Monday, June 24, 2019

Shale Law Weekly Review - June 24, 2019

Written by:
Sara Jenkins - 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.

Federal Lands: Department of Interior Issues Guidance on the Recalculation of Royalties Following Reinstatement of 2016 Rule
On June 13, 2019, U.S. Department of the Interior’s Office of Natural Resources Revenue (ONRR) issued a letter explaining that all federal oil and gas lessees, along with federal and Indian coal lessees, must recalculate royalty payments from January 1, 2017, to the present. The letter follows a ruling by the U.S. District Court for the Northern District of California, which vacated ONRR’s repeal of a 2016 rule titled, Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform (2016 rule). The District Court’s action reinstated the 2016 rule, creating a need for federal lessees to recalculate royalties under the 2016 rule. ONRR is offering resources including letters, trainings, and royalty valuation guidance to help support lessees with the transition back to the 2016 rule.

Pipelines: Pennsylvania’s Public Utility Commission Seeks Comment on Pipeline Rulemakings
On June 13, 2017, the Pennsylvania Public Utility Commission (PUC) announced that it was seeking comment on rulemaking proposals regarding pipeline safety regulations and pipeline utility financial reporting. PUC is seeking public comments on an Advance Notice of Proposed Rulemaking Order to more “comprehensively regulate the design, construction, operations and maintenance of public utilities transporting petroleum products.” The order states that PUC follows federal minimum pipeline safety requirements but that it may adopt more stringent standards. PUC also is seeking public comments on another Notice of Proposed Rulemaking Order, which seeks to require public utilities providing pipeline transport of oil and gas to file annual reports on depreciation, service life studies, and capital investment plans. Currently, PUC’s reporting requirements apply only to electric, gas, and water service public utilities.

International Development/Pipelines: Canada Announces Approval of Transmountain Pipeline Expansion Project
On June 18, 2019, Canadian Prime Minister Justin Trudeau announced government approval for the Trans Mountain pipeline expansion project (project). The government based its decision on a plan to bridge the gap between present and future energy development as well as a plan to create a strategy for reaching the global market. Trudeau explained that money earned from the project, including tax revenue and possible sale of the pipeline, would be invested into Canada’s clean energy transition. Trudeau also addressed concerns from indigenous groups, stating that the government would be open to input from the groups on how they could benefit from the project, including equity stakes and revenue sharing. The project is expected to cost $7.4 billion CAD and increase the transport capacity of the pipeline from 300,000 barrels of oil per day to 890,000 barrels per day.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (June 14, 2019)

Dena Adler, Jessica Wentz, and Romany Webb, Four Important Points About EPA’s Affordable Clean Energy Rule, (June 20, 2019)

Pennsylvania Legislation:
HB 1557: would amend the Coal Refuse Disposal Control Act, designating areas where coal refuse disposal is prohibited (Re-reported as committed - June 19, 2019)

HB1635: would provide legislative framework specific to conventional oil and gas drillers to assist family owned operations (Referred to Environmental Resources and Energy - June 14, 2019)

HB1649: would require additional reporting requirements for unconventional natural gas well operators (Referred to Environmental Resources and Energy - June 18, 2019)

SB258: would mandate that public utilities transporting natural gas must identify high consequence areas and emergency operating procedures (First consideration - June 19, 2019)

SB284: would require pipeline operators to provide Emergency Response Plans to the Public Utility Commission (First consideration - June 19, 2019)

HB247: would allow well bores to cross multiple units so long as the operator has the right to drill wells on those units (Laid on the table and Removed from table - June 20, 2019)

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This week we published a new Shale Law in the Spotlight article: Shale Law in the Spotlight – Oregon and Washington Enact Hydraulic Fracturing Bans.

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