Monday, May 7, 2018

Shale Law Weekly Review - May 7, 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: Pennsylvania Public Utility Commission Allows Mariner East 1 Operations to Resume
On May 3, 2018, the Pennsylvania Public Utility Commission (PUC) issued an order allowing Sunoco Pipeline L.P. (Sunoco) to resume operations of the Mariner East 1 Pipeline (ME1). The order was approved by a 5 to 0 vote of the commissioners. The approval order requires that ME1 comply with several reporting and notification conditions. PUC had issued an emergency shutdown order on March 7, 2018, after several sinkholes were discovered along the path of ME1.

Severance Tax: Pennsylvania Severance Tax Bill Introduced to House Committee
On May 3, 2018, House Bill 2253, a bill providing for a new severance tax in Pennsylvania, was introduced and referred to the House Environmental Resources and Energy Committee. House Bill 2253 and Senate Bill 1000 both were announced on April 10, 2018, by bill sponsors, Representative Jake Wheatley, Jr. and Rep. Bernie O’Neill. The two bills provide for a volumetric severance tax and for multi-well permitting. The Governor’s Budget Office estimates that the severance tax will generate approximately $248 million in the first year. In a press release, Governor Tom Wolf states that Pennsylvania is the only gas-producing state in the nation without a severance tax and the purpose of the two bills is to “give Pennsylvania citizens their fair share of revenues from the natural gas industry.”

Pipelines: United States Supreme Court Declines to Hear Constitution Pipeline Case
On April 30, 2018, the United States Supreme Court denied Constitution Pipeline Co., LLC’s (Constitution) petition for a writ of certiorari (Constitution Pipeline Co. v. N.Y. State Dep’t of Envtl. Conservation, 2018 U.S. LEXIS 2726). In April 2015, Constitution filed a Section 401 Water Quality Certification with the New York Department of Environmental Conservation (DEC) for the proposed pipeline project. In April 2016, DEC denied the Water Quality Certification, stating that Constitution failed to analyze alternative routes and address potential impacts to water resources. Constitution filed suit against New York, and in January 2018, Constitution filed this petition requesting that the Supreme Court decide whether New York’s decision exceeds the state’s authority. Constitution argued that the Federal Energy Regulatory Commission (FERC) had approved the pipeline and that under the Natural Gas Act, New York’s permitting and licensing requirements were preempted. The Constitution pipeline is a 124-mile project designed to deliver 650,000 dekatherms of natural gas per day to markets in New York and New England. For more information on the legal background of this case, please see our Shale Law in the Spotlight article, Constitution Pipeline Project - An Overview of Status and Current Legal Developments.

Pipelines: Rover Pipeline Receives Approval from FERC for Market Zone North Segment
On May 1, 2018, Energy Transfer Partners, L.P. announced that the Federal Energy Regulatory Commission (FERC) granted approval for Rover Pipeline, LLC to place their Phase 2 facilities into service. This approval will allow for full commercial operation of the Market Zone North Segment. The Rover Pipeline is designed to transport 3.25 Bcf/day of natural gas from the Marcellus and Utica shale to “markets in the Midwest, Northeast, East Coast, Great Lakes and Gulf Coast regions of the United States and Canada.” Rover Pipeline is still waiting for approval for the entire Mainline B portion of the pipeline, according to Platts.

Infrastructure: Iowa Governor Signs Law Making Critical Infrastructure Sabotage a Felony
On April 17, 2018, Iowa Governor Kim Reynolds signed Senate File 2235 into law. The new law defines critical infrastructure sabotage “to mean any unauthorized act that is intended to cause a substantial interruption or impairment of service rendered to the public relating to critical infrastructure property. The law would apply to protect electrical plants, telecommunications or broadband structures, and transportation infrastructure. In addition, the law would apply to gas, oil, chemical, and petroleum product infrastructure, including processing plants, storage facilities, pump stations, and pipelines.  Violation of this law is a Class B felony and calls for a fine of at least $85,000 but not more than $100,000. Prior versions of the bill included a section allowing for “confinement for no more than 25 years,” however, the final version excluded this section.

Pennsylvania Legislation
Environmental Resources and Energy (H)
Vote to report bill as committed: HB2154 (establishes the Conventional Oil & Gas Wells Act - only relates to conventional wells and establishes program for plugging wells) (April 30, 2018)
Legislation in: HB 2253 (An Act providing for a severance tax and multi-well permitting; and making a related repeal) (May 3, 2018)

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Check out this week’s Shale Law in the Spotlight: PennEast Pipeline Project - An Overview of Status and Current Legal Developments.
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