Wednesday, January 2, 2019

Shale Law Weekly Review - January 2, 2019

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: FERC Approves Gateway Expansion Project
On December 12, 2018, the Federal Energy Regulatory Commission issued an order authorizing the construction of the Gateway Expansion Project by Williams. The project, an expansion of an existing natural gas pipeline servicing the northeastern United States, is expected to provide an additional 65,000 dekatherms of natural gas per day to customers in New York and New Jersey. Williams plans to complete the expansion by winter 2020/2021.

Pipelines: Federal Appeals Court Upholds Ruling for Dakota Access Pipeline
On December 13, 2018, the U.S. Court of Appeals for the Eighth Circuit issued an opinion upholding the ruling of a federal district court regarding a dispute between a group of landowners and Dakota Access, LLC. The landowners allege that Dakota Access, LLC induced them to sign easements for the Dakota Access Pipeline by use of threat, misrepresentation, deception, fraud, and other tactics.  According to the district court, the allegations constituted a claim for fraud and as such, required a heightened pleading standard.  The district court dismissed their claims, holding that this standard was not met and in the present opinion, the Court of Appeals affirmed.

LNG Exports: Department of Energy Alters LNG Export Reporting Requirements
On December 19, 2018, the U.S. Department of Energy issued a policy statement indicating its intention to alter existing LNG export reporting requirements. Specifically, the Department will seek to change a policy adopted in 2016 requiring exporters to report the country where the product will be received for “end use” when seeking authorization for exports. The new policy will require exporters only to report the country or countries where the natural gas will be delivered from the United States.

Pipelines: Michigan Panel Gives Final Approval to Line 5 Pipeline
On December 19, 2018, the Mackinac Straits Corridor Authority gave its final approval for Enbridge Energy to build a utility tunnel that will house the proposed Line 5 natural gas pipeline.  The utility tunnel will be constructed beneath the Straits of Mackinac, a channel that connects Lakes Huron and Michigan.  When the new pipeline is completed, Enbridge will deactivate the existing pipelines at the Straits.  The new Line 5 will be housed inside of a utility tunnel roughly 100 feet below the lake bed, which Enbridge says will protect the aquatic environment and prevent potential accidents, like anchor strikes, from damaging the pipeline.

Pipelines: Pennsylvania DEP Approves Permits for Falcon Ethane Pipeline
On December 20, 2018, the Pennsylvania Department of Environmental Protection (DEP) announced the approval of permits for the Falcon ethane pipeline project.  The approved permits include Chapter 105, Water Obstruction and Encroachment Permits and Chapter 102, Erosion and Sediment Control Permit.  The Falcon project is a 97-mile ethane pipeline built and operated by Shell Pipeline Company LP.  The pipeline will connect Houston, Pennsylvania; Scio, Ohio; and Cadiz, Ohio.

Pipelines: Chester County District Attorney Announces Criminal Investigation of Mariner East Pipeline
On December 19, 2018, Chester County District Attorney Tom Hogan issued a press release detailing his office’s intention to begin a criminal investigation into Energy Transfer LP and Sunoco Logistics Partners.  The office will investigate issues relating to the construction of the Mariner East 1, 2, and 2X pipelines.  The District Attorney alleges that the pipeline construction is responsible for well water contamination and sinkholes in Chester County.  The office is considering a number of potential charges against the company, including causing or risking a catastrophe and criminal mischief.  The Mariner East 1 pipeline has been used to transport refined petroleum to western parts of the state.  The new Mariner East project would reverse the flow of the Mariner East 1 and use it, along with the 2 and 2X pipelines, to transport natural gas to eastern Pennsylvania.

Production and Operation: Amount of Recoverable Natural Gas Expected to Rise in Future Shale Wells
On December 17, 2018, the University of Texas at Austin published a study with a production outlook model used to better assess the amount of economically recoverable natural gas.  The study, which looked at the Barnett, Haynesville, Fayetteville, and Marcellus Shales, found an overall increase of nearly twenty-five percent in technical recoverability, largely brought on by technical advances like stacked and staggered well drilling.  Additionally, the study found that improvements in geologic characterization and a favorable market have contributed to the increase.  The study is entitled Update and Enhancement of Shale Gas Outlooks and was prepared for the U.S. Department of Energy Office of Scientific and Technical Information.

From the National Oil & Gas Law Experts:
George Bibikos,  At the Well Weekly, (January 2, 2019)

Ryan Steele, State Legislature Exempts Oil and Gas Landmen from Real Estate License Requirements, Oil & Gas Law Report (December 20, 2018)

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