River's headwaters, treatment plant for fracking wastewater stirs debate" - PittsburghPG
"State says PES owes $3.8 billion in back taxes, urges court hold up bankruptcy plan" - State Impact
"Women in energy: Perspectives on gender balance" - The Stream
"More lawsuits flow against Mariner East construction" - Pittsburgh PG
"Wisconsin frac sand industry roars back, but new competition looms" - Lacrosse Tribune
"South Korean company signs on to build ethane cracker in Ohio" -Shale Gas Reporter
"City Declares A Frack-Out" - NewHaven Independent
"South Korea's SK Innovation To Buy US Shale Oil Company" - Oil and Gas Investor
"How Two Wells in Wyoming Explain the Natural-Gas Glut" - The Wall Street Journal
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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: Bayou Bridge Pipeline Project - An Overview of the Current Legal Developments.