Shale Law Weekly Review - October 21, 2019

Written by:
Chloe Marie – Research Specialist 
Jackie Schweichler – Staff Attorney

The following information is an update of recent local, state, national and international legal developments relevant to shale gas.

Pipelines: U.S. Court of Appeals Issues Stay in Case Relating to the Mountain Valley Pipeline

On October 11, 2019, the U.S. Court of Appeals for the Fourth Circuit stayed the U.S. Fish and Wildlife Service (FWS) Biological Opinion (BiOp) and Incidental Take Statement (ITS) issued in November 2017 for the proposed Mountain Valley Pipeline project, pending the outcome of the case before the court (Wild Virginia, Inc. v. U.S. Dept. of the Interior, No. 19-1866).  On August 21, 2019, a group of environmental organizations petitioned the U.S. Court of Appeals, seeking judicial review of these two FWS documents.  The petitioners filed a motion for a stay of the documents to halt construction on the pipeline. The petitioners argue that FWS failed to consider certain aspects in their analysis that would significantly affect several threatened and endangered species, including the Indiana and Northern long-eared bat species and Roanoke logperch.  Following the petitioner’s motion, FWS requested an official re-consultation with the Federal Energy Regulatory Commission to discuss project impacts on wildlife species including the candy darter, Roanoke logperch, Indiana bat, and Northern long-eared bat.  The Court of Appeals granted the petitioner’s stay and will hold the case in abeyance until January 11, 2020, to allow for the agencies' re-consultation. 

Pipelines: New Jersey DEP Denies Land Use Permits for the Construction of the PennEast Pipeline

On October 8, 2019, the New Jersey Department of Environmental Protection (DEP) denied PennEast Pipeline Company, LLC’s application for a Freshwater Wetlands Individual Permit and Water Quality Certification necessary for the construction of the PennEast Pipeline.  The PennEast Pipeline is a 118-mile expansion project designed to transport Marcellus Shale gas in southeastern Pennsylvania and New Jersey.  DEP Director of the Division of Land Use Regulation Diane Dow explained the decision a letter sent to PennEast.  According to Director Dow, this decision was based on a recent court ruling issued on September 10, 2019, from the U.S. Court of Appeals for the Third Circuit.  The court found that PennEast Pipeline Company is barred by the 11th amendment from condemning properties along the pipeline route that are controlled by the state of New Jersey (In re: PennEast Pipeline Company, LLC, No. 19-1191 thru 19-1232).  

Public Lands: California Passes Law Prohibiting Oil and Gas Leasing on State-Owned Lands

On October 12, 2019, California Governor Gavin Newsom signed into law Assembly Bill No. 342 barring any future oil and gas development projects on California’s public lands.  More specifically, AB 342 prevents any state department, agency or other entity from entering into a new lease agreement or conveyance of the lands allowing the construction and operation of oil and gas infrastructure on state property.  AB 342, however, will not prohibit any maintenance work activity or repair necessary for the safe operation of an existing pipeline or other oil and gas-related infrastructure, or any activity necessary to transport oil and gas from state lands or waters.  In addition, the bill clarifies that the validity of all leases that are in effect as of January 1, 2020, would not be impacted by the legislation.  According to the governor, the new bill will help “refocus the state’s geologic energy division to better consider public health.”

Induced Seismicity: Study Examines Induced Seismicity and Hydraulic Fracturing in Texas

On October 14, 2019, the Journal of Geophysical Research-Solid Earth published a study regarding induced seismicity entitled Improving absolute earthquake location in west Texas using probabilistic, proxy ground-truth station corrections.  The study examines the Delaware Basin in western Texas using data from the TexNet seismic-monitoring program.  In the study, the researchers “statistically associate earthquakes in space and time to fracturing activity.”  The study concludes that it is more likely that some recent seismic activity in Texas is due to hydraulic fracturing, rather than wastewater disposal wells.  TexNet was created as a response by the Texas legislature to study the increase in earthquakes experienced in the state since 2009. 

From the National Oil & Gas Law Experts:

Charles Sartain, Midstream Dedications - Colorado Bankruptcy Court Levels the Playing Field (October 16, 2019)

John McFarland, Study Concludes Some Earthquakes in West Texas Likely Caused by Fracing (October 16, 2019)

John McFarland, When is a contract provision a liquidated damages clause, and when is a liquidated damages clause an unenforceable penalty? (October 14, 2019)

Federal Actions and Notices

Federal Energy Regulatory Commission

Notice of Availability of the Final Guidance for Horizontal Directional Drill Monitoring, Inadvertent Return Response, and Contingency Plans, 84 FR 55305 (October 16, 2019)

Land Management Bureau

Proposed Rule; Non-Energy Solid Leasable Minerals Royalty Rate Reduction Process, 84 FR 55873 (October 18, 2019)

Pennsylvania Legislation 

Senate Bill 694: this bill would allow well bores to cross multiple units (referred to Environmental Resources and Energy on Oct. 15, 2019)

Pennsylvania Actions and Notices

Department of Environmental Protection

Applications, Actions and Special Notices (October 19, 2019)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Lawmakers Point Fingers Across Aisle Over Stalled Pipeline Bill,” Bloomberg Environment
“New federal pipeline safety rules draw praise from industry, scorn from critics,” State Impact
“Technology takes over tight oil,” Petroleum Economist
“Study linking fracking to Permian Basin earthquakes stirs public debate,” Houston Chronicle “Drillers pay Ohio counties $141.9M in taxes” Shale Gas Reporter
“Big oil R&D clean tech is hard to pin down,” Axios
“Trump to headline Pa. shale conference,” Greenwire
“Scientists endorse mass civil disobedience to force climate action,” Reuters
“Exclusive: No choice but to invest in oil, Shell CEO says,” Reuters
“Rise of renewables may see off oil firms decades earlier than they think,” The Guardian
“Texas driller ordered to shut in wells for not paying impact fees,” Pittsburgh Business Times
“Analyst: Permian Basin Venting, Flaring Stabilizes,” Hart Energy
“CNX Gas Co. and state regulators strike deal over abandoned wells,” Pittsburgh Post-Gazette
“‘Broken system’ starves U.S. oil boom of immigrant workers,” Reuters
“BLM chief: Banning oil and gas is ‘absolutely insane’,” Greenwire
“California laws aim to cut fossil fuel use,” Oil & Gas Journal

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