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.
Pipelines: Appeals Court
Vacates Biological Opinion and Incidental Take Statement for Atlantic
Coast Pipeline
On July 26, 2019, the
U.S. Court of Appeals for the Fourth Circuit vacated a decision by the U.S. Fish and Wildlife Service (FWS) regarding
endangered species potentially affected by the construction of the Atlantic
Coast Pipeline (Defenders of Wildlife v. U.S. Dep’t of the Interior, No.
18-2090). The Petitioners – Defenders of Wildlife, Sierra Club, and Virginia
Wilderness Committee – filed suit after FWS issued a Biological Opinion and
Incidental Take Statement for the pipeline. The Biological Opinion
concluded that two species, the rusty patched bumble bee and the clubshell,
would not be jeopardized by pipeline construction. Further, the Incidental
Take Statement issued by FWS set an allowable limit on two other endangered
species, the Indiana bat and the Madison Cave isopod, that could be harassed or
eradicated during construction of the pipeline. Ultimately, the court
vacated both the Biological Opinion and the Take Statement, finding that “FWS
arbitrarily reached its no-jeopardy conclusions and failed to correct the
deficiencies in the take limits” that the court had previously identified.
LNG Exports: FERC
Announces New Division to Handle LNG Export Facility Applications
On July 23, 2019, the
U.S. Federal Energy Regulatory Commission (FERC) announced the creation of a new division under the Office of Energy
Projects to handle incoming applications for liquified natural gas (LNG)
facilities. The new division will be referred to as the Division of LNG
Facility Review and Inspection and will include an expansion of personnel to a
new Houston Regional Office. According to the announcement, the amount of LNG
projects in the United States has grown, requiring more resources for FERC
oversight. Additional staffers are needed in Washington D.C. as well as in the
Houston area for “completing engineering reviews, coordinating safety reviews
with the Pipeline and Hazardous Materials Safety Administration, . . . and
preparing engineering analyses for inclusion in environmental documents.”
State Regulation:
Colorado Oil and Gas Conservation Commission Approves Oil and Gas Rule
Amendments
amendments to the state
Department of Natural Resources’s practices and procedures. These amendments
added language to streamline the process for adjudicatory matters typically
handled by the Commission's hearing officers (1:29:30). More specifically, rule
303h was amended to allow administrative judges to hear and make
recommendations regarding drilling permit requests (1:29:30). Additionally, the
Commission approved amendments to rule 530, which regulates involuntary pooling procedures. Under the
amendments, an owner must own or obtain consent from the owners of a combined
“forty-five percent of the mineral interests to be pooled” before submitting an
involuntary pooling application (2:11:00). The amendments were approved by
motion at the hearing, and no objections were noted (2:36:30).
Pipelines: FERC Issues
Draft Environmental Impact Statement for Southgate Pipeline Project
On July 26, 2019, the
Federal Energy Regulatory Commission issued a draft environmental impact statement (EIS) for Mountain Valley
Pipeline, LLC’s Southgate project (project). The draft EIS concluded that the
project would result in “limited adverse environmental impacts.” Most
of the impacts would be temporary, but other long-term impacts would affect
forests or wetlands. FERC
recommended a number of mitigation measures in the EIS to reduce the adverse
impacts to “less-than-significant” levels. Some of these mitigation measures
included: requiring Mountain Valley to follow the mitigation plans outlined in
their application for each specified environmental issue, requiring
detailed maps and photos of all construction areas to be filed, and
requiring Mountain Valley to develop and implement an “environmental complaint
resolution procedure.” According to FERC’s website, the project is expected to include 73 miles of natural gas
pipeline in Virginia and North Carolina, and it would transport 375 million
cubic feet of gas per day.
Induced Seismicity:
Study Evaluates Fluid Injection Data to Predict Seismic Activity
On July 29, 2019,
Proceedings of the National Academy of Sciences published a study evaluating fluid injection data to predict seismic activity in
Oklahoma. The study titled, Pore-pressure diffusion, enhanced by poroelastic
stresses, controls induced seismicity in Oklahoma, focuses on predicting
“induced seismicity linked to geothermal resource exploitation, hydraulic
fracturing, and wastewater disposal.” The study looked at data
from 1995 to 2017, noting that increased seismic activity began in Oklahoma in
2008. The researchers examined 715 wells in north-central Oklahoma, observing
the effect that deep, subsurface injection of saltwater had on potential fault
slips. The study concluded that the “physics-based
earthquake-forecasting” model could correctly predict seismic activity by
considering “pore pressure and poroelastic stresses.”
State Regulation: Texas
State Auditor Releases Report on Texas Railroad Commission
In July 2019, The Texas
State Auditor released An Audit Report on Financial Management at the Railroad
Commission. The audit found that
the Railroad Commission (Commission) could improve in several areas including
the tracking of cash transactions and strengthening security over its
information systems. More specifically, the audit found that certain
cash transactions lacked documentation to prove correct fees were paid or
tracked upon receipt. Further, the audit found the Commission failed to
maintain control over certain accounts that had access to its information
systems. The Commission did not know the status of some user accounts
including: duplicate accounts, accounts with incorrect access rights, and
accounts of former employees. The Commission received high marks in
other areas regarding collecting administrative penalties, processing refunds,
and correcting data processing errors.
From the National Oil
& Gas Law Experts:
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This week we published
a new Shale Law in the Spotlight article: Shale Law in the Spotlight – North Dakota
Supreme Court Rules that Post-Production Costs Cannot be Deducted from
Royalties Paid to State
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