Tuesday, January 8, 2019

Shale Law Weekly Review - January 8, 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.

PA Impact Fee: Pennsylvania Supreme Court Issues Ruling on Production Threshold that Subjects Wells to State Impact Fee
On December 28, 2018, the Pennsylvania Supreme Court issued an opinion finding that vertical natural gas wells producing more than 90,000 cubic feet of natural gas for at least one month a year are subject to the state’s impact fee (Snyder Brothers, Inc v. Pennsylvania Public Utility Commission, No. 47 WAP 2017).  At issue was the language of section 2301 of Act 13, which requires the payment of an impact fee for a vertical well whose production exceeded that of a “stripper well.”  Act 13 defines stripper well as “an unconventional gas well incapable of producing more than 90,000 cubic feet of gas per day during any calendar month.”  Snyder Brothers, the well operator, argued that the word “any” meant that the production threshold had to be met every month of the year.  Conversely, the state argued that “any” required only a single month of the year to meet the requirement.  The Supreme Court ultimately adopted the latter position, overturning the decision of the state Commonwealth Court and requiring the payment of impact fees on the wells at issue.

State Regulation: Ohio EPA Issues Air Permit to Planned Ethane Cracker Plant
On December 21, 2018, the Ohio Environmental Protection Agency issued a news release detailing its decision to give an air permit to the planned ethane cracker plant in Belmont County. The permit authorizes the construction of six ethane cracking furnaces which would produce roughly 1.5 million tons per year of ethylene and polyethylene. The plant is expected to emit volatile organic compounds, carbon monoxide, nitrogen oxide, particulate matter, and greenhouse gases but is expected to do so within acceptable limits.

Pipelines: New Michigan Governor Asks State AG to Provide Opinion on Legality of Enabling Statute of Mackinac Straits Corridor Authority
On January 1, 2019, Gretchen Whitmer, the new governor of Michigan, sent a letter to the state Attorney General, Dana Nessel, regarding the Mackinac Straits Corridor Authority.  The letter asks the Attorney General to provide her opinion on the legality of PA 359, the statute which provided for the creation of the Mackinac Straits Corridor Authority.  The letter includes several questions on specific matters of law.  One of the questions asks whether Act 359 amends other laws, such as restrictions on the construction or operation of a tunnel.  A press release from Attorney General Nessel’s office said that it would be unwise to use PA 359 as justification for moving forward with plans to construct the Line 5 public utility tunnel.  Last month, on December 19, 2018, the Mackinac Straits Corridor Authority gave final approval for Enbridge Energy to build a utility tunnel for the proposed Line 5 natural gas pipeline.

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

Jeremy Mercer and Devan Flahive, Reference to Oil & Gas Royalty Interest Deemed Sufficient Under the Marketable Title Act, Oil & Gas Law Report (December 20, 2018)

John McFarland, Tsunami of Crude Exports?, Oil and Gas Lawyer Blog (January 7, 2019)

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Don’t forget to check out the latest Shale Law in the Spotlight article: U.S. EPA and Army Corps of Engineers Issue Proposed Revised Definition of “Waters of the United States

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