Shale Law Weekly Review—October 6, 2020

Written by: 
Jackie Schweichler – Staff Attorney
Sarah Straub – Research Assistant 
The following information is an update of recent local, state, national and international legal developments relevant to shale gas. 

Pipelines: Mountain Valley Pipeline Receives Permits to Move Project Forward
On September 25, 2020, the U.S. Army Corps of Engineers issued a letter to the Mountain Valley Pipeline Project reissuing Nationwide Permit 12 Verifications (NWP 12). This permits dredge and fill activities in navigational waters in Virginia and West Virginia and is a step towards the pipeline being completed. Also on this same date, a Draft Supplemental Environmental Impact Statement prepared by the U.S. Forest Service was issued evaluating the effects of the pipeline’s construction on federal lands in Jefferson National Forest. The draft SEIS is available for comment until November 9. In response to the NWP 12 Verifications, Appalachia Valley Advocates wrote a letter to the U.S. Department of Justice requesting that the U.S. Army Corps of Engineers’ decision be stayed until a court can review the decision. On September 28, 2020, environmental groups initiated a lawsuit against the U.S. Army Corps of Engineers seeking judicial review of its re-issuance of the NWP 12 Verifications to Mountain Valley Pipeline.

Air Quality: Colorado State Agency Approves Rule on Oil and Gas Emissions 
On September 23, 2020, the Colorado Air Quality Control Commission voted to approve a rule which is intended to limit emissions in oil and gas production. The rule will impose more stringent emissions tracking requirements, including monitoring emissions more frequently and tracking emissions from the time construction of the well begins through the first six months of the well’s production. The rulemaking is a result of Colorado legislation, Senate Bill 19-181, which modified the state’s laws on oil and gas regulation to prioritize both the environment and the public’s health, safety and welfare. 

Air Quality: EPA Modifies Rule to Allow Reclassifying of Major Sources
On October 1, 2020, the Environmental Protection Agency (EPA) finalized modifications to a 1995 rule promulgated under Section 112 of the Clean Air Act known as “Once In, Always In.” The rule, summarized in EPA’s Fact Sheet, will allow major sources of hazardous pollutants that have reduced the amount of emissions they produce to be reclassified to area source status. Previously, under the National Emissions Standards for Hazardous Air Pollutants General Provisions, major sources, once classified as a major source, could not be reclassified. This rule amends that policy to permit major sources achieving emissions standards the flexibility to be recategorized. EPA said in its news release that the changes in the rule “will encourage facilities to pursue innovations in pollution-reduction technologies and relieve regulatory requirements intended for much larger emitters.” 

From the National Oil & Gas Law Experts: 
Charles Sartain, My Operator is Making Money on the Well and I’m Not. What Can I Do? Part 1., (October 1, 2020)
John McFarland, Consent-to-assign Provisions in Oil and Gas Leases – Mayo Foundation v. BP America, (September 28, 2020) 
John McFarland, An Update: Dinosaur Fossils as “Minerals”, (October 2, 2020)

State Actions - Executive/Legislative
Pennsylvania Legislature:
HR 1018 “A Resolution recognizing the month of October 2020 as "Energy Awareness Month" in Pennsylvania.” INTRODUCED AS NONCONTROVERSIAL RESOLUTION UNDER RULE 35 (September 25, 2020). 
HB 2002 “An Act repealing the act of May 11, 1921 (P.L.479, No.225), entitled "An act imposing a State tax on anthracite coal; providing for the assessment and collection thereof; and providing penalties for the violation of this act.” Laid on the table, (September 30, 2020). 
HB 2795 “An Act amending the act of March 10, 1949 (P.L.30, No.14), known as the Public School Code of 1949, in terms and courses of study, providing for science curriculum to include climate change.” Re-reported as committed from Education. (September 30, 2020). 
SB 745 “ An Act amending Title 75 (Vehicles) of the Pennsylvania Consolidated Statutes, in inspection of vehicles, further providing for prohibition on expenditures for emission inspection program.” Laid on the table, (September 30, 2020). 
HB 1106 “An Act amending the act of April 9, 1929 (P.L.177, No.175), known as The Administrative Code of 1929, providing for environmental permits and plan approvals; making related repeals; and abrogating regulations.” Removed from table, (October 1, 2020). 

Federal Actions - Executive/Legislative
Federal Executive Agencies—Actions and Notices:
Federal Energy Regulatory Commission 
85 FR 60779 “Midship Pipeline Company, LLC; Notice of Petition for Declaratory Order” Notice (September 28, 2020). 
85 FR 61743 “ANR Pipeline Company, Columbia Gas Transmission, LLC, Columbia Gulf Transmission, LLC; Notice of Petition for Declaratory Order” Notice (September 30, 2020). 
85 FR 61745 “Rover Pipeline LLC; Notice of Petition for Declaratory Order” Notice (September 30, 2020). 
85 FR 61948 “Rockies Express Pipeline, LLC; Notice of Initiation of Section 5 Proceeding” Notice (October 1, 2020). 
85 FR 61945 “Total Peaking Services, LLC; Notice of Request for Extension of Time” Notice (October 1, 2020). 
85 FR 61946 “Columbia Gas Transmission, LLC; Notice of Request Under Blanket Authorization” Notice (October 1, 2020). 
85 FR 62297 “Columbia Gas Transmission, LLC; Notice of Request Under Blanket Authorization” Notice (October 2, 2020). 

Energy Department
85 FR 60986 “Freeport LNG Expansion, L.P.; FLNG Liquefaction, LLC; FLNG Liquefaction 2, LLC; and FLNG Liquefaction 3, LLC; Application To Amend Export Term Through December 31, 2050, for Existing Non-Free Trade Agreement Authorizations” Notice of application (September 29, 2020). 
85 FR 61944 “Port Arthur LNG, LLC; Application To Amend Export Term Through December 31, 2050, for Existing Non-Free Trade Agreement Authorization” Notice of application (October 1, 2020). 
85 FR 61942 “Sabine Pass Liquefaction, LLC; Application To Amend Export Term Through December 31, 2050, for Existing Non-Free Trade Agreement Authorizations” Notice of application (October 1, 2020). 

Pipeline and Hazardous Materials Safety Administration
85 FR 61101 “Pipeline Safety: Inside Meters and Regulators” Notice; issuance of advisory bulletin (September 29, 2020). 
85 FR 61097 “Pipeline Safety: Overpressure Protection on Low-Pressure Natural Gas Distribution Systems” Notice; issuance of advisory bulletin (September 29, 2020). 

Interior Department
85 FR 61966 “Deepwater Horizon Oil Spill, Louisiana Trustee Implementation Group; Final Phase 2 Restoration Plan #1.2 and Environmental Assessment: Barataria Basin Ridge and Marsh Creation Project, Spanish Pass Increment and Lake Borgne Marsh Creation Project Increment One; and Finding of No Significant Impact” Notice (October 1, 2020). 

Offices of Natural Resources Revenue 
85 FR 62016 “Consolidated Federal Oil and Gas and Federal and Indian Coal Valuation Reform” Final Rule (October 1, 2020). 

Presidential Documents
85 FR 62191 “Authorizing the Alaska to Alberta Railway Development Corporation To Construct, Connect, Operate, and Maintain Railway Facilities at the International Boundary Between the United States and Canada” Presidential document (October 2, 2020)

House Energy and Commerce Committee Actions:
H.R. 8487 “To prevent energy poverty in at-risk communities, and for other purposes” “Referred to the Committee on Natural Resources, and in addition to the Committees on Agriculture, Energy and Commerce, the Budget, and Rules.” (October 1, 2020). 
H.R. 362 “Energy Emergency Leadership Act” “Received in the Senate and Read twice and referred to the Committee on Energy and Natural Resources” (September 30, 2020). 
H.R. 8432 “To require the establishment of an advanced energy technology research initiative and an advanced energy technology and modeling grant program, and for other purposes” “Referred to the Committee on Energy and Commerce, and in addition to the Committee on Science, Space, and Technology” (September 29, 2020). 

Senate Energy and Natural Resources Committee:
PM 59 “Presidential Message - A message from the President of the United States, transmitting, pursuant to law, a report relative to the issuance of an Executive Order declaring a national emergency to deal with the threat posed by our Nation's undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries; to the Committee on Energy and Natural Resource” Referred to Senate Energy and Natural Resources Committee (September 30, 2020). 

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“U.S. Weekly Lng Exports Edge Down” LNG World News
“Pennsylvania Lawmakers, Industry Officials Optimistic About New Natural Gas Tax Credit Legislation” The Center Square
“Mountain Valley Seeks To Resume Construction Of Pipeline” The Roanoke Times
“Colorado Poised To Take Another Major Step In Regulating Oil, Gas Industry — This Time On Well Setbacks” Loveland Reporter-Herald

Want to get updates, but prefer to listen? Check out the Shale Law Podcast! We can always be found on our Libsyn page, iTunes, Spotify, or Stitcher.

Shale Law Weekly Review - December 5, 2016

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

Army Corps Decides to Refuse Easement for Dakota Access Pipeline

On December 4, 2016, the United States Army Corps of Engineers (USACE) announced they will not grant an easement to allow the Dakota Access Pipeline to cross under Lake Oahe. According to the U.S. Army website, the Army’s Assistant Secretary, Jo-Ellen Darcy says there is a need to explore alternate routes for the pipeline. The Assistant Secretary says alternate routes will probably be considered by way of an Environmental Impact Statement.

Stone Energy Corporation Faces Royalty Violation Lawsuits

According to the West Virginia Record, Stone Energy Corporation now faces two lawsuits for contract violation claims. The article states that the plaintiff landowners entered into oil and gas leases for their properties in Wetzel County. These landowners claim the leases are invalid because the leases “do not state with particularity the specific deductions the lessee intends to take from the lessor’s royalty…” In addition, the article shows that the plaintiffs protest the post-production costs taken from the royalty payments, allegedly in violation of West Virginia law.

Environmental Protection Agency Releases Drinking Water Action Plan

On November 30, 2016, the Environmental Protection Agency (EPA) released a report entitled “Drinking Water Action Plan.” The plan “is a national call to action, urging all levels of government, utilities and other key stakeholders to work together - to reinvigorate the safe drinking water enterprise…” The number one priority area is promoting and building capacity for drinking water infrastructure financing and management. The other five priority areas include next generation oversight, strengthening source water protection, addressing unregulated contaminants, improving transparency for drinking water safety and reducing lead risks.

Accountability Office Says Biofuel Production Insufficient for RFS Program

On November 28, 2016, the U.S. Government Accountability Office published a study on the Renewable Fuel Standard (RFS) program titled “Program Unlikely to Meet Its Targets for Reducing Greenhouse Gas Emissions.” According to the study, “[l]ess than 5% of the 3 billion cellulosic biofuel RFS target was produced in 2015, and additional investments for commercialization seem unlikely.” The study says that advanced biofuels greatly decrease the amount of greenhouse gas released and with the current limited production of biofuels, reduction goals for greenhouse gas are unlikely to be achieved.

EPA and Slawson Exploration Co. Agree on Consent Decree for Clean Air Act Violations

On December 1, 2016, a consent decree was proposed between Slawson Exploration Co. and the U.S. Environmental Protection Agency (EPA). According to an EPA press release, the claims were based on Slawson’s alleged Clean Air Act violations for oil and gas production in North Dakota. EPA inspectors had discovered volatile organic compound (VOC) emissions visually and with optical gas imaging infrared cameras. Additionally, inspections uncovered impermissible pit flares, visible emissions from pit flares, open thief hatches, and other violations. The settlement requires the company to perform system upgrades with better monitoring and inspections. Also, “Slawson will spend at least an estimated $2 million to fund environmental mitigation projects and pay a $2.1 million civil penalty.”

EIA Reports on Increase in Natural Gas Pipeline Exports to Mexico

On December 1, 2016, the U.S. Energy Information Administration (EIA) released a report on increasing shale gas exports to Mexico. According to the report, U.S.has a natural gas pipeline capacity of 7.3 billion cubic feet per day (Bcf/d) for gas traveling to Mexico. They estimate that the current pipeline capacity will double by 2019. At present, four pipelines to Mexico are under construction and two more will be built by the end of 2018. The EIA suggests this increase in natural gas exports by pipeline is due to “strong growth in Mexico’s natural gas demand in the power sector, declining domestic production, and the lower prices of U.S. pipeline gas compared with more expensive liquefied natural gas (LNG) imports.”

Study Examines Induced Seismicity Effects of Hydraulic Fracturing in Canada

On November 17, 2016, a study was published by the American Association for the Advancement of Science in Science magazine online. The study examines induced seismicity in western Canada resulting from hydraulic fracturing. The study notes that “[h]ydraulic fracturing has been inferred to trigger the majority of injection induced earthquakes in western Canada, in contrast to the midwestern United States where massive saltwater disposal is the dominant triggering mechanism.” The study is called “Fault Activation by Hydraulic Fracturing in Western Canada” and was written by geophysics professor David Eaton and Xuwei Bao at the University of Calgary.

Australia Finds Underpaid Royalties in North West Shelf Venture

On November 28, 2016, the Australian National Audit Office released a report on deficiency in royalty revenue collected from the North West Shelf joint venture. The report had been prepared to determine “whether the Department of Industry Innovation and Science has effectively and efficiently administered the collection” of revenues. Deductions were claimed for operating costs and depreciations in capital assets, which reduced royalty payments. These errors in deductions were due to limited oversight. In the 18 month period leading to December 2015, over $5 billion in deductions were claimed for petroleum revenues. Overall, at least “$8.6 million in royalties has been underpaid.”

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

Recent ShaleLaw HotLinks include:

When it comes to natural gas the United States is a net exporter - WSJ

Outlook for coal country is changing but unpredictable - NYtimes

New cracker plant will mean new business in Beaver County - PowerSource

Kelly Mitchell announced as candidate for Energy Department - Governors Wind & Solar Coalition

China to receive more U.S. shale gas - Bloomberg

Supplies no longer allowed to be brought for DAPL protesters - Kallanish

Eurogas supports gas over coal for less carbon emissions - NaturalGasWorld

“Pennsylvania’s Act 13 Revenue directed to public safety, infrastructure” - NGI

OPEC wants to balance oil prices but there are concerns with the American market - Forbes

Connect with us on Facebook! Every week we post the Friday Recap which details all our publications and activities from the week.

Stay informed with our monthly Agricultural Law Brief located here.

Written by Jacqueline Schweichler - Education Programs Coordinator

Environmental Groups File Appeal of Ethane Cracker Plant Permit

On August 3, 2015, the Clean Air Council and the Environmental Integrity Project filed an appeal to the Environmental Hearing Board (EHB) over the issuance of a permit by the Department of Environmental Protection (DEP) to Shell Chemical Appalachia for the construction of an ethane cracker plant in Beaver County.  The plant proposes to breaks down ethane, a gas that is extracted in the Marcellus region, into smaller molecules to create ethylene which is a compound used in the production of plastics.  Shell was issued its permit on June 18, 2015, and the grant of the permit was officially announced in the Pennsylvania Bulletin on July 4^th, 2015.

The environmental groups oppose the issuance of the permit because they claim the DEP “failed to comply with the minimum requirements of the Federal Clean Air Act” for a location that is not meeting the National Ambient Air Quality Standards (NAAQS).  The DEP is responsible for implementing the Federal Clean Air Act and related regulations. 

The appellants more specifically contend that the permit is legally deficient because the plant does not plan to meet the emission standards of the lowest achievable emissions rate (LAER) which is required in an area that is not meeting the (NAAQS).  LAER is used by the EPA to determine if emissions from a chemical plant or other stationary source are acceptable under the State Implementation Plan.  The State Implementation Plan is a state’s plan for complying with the Clean Air Act so that air pollution will be reduced in that particular state by a predetermined amount. 

The advocacy groups further allege that the permit does not “include federally enforceable limits for volatile organic compounds for the flare.”  Volatile organic compounds are emitted as gases from certain solids or liquids. 

Overall, the environmental advocacy groups contend that the administered permit will not adequately protect the atmosphere by limiting and monitoring the emissions of the ethane cracker plant.  The EHB issued a prehearing order on August 4, 2015.  Discovery from both sides is due on February 1, 2016.  

Written by Stephen Kenney - Research Assistant

Center for Agricultural and Shale Law

August 5, 2015

Obama Administration Announces Clean Power Plan

On August 3, 2015, President Obama and the Environmental Protection Agency (EPA) announced the unveiling of the Clean Power Plan.  The Clean Power Plan 40 CFR Part 60 is a regulation advanced by the EPA under the Clean Air Act.  The plan proposes to cut carbon dioxide emissions from U.S. power plants to 32 percent below their 2005 levels by the year 2030. According to the White House, fossil fuel-fired power plants are the largest source of U.S. CO₂ emissions, making up 32 percent of U.S. total greenhouse gas emissions. The plan calls for renewable energy sources to account for 28 percent of the power capacity by 2030.  The EPA has set targeted emission goals for each state.

The states are tasked with developing and implementing plans to ensure that their power plants achieve the interim emissions performance rates between 2022 and 2029 and the final emission performance rates, rate-based goals, or mass-based goals by 2030. According to a White House fact sheet, the states can choose from three different forms of goal measurement: “a rate-based state goal measured in pounds per megawatt hour; a mass-based state goal measured in total short tons of CO₂; and a mass-based state goal with a new source complement measured in total tons of CO₂."  The states can reach these goals by increasing the percentage of their electricity that comes from renewable sources, increasing efficiency at power plants, increasing reliance on nuclear power, implementing carbon capture and storage,  and/or switching away from coal-fired power plants and toward natural gas generation.   An administration fact sheet says that these emission reduction goals will be less reliant on a growth of the use of natural gas than was the case with the earlier proposed rule in 2014.   The final rule includes a Clean Energy Incentive Program, which will promote “early deployment of renewable energy and energy efficiency.”  

The states also may reduce their emissions through emissions trading.  States can use either emission rate credits (for a rate-based standard) or allowances (for a mass-based standard).   The rule enables states to design state rate-based or mass-based plans the will make their units “trading ready” which would allow individual power plants to use out-of-state reductions in the form of credits or allowances.  States are required to submit a final or initial state plan with an extension request by September 6, 2016.  The final complete state plans must be submitted by September 6, 2018.

Written by Stephen Kenney - Research Assistant

Center for Agricultural and Shale Law

August 3, 2015

Water Treatment Plant Sued To Stop Drilling Fluids Discharge into Allegheny River

Clean Water Action filed a citizen's suit against Waste Treatment Corporation under the Clean Water Act for discharging drilling fluids into the Allegheny River from its Warren, Pennsylvania waste processing facility.  Clean Water Action alleged that the company processed oil and gas well waste while being limited to processing metal type wastes, that those discharges contained harmful levels of chloride and other pollutants, and that those discharges continue to endanger the health and welfare of people and wildlife in the area.  The complaint further alleges violations of the Endangered Species Act, alleging that chloride discharges injured or killed the Northern Riffleshell mussel, an endangered species that lives in the Allegheny River. Clean Water Action seeks that Waste Treatment Corp. stop these discharges, study the environmental damage of the discharges, remediate any damage it caused to the environment, and pay civil penalties.

The complaint may be found at: http://www.cleanwateraction.org/files/publications/Complaint%20pdfa%20filed%20on%2028October2013.pdf

Clean Air Act allows a citizen suit to be brought directly to federal court

In Citizens for Pennsylvania’s Future v. Ultra Resources decided on September 24th, the District Court for the Middle District of Pennsylvania, in finding that it has subject matter jurisdiction, concluded that the language of the Clean Air Act allows the plaintiff to bring a citizen suit for violations of the Clean Air Act directly to federal court. The Court rejected defendant Ultra’s claim that plaintiff was required to exhaust the state and administrative remedies before going to federal court. The Court also rejected Ultra’s abstention argument explaining that “it would be improper to abstain from exercising jurisdiction when Congress has clearly established a cause of action for citizen suits in Section 304 of the CAA.”

Written by Anna Leonenko, Research Fellow
Penn State Law, Agricultural Law Center

October 2, 2012

Click here for the Citizens for Pennsylvania’s Future v. Ultra Resources opinion.