Shale Law Weekly Review - December 12, 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: State Department to Prepare Supplemental Environmental Impact Statement for Keystone XL Pipeline

On December 3, 2018, the U.S. State Department issued a Notice of Intent to prepare a supplemental Environmental Impact Statement (EIS) for the proposed Keystone XL pipeline. TransCanada resubmitted its 2012 Presidential permit application for the Keystone XL in January 2017.  Shortly thereafter, the Under Secretary of State for Political Affairs issued the pipeline permit to TransCanada, and the Nebraska Public Service Commission approved the Mainline Alternative Route.  Following the Department of State’s (Department) issuance of the draft EIS for the Mainline Alternative route, the U.S. District Court for the District of Montana ordered Department to supplement its analysis.  The court found that Department had not taken a sufficiently “hard look” at the potential environmental impacts of the project (Indigenous Environmental Network v. United States Department of State, CV-17-29-GF-BMM). The pipeline, if completed, will carry crude oil from Canada to terminals in Oklahoma and Texas.

Air Quality: Ohio EPA Considers Expanding Air Pollution Requirements to Existing Unconventional Oil and Gas Facilities

On November 20, 2018, the Ohio Environmental Protection Agency issued a press release asking for comments on proposed changes to oil and gas rules in the state. Specifically, the agency is considering expanding air pollution emission standards.  The new rules would continue to cover all new unconventional oil and gas facilities as well as existing facilities.  According to the press release, the agency is looking for comments from stakeholders before they draft new language for the rules. The agency will be accepting comments through December 14, 2018.

Pipelines: Louisiana Court Orders Bayou Bridge to Pay Fees for Trespass but Allows Expropriation of Properties Along Pipeline Route

On December 6, 2018, the Louisiana 16th Judicial District Court held that Bayou Bridge Pipeline, LLC (Bayou Bridge) trespassed when it built its pipeline on private land in the Atchafalaya Basin (Bayou Bridge Pipeline, LLC v. 38 Acres, More or Less, Located in St. Martin Parish, No. 87011). The court also found that Bayou Bridge, an entity owned by Energy Transfer Partners, had the right to expropriate properties along the pipeline route. The court determined that the Bayou Bridge Pipeline has a public purpose and that expropriation is reasonably necessary to complete the project.  Bayou Bridge obtained “numerous rights of way” from the hundreds of owners who own a portion of the 38 acres at issue in this lawsuit.  The three landowners in this case had interests between 0.00994% and 0.05803%.  The court determined treble damages based on market value to be between $0.91 and $6.64.  The plaintiffs each were awarded a total of $150 in damages and compensation.  The pipeline, once complete, will carry crude oil 163 miles from Lake Charles to St. James, Louisiana, from where it will be distributed to refineries across the Gulf Coast.

Public Lands: BLM Announces Plans to Open Sage Grouse Habitat to Development

On December 6, 2018, the Bureau of Land Management (BLM) detailed its plans to open roughly nine million acres currently protected as sage grouse habitat to mining and drilling operations.  BLM published the proposed resource management plan amendments and final environmental impact statements regarding the Greater Sage-Grouse for Oregon, Colorado, Idaho, Utah, Wyoming, Nevada and Northeastern California.  According to a New York Times article, the proposed changes would limit the species’ protected area to roughly 1.8 million acres.   These changes follow a 2015 decision that placed restrictions on oil and gas drilling within nearly eleven million acres of sage grouse habitat.

From the National Oil & Gas Law Experts:

George Bibikos, At the Well Weekly, (December 10, 2018)

Charles Sartain, Local Taxation of Oil and Gas Activities Fails Again, Energy and the Law (December 11, 2018)  

John McFarland, Miller on Negotiating Oil and Gas Leases, Oil and Gas Lawyer Blog (December 10, 2018)

Dena Adler, Four Important Points About EPA's Revised New Source Performance Standards for Electric Generating Units, Climate Law Blog (December 7, 2018)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:

“Qatar is pulling out of OPEC to focus on gas” - CNN Business

“U.S. natural gas exports to Mexico hit new record” - Houston Chronicle

“Shell to set-sector leading emissions targets after investor pressure” - Reuters

“Construction begins on South Jersey pipeline tied up in court” - The Press of Atlantic City

“Report: Trump stance hurting oil sector, Texas economy” - Houston Chronicle

“Atlantic Sunrise doubles prices in Appalachia” - Argus Media

“Cheap oil is no longer a huge positive for the U.S. economy” - CNN Business

“Big Oil battles gender problem that may take decades to fix” - Bloomberg

“U.S. coal consumption drops to lowest level since 1979” - Associated Press

“U.S. M&A activity is red hot, but will it continue?” - Rigzone

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This week we published a new Shale Law in the Spotlight article: PHMSA Amends Regulatory Requirements for Crude Oil Trains

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