Monday, March 9, 2020

Shale Law Weekly Review - March 9, 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. 
Production and Operation: Pennsylvania Quarterly Natural Gas Report Shows Continued Increase in Production
On February 26, 2020, the Pennsylvania Independent Fiscal Office released the Natural Gas Production Report for the fourth quarter of 2019.  While the report shows an overall increase in production from the fourth quarter in 2018, the 7.6 percent increase equates to the “lowest growth rate in over two years.”  More specific data shows that all of the growth comes from wells that were spudded in 2018.  The number of horizontal wells increased by 8.3 percent in the last year, and horizontal production increased by 26.8 percent in the last two years.  Susquehanna County remains the top producer by volume in Pennsylvania, followed by Washington and Greene Counties.  According to the report, Pennsylvania is currently the second largest natural gas producer in the United States behind Texas. 

Pipelines: NiSource Subsidiary Columbia Gas to Pay $53 Million for Safety Violations Resulting from Massachusetts Explosions 
On February 26, 2020, U.S. Attorney Andrew Lelling announced that NiSource subsidiary Columbia Gas will pay a $53 million fine for federal violations that caused fatal explosions in the Merrimack Valley region of Massachusetts in 2018.  Attorney Lelling stated in a press conference that the explosions were the result of “flagrant disregard” for the public safety while Columbia Gas was executing a pipeline replacement project.  As part of the plea deal, Columbia Gas of Massachusetts agreed to plead guilty to violations of the Federal Pipeline Safety Act.  Columbia Gas’ parent company NiSource Inc. also agreed to sell Columbia Gas in order to stop doing business in Massachusetts.  Columbia Gas activities will be monitored monthly by the Department of Transportation to ensure compliance with safety regulations until the company is sold.  According to the National Safety Transportation Board, the 2018 explosions were caused by high-pressure natural gas being released into a low-pressure distribution system.

GHG Emissions: BP Announces Split with Three U.S. Trade Associations Following Net Zero Goal 
On February 26, 2020, British Petroleum (BP) announced its split with three U.S. trade associations following its decision to become a net zero company by 2050.  BP decided to leave the American Fuel and Petrochemical Manufacturers (AFPM), the Western States Petroleum Association (WSPA), and the Western Energy Alliance (WEA) after determining the organizations did not align with BP’s climate-related policies.  BP issued a report finding it was not in agreement with AFPA and WSPA on their stance on carbon pricing, and with WEA on its policy regarding federal regulations of methane.  The move follows BP’s February 12, 2020, outline on how it plans to reach net zero carbon emissions while cutting carbon intensity and methane emissions by 50 percent.  BP estimates its current carbon emissions at 55 million tons per year. 

International Development: OPEC Addresses Coronavirus Impact on Global Oil Markets at 178th Meeting of the Conference
On March 5, 2020, the Organization of the Petroleum Exporting Countries (OPEC) held an extraordinary session of their semi-annual Meeting of the Conference to address the impact of the COVID-19 (Coronavirus) outbreak on global oil markets.  At the December 2019 meeting, OPEC projected global oil demand to grow by 1.1 million barrels per day in 2020, but the projection has now fallen to 0.48 million barrels per day.  The Conference recommended production adjustments of 500 thousand barrels per day to extend throughout 2020, with an additional adjustment of 1.5 million barrels per day until June 30, 2020.  The Conference plans to reconvene on June 9, 2020.  
From the National Oil & Gas Law Experts:
Charles Sartain, Texas Easement Not Modified By Email (Mar. 9, 2020)
John McFarland, The Changing Dynamics of Mineral Sales (Mar. 4, 2020)

Pennsylvania Department of Energy Press Releases:
No new releases Mar. 2–9, 2020.

U.S. Department of Energy
No new releases Mar. 2–9, 2020.

U.S. Environmental Protection Agency

Pennsylvania Executive Agencies—Actions and Notices: 
No actions Mar. 9, 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 Executive Agencies—Actions and Notices: 
Bureau of Safety and Environmental Enforcement
85 FR 12733 “Oil and Gas and Sulfur Operations on the Outer Continental Shelf-Civil Penalty Inflation Adjustment” Rule (March 4, 2020)

Coast Guard
85 FR 12451 “Waterway Suitability Assessment for Operations of Liquefied Hazardous Gas Terminal; Beaumont, TX” Proposed Rule (March 3, 2020)

Energy Department
85 FR 13152 “Notice of Orders Issued Under Section 3 of the Natural Gas Act During January 2020” Notice (March 6, 2020)

Environmental Protection Agency
85 FR 13055 “Approval and Promulgation of Air Quality Implementation Plans; District of Columbia; Negative Declaration for the Oil and Gas Control Techniques Guideline” Rule (March 6, 2020)

Federal Energy Regulatory Commission 
85 FR 12547 “Columbia Gas Transmission, LLC; Notice of Intent to Prepare an Environmental Assessment for the Proposed Leach XPress Project Amendment and Request for Comments on Environmental Issues” Notice (March 3, 2020)
85 FR 12781 “Texas Eastern Transmission, LP; Notice of Revised Schedule for Environmental Review of the Cameron Extension Project” Notice (March 4, 2020)
85 FR 12783 “Sheetz, Inc. v. Colonial Pipeline Company; Notice of Complaint” Notice (March 4, 2020)
85 FR 12784 “National Fuel Gas Supply Corporation; Notice of Application for Amendment” Notice (March 4, 2020)
85 FR 12911 “PennEast Pipeline Company, LLC; Notice of Intent To Prepare an Environmental Assessment for the Proposed PennEast 2020 Amendment Project and Request for Comments on Environmental Issues” Notice (March 5, 2020)
85 FR 12914 “Northwest Pipeline LLC; Notice of Request Under Blanket Authorization” Notice (March 5, 2020)

Fish and Wildlife Service
85 FR 13181 “Draft Environmental Assessment and Draft General Conservation Plan for Oil and Gas Activities in Santa Barbara County, California” Notice (March 6, 2020)

Pipeline and Hazardous Material Safety Administration
85 FR 13703 “Pipeline Safety: Request for Special Permit; Empire Pipeline, Inc.” Notice (March 9, 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 House Committee on Natural Resources (Mar. 5, 2020). 

Senate Energy and Natural Resources Committee Actions: 
No new actions Mar. 2–9, 2020.
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“U.S. Oil and Gas Output in December Pulled Back From Record Highs,” Reuters
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