Shale Law Weekly Review - December 9, 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.

LNG Exports: FERC Approved Four LNG Projects in Texas

On November 21, 2019, the Federal Energy Regulatory Commission (FERC) approved construction of four liquefied natural gas (LNG) projects and their associated facilities in Texas.  These projects include the Texas LNG Brownsville Project, a project involving the construction and operation of new LNG export facilities along the Brownsville Ship Channel in Cameron County, with an export capacity of approximately 4 million metric tonnes per annum (MMtpa).  Two of the new LNG facilities will be the Rio Grande Terminal Project and the Annova LNG Brownsville Project, both located in the Port of Brownsville.  These facilities would have a capacity to export up to 27 MMtpa and 6 MMtpa, respectively.  The fourth project, the Stage 3 LNG Project, would expand the existing Corpus Christi Liquefaction’s LNG terminal by increasing the export capacity by an additional 11.45 MMtpa. 

Municipal Regulation: City of Broomfield, Colorado, Extends Temporary Moratorium on Oil and Gas Development Applications

On December 3, 2019, the Broomfield City Council passed Ordinance No. 2111 to approve a 6-month extension of a prior moratorium on processing or approving oil and gas development applications within the city and county of Broomfield.  The prior moratorium had been set to expire on December 4, 2019, and will now be in place until June 4, 2020. The council had previously directed its staff to prepare draft oil and gas regulations following the enactment of SB 19-181; however, it needed additional time to complete research and prepare related regulations.

Methane Emissions: Pipeline Companies File Legal Actions Against Texas Railroad Commission over Flaring Permits

On November 20, 2019, Williams MLP Operating, LLC and Mockingbird Midstream Gas Services, LLC petitioned the 345th Civil District Court in Travis County for a judicial review of an order granting a flaring exception to EXCO Operating Company, LP.  The plaintiffs are owners and operators of the Eagle Ford Gathering System that transports gas for the EXCO wells at issue.  EXCO requested an exception to the no-flaring rule for more than 130 wells in the Eagle Ford Shale Field.  The request was granted by the Railroad Commission of Texas in August 2019 pursuant to Statewide Rule 32.  Under Rule 32, operators are required to obtain a permit to flare gas from oil wells; however, plaintiffs argued that EXCO had no need to flare gas in this context because the company was already connected to a gathering system.  The plaintiffs also pointed out that for the period from 2013 through 2019, the Commission granted no less than 35,000 flaring permits.

Climate Change: Federal Judge Denies Exxon Motion to Remove Climate Change Lawsuit from State to Federal Court

On December 6, 2019, the U.S. District Court for the District of Massachusetts denied Exxon Mobil Corporation’s motion to remove the case from the Superior Court of Suffolk County, Massachusetts to federal court (Massachusetts v. Exxon Mobil Corp., No. 1:19-cv-12430). Massachusetts Attorney General Maura Healey filed this case in October 2019 alleging that Exxon violated the state’s Consumer Protection Act by deceiving investors and consumers about the consequences of climate change.  Exxon described this lawsuit as a “culmination of a multi-year plan concocted by Plaintiffs’ attorneys, climate activists, and special interests to force a political and regulatory agenda that has not otherwise materialized through the legislative process.”  Exxon argued that this lawsuit involves questions of federal law not state law and thus filed a request on November 29, 2019, before the federal court to remove the case from state court. 

Production and Operation: EIA Reports that U.S. is Net Petroleum Exporter for the First Time in 50 Years

On December 5, 2019, the U.S. Energy Information Administration (EIA) reported that in September 2019, and for the first time in nearly 50 years, the United States exported more petroleum than it imported.  This development is partially due to crude oil production more than doubling in the past decade. Specifically, crude oil production increased from 5.3 million b/d in 2009 to 12.1 million b/d through September 2019.  The change is also the result of decreasing crude oil imports from outside countries as well as the 2015 lifting of federal restrictions on oil exports.  The U.S. EIA, however, pointed out that the country is still a net importer of crude oil that comes mainly from Canada and Mexico.

Pipelines: Chester County District Attorney’s Office Files Suit Against Energy Transfer for Bribery and Conspiracy over Mariner East Pipeline

On December 3, 2019, Chester County District Attorney Tom Hogan announced in a press release that his office instituted criminal proceedings against Energy Transfer for bribery, conspiracy, and other related offences.  District Attorney Hogan alleged that Energy Transfer unlawfully hired armed Pennsylvania constables to act as private agents for the protection of the Marine East Pipeline in lieu of private security firms.  He argued that these constables were outside their jurisdictions and illegally used their badges and positions to intimidate the local population.  In addition, Hogan claimed that Energy Transfer developed an illicit scheme to conceal payments made to the constables, which would also hide the company’s fraudulent involvement.  All those implicated have been arrested and now await the hearing.  According to Energy Transfer, the allegations have no merit as the constables were legally hired through an “independent, Pennsylvania-based security firm.”

GHG Emissions: Spanish Company Repsol Makes a Step Towards Reducing GHG Emissions to Meet the Paris Climate Agreement Requirements

On December 2, 2019, Spanish Energy Company Repsol announced its aim to become a carbon neutral company by 2050.  According to their announcement, the company is the first oil and gas company to entertain a zero emissions objective.  Repsol is committed to producing a business plan that sets out steps towards limiting increases in global temperature to below 2 degrees Celsius in line with the Paris Climate Agreement.  In this respect, and among others, the company developed a low-carbon transition plan with the aim of increasing electricity generation capacity up to 7,5000 MW by 2025 from renewable energy sources.  In addition, the company has implemented a new oil and gas price scenario, including reevaluating some financial assets, with an after-tax accounting charge of about 4.8 billion euros. 

From the National Oil & Gas Law Experts:

Charles Sartain, The Duhig Rule Explained and Distinguished (Dec. 5, 2019)

John McFarland, The Economics of Flaring (Dec. 2, 2019)

John McFarland, Fight Over Flaring in the Eagle Ford (Nov. 25, 2019)

U.S. Energy Information Administration, Natural gas venting and flaring increased in North Dakota and Texas in 2018 (Dec. 6, 2019)

National Legislation

Engineers Corps

Notice; Occupational Safety and Health Programs for Federal Employees (Dec. 5, 2019)

Environmental Protection Agency

Final Action; Finding of Failure to Submit a Clean Air Act Section 110 State Implementation Plan for Interstate Transport for the 2015 Ozone National Ambient Air Quality Standards (NAAQS) (Dec. 5, 2019)

Pennsylvania Actions and Notices

Department of Conservation and Natural Resource

Execution of Oil and Gas Lease for Publicly-Owned Streambeds (Dec. 7, 2019)

Department of Environmental Protection

Applications, Actions and Special Notices (Dec. 7, 2019)

Availability of National Pollutant Discharge Elimination System General Permit for Discharges of Stormwater Associated with Construction Activities (PAG-02) (Dec. 7, 2019)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Oil: OPEC Nations Grapple With Oversupply” - Energy Wire
“Cornyn Sees Us Positioned to Share Energy Strength With Its Allies” - Oil & Gas Journal
“Shale’s Debt-fueled Drilling Boom is Coming to an End” - Oilprice.Com
“Europe Was Favored Destination For US LNG In November Amid Activity Ramp-up” - S&P Global
“Enviros: Proposed LNG Plant Will Harm Rare Marsh Bird” - Houston Chronicle
“Trump Lawyers Defend Pipeline’s Route Across Appalachian Trail” - Bloomberg Environment
“PA. Dep And Major Oil Companies Agree: Trump Administration Shouldn’t Roll Back Methane Rules” - Pittsburgh Post-gazette
“As Climate Warnings Grow Dire, Energy Companies Face a ‘new Frontier Of Threats’” - Npr
“Eagle Ford: Faded Texas Oil Field Offers Austerity Lesson For U.S. Shale” - Energy Wire
“Oklahoma: Earthquake Rattles Town Already Shaken 8 Years Ago” - Energy Wire
“Frac Sand Slump Continues to Sting Industry” - Houston Chronicle
“An Oil Giant Plans for Climate Change” - The Wall Street Journal

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