Shale Law Weekly Review - January 16, 2017

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

EIA Projects the United States as Net Energy Exporter

On January 5, 2017, the U.S. Energy Information Administration (EIA) released their Annual Outlook 2017. The report projects that the United States will be a net exporter in most scenarios. Energy consumption is generally expected to remain consistent, while projections for energy production vary widely to where there could be no change or a 50% increase in growth. The report also states that much of the total shale gas and dry natural gas production is due to the development of the Marcellus and Utica shale plays. In addition, the Short-Term Energy Outlook released January 10th by the EIA, projects natural gas consumption to increase by 0.3 Bcf/d in 2017.

PA Senators' Motion to Intervene in Lawsuit is Denied

On January 5, 2017, the United States District Court for the Middle District of Pennsylvania denied a motion to intervene by three Pennsylvania senators in a lawsuit against the Delaware River Basin Commission (DRBC) (Wayne Lane & Mineral Grp., LLC v. Del. River Basin Comm’n, No. 3:16-CV-00897). The senators, Joseph B. Scarnati, Lisa Baker, and Gene Yaw, intervened on the side of Wayne Land and Mineral Group, LLC, arguing that the DRBC lacks jurisdiction and authority to deny drilling activities. The court held that the senators lacked sufficient interest in the litigation but the senators will be permitted to file a joint amicus curiae brief on behalf of the plaintiff.

Bureau of Ocean Energy Management Denies Seismic Survey Applications for Atlantic

On January 6, 2017, the Bureau of Ocean Energy Management (BOEM) announced the denial of pending permit applications to conduct seismic surveys in the Atlantic Ocean. The denial was based on the recent removal of this area of the Atlantic from the Outer Continental Shelf Oil and Gas Leasing Program. The BOEM said in their statement that there is “no immediate need” to conduct these surveys because there can be no leasing for this area for at least the next five years. In addition, the BOEM stated that “the value of obtaining the geophysical and geological information...does not outweigh the potential risks of those surveys’ acoustic pulse impacts on marine life.”

New Bill Signed in Ohio Will Regulate Local Ballot Issues

On January 4, 2017, Ohio Governor John Kasich signed House Bill 463 which includes new requirements for county charters. The bill will give the board of elections and the secretary of state the power to decide when a proposed county charter does not meet proper procedural requirements. In addition, the proposed charter must not reserve certain powers for local control  that have already been reserved to the state. According to the Columbus Dispatch, the bill will make it more difficult for local groups to use ballot voting to change local rules for hydraulic fracturing.

Canadian Environmental Group Files Legal Challenge to Energy East Pipeline

On January 10, 2017, Transition Initiative Kenora (TIK) filed a motion with the Canadian National Energy Board to stay the Energy East pipeline review. TIK argues that the review process is void, or in the alternative, there should be a stay of the proceeding pending a determination by the Federal Court of Appeals. The motion comes as a result of three members of the Energy East Panel who recused themselves after they held private meetings with a company consultant. TIK’s motion states that “The former Panel’s conduct taints the entirety of the Energy East proceeding with a reasonable apprehension of bias.”

Oral Arguments for BLM Hydraulic Fracturing Rule Postponed

On January 3, 2017, the 10th United States Circuit Court of Appeals rescheduled oral arguments for the lawsuit over the Bureau of Land Management's new hydraulic fracturing rules (State of Wyoming, et al. v. Jewell, et al.). Initially set for January 17th, the arguments will now be held March 22nd. The rule regulates hydraulic fracturing on federal and American Indian lands.   

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The rise of natural gas exports will help make the U.S. a net energy exporter - OGJonline

According to DEP, almost 60% of erosion and sedimentation control permits had errors - PowerSource

Colder temperatures increase energy demand in Asia - LNGWorldNews

The price of crude oil climbs, bringing more oil and gas jobs - UG Center

Environmentalists in Buffalo show concern for Northern Access Pipeline - NiagaraGazette

First LNG shipment from U.S. to Japan on Friday - JapanNews

PA Governor plans to ask for tax on Marcellus Shale drillers - StateImpact

Energy Information Administration decreases natural gas production estimate for 2017 - Reuters

New administration may intend to open federal lands to drilling - UG_Center

Drones are becoming an efficient source of data collection - E&P

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Check out this week’s Shale Law in the SpotLight: BLM Releases Final Rule on Waste Prevention, Production Subject to Royalties, and Resource Conservation.

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Written by Jacqueline Schweichler - Education Programs Coordinator

Atlantic offshore leasing opportunities barred from the new 2017-2022 Offshore Oil and Gas Leasing Program

On March 15, 2016, as part of her duty under the Outer Continental Shelf (OCS) Lands Act, Secretary of the Interior Sally Jewel announced the release of a proposed Oil and Gas Leasing program for the 2017-2022 period. As explained within the preamble, this proposed program is the second of three proposals required to develop the 2017-2022 Oil and Gas Leasing program, which will replace the 2012-2017 program. The five-year program aims to provide information as to leasing opportunities for mineral exploration and development of offshore natural gas and oil while balancing the potential environmental impacts on the coastal zone and offshore. The proposed program is available for public comment through June 16, 2016.

The Bureau of Ocean Energy Management (BOEM) determined a potential of thirteen lease sales in six OCS planning areas, including ten potential leases sales in the Gulf of Mexico region and three in the Alaska region. The proposed program offers all available acreages in the central and western Gulf of Mexico planning areas as well as a narrow strip of water acreage at the edge of the eastern Gulf of Mexico “where infrastructure is best-established and there is strong adjacent state support and significant oil and gas resource potential.” A large part of the eastern planning area is under a Congressional moratorium that will expire on June 30, 2022.

In the Alaska region, the proposed program makes available for leasing the Beaufort and Chukchi Sea along the northern coast of Alaska. A 25-mile zone along the Chukchi and Chukchi Sea coasts is subject to a Presidential Moratorium in place since January 27, 2015. The determination of those three potential lease sales is part of a substantial collaborative effort “with North Slope communities to deconflict oil and gas activities from traditional and subsistence activities on the Arctic OCS.”

BOEM also considered the possibility of leasing offshore acreages of the Atlantic region before stepping back for various reasons. BOEM explained that “ocean-dependent tourism, commercial and recreational fishing, and commercial shipping and transportation are established and important economic uses in and along the coast of the Mid- and South Atlantic Program Area . . . [and] could be potentially impacted by oil and gas activity.” Interestingly it also added that “though additional offshore production is arguably always beneficial to the U.S. economy, the current market of increased onshore production and persistently low oil prices reduces the need for oil and gas development in the Atlantic at this time.”

On March 23, 2016, BOEM announced in a Press Release that, under the 2012-2017 Oil and Gas Leasing program, “a total of 30 offshore energy companies submitted 148 bids . . . [and] the sum of all bids received totaled $179,172,819.” It also observed that no bids were submitted for the eastern planning area of the Gulf of Mexico.

Written by Chloe Marie - Research Fellow

U.S. DEPARTMENT OF INTERIOR AGREES TO DISCLOSE RECORDS ABOUT HYDRAULIC FRACTURING OCCURING IN THE GULF OF MEXICO’S WATERS

On June 2 2015, the U.S. Department of Interior agreed to reveal information about the use of the hydraulic fracturing technique in the Gulf of Mexico’s waters as part of a legal settlement with the Center for Biological Diversity (CBM).

The Center for Biological Diversity filed a lawsuit against the U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) “challeng[ing] BSEE’s and BOEM’s failure to issue a timely response to its FOIA request for records related to the extent that BSEE and BOEM have allowed hydraulic fracturing and other unconventional well stimulation in offshore oil and gas operations in the Gulf of Mexico”.

The agreement stipulates that “BOEM and BSEE will begin providing [the CBM] with a rolling production of non-exempt documents subject to FOIA that are responsive to the FOIA request as narrowed beginning on July 1, 2015, and will complete the production by April 30, 2016”. 

Written by Chloe Marie - Research Fellow

06/08/2015