Shale Law Weekly Review - March 16, 2020

Written by: 
Sara Jenkins – Research Assistant 
Jackie Schweichler – Staff Attorney
Brennan Weintraub – Research Assistant

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

LNG Infrastructure: FERC Issues Final Environmental Impact Statement for Alaska LNG Project

On March 6, 2020, The Federal Energy Regulatory Commission issued a Final Environmental Impact Statement (EIS) for the Alaska LNG Project (Project).  The Final EIS concluded that the project would cause some impacts to the environment that could be reduced or mitigated through various proposed measures.  However, FERC found that some permanent impacts of the Project would be significant and adverse to permafrost, wetlands, and forests in Alaska’s North Slope area.  The project would also likely adversely affect six federally listed species: the spectacled eider, polar bear, bearded seal, Cook Inlet beluga whale, humpback whale, and ringed seal.  The Project manager, Alaska Gasline Development Corporation, is consulting with the U.S. Fish and Wildlife Service and National Marine Fisheries Service and will be required to comply with the Endangered Species Act regarding the listed species.  The Project includes installation of a natural gas main pipeline, transmission lines, compressor stations, and liquefaction facilities.  If completed, the main facilities will be located in the Nikiski area of the Kenai Peninsula and will have an annual average capacity of “up to 3.7 billion standard cubic feet per day.”

GHG Emissions: Fourth Circuit Remands Climate Change Suit to State Court

On March 6, 2020, the U.S. Court of Appeals for the Fourth Circuit affirmed a District Court ruling that remanded a Maryland climate change lawsuit to state court. (Mayor and City Council of Baltimore v. BP P.L.C., No. 19-1644).  The complaint was first filed in July 2018 by the Mayor and City of Baltimore against several oil and gas companies, alleging that the companies contributed to climate change through production and promotion of fossil fuels. (pg. 5).  Plaintiffs filed eight causes of action under Maryland state law, seeking monetary damages and equitable relief. (pg. 6).  Two Defendants, Chevron Corporation and Chevron U.S.A. Inc., removed the case to District Court under eight different grounds for removal. (pg. 7).  The District Court denied all eight grounds and remanded the case back to Maryland state court. (pg. 8).  On appeal, the Fourth Circuit reviewed the Defendant’s grounds for removal only under the federal officer removal statute. 28 U.S.C. § 1442 (pg. 5).  The Fourth Circuit concluded that the federal officer removal statute was not applicable under the circumstances of the case and affirmed the District Court’s order remanding the case to Maryland state court. 

Hydraulic Fracturing Bans: Minnesota Supreme Court Upholds County Ordinance Banning Industrial Mineral Operations

On March 11, 2020, the Minnesota Supreme Court issued an opinion upholding a county ordinance that prohibits industrial mining operations. (Minnesota Sands, LLC v. County of Winona, No. A18-0090).  Plaintiff Minnesota Sands LLC mines for silica sand that it sells to oil and gas producers for usage in hydraulic fracturing. (pg. 3).  Minnesota Sands filed the case challenging the Winona County prohibition, alleging that the ordinance violated the “dormant” Commerce Clause of the U.S. Constitution and resulted in an unconstitutional taking of property interests in several leases the company has with the county. (pg. 3).  The court held that the ordinance does not violate the dormant Commerce Clause “on its face, in purpose, or in effect.” (pg. 26).  The court also held that the takings claims raised by Minnesota Sands were invalid because they never had a possessory right to use or control the property subject in the lease agreements with the county. (pg. 38).  Justice Anderson wrote a 19-page dissenting opinion in which Chief Justice Gildea joined fully and two other Justices joined in part.

From the National Oil & Gas Law Experts:

Charles Sartain, “No Obligation” Clause Dooms Oil and Gas Asset Bid (Mar. 10, 2020)

John McFarland, A Review of World Oil Production and Consumption (Mar. 10, 2020)

John McFarland, Oil in the Time of Pandemic (Mar. 13, 2020)

U.S. Department of Energy

DOE Responds to Recent Oil Market Activity (Mar. 9, 2020)

U.S. and Australia Strengthen Fuel Security with New SPR Arrangement (Mar. 10, 2020)

DOE Statement on Upcoming SPR Crude Oil Sale (Mar. 10, 2020)

DOE Announces $111 Million for FY 2020 Small Business Innovation Research and Technology Transfer Funding (Mar. 10, 2020)

DOE Applauds Swift Action of President Trump, Initiates Process to Purchase Oil for the Strategic Petroleum Reserve (Mar. 13, 2020)

U.S. Environmental Protection Agency

EPA Grant to Houston-Galveston Area Council Will Reduce Diesel Emissions (Mar. 6, 2020)

EPA Announces 2019 Energy Star Manufacturing Plants (Mar. 11, 2020)

Trump Administration Takes Major Step to Improve Implementation of the Endangered Species Act (Mar. 12, 2020)

EPA to Review Lead Ambient Air Standards (Mar. 12, 2020)

Pennsylvania Legislature:

The House will reconvene on Monday, March 16, 2020 at 1:00PM

The Senate will reconvene on Monday, March 16, 2020 at 1:00PM unless sooner recalled by the Pres. Pro Temp.

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE

Federal Executive Agencies—Actions and Notices: 

Federal Energy Regulatory Commission 

85 FR 13888 “Tennessee Gas Pipeline Company, LLC; Notice of Petition for Declaratory Order” Notice (March 10, 2020)

85 FR 13890 “Port Arthur LNG Phase II, LLC; PALNG Common Facilities Company, LLC; Notice of Application” Notice (March 10, 2020)

85 FR 14470 “Alaska Gasline Development Corporation; Notice of Availability of the Final Environmental Impact Statement for the Proposed Alaska LNG Project” Notice (March 12, 2020)

85 FR 14473 “Southern Star Central Gas Pipeline, Inc.; Notice of Request Under Blanket Authorization” Notice (March 12, 2020)

85 FR 14672 “Notice of Request Under Blanket Authorization; Northern Natural Gas Company” Notice (March 13, 2020)

Foreign-Trade Zones Board

85 FR 13859 “Foreign Trade Zone (FTZ) 87-Lake Charles, Louisiana, Notification of Proposed Production Activity, Lake Charles LNG Export Company, LLC (Liquefied Natural Gas Processing), Lake Charles, Louisiana” Notice (March 10, 2020)

85 FR 14460 “Approval of Subzone Status, Packard Pipe Terminals, LLC, Belle Chasse, Louisiana” Notice (March 12, 2020)

House Energy and Commerce Committee Actions:

H.R.6112 “To Require Operators of Oil and Gas Production Facilities to Take Certain Measures to Protect Drinking Water, And For Other Purposes” Referred to the Subcommittee on Water Resources and Environment (Mar. 9, 2020)

H.R.5986 “Environmental Justice For All Act” Referred to the Subcommittee on Crime, Terrorism, and Homeland Security (Mar. 10, 2020)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Maryland Climate Ruling a Setback for Oil and Gas Industry,” Inside Climate

“Why CenterPoint Energy is Pushing to Test ‘Renewable’ Natural Gas. And Why Some Environmental Groups Are So Skeptical Of It,” Minnesota Post

“Big Oil Looks to Petrochemicals As Gasoline Demand Plunges,” Energywire

“Falling Oil Is a Shot in the Arm for U.S. Gas Drillers,” World Oil

“New Mexico Brings in Over $108M in Oil, Gas Royalty Payments,” Associated Press

“Coronavirus Could Lead to a Wave of Defaults for Oil Companies,” Axios

“Oil Demand Set for First Contraction Since 2009 Due to Coronavirus,” Reuters

“Ohio Bill Aims to Standardize Information Included With Royalty Checks,” Shale Gas Reporter

“Houston Is Not Prepared for the Oil Bust,” Texas Monthly

“Oil-Producing U.S. States to Lose Revenue as Crude Prices Collapse,” Reuters

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