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)
Follow
us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive
ShaleLaw HotLinks:
“Early
2019 will see flurry of LNG activity” - Houston Chronicle
“After
years of legal battles, natural gas pipeline spanning Pa. is officially in service”
- York Daily Record
“As
court challenges pile up, gas pipeline falls behind” - Washington Post
“America’s
new energy reality shines in 2018” - Breaking Energy
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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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