Tuesday, June 12, 2018

Shale Law Weekly Review - June 12, 2018

Written by:
Brennan Weintraub - Research Assistant
Jackie Schweichler – Education Programs Coordinator

The following information is an update of recent local, state, national, and international legal developments relevant to shale gas.

Methane Emissions: New General Permits for Unconventional Wells Finalized
On June 7, 2018, Pennsylvania Governor Tom Wolf and the Department of Environmental Protection announced final permit revisions for GP-5 and GP-5A permits.  The stated purpose for the new general permits is to reduce methane emissions and set thresholds for volatile organic compounds, hazardous air pollutants, and nitrogen oxides.  The permit changes are part of Pennsylvania’s methane emissions reduction strategy, which was announced in January 2016.  The changes will affect unconventional natural gas wells as well as compression, processing, and transmission facilities.  Both new permits will go into effect August 8, 2018.

Production and Operation: Court Rejects Company’s Request for Reconsideration in “Rule of Capture” Decision
On June 8, 2018, the Pennsylvania Superior Court denied a request by Southwestern Energy Production Company to reconsider its case against a Susquehanna County family who successfully sued the company for trespass and conversion earlier this year (Briggs, et al. v. Southwestern Energy Production Co. No. 1351 MDA 2017).  The case hinged largely on the applicability of the historic doctrine of the “rule of capture” to hydraulic fracturing.  The court held that hydraulic fracturing could constitute actionable trespass where subsurface fractures, fracturing fluid, and proppant cross property boundary lines.  According to StateImpact, Southwestern Energy plans to appeal the case to the Pennsylvania Supreme Court.

State Regulation: Pennsylvania House Passes Bill to Revise Conventional Drilling Standards
On June 5, 2018, the Pennsylvania House of Representatives passed a bill which seeks to reinstate provisions of the Oil and Gas Act of 1984 for conventional wells that were superseded by Act 12 of 2012.  Under this legislation, conventional drillers would be subject to different environmental standards than are applicable to unconventional drillers.  House Bill 2154 affects general requirements for underground gas storage, enforcement and remedies, funds, and various other provisions.  The purpose of HB 2154 is to reduce the economic burden on smaller conventional producers to clarify and update current regulations.  HB 2154 was introduced by Representative Causer and passed in the House by a vote of 111 to 84.  The bill was referred to the Senate Environmental Resources and Energy Committee on June 8, 2018.

Methane Emissions: Court Declines to Lift Stay of Waste Prevention Rule
On June 4, 2018, the 10th Circuit Court of Appeals refused to lift an injunction imposed by a lower court in the ongoing legal case for the Bureau of Land Management’s (BLM) Waste Prevention Rule (Wyoming et al., v. Dept. of the Interior, No. 18-8027).  The rule, Waste Prevention, Production Subject to Royalties, and Resource Conservation was promulgated in November 2016 for the purpose of reducing methane emissions from venting, flaring, and leaks during natural gas production.  Following the transition from the Obama administration to the Trump administration, BLM announced they would be reviewing the rule and delaying certain provisions.  BLM then published a proposed rule in February 2018 that revised the Waste Prevention Rule.  Soon after, Montana and Wyoming filed a motion requesting a suspension of the deadlines within the original Waste Prevention Rule, in light of the new proposed rule.  The lower court granted their request and issued a stay of the original Waste Prevention Rule in April 2018, stating that it would be a “waste of judicial resources” to go forward with this case while BLM revisions to the original rule are pending (Wyoming et al, v. Dept. of the Interior, et al., No. 2:16-CV-0285-SWS).  For more information on this, please see our Shale Law in the Spotlight article, Current Legal Developments Relating to Bureau of Land Management (BLM) Rules on Methane Waste Prevention and Hydraulic Fracturing. 

International Development: Cuadrilla Secures New Injunction Against Hydraulic Fracturing Protesters
On June 1, 2018, the High Court in Manchester, England approved a temporary injunction preventing protesters from trespassing on one of Cuadrilla’s proposed drilling sites in Lancashire and from interfering with vehicles entering or exiting the site.  The injunction replaces the current injunction forbidding trespass until August 31, 2018.  Cuadrilla is a privately owned exploration and production company headquartered in Lancashire.  The company has been granted exploration licenses for 600,000 acres in the United Kingdom.

Pennsylvania Legislation
Environmental Resources and Energy (H)
Bill 2454 referred to Environmental Resources  and Energy (would require the amount of funds used annually by DEP to be set by the General Assembly) (June 4, 2018)  
Bill 2462 referred to Environmental Resources and Energy (provides for registration of on-lot wastewater treatment system inspectors) (June 5, 2018)
Bill 952 referred to Environmental Resources and Energy (resolution urging Congress to support legislation advancing the development of an Appalachian storage hub for natural gas) (June 5, 2018)

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