Monday, June 25, 2018

Shale Law Weekly Review - June 25, 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.

State Regulation: Federal Court Dismisses Lawsuit Seeking Compensation for New York Hydraulic Fracturing Ban
On June 18, 2018, the U.S. District Court for the Western District of New York dismissed a lawsuit by an East Rochester resident who sued the state of New York for banning hydraulic fracturing. The resident, David Morabito, claimed that the ban constituted an unconstitutional taking of his oil and gas rights. The court, however, decided that the lawsuit was in violation of the Eleventh Amendment, which prohibits parties from suing states for money in federal court.

Pipelines: FERC Declines to Review Approval of Mountain Valley Pipeline
On June 15, 2018, the Federal Energy Regulatory Commission (FERC) issued an opinion denying a request from environmental groups for rehearing in the ongoing lawsuit against Mountain Valley Pipeline, LLC. (MVP). In November 2017, several environmental groups sought rehearing after FERC approved MVP’s Certificate Order authorizing construction and operation of the pipeline. The court held that the Certificate Order complies with all requirements including those within the Natural Gas Act and the National Environmental Policy Act. The pipeline, once completed, will carry natural gas from the Utica and Marcellus Shales in northern West Virginia to a compressor station in southern Virginia. Construction on the project has already begun and completion is expected by the end of 2018.

Pipelines: Fourth Circuit Court of Appeals Issues Stay for Mountain Valley Pipeline Construction
On June 21, 2018, the U.S. Fourth Circuit Court of Appeals issued a stay halting construction on parts of EQT Midstream Partners’ (EQT) Mountain Valley Pipeline in West Virginia (Sierra Club, et al v. U.S. Army Corps of Engineers, et al., No. 18-1173). The stay was requested by Sierra Club, which challenged a permit issued to the project that allows the pipeline to cross streams and wetlands in the southern part of the state. Sierra Club argued that it would not be possible for EQT to cross all four bodies of water within the 72 hours required by the permit. EQT responded to the stay saying that they will be using a different technique to cross the waterways that requires more time but is also is more environmentally protective.

PA Impact Fee: Pennsylvania Announces Distribution of 2017 Shale Gas Fees
On June 21, 2018, the Pennsylvania Public Utilities Commission (PUC) announced the planned distribution of the nearly $210 million collected in shale gas fees in 2017. More than half will be given to counties and municipalities across the state and nearly $80 million will be placed in the Marcellus Legacy Fund, which supports environmental and infrastructure projects in the state. Last year’s total marks an increase from 2016, when Pennsylvania took in $173 million. The PUC also announced that it has now taken in more than $1.4 billion in shale gas fees in the last seven years.

Municipal Regulation: Chatham County Extends Moratorium on Hydraulic Fracturing
On June 18, 2018, the Board of Commissioners of Chatham County, North Carolina extended a moratorium on hydraulic fracturing within the county to January 31, 2019, according to the Herald-Sun. The Board decided to extend the moratorium to conduct further research and fully consider potential impacts. The moratorium was originally put into place in August 2015. The commission received a report from an environmental consultant last October which warned of potential groundwater contamination. The state of North Carolina began allowing oil and gas exploration in 2014. State law preempts local governments from banning it entirely, though counties and municipalities may still regulate the practice.

Methane Emissions: Study Suggests Oil and Gas Industry Leaks Far More Methane Than EPA Reports
On June 21, 2018, a collaboration of researchers from various universities published a study which found that methane emissions from the oil and gas industry may be up to sixty percent higher than reported by the U.S. Environmental Protection Agency. The study estimated that yearly methane emissions from the production and transport of oil and gas are equal to about 2.3 percent of all natural gas production in the United States. The most significant source of leaks, according to the study, are vents and hatches in storage tanks. The study is entitled Assessment of Methane Emissions From the U.S. Oil and Gas Supply Chain, and was published in Science.

Public Health: Report Examines Effect of Energy Companies Located Near Disadvantaged Communities
On June 20, 2018, Food & Water Watch, a Washington, D.C. environmental group, released a report, Pernicious Placement of Pennsylvania Power Plants, detailing the impact of the Pennsylvania oil and gas industry on disadvantaged communities. Specifically, the study concluded that existing power plants were disproportionately located near communities with “lower incomes, higher economic stress, lower educational levels and/or communities of color.”  The report noted that people of color make up nearly half of the population of census tracts within three miles of fossil fuel power plants. Majority white populations, however, were found in less than ten percent of those census tracts within three miles of fossil fuel power plants according to the researchers. The report also noted that household income in Pennsylvania is considerably lower near power plants and rises as residents get further away.

International Development: Judge Says Hydraulic Fracturing is Not Banned in Scotland
On June 19, 2018, Lord Pentland of the Scottish Court of Session issued an opinion in which he agreed with the Scottish government that the nation did not have an enforceable ban on hydraulic fracturing. Scotland had been sued by Ineos Upstream, which claimed that the government had illegally banned the practice in October 2017. Instead, the court agreed with the government’s argument that Scotland’s policy on unconventional oil and gas had not yet been finalized. A representative of the Scottish government stated that the government is currently undertaking environmental impact studies and no final policy will be announced until they are completed in October.

From the National Oil & Gas Law Experts:
Ag Groups File Amicus Brief in WOTUS Case, Amie Alexander, William H. Bowen School of Law (June 18, 2018)
Texas Supreme Court Affirms Washout of a Back-in Interest, Charles Sartain, Gray Reed (June 20, 2018)  

Pennsylvania Legislation:
HB 107 An Act amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in rates and distribution systems, providing for recovery of natural gas distribution system extension costs. (re-reported as committed, June 22, 2018)

HB 2502 An amending Title 58 (Oil and Gas), further providing for well permits (referred to Environmental Resources and Energy, June 18, 2018)

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