Tuesday, May 19, 2020

Shale Law Weekly Review – May 18, 2020

Written by:

Sara Jenkins – Research Assistant

Jackie Schweichler – Staff Attorney

Kaela Gray – Research Assistant

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

National Energy Policy/LNG Exports: Department of Energy Issues Proposed Rule for Changes to NEPA Implementing Procedures

On May 1, 2020, the U.S. Department of Energy (DOE) issued a Notice of Proposed Rulemaking for changes to the Department’s National Environmental Policy Act (NEPA) implementing procedures.  The proposed rule states that DOE intends to amend its policies regarding NEPA review of certain imports and exports under the Natural Gas Act.  DOE is proposing changes to its procedures based on the legal principle found in Pub. Citizen and Sierra Club that NEPA review does not include review of environmental effects that an agency has no discretion over.  See Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752 (2004) and Sierra Club v. Fed. Energy Regulatory Comm’n, 827 F.3d 36 (D.C. Cir. 2016).  DOE stated that section 3 of the Natural Gas Act does not give DOE discretion over authorizing natural gas imports because they have already been determined to be in the public interest.  Further, DOE explained that they do not have discretion over the construction and operation of LNG export facilities.  Therefore, DOE proposes to alter its NEPA review to exclude effects of export facilities and limit its review of environmental effects to “at or after the point of export.”  DOE is accepting public comments on the proposal until June 1, 2020.


Pipelines: Federal District Court Amends Ruling on Army Corps NWP 12 Permits

On May 11, 2020, the U.S. District Court for the District of Montana amended a previous summary judgment order regarding the U.S. Army Corps of Engineers (Corps) ability to issue Nationwide Permit 12 (NWP 12).  In the previous order, the court vacated NWP 12 and enjoined the Corps from authorizing any dredge or fill activities under NWP 12 until the Corps complied with the Endangered Species Act and consulted with U.S. Fish and Wildlife Service (FWS).  Following a motion for stay and request to revise the remedy filed by the Corps and TC Energy, the court partially amended its previous order.  The amendment allows the NWP 12 to remain in place for “non-pipeline construction activities and routine maintenance, inspection, and repair activities” on existing projects.  The revised order also allows the Corps to authorize dredge or fill activities for current projects.  However, the NWP 12 remains vacated with regards to new oil and gas pipeline construction pending consultation with FWS and compliance with environmental laws.  The Corps also remains enjoined from authorizing dredge or fill activities on new pipeline construction.


Crude Oil by Rail: PHMSA Preempts Washington State’s Vapor Limit for Transportation of Crude Oil by Rail

On May 11, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) preempted the state of Washington’s vapor pressure requirement and Advance Notice of Transfer for transportation of crude oil by rail car.  Montana and North Dakota had previously filed an application asking PHMSA to review Washington’s requirements, alleging that the rules were too burdensome to allow rail transportation of oil from the Bakken region.  PHMSA published a notice of the application in the Federal Register and received over 4,000 comments from a variety of interested groups.  After review, PHMSA found that Washington’s vapor pressure limit created a classifying scheme and handling requirement that was not substantively the same as existing federal regulations.  Further, PHMSA found that the limit was an obstacle to complying with the Federal Hazardous Material Transportation Law and the Hazardous Materials Regulations.  Therefore, PHMSA ruled that Washington’s vapor pressure regulation was preempted.  PHMSA also noted that it could not make a determination regarding preemption of Washington’s Advance Notice of Transfer requirement because the administrative record was insufficient.


Municipal Regulation: City Council in Colorado Approves Changes to Zoning for Oil and Gas Development

On May 12, 2020, Broomfield City Council in Colorado approved changes to its zoning code limiting oil and gas development in certain areas.  The city council proposed changes to the zoning code after the Colorado legislature passed SB19-181, authorizing local government to regulate the location and siting of oil and gas facilities.  The approved changes consist of deleting specific language from sections of zoning regulations that permitted oil or gas wells in certain districts.  Other sections have been amended to allow oil and gas wells except on “public or private open lands or . . . a public or private park.”  Further, the approved changes increase the current buffer between oil and gas development and residential neighborhoods from 1,000 feet to 2,000 feet.  More specifically, the 2,000 foot buffer will be required near athletic fields, child care facilities, correctional facilities, dwelling units, hospitals, schools, and undeveloped residential lots among other places.


From the National Oil & Gas Law Experts:

George Bibikos, PA Supreme Court Agrees to Hear O+G Lease Expiration Case (May 15, 2020)



Pennsylvania Department of Energy Press Releases:

No new releases May 11–18, 2020.


U.S. Department of Energy

The U.S. Department of Energy today released a Request for Proposals (RFP) to purchase up to one million barrels of sweet crude oil for the SPR (May 14, 2020).

Department of Energy Announces $30 Million for Innovation in Critical Materials Processing Technologies (May 14, 2020).

U.S. Department of Energy Launches $230 Million Advanced Reactor Demonstration Program (May 14, 2020)


U.S. Environmental Protection Agency

EPA completes oil spill cleanup at Duck Creek in Toledo, Ohio (May 13, 2020).




Pennsylvania Executive Agencies—Actions and Notices:

No actions May 18, 2020.


Pennsylvania Legislature:

HB 1106, Energize PA Legislative Package” Removed from Table (May 13, 2020)




Federal Executive Agencies—Actions and Notices:


Environmental Protection Agency

85 FR 27979 “National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List: Partial Deletion of the Omaha Lead Superfund Site” Proposed Rule (May 13, 2020).

85 FR 29678Air Plan Approval; Massachusetts; Negative Declaration for the Oil and Gas Industry” Proposed Rule (May 18, 2020)

85 FR 29628 “Air Quality State Implementation Plans; APprovals and Promulgations: Massachusetts; Negative Declaration for the Oil and Gas Industry” Rule (May 18, 2020).


Federal Energy Regulatory Commission

85 FR 29444 “Dominion Energy Overthrust Pipeline, LLC” Request Under Blanket Authorization (May 15, 2020)


Justice Department

85 FR 28984 “Clean Water Act and Oil Pollution Act” Proposed Modification of Consent Decree ─ Notice (May 14, 2020).


Pipeline and Hazardous Material Safety Administration

85 FR 29511 “Washington Crude oil by Rail Volatility Requirements” Notice (May 15, 2020)



House Energy and Commerce Committee Actions:

No new actions May 11-May 18, 2020.


Senate Energy and Natural Resources Committee Actions:

S.3711 “A bill to amend the Energy Independence and Security Act of 2007 to reauthorize the Energy Efficiency and Conservation Block Grant Program, and for other purposes.” Referred to the Committee on Energy and Natural Resources (May 13, 2020)

S.3688 “A bill to amend the Federal Power Act to authorize the Federal Energy Regulatory Commission and the Secretary of Energy to offer assistance in securing the assets of the owners and operators of energy infrastructure against threats and increasing the security of the electric grid, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources (May 12, 2020)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:

“Trump administration to buy 1 million barrels of oil for national stockpile,” The Hill

“Energy regulator declines states' request for moratorium on pipeline approvals,” The Hill

“Oil bust takes heavy toll on Texas county,” National Public Radio

“Qatar Has a Lose-Lose Problem in Global Gas Fight,” Rigzone

“Yet Another State Quietly Moves To Criminalize Fossil Fuel Protests Amid Coronavirus,” Huffington Post

“Lawsuit says western Massachusetts pipeline approval ignored climate risk,” Energy News US

“Natural Gas Exports Slow as Pandemic Reduces Global Demand,” New York Times

“Does New York need a new natural gas pipeline? It’s about to decide,” Grist

“10 states ask energy regulators to postpone pipeline approvals amid pandemic,” The Hill

“States ask Trump administration to pay laid off oil workers to plug abandoned wells,” Reuters

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