Tuesday, November 20, 2018

Shale Law Weekly Review - November 20, 2018

Written by:
Brennan Weintraub - Research Assistant
Jackie Schweichler - Staff Attorney

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

Pipelines: Montana Federal Judge Orders Construction Halt for Keystone XL Pipeline
On November 8, 2018, the U.S. District Court for the District of Montana issued an order temporarily halting further construction and operation of the Keystone XL pipeline (Indigenous Environmental Network v. United States Department of State, CV-17-29-GF-BMM). In the opinion, the court found that the federal government did not satisfy its obligations under the National Environmental Policy Act in approving construction of the Keystone XL pipeline . Specifically, the court found that the Department of State’s environmental analysis fell short of the “hard look” required by the statute. The court ordered the Department to supplement its analysis by looking at several other issues, including the effect of oil prices on the pipeline, cultural resources that may be affected by construction, and the potential for oil spills.

Municipal Regulation: Pennsylvania Appeals Court Upholds Penn Township Hydraulic Fracturing Exceptions
On November 8, 2018, the Pennsylvania Commonwealth Court affirmed a trial court decision in Westmoreland County upholding the grant of permits to several shale gas wells in Penn Township (Protect PT v. Penn Township Zoning Hearing Board and Apex Energy (PA), LLC, No. 39-42 C.D. 2018). Opponents of the permits argued that local water and air quality would be threatened and that the proposals did not adequately address the issue of wastewater generated by the wells. The Commonwealth Court found that the exceptions granted by the Penn Township Zoning Hearing Board complied with the applicable zoning ordinances, and that there was not sufficient evidence that the community would suffer adverse impacts.

Electricity Generation: West Virginia Supreme Court Affirms Grant of Permit for Natural Gas Power Plant
On November 1, 2018, the West Virginia Supreme Court of Appeals issued an opinion affirming the siting certificate for ESC Brooke County Power (Ohio Valley Jobs Alliance, Inc., et al. v. The Public Service Commission of West Virginia, et al., No. 18-0249).  Petitioners alleged that the Public Service Commission of West Virginia, which granted the siting permit, should have required a hypothetical tax estimate for the project and a finding that the plant would have a substantial positive impact on the state and local economies.  While the court agreed that a tax estimate should have been required, it found that the weight of the evidence was in favor of the permit, and therefore, affirmed the granting of the permit.  The plant, which claims that it will produce up to 830 megawatts of power and $440.5 million in total economic impact, will be powered by the significant natural gas reserves found across the state of West Virginia as part of the Marcellus Shale.

Wastewater Treatment/Disposal: New Mexico Releases Draft White Paper for Reuse of Oil and Gas Wastewater
On November 9, 2018, the state of New Mexico, in collaboration with the U.S. Environmental Protection Agency (EPA), released a draft white paper on potential changes to regulations for treatment and reuse of oil and gas wastewater. New Mexico, one of the most arid states in the nation, generates roughly 38 billion gallons of wastewater from oil and gas field in the Permian Basin, which covers much of the southeastern portion of the state.  In the draft white paper, EPA and New Mexico identified regulatory opportunities, such as incentivizing the re-use of produced water and researching the treatment of produced water for potable uses.  (Oil and Natural Gas Produced Water Governance in the State of New Mexico - Draft White Paper)

Pipelines: Louisiana Landowners Sue Bayou Bridge Pipeline for Trespass and Property Damage
On November 9, 2018, a group of landowners from Louisiana’s Atchafalaya Basin filed a pre-trial memorandum in their case against the Bayou Bridge Pipeline, LLC. (Bayou Bridge Pipeline LLC v. 38.00 Acres, More or Less, et al., No. 87011-E).  The plaintiffs are suing Bayou Bridge for trespass and property damage, alleging a lack of legal authority to build on their land. The plaintiffs allege that pipeline construction has resulted in the felling of a number of trees and destruction of their land.  The pipeline, according to the plaintiffs, was in the process of expropriating the land under the state’s eminent domain laws, but it began construction on their property before the process was completed. When completed, the pipeline will run 163 miles, from East Texas to southwest Louisiana, and carry up to 480,000 barrels of oil per day.

Methane Emissions: EPA Holds Public Hearing on Methane Rule Changes
On November 14, 2018, the Environmental Protection Agency (EPA) held a public hearing on the proposed rule, Oil and Natural Gas Sector Emission Standards for New, Reconstructed, and Modified Sources Reconsideration.  The proposed rule was published on October 15, 2018, and would reduce the frequency of inspections for oil and gas drilling sites and would alter or eliminate requirements for pneumatic pumps at well sites and certification from a professional engineer. EPA estimates that these changes will save the oil and gas industry up to $75 million a year.  According to the Denver Post, the hearing invited support from some industry leaders, but opposition from many private citizens.  Comments on the proposed rule will be accepted until December 17, 2018.

Municipal Regulation: Oklahoma Supreme Court Rules Against County Restricting Oil and Gas Operations
On November 13, 2018, the Oklahoma Supreme Court issued an order finding Kingfisher County’s local ordinances to be contrary to state law (Oklahoma Oil & Gas Association, v. The Kingfisher County Commissioners, No. 117,303).  The Kingfisher County ordinances banned temporary oil and gas lines from carrying produced water within county road easements.  The court found that the Oklahoma Corporation Commission, not local authorities, has the authority to regulate the transportation and disposal of produced water from oil and gas operations. Further, the court held that the Oklahoma Corporation Commission has the authority to determine the validity of similar local ordinances regarding restrictions on energy development.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (November 19, 2018)

Charles Sartain, Local Zoning Board Okays Drilling-Friendly Ordinance, Gray Reed (November 14, 2018)

Michael Burger, Sabin Center Briefs Court in Exxon Lawsuit Appeal, Climate Law Blog (November 16, 2018)

Pennsylvania Notices
Public Hearings regarding: Air Quality Plan Approvals for Proposed Compressor Stations in Delaware, Bucks Counties (December 4, 2018)

Upcoming Meeting: Conservation and Natural Resources Advisory Council Meeting (November 28, 2018)

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