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.
Pipelines: Court of
Appeals Rejects Challenge to Water Discharge Permit for Atlantic Sunrise
Pipeline
On August 15, 2019, the
U.S. Court of Appeals for the Third Circuit denied a petition to review Pennsylvania’s Department of Environmental
Protection’s approval of a hydrostatic testing permit for the Atlantic Sunrise
pipeline (Delaware Riverkeeper Network v. Sec’y Pennsylvania Dep’t of Envtl.
Prot., No. 17-3299). As described by the court, hydrostatic testing
is a “process by which water is pumped into pipes to check them for strength or
leaks.” A hydrostatic testing permit was granted to
Transcontinental Gas Pipe Line Company, operator of the Atlantic Sunrise
pipeline, and allows the company to discharge the water used for testing the
pipes. Petitioners asserted their own petition was not ripe for
decision as the DEP action must be first reviewed by the Environmental Hearing
Board. Petitioners also argued that the process to obtain the permit violated
regulatory and statutory requirements. The court rejected both of these
arguments, finding that the petition was ripe for decision, and that it
“fail[ed] on the merits.”
Pipelines: Federal Court
Dismisses Request by Columbia Gas to Acquire Land for Pipeline Project
On August 22, 2019, the
U.S. District Court for the District of Maryland issued a written Order
dismissing a Complaint in Condemnation issued by Columbia Gas Transmission, LLC
(Columbia) Columbia filed suit on May 16, 2019, against the State of Maryland, Department of
Natural Resources (Columbia Gas Transmission, LLC. v. 0.12 Acres of Land, et
al., 1:19-cv-01444-GLR). Columbia sought to acquire by condemnation 0.12
acres of land in Washington County, Maryland to construct a portion of pipeline
that would stretch from Fulton County, Pennsylvania to Morgan County, West
Virginia. Columbia argued that the Federal Energy Regulatory Commission (FERC)
had granted a certificate of public convenience and necessity for the project.
According to Columbia, the FERC certificate explicitly stated that Columbia
could use eminent domain to acquire easements for the project. The court concluded,
however, that the condemnation claim was barred by the Eleventh Amendment to
the U.S. Constitution.
LNG Exports: July Sets
Record for Natural Gas Deliveries to LNG Export Facilities
On August 19, 2019, the
U.S. Energy Information Administration (EIA) released a report detailing the amount of natural gas deliveries to U.S. liquefied
natural gas (LNG) facilities. The report showed a record high volume of incoming
gas for the month of July 2019, “averaging 6.0 billion cubic feet per day”
(Bcf/d). According to the report, natural gas delivered by pipelines to Mexico
and to U.S. LNG export facilities was 30% higher from January to July 2019,
than it was during the same time period last year. EIA expects LNG exports to
continue to rise in June and July 2019, estimating 4.8 Bcf/d and 5.2 Bcf/d. According
to the report, the United States has a current LNG export capacity of 5.4 Bcf/d with four export terminals and nine liquefaction
trains.
Taxation / Public Lands:
Legislative Revenue Report Shows Increase in New Mexico’s Oil and Gas Rent and
Royalties
On August 2, 2019, the
State of New Mexico’s Legislative Finance Committee released their General Fund
Revenue Tracking Report detailing revenue collected from several areas, including the oil
and gas industry. The report, which presents data through April 2019, shows an
overall year-over-year growth in both “mineral production taxes” and “rent and
royalties.” More specifically, New Mexico saw a 5.9% year-over-year
growth in mineral production taxes, including an oil and gas school tax, oil
conservation tax, and natural gas processors tax. The largest increase
in year-over-year growth was in rent and royalties, increasing by 129.4%, and
including a bonus payment for federal land leases. Mineral production
taxes rose $23.2 million as compared to the same time in 2018, with rent and
royalties increasing by $651.1 million. The report states that for 2019,
there is currently $273.5 million over the revenue forecast “due to strong
revenues from gross receipts taxes and oil and gas production royalties.”
Water Use: Study Concludes
Conventional Oil and Gas Production Has Greater Impact on Water Resources Than
Hydraulic Fracturing
On June 10, 2019, Groundwater published an Issue Paper which concluded that conventional oil and gas production has a
greater impact on water resources than unconventional methods of extraction
such as hydraulic fracturing. The paper titled, Conventional oil - The
Forgotten Part of the Water-Energy Nexus, was conducted by the University
of Arizona and the University of Saskatchewan. The paper examines the “volume
of produced and injected water, changes to subsurface pressure regimes, and
potential contamination pathways of conventional oil production” and compares
it to hydraulic fracturing. The paper concluded that a net gain of
water in subsurface reservoirs came primarily from enhanced oil recovery and
saltwater disposal, with less than 5% coming from hydraulic fracturing. Additionally, large water injections used in enhanced oil recovery and
saltwater disposal “will lead to longer distance transport of solutes or
contaminants” compared to hydraulic fracturing.
From the National Oil
& Gas Law Experts:
Pennsylvania Actions
and Notices:
Board of Coal Mine
Safety
Reclamation Committee
of the Mining and Reclamation Advisory Board
Pennsylvania Energy
Development Authority
Environmental Hearing
Board
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