Shale Law Weekly Review - August 19, 2020

Written by:
Sara Jenkins – Research Assistant 
Jackie Schweichler – Staff Atorney
Kaela Gray – Research Assistant

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

Production and Operation: Texas Railroad Commission Proposes Amendments to Application for Exception to State Flaring Rule
On August 4, 2020, the Railroad Commission of Texas (RRC) announced they will be accepting public comments on proposed amendments to the application for exception to a state flaring rule.  The RRC proposal would amend the Statewide Rule 32 Exception Data Sheet Application for Exception to Statewide Rule 32.  According to RRC, the application is filed by operators when requesting authority to flare or vent gas.  The amendments will require thorough documentation of flaring circumstances and more information to ensure compliance with RRC regulations.  RRC will be accepting public comments through September 4, 2020. 

Public Lands: Department of Interior Issues Proposed Rule to Amend Oil and Gas Royalty Regulations for Federal Leases
On August 7, 2020, the U.S. Department of Interior Office of Natural Resources Revenue (ONRR) issued a proposed rule to amend oil and gas royalty regulations for Federal and Indian leases. (30 CFR Parts 1241 and 1206).  The proposed rule titled, ONRR 2020 Valuation Reform and Civil Penalty Rule, would amend 2016 provisions which, according to ONRR, are inconsistent with recent executive orders.  The proposed rule is expected to amend regulations for valuing royalties, valuing coal, and assessing penalties for violating statutes associated with Federal and Indian leases.  ONRR is accepting public comments on the proposed rule until 60 days after the proposed rule is published in the Federal Register. 

Methane Emissions: EPA Issues Final Amendments to Ease Compliance with Oil and Gas New Source Performance Standards
On August 13, 2020, the Environmental Protection Agency (EPA) issued two final rules amending policies and technical requirements to ease compliance burdens associated with oil and gas New Source Performance Standards (NSPS). (See 40 CFR Part 60).  The first rule titled, Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review will rescind the NSPS methane requirements applicable to transmission, storage, production, and processing.  The second rule titled, Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Reconsideration includes amendments relating to fugitive emissions requirements, well site pneumatic pump standards, certification of closed vent systems, and use of an alternative means of emission limitation.  EPA also issued a fact sheet, stating that the final rules will benefit small oil and natural gas producers that make up a majority of the industry.

Pipelines: North Carolina Denies Water Quality Certification for Mountain Valley Pipeline Southgate Project 
On August 11, 2020, North Carolina's Department of Environmental Quality denied a water quality certification for the Mountain Valley Pipeline (MVP) Southgate project.  The Department’s Division of Water Resources denied the certification after reviewing supporting materials and public comments.  The Division determined that the Southgate project was dependent on the successful completion of the MVP Mainline Project.  The Division concluded that pending litigation and suspension of needed permits for the Mainline project presented a “critical risk” to achieving the purpose of the Southgate project.  The Division cited concerns that environmental impacts caused by the Southgate project’s construction would be “inconsistent with principles of minimization” while the Mainline project’s completion remains uncertain.

From the National Oil & Gas Law Experts:
Charles Sartain, When is a “Gross Proceeds” Royalty not Paid on Gross Proceeds? (August 13, 2020). 
John McFarland, Solar Energy in Texas and the Chadbourne Ranch (August 14, 2020). 
Romany Webb, EPA Rescinds Methane Standards For Oil And Gas Facilities (August 14, 2020). 

AGENCY PRESS RELEASES—STATE/FEDERAL

Pennsylvania Department of Energy Press Releases:
Wolf Administration Outlines Actions Underway in Wake of Pipeline Drilling Spill Affecting Marsh Creek State Park, Chester County (August 13, 2020). 

U.S. Department of Energy
The U.S.-Israel Energy Center Announces Funding Opportunity for Energy Infrastructure Cybersecurity Cooperation (August 14, 2020). 

U.S. Environmental Protection Agency
ICYMI: EPA Administrator Wheeler Talks New EPA Rules to Strengthen, Promote American Energy on Varney & Co. (August 14, 2020). 
What They Are Saying: Administrator Wheeler Delivers on President Trump’s Administration’s Efforts to Strengthen, Promote American Energy in Pittsburgh (August 14, 2020). 
In Pittsburgh, Administrator Wheeler Announces Final Air Regulations for Oil and Gas Removing Redundant Requirements, Streamlining Implementation, and Reducing Burdens (August 13, 2020). 

STATE ACTIONS—EXECUTIVE/LEGISLATIVE

Pennsylvania Executive Agencies—Actions and Notices: 
50 Pa.B. 4218 “Availability of the Pennsylvania Energy Development Authority Restart Grant” (August 15, 2020). 
50 Pa.B. 4220 “Wastewater Service” Pennsylvania Public Utility Commission (August 15, 2020).

Pennsylvania Legislature:
HB 2780 “An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in unconventional gas well fee, further providing for distribution of fee” Referred to Environmental Resources And Energy (Aug. 13, 2020).
SB 15 “An Act establishing the CO2 Budget Trading Program; providing for powers and duties of department; establishing the Energy Transition Fund; providing for revenue from sale of carbon allowances; establishing the Energy Transition Board; and providing for energy transition plan” Referred to Environmental Resources And Energy (Aug. 11, 2020) (Senate).
HB 2778 “An Act amending the act of November 30, 2004 (P.L.1672, No.213), known as the Alternative Energy Portfolio Standards Act, further providing for definitions and for alternative energy portfolio standards, providing for solar photovoltaic technology requirements, for contract requirements for solar photovoltaic energy system sources, for renewable energy storage report, for energy storage deployment targets and for contracts for solar photovoltaic technologies by Commonwealth agencies and further providing for portfolio requirements in other states; and making a related repeal.” Referred to Environmental Resources And Energy (Aug. 13, 2020) (House).
HB 2772 “Amending the act of October 15, 1980 (P.L. 950, No. 164), known as the Commonwealth Attorneys Act, in Office of Attorney General, further providing for criminal prosecutions” Referred to Judiciary (Aug. 13, 2020) (House). 

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE

Federal Executive Agencies—Actions and Notices: 
National Oceanic and Atmospheric Administration
85 FR 50720 “Takes of Marine Mammals Incidental to Specified Activities: Alaska Liquefied Natural Gas Project in Cook Inlet” Rule (August 17, 2020). 
Office of Natural Resources Revenue
85 FR 48561 “Major Portion Prices and Due Date for Additional Royalty Payments on Indian Gas Production in Designated Areas Not Associated with an Index Zone; Correction” Notice (August 11, 2020). 

House Energy and Commerce Committee Actions:
No relevant actions August 10-17, 2020.

Senate Energy and Natural Resources Committee Actions: 
S.4523 “A bill to regulate large-scale emissions of methane and natural gas, and for other purposes” Read twice and referred to the Committee on Energy and Natural Resources (August 12, 2020). 

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Dakota Access Review May Test Trump's NEPA Overhaul,” EE News
“New Mexico Close To Adopting Oil And Gas Water Rules,” Associated Press
“Job Losses Climb in Oilfield Services,” Rigzone
“COVID Compounds Pennsylvania's Fracking Industry Problems,” CBS News
“Shale Gas Drilling Permit Fees More Than Double in Pa.,” Pittsburgh Post-Gazette
“N.M. to Update Oil, Gas Wastewater Regulations,” Associated Press
“Mariner East Spill Reaches Drinking Water In Pa.,” EE News

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