Monday, March 25, 2019

Shale Law Weekly Review - March 25, 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.

Landowner Royalties: Pennsylvania Appellate Court Finds for the State in Landowner Royalties Case
On March 15, 2019, the Pennsylvania Commonwealth Court issued an opinion affirming that the Attorney General of Pennsylvania has the authority, under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, to bring a cause of action alleging wrongful conduct in the context of leasing subsurface mineral rights from private landowners (Anadarko Petroleum Corporation v. Commonwealth of Pennsylvania, No. 58 C.D. 2018) (p.1-2, 16-17). The Attorney General asserted this power under §2(xxi) of the statute, which prohibits “[e]ngaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding (p.5-6).” The court, however, reversed the portion of the lower court’s decision that found the Attorney General to have the power to bring such suits on the basis of alleged violations of antitrust law (p.1-2, 16-17).  The Attorney General alleges that Anadarko acted unlawfully by deceiving or misleading private landowners in order to acquire their mineral rights (p. 2).

Pipelines: Ohio Court Dismisses Environmental Lawsuit Against Rover Pipeline
On March 12, 2019, the Stark County, Ohio Court of Common Pleas dismissed a lawsuit filed against Rover Pipeline by the State of Ohio (State of Ohio v. Rover Pipeline, No. 2017 CV 02216) (p.2).  Ohio alleged that the company had illegally released millions of gallons drilling fluids into state waters during construction of the Rover Pipeline. Ohio states that Rover violated Ohio’s water quality standards and failed to obtain the necessary permits and certification.  Under the Clean Water Act, projects that will affect the water quality are subject to section §401 Water Quality Certification by the state (p.6-7).  In turn, states must act within one year of receiving an application for certification in order to preserve this authority (p.6-7). The court found here that the State of Ohio did not act within one year and, accordingly, dismissed the lawsuit in favor of the defendant (p.7-10).

Federal Lands: Federal Court Holds That BLM Must Consider Climate Change for Drilling Leases
On March 19, 2019, the U.S. District Court for the District of Columbia issued an opinion finding that the Bureau of Land Management did not adequately consider the impacts of climate change resulting from oil and gas drilling leases on public lands in Wyoming (WildEarth Guardians v. Zinke, No. 16-1724) (p.1-2). Specifically, the court found that the agency had not given greenhouse gas emissions likely to result from proposed drilling the “hard look” required by the National Environmental Policy Act (p.59-60). The court ultimately granted a motion for summary judgment filed by the plaintiffs on the grounds outlined above (p.1-2).

LNG Exports: FERC Issues Final Environmental Impact Statement for Texas LNG Port
On March 15, 2019, the Federal Energy Regulatory Commission (FERC) issued its Final Environmental Impact Statement for the proposed liquefied natural gas export terminal at the Port of Brownsville, Texas. FERC found that, while the project would have adverse environmental impacts, they would not be significant and could be avoided through the use of mitigation measures. The proposed facility, according to Texas LNG, will initially have the capacity to produce up to two million tons of liquefied natural gas each year and would begin exports in 2023/2024.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (March 22, 2019)

John McFarland, Net Royalty Acres Defined, (March 25, 2019)

Pennsylvania Legislation:
HB 886:  would require pipeline routes to be evaluated for community safety and pipeline operators would need to share information with emergency response teams (Referred to Consumer Affairs - March 19, 2019)

HB 247: would allow operators to drill well bores across multiple units so long as the operator has leases with all owners of the units (Reported as Amended - March 19, 2019)

SB 457: would create a 5 percent energy extraction tax (Referred to Environmental Resources and Energy - March 19, 2019)

HB 906: would require the Pennsylvania Real Estate Commission to certify and register land agents who work with landowners in acquiring oil, gas, and mineral rights (Referred to Professional Licensure - March 20, 2019)

SB 468: would create a 5% natural gas severance tax in Pennsylvania (Referred to Environmental Resources and Energy - March 21, 2019)

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