Monday, March 4, 2019

Shale Law Weekly Review - March 4, 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: Canadian National Energy Board Recommends Approval of Trans Mountain Pipeline Expansion
On February 22, 2019, the Canadian National Energy Board released a report recommending approval of the proposed Trans Mountain Pipeline expansion project (p. i). The project, which would involve the construction of nearly 1000 kilometers of new pipeline, would carry crude oil from Alberta to British Columbia, where it would be exported to markets across the Pacific Ocean. The Board found that while the project will likely have significant adverse environmental effects and may negatively impact marine species, the economic benefits of the project are considerable and will ultimately be in the Canadian public interest (p.i, p.iii). As such, the Board decided in favor of the project.

Pipelines: Court of Appeals Denies Petition for Rehearing in Atlantic Coast Pipeline Case
On February 25, 2019, the United States Court of Appeals for the Fourth Circuit issued an order denying a petition for rehearing in a case related to the construction of the Atlantic Coast Pipeline (Cowpasture River Preservation Association v. Forest Service, No. 18-1144) (p.2).  The case was originally brought by several environmental groups after the Atlantic Coast Pipeline was given federal approval to cross the Appalachian National Scenic Trail.  On December 13, 2018, the Court of Appeals ruled in favor of the environmental groups, finding that the Forest Service had “abdicated its responsibility to preserve national forest resources.”  The Forest Service and the National Park Service jointly petitioned for rehearing, arguing that the court had incorrectly held that the land surrounding the Appalachian National Scenic Trail is “land within the National Park System.” This conclusion, the agencies said, would raise issues regarding many of the existing permits for operations on this land, including power transmission lines and grazing areas.

Pipelines: Court of Appeals Remands Constitution Pipeline Case
On February 28, 2019, the U.S. Court of Appeals for the District of Columbia Circuit issued an order remanding the case regarding the Constitution pipeline and a denied New York water permit (Constitution Pipeline Co. v. Federal Energy Regulatory Commission, No. 18-1251).  In April 2015, Constitution Pipeline Co., LLC (Constitution) filed a Section 401 Water Quality Certification with the New York Department of Environmental Conservation (DEC) for the proposed pipeline project (Constitution Pipeline Co. v. N.Y. State Dep’t of Envtl. Conservation, 2018 U.S. LEXIS 2726).  In April 2016, DEC denied the Water Quality Certification, stating that Constitution failed to analyze alternative routes and address potential impacts to water resources.  Constitution petitioned FERC, arguing that DEC had waived their authority to deny a water quality permit by failing to act within a reasonable period of time.  FERC denied Constitution’s petition and the U.S. Supreme Court later denied Constitution's petition for writ of Certiorari.  In October 2018, FERC requested that the case be held in abeyance to await the result of the Hoopa case, which posed similar questions of law (Hoopa Valley Tribe v. FERC, D.C. Cir. No. 14-1271).  The court in Hoopa issued their decision on January 25, 2019, holding that the state in that case had waived their authority by failing to act within the year.  Accordingly, FERC filed a motion on February 25, 2019, requesting the court remand the appeal to allow the agency to reconsider its orders in light of the Hoopa case.

Pipelines: Shin Oak Natural Gas Pipeline Begins Service in Texas
On February 28, 2019, Enterprise Products Partners announced that its Shin Oak natural gas pipeline has begun service in Texas. The pipeline stretches from the Permian Basin in West Texas to the company’s Mont Belvieu hub on the Gulf Coast. The pipeline will initially have a capacity of approximately 250,000 barrels of natural gas a day, which will expand to 550,000 barrels upon the completion of the Waha lateral, which is currently scheduled for the second quarter of 2019.

Pipelines: FERC Grants Approval for Midship Pipeline Construction in Oklahoma
On February 27, 2019, the Federal Energy Regulatory Commission granted its approval for Midship Pipeline, LLC to begin construction on a portion of its natural gas pipeline in Oklahoma. The pipeline will carry natural gas from new plays in the Anadarko Basin to the company’s existing pipelines to the Gulf Coast and Southeastern U.S. Once complete, the pipeline will run approximately 200 miles and will include three compressor stations and two lateral pipelines and will ultimately have a capacity of 1.4 billion cubic feet of gas per day.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (March 1, 2019)

Charles Sartain, A Lesson in Property Stipulations, (February 27, 2019)

David Sweeney and Savannah Raymond, Earnouts in Oil and Gas Transactions, (February 27, 2019)

Pennsylvania Legislation:
SB 282: would establish a pipeline impact fee in Pennsylvania (Referred to Environmental Resources and Energy - Feb. 26, 2019)

SB 280: would require pipeline operators to investigate aquifers that could be impacted by pipeline construction  (Referred to Environmental Resources and Energy - Feb. 26, 2019)

SB 281: would require companies to notify residents at least 5 days in advance of pipeline construction or drilling (Referred to Environmental Resources and Energy - Feb. 26, 2019)

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