Shale Law Weekly Review - June 19, 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.

Pipelines: PUC Allows Mariner East 1 Pipeline to Restart

On June 14, 2018, the Pennsylvania Public Utilities Commission issued an order allowing Sunoco Pipeline, L.P. to continue some, but not all, pipeline construction operations within West Whiteland Township, located in Chester County. The order dissolves the operation injunction against Mariner East 1, but affirms the injunction prohibiting construction of Mariner East 2 and Mariner East 2X. The pipeline had previously been ordered to suspend construction activities in May 2018 when the Commission determined that continued construction could pose a risk to public safety. The order states that to seek continued construction on the Mariner East 2 and East 2X, Sunoco must file information on leak detection, repairs, inspection frequency, testing, preventative inspection and maintenance, and submit a comprehensive emergency response plan.

State Regulation: Ohio Legislature Passes Bill Modifying Sales and Use Tax Exemption for Oil and Gas
On June 7, 2018, the Ohio state legislature passed HB 430 which, if signed by Governor John Kasich, would modify current legislation governing the sales and use tax exemption applicable to the oil and gas industry in the state. According to the bill’s sponsor, Tim Schaffer, the purpose of HB 430 is to clarify and narrow the scope of existing exemption. The bill specifies which oil and gas activities will be exempt including, but not limited to, drilling services, equipment and rigging, equipment trailers, pressure pumping equipment, reservoir stimulation and hydraulic fracturing services. The bill passed in the Senate with a vote of 32 to 1 and in the House with a vote of 73 to 13.

Water Quality: Study Examines Groundwater Quality in Marcellus Shale

On May 22, 2018, a study conducted by Penn State researchers that was published in Environmental Science & Technology, found few instances of groundwater contamination from hydraulic fracturing and a general trend of improving water quality in Bradford County, Pennsylvania. Bradford County is host to a large number of drilling operations, but the study found instances of possible contamination in the vicinity of only seven of nearly 1400 wells. According to the researchers, the improved groundwater quality could be due to “decreased acid rain (pH, sulfate) since the imposition of the Clean Air Act or decreased steel production (Fe, Mn).” The study is entitled, Big Groundwater Data Sets Reveal Possible Rare Contamination Amid Otherwise Improved Water Quality for Some Analytes in a Region of Marcellus Shale Development.

Wastewater Treatment/Disposal: Study Examines Potential Health Impacts from Use of Drilling Fluid on Roadways

On May 30, 2018, a study conducted by Penn State researchers, Environmental and Human Health Impacts of Spreading Oil and Gas Wastewater on Roads, was published in the online Environmental Science and Technology journal. Researchers found that the application of oil and gas wastewater to roadways could potentially harm aquatic life and pose health risks to humans. The researchers first evaluated the mobility of oil and gas wastewater used on roads and then measured the aquatic and human toxicity potential. Drilling fluid has been used in Pennsylvania for deicing and to suppress dust emissions from unpaved roads.  The researchers found that from 2008 to 2014, drilling fluid spread on Pennsylvania roads “released over 4 times more radium to the environment (320 millicuries) than O&G wastewater treatment facilities and 200 times more radium than spill events.” Last month, the Pennsylvania Department of Environmental Protection suspended its permit program for wastewater spreading on unpaved roads across northern and western Pennsylvania.

Pipelines: South Dakota Supreme Court Dismisses Keystone XL Pipeline Appeal

On June 14, 2018, the South Dakota Supreme Court dismissed an appeal by opponents of the Keystone XL pipeline, finding that a lower court did not have jurisdiction to hear the case. The case revolved around the construction permit issued for the Keystone XL by the South Dakota Public Utilities Commission. Construction did not begin on the pipeline within the four years specified in the permit and as a result, TransCanada had to submit new certification. The Commission conducted an evidentiary hearing and eventually accepted the certification. The Commission’s decision was appealed to the Sixth Judicial Circuit Court for Hughes County, which, according to the South Dakota Supreme Court, did not have subject-matter jurisdiction. The proposed pipeline expansion would carry crude oil from Canada through the states of Montana, South Dakota, and Nebraska before connecting to the existing Keystone pipeline system.

Oil and Gas Leasing: Federal Court Reverses BLM Oil and Gas Leases in New Mexico

On June 14, 2018, the United States District Court for the District of New Mexico overturned the grant of several oil and gas leases in northwestern New Mexico, saying that the Bureau of Land Management (BLM) had not adequately considered the potential environmental impacts of the developments. In her decision, Judge Armijo wrote that BLM had violated the National Environmental Policy Act by not studying the effects of fossil fuel combustion on the San Juan Basin.

Pennsylvania Legislation
Environmental Resources and Energy (H)
Bill 2485 referred to Environmental Resources and Energy (would amend Title 27 enabling legislation to fund projects and programs for a Growing Greener III program) (June 12, 2018)

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“Shale Crescent USA wants to rebrand region” - The Intelligencer
“DNC to reject fossil fuel company donations” - The Hill
“In possible roadblock for Keystone XL, pipeline opponents gift land to Ponca” - Omaha World-Herald
“Researchers bring new tools to identify methane sources” - E&E News
“First Nations look to buy equity in pipeline to have say in project’s future” - The Guardian
“State and federal grants awarded to Lycoming County” - Williamsport Sun-Gazette

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This week we have two Shale Law in the Spotlights, check them out here: Overview of State Critical Infrastructure Protection Statutes and Related Legislation; and FERC Seeks Comment on Proposed Policy Changes Regarding Natural Gas Pipeline Certification Process

Stay informed with our monthly Agricultural Law Brief located here.