Friday, November 22, 2019

Shale Law Weekly Review - November 19, 2019

Written by:
Jackie Schweichler – Staff Attorney
The following information is an update of recent local, state, national and international legal developments relevant to shale gas.
State Regulation: Pennsylvania Governor Signs Bill Allowing Horizontal Cross Unit Drilling
On November 7, 2019, Pennsylvania Governor Tom Wolf signed a new law which amends the Oil and Gas Lease Act and authorizes operators to drill horizontally across multiple units.  This law would apply only where the operator has a lease with the landowner of each tract, and the operator is required to allocate production among the various landowners.  The new law does not allow drilling where the lease terms specifically prohibit cross unit drilling.  This law will be codified as section 2.2 of the Oil and Gas Lease Act.  Previously, in 2013, the Oil and Gas Lease Act was amended to add section 2.1, which effectively allows operators to act as if they have pooled together several tracts, even when those leases have no pooling clause.

Production and Operation: EIA Releases Reports Estimating Natural Gas Production in the United States
On November 13, 2019, the U.S. Energy Information Administration (EIA) released the November Short-Term Energy Outlook.  The report estimates that dry natural gas production in the United States will increase 10% from 2018 levels to reach 92.1 billion cubic feet per day in 2019.  Liquefied natural gas (LNG) exports are also expected to increase in 2019 to average 4.7 Bcf/d and to reach 6.4 Bcf/d in 2020.  In addition, EIA released an analysis of their Heating Oil and Propane Update, published on November 14, 2019.  EIA states that heating oil prices are expected to be 10% lower and propane prices 22% lower for the 2019/2020 winter heating season.

Pipelines: Public Hearing Held in North Dakota to Discuss Dakota Access Pipeline Expansion
On November 13, 2019, the North Dakota Public Service Commission held a public hearing to allow members of the public to comment on plans to increase pipeline capacity for the Dakota Access Pipeline project.  The hearing was held in Linton and live-streamed through the Commission’s website.  Prior to the hearing, the Standing Rock Sioux Tribe released a pre-hearing brief.  According to the Tribe, expanding the pipeline capacity high velocity pumping would increase the likelihood and severity of negative repercussions.  According to Dakota Access, this project does not require mainline construction, and instead the company intends to add horsepower and upgrades to pump stations.

Pipelines: Michigan Attorney General Appeals Court Ruling Involving Enbridge Energy Line 5 Pipeline
On November 5, 2019, Michigan Attorney General Dana Nessel appealed the decision of the Michigan Court of Claims involving the Enbridge Energy Line 5 pipeline project.  In March, Michigan Governor Gretchen Whitmer ordered state agencies to cease implementation of Public Act 359.  The Act allows for the creation of a utility tunnel between the Upper and Lower Peninsulas of Michigan in the Straits of Mackinac.  The Governor based the decision on the Attorney General’s determination that the Act violated the state constitution’s Title Object Clause.  The Court of Claims decision, issued on October 31, 2019, found that the law was not unconstitutional.    
From the National Oil & Gas Law Experts:
Georges A. Bibikos, At the Well Weekly (Nov. 15, 2019)
Pennsylvania Actions and Notices
Department of Environmental Protection
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- Updated: November 22, 2019

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