Shale Law Weekly Review - February 12, 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: Second Circuit Vacates New York Denial of Pipeline Permit

On February 5, 2019, the U.S. Court of Appeals for the Second Circuit issued an order vacating and remanding a decision by the New York State Department of Environmental Conservation (NYDES) denying a water quality certification for the proposed Northern Access pipeline project (National Fuel Gas Supply Corp. v. New York State Department of Environmental Conservation, No. 17-1164-cv). National Fuel Gas Supply Corp. seeks to build this natural gas pipeline in western Pennsylvania and upstate New York and, pursuant to §401 of the Clean Water Act, applied for water quality certifications from both states. Pennsylvania granted the application in February 2018, but New York sent the petitioners a denial letter in April 2017. The Second Circuit noted that the denial letter contained no citations on the record to justify its denial of the application and that it could not say for certain whether the decision was made in an arbitrary and capricious manner. The court remanded the decision back to NYDES to more clearly explain its rationale.

LNG Exports: FERC Issues Final EIS for Port Arthur LNG Export Project

On January 31, 2019, the Federal Energy Regulatory Commission (FERC) issued a final Environmental Impact Statement (EIS) for the proposed Port Arthur LNG export project in Texas and Louisiana.  In the EIS, FERC concluded that adverse impacts from the project will be reduced to “less-than-significant levels” once mitigation measures are implemented.  The Port Arthur project, if approved, will include the creation of an LNG export terminal in Jefferson County, Texas and the creation of a 170-mile natural gas pipeline from Louisiana to Texas. In addition, two natural gas liquefaction trains will be built, each with a yearly capacity of nearly seven million tons.

Pipelines: Federal Court Declines to Block Bayou Bridge Pipeline Construction

On February 7, 2019, the U.S. District Court for the Middle District of Louisiana denied a motion for a preliminary injunction seeking to halt the continued construction of the Bayou Bridge Pipeline (Atchafalaya Basinkeeper v. U.S. Army Corps of Engineers, 18-23-SDD-EWD).  The lawsuit was brought by Atchafalaya Basinkeeper and other environmental groups who allege that continued construction of the Bayou Bridge pipeline will cause irreparable harm to the Atchafalaya Basin.  The court pointed to a number of factors in its decision in denying the motion, including a period of almost a year between the plaintiffs learning of the potential harm and the filing of the motion and the near-completion of the project at issue. Once completed, the Bayou Bridge pipeline will carry crude oil roughly 160 miles in Louisiana from Lake Charles to St. James for distribution to refineries in the region.

National Energy Policy: Energy Groups File Amicus Briefs in NEPA Case

On February 1, 2019, several U.S. energy groups filed two amicus briefs supporting the Federal Energy Regulatory Commission (FERC) in a pending action before the U.S. Court of Appeals for the District of Columbia (Otsego 2000, Inc. v. FERC, No. 18-1188).  The lawsuit was brought by landowners and Otsego2000 on July 16, 2018.  The plaintiffs argue that FERC did not follow precedent by failing to evaluate greenhouse gas emissions from the New Market project.  Under the National Environmental Policy Act, FERC is required to consider “indirect effects” that are “reasonably foreseeable” results of the proposed project.  FERC argues that the kinds of emissions that the petitioners wish to be considered are not “reasonably foreseeable” under NEPA and should not be considered in approving proposed projects.  The Interstate Natural Gas Association of America filed one of the briefs in support of the FERC decision. The other amicus brief was filed by the American Fuel & Petrochemical Manufacturers, American Petroleum Institute, U.S. Chamber of Commerce, and the National Association of Manufacturers.  The New Market project is owned by Dominion Energy and is designed to transport 112,000 Dth/day of natural gas to Dominion’s existing system in New York.

Interstate Commissions: New Jersey Governor Announces Support for Full Ban on Hydraulic Fracturing Activities in the Delaware Basin

On January 30, 2019, Governor Phil Murphy of New Jersey sent a letter to the Executive Director of the Delaware River Basin Commission announcing his support for a full ban on all hydraulic fracturing-related activities in the Basin. Currently, no hydraulic fracturing is allowed within the Delaware River Basin. The Commission, however, does allow the importation of hydraulic fracturing wastewater into the Basin for treatment and eventual discharge. Under Governor Murphy’s proposal, these activities would also be banned.

From the National Oil & Gas Law Experts:

George Bibikos, At the Well Weekly, (February 8, 2019)

Charles Sartain, Insurer Liable for Macondo Blowout Defense Costs, Energy and the Law (February 5, 2019)

Pennsylvania Legislation:

HB 414: would require DEP to complete permitting approval/disapproval within 45 days for erosion and sediment control permits (Referred to House Environmental Resources and Energy - Feb. 6, 2019)

SB 261: would authorize municipalities to impose a fee on the pipelines in the county for funding to support emergency responders (Referred to Senate Environmental Resources and Energy - Feb. 7, 2019)

SB 264: would allow local governments to tax natural gas and hazardous liquid transmission pipelines (Referred to Senate Finance Committee - Feb. 7, 2019)

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

“Exxon plans $10 billion Texas natural gas export terminal” - The Hill

“Southwestern Pennsylvania leads the state when it comes to new shale gas wells drilled” - Pittsburgh Business Times

“How a ‘monster’ Texas oil field made the U.S. a star in the world market” - New York Times

“U.S. on track to become net energy exporter by 2020” - Shale Gas Reporter

“Early version of Ocasio-Cortez Green New Deal touts clean power” - Bloomberg

“Moniz: ‘A 100% renewable system is not realistic’” - Energywire

“Driller backs off demand to have homeowner thrown in jail” - Greenwire

“Atlantic Coast Pipeline delayed amid $2 billion- $3 billion price increase” - Fayetteville Observer

“4 charged in oil pipeline shutdown attempt” - MPR News

“Fracking firm Cuadrilla says earthquake rules hinder its work” - The Guardian

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