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.
National Energy
Policy/Public Health: EPA Announces Temporary Policy Change for Environmental
Compliance Obligations Amid Covid-19
On March 26, 2020, the U.S.
Environmental Protection Agency (EPA) announced a temporary policy change for environmental compliance
obligations amid the Covid-19 outbreak. EPA
recognized that many firms under environmental compliance obligations may have
had changing circumstances due to Covid-19 social distancing protocols that
restrict the ability to continue with normal business operations. The policy’s scope is intended to address
staff shortages that may affect laboratory services, reporting and emissions
requirements, or management of hazardous waste and drinking water. EPA outlined enforcement discretion for civil
violations in the following areas: routine compliance monitoring and reporting
by regulated entities; settlement agreement and consent decree reporting
obligations and milestones; facility operations; public water systems regulated
under the Safe Drinking Water Act; and critical infrastructure. The policy change does not apply to criminal
actions, Superfund enforcement, or product imports.
Tax Policy: Pennsylvania
Governor Vetoes Energy Tax Credit Bill
On March 27, 2020,
Pennsylvania Governor Tom Wolf vetoed House Bill 1100 which sought to provide an energy and fertilizer
manufacturer’s tax credit. The bill was passed by the Senate and conferred by the House on February 4, 2020. The bill designated a tax credit for companies that purchased natural gas
and used it in the manufacturing of petrochemicals or fertilizers. In his announcement, Governor Wolf stated,
“Although the bill requires payment of prevailing wages for facility
construction . . . the critical enforcement and investigative tools provided
under the Pennsylvania Prevailing Wage Act are absent from this bill.” Governor Wolf also cited a need to focus on
passing other bills that promote jobs for those impacted by the Covid-19
outbreak.
Public Lands: Federal
Court Upholds BLM Decision to Repeal 2015 Hydraulic Fracturing Rule
On March 27, 2020, the U.S.
District Court for the Northern District of California upheld the Bureau of Land Management’s (BLM) decision to repeal their
2015 rule regulating hydraulic fracturing on federal and Indian lands. (State
of California v. Bureau of Land Management, No. 18-cv-00521-HSG, and Sierra
Club v. Zinke, No. 18-cv-00524-HSG). The rule titled, Oil and Gas; Hydraulic Fracturing on Federal and
Indian Lands, was repealed by BLM in response to President Trump’s Executive Order 13783 promoting energy independence. The State of California and several
environmental advocacy groups filed suit against BLM for the repeal of the rule
alleging violations of several federal statutes, including the Mineral Leasing
Act and the Endangered Species Act. The court
found that BLM provided a reasonable explanation for determining that their
pre-2015 regulations were sufficient in addressing hydraulic fracturing on
federal lands. Additionally, the court
held that BLM’s conclusion that there would be “no effect to threatened
species” as a result of the rule repeal was not “arbitrary and capricious in
light of the totality of the record.”
Pipelines: FERC Denies Rehearing on Columbia Gas Transmission Project
On March 25, 2020, the
Federal Energy Regulatory Commission (FERC) issued an Order denying a rehearing on the approval of Columbia Gas Transmission
and Columbia Gulf Transmission’s pipeline projects (Projects). Allegheny Defense Project, along with
other environmental advocacy groups, filed the request for rehearing alleging
that the Project’s Environmental Impact Statement (EIS) did not comply with the
Natural Gas Act (NGA) and the National Environmental Policy Act (NEPA). FERC’s Order addressed each concern raised by
the Petitioners including: impacts to water resources, endangered species, air
quality and climate change. FERC found
that the EIS met NGA and NEPA requirements in each area of concern. Commissioner Glick filed a dissent in part regarding the Commission's consideration of
impacts to climate change. Commissioner
McNamee filed a concurrence to further address whether FERC is required to consider
environmental effects of upstream production or downstream use of natural gas.
Air Quality: EPA Science
Advisory Board Declines to Review Proposed Rule on Oil and Natural Gas
Emissions Standards
On March 30, 2020, the U.S.
Environmental Protection Agency’s Science Advisory Board (SAB) scheduled a public teleconference on a proposed rule regarding oil and natural
gas emissions standards. According to Inside EPA, SAB declined to review the proposed rule due to time constraints
before the final rule is published. The rule titled, Oil and Natural Gas Sector: Emission Standards for
New, Reconstructed, and Modified Sources Review, proposes to rescind the
methane-specific requirements of the new source performance standards related
to production and processing. (rule summary). EPA also is considering “alternative
interpretations to its statutory authority to regulate pollutants under the
Clean Air Act.”
Pipelines: Texas Court
Denies Preliminary Injunction, Allowing Kinder Morgan Pipeline Project to
Continue
On March 19, 2020, the U.S.
District Court for the Western District of Texas denied a Preliminary Injunction that was requested to delay Kinder
Morgan’s natural gas pipeline project. (City of Austin v. Kinder Morgan
Texas Pipeline, LLC, No. 1:20-CV-138-RP). After being denied a
Temporary Restraining Order on the project, the City of Austin filed for a
Preliminary Injunction under the Endangered Species Act (ESA) and the National
Environmental Policy Act (NEPA). The
City of Austin argued that Kinder Morgan must first obtain an incidental take
permit under the ESA before proceeding with pipeline construction that will
travel through golden-cheeked warbler habitat. The City of Austin also argued that the U.S.
Fish and Wildlife Service’s issuance of a Biological Opinion and Incidental
Take Statement regarding the pipeline’s construction was a “major federal
action” subject to NEPA procedures. The
District Court ultimately denied the Preliminary Injunction finding that the
City of Austin failed to show “irreparable harm” to a protected species, and
that other alleged harms were too speculative for injunctive relief. To read about the District Court’s previous denial of the Temporary Restraining Order, see our Shale Law Weekly
Review for February 25, 2020.
Pipelines: Federal District
Court Rules Environmental Impact Statement Needed for Dakota Access Pipeline
On March 25, 2020, the U.S.
District Court for the District Court of Columbia ruled that the U.S. Army Corps of Engineers (Corps) must prepare an
Environmental Impact Statement (EIS) for the Dakota Access Pipeline (Pipeline).
(Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, No. 16-1534
(JEB)). The Corps previously issued a Finding
of No Significant Impact for an easement that the pipeline needs to cross under
Lake Oahe, a reservoir in the Missouri River. The Standing Rock Sioux Tribe along with other
tribes located near the easement location filed suit challenging the Corps’
finding that construction of the pipeline would have no significant impact on
the environment. The nearby Tribes use
the lake for various purposes including drinking water and agricultural uses. The court found that the Corps did not
adequately address expert comments that raised questions regarding
“leak-detection systems, operator safety records, adverse conditions, and
worst-case discharge.” Therefore, the
court concluded that the Corps will need to prepare an EIS to address the
expert concerns. The court did not rule
on the status of the easement, but allowed each party to prepare arguments for
what should happen to the easement while the EIS is being prepared.
Pipelines: South Dakota
Governor Signs Riot Boosting Bill
On March 18, 2020, South
Dakota Governor Kristi Noem signed HB 1117, amending liability for riot boosting and establishing an
“incitement to riot” section. The bill
amends several sections of the statute, including sections on “riot,”
“definitions,” “liability for riot or riot boosting,” and “recovery of
damages.” The bill creates a new
“incitement to riot section” that includes “instigating, inciting, or
directing” the use of force or violence with three or more people.
Governor Noem stated that the purpose of HB 1117 is to ensure that future
pipelines in the state will be constructed safely and efficiently. The State House of Representatives passed the bill 45 to 25, and the State Senate passed the bill 27 to 8.
According to the bill, violations of the “riot” section or “incitement to riot”
section are class 4 felonies.
From the National Oil & Gas Law Experts:
AGENCY PRESS RELEASES—STATE/FEDERAL
Pennsylvania
Department of Energy Press Releases:
No new releases Mar. 30
- Apr. 6, 2020.
U.S.
Department of Energy
U.S. Department of Energy to Make Strategic
Petroleum Reserve Storage Capacity Available to Struggling U.S. Oil Producers (Apr. 2, 2020)
U.S.
Environmental Protection Agency
U.S. DOT and EPA Put Safety and American
Families First with Final Rule on Fuel Economy Standards (Mar. 31, 2020)
EPA Takes Step Toward Granting Wyoming Primacy
for Certain Underground Injection Wells (Apr. 1, 2020)
STATE
ACTIONS—EXECUTIVE/LEGISLATIVE
Pennsylvania
Executive Agencies—Actions and Notices:
No actions Apr. 6,
2020.
Pennsylvania
Legislature:
S.B. 1099 “Pennsylvania Energy and Water Efficiency Standards Act.” Referred
to Consumer Protection and Professional Licensure (Apr. 3, 2020)
FEDERAL
ACTIONS—EXECUTIVE/LEGISLATIVE
Federal
Executive Agencies—Actions and Notices:
Energy Department
85 FR 18944 “Lake Charles Exports, LLC; Application to Amend Existing
Long-Term Authorizations to Export Liquefied Natural Gas to Non-Free Trade
Agreement Countries” Notice (Apr. 3, 2020)
Environmental Protection
Agency
85 FR 18221 “National Fuel Gas Supply Corporation; Notice of Intent to
Prepare an Environmental Assessment for the Amendment to West Side Expansion
and Modernization Project and Request for Comments on Environmental Issues” Notice
(Apr. 1, 2020)
85 FR 18227 “Alternative Methods for Calculating Off-Cycle Credits Under the
Light-Duty Vehicle Greenhouse Gas Emissions Program: Application From Toyota
Motor North America” Notice (Apr. 1, 2020)
85 FR 18228 “Proposed Information Collection Request; Comment Request;
Regulation of Fuels and Fuel Additives; Gasoline Volatility” Notice
(Apr. 1, 2020)
Federal Energy
Regulatory Commission
85 FR 17868 "Transcontinental Gas Pipe Line Company, LLC; Notice of
Schedule for Environmental Review of a Proposed Amendment of the Northeast
Supply Enhancement Project” Notice (Mar. 31, 2020)
85 FR 17869 “Double E Pipeline, LLC; Notice of Availability of the
Environmental Assessment for the Proposed Double E Pipeline Project” Notice
(Mar. 31, 2020)
85 FR 17870 “Iroquois Gas Transmission System, L.P.; Notice of Intent to
Prepare an Environmental Assessment for the Proposed Enhancement by Compression
Project and Request for Comments on Environmental Issue” Notice (Mar.
31, 2020)
85 FR 18224 “Transcontinental Gas Pipe Line Company, LLC; Notice of Extension
of Time Request” Notice (Apr. 1, 2020)
House
Energy and Commerce Committee Actions:
No new actions Mar. 30 -
Apr. 6, 2020
Senate
Energy and Natural Resources Committee Actions:
No new actions Mar. 30 -
Apr. 6, 2020.
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“Pipeline Operators May Seek Legal Protection as Pandemic Causes Oil Demand to Plummet,” Houston Chronicle
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