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.
Water Quality: Pennsylvania
Supreme Court Rules Against Imposition of Additional Fines by DEP for Ongoing
Pollution
On March 28, 2018, the Pennsylvania
Supreme Court held that penalties for violations of the Clean Streams Law apply
only to contamination that occurs from the original release of a pollutant and
not for subsequent days when that pollutant remains in the waterway. (EQT
Production Co. v. DEP, No. 6 MAP 2017). The court determined that it was
“most reasonable to conclude the Legislature was focused on protecting the
waters of the Commonwealth with reference to the places of initial entry.” The
case revolves around fines issued by the Department of Environmental Protection
(DEP) against EQT Production Company. DEP issued a fine that included
penalties for each day that the pollution remained in Pennsylvania waters. EQT
argued that the Clean Streams Law only authorizes penalties for the initial
waste violation.
Pipelines: DEP Halts
Drilling Operations for Mariner East II at Two Sites After Spills
On March 26, and 30,
2018, the Pennsylvania Department of Environmental Protection (DEP) issued two notices of violation to Sunoco for drilling fluid
spills associated with the Mariner East 2
Pipeline Project.
Both incidents involved less than one gallon of drilling fluid that was
released into wetlands qualifying as waters of the Commonwealth. The drilling
fluids in this case constitute Industrial Waste and discharge; therefore, the
spills violate the Clean Streams Law. The first spill occurred in Huntingdon
County on March 23, 2018, and the second spill
occurred in Perry County on
March 29, 2018. Sunoco may not restart
drilling operations for either site until DEP has given its approval.
Bankruptcy: Bankruptcy
Court Approves Plan for Philadelphia Energy Solutions
On March 26, 2018, the
U.S. Bankruptcy Court for the District of Delaware approved the
bankruptcy plan
for Philadelphia Energy Solutions (PES). According to The Inquirer, PES was forced to engage in bankruptcy
proceedings due to the high cost of renewable energy credits. As the largest
oil refining complex, PES operates two domestic refineries which process 335,000 barrels of
crude oil per day. PES is owned by The Carlyle Group and is a subsidiary of
Energy Transfer Partners, L.P.
Landowner Royalties:
West Virginia No Longer Allows Post Production Deductions from Royalty Payments
On March 9, 2018, West
Virginia Governor Jim Justice signed into law a new bill that will not allow
for the issuance of a well permit unless the operator certifies that minimum
royalty obligations have been satisfied. Senate Bill 360 amends W. Va. Code §22-6-8, which generally prohibits the issuance of permits with flat well
royalty leases unless the permit is accompanied by an affidavit certifying a
specified minimum payment to the lessor. Originally, the law required that the
lessor would be granted at least a one-eight interest of the total amount of
the interest at the wellhead. Senate Bill 360 amends the law so that a new
permit will be invalid unless the royalty is not less than one-eighth of the
gross proceeds with no post-production cost deductions.
Pipelines: Virginia
Approves Two Permits for Mountain Valley Pipeline
On March 26, 2018, the
Virginia Department of Environmental Quality (DEQ) approved Erosion and Sediment Control and Stormwater
Management Plans for Mountain Valley Pipeline, LLC (MVP). DEQ’s approval
authorizes MVP to begin “land disturbing activities.” The Mountain Valley Pipeline will carry natural gas from the Marcellus and
Utica shale plays to markets in the Mid and South Atlantic regions of the U.S.
The pipeline is over 300 miles long and will provide up to two Bcf of gas per
day. According to Argus, this new approval means MVP may now begin full
construction in the state.
Methane Emissions:
Report Recommends Increased Collection of Methane Emissions Data
On March 27, 2018, the National
Academies of Science, Engineering, and Medicine (NASEM) released a report that
examines various approaches to measuring, monitoring, and developing methane
emissions. Research for the report was conducted by the Committee on
Anthropogenic Methane Emissions in the United States. The purpose of the report
is to assist in the development of improved methane emissions inventories that
are more accurate and verifiable. The Committee examined emissions from
cattle farms as well as petroleum and natural gas facilities. The report is
entitled, Improving Characterization of Anthropogenic
Methane Emissions in the United States, and can be found on the NASEM website.
International
Development: Australian Territory Presents Final Report on Hydraulic Fracturing
On March 27, 2018, the
Independent Scientific Inquiry into Hydraulic Fracturing on Onshore
Unconventional Reservoirs in the Northern Territory (Inquiry) presented their final report to the Northern Territory
Government. The Inquiry was established after the Northern Territory Government
announced a moratorium on onshore hydraulic fracturing. The purpose of the
report, Scientific
Inquiry into Hydraulic Fracturing in the Northern Territory, is to identify and examine “the environmental,
social, cultural, and economic risks associated with hydraulic fracturing for
onshore shale gas in the NT, and to make recommendations to mitigate those
risks...” The report includes a list of recommendations for regulatory reforms
and actions that could be taken to mitigate any negative effects of hydraulic
fracturing.
Induced Seismicity:
Southern Methodist University Publishes Research on Geohazards Associated with
Human Activity
On March 16, 2018,
researchers from the Southern Methodist University of Dallas published a report on the relationship between human activity and
geohazards. The researchers examined West Texas’ Permian Basin using satellite
radar imaging. They conclude that oil and gas production activities have a
“negative impact on the ground surface and infrastructures, including possible
induced seismicity.” The researchers suggest that proactive, detailed, and
continuous monitoring of oil and gas operations is essential for human safety,
preservation of property, and for the growth of the energy industry. The study
is entitled Association
Between Localized Geohazards in West Texas and Human Activities, Recognized by
Sentinel-1A/B Satellite Radar Imagery.
"Does Scientific Report Open Road For Hydraulic Fracturing In Australia?" - Oil and Gas Investor
"Is This The World’s Next Petrochemical Hub?" - Oil Price
"Global Crude Oil Outlook: It’s All About OPEC, US Shale" - Oil and Gas Investor
"Pennsylvania DEP grants approval for natural gas fired power plant" - Shale Gas Reporter
Connect with us on Facebook! 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 Law Governance in Pennsylvania - Regulations from 2008 to 2010
Check out this week’s Shale Law in the Spotlight: Rover Pipeline Project - An Overview of the Current Legal Developments.
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