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.
Production and
Operation: Oklahoma Corporation Commission Approves Emergency Order Allowing
Oil Producers to Shut-in Wells in Response to COVID-19
On April 22, 2020, the
Oklahoma Corporation Commission announced approval of an emergency order allowing oil producers to shut-in or reduce
production of oil wells for the prevention of waste. The order was approved in response to a
request from LPD Energy Company LLC seeking to prevent waste by stopping or
reducing oil production without impacting the company’s lease agreement. The request stated that
due to a decline in demand and oversupply from COVID-19 circumstances, LPD is
losing $200,000 per month by producing “economically challenged” wells.
At a hearing on April 17,
2020, the Commission heard testimony and made findings. No objections to the requested relief were
filed or received at the hearing. The Commission’s Media Advisory stated that
the order “gives those operators the freedom and flexibility they need to
respond to market forces and decide what actions to take to survive.”
Water Quality: EPA
Issues Final Rule Defining Waters of the United States
On April 21, 2020, the
Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers issued
a final rule regarding the definition of “waters of the
United States” (WOTUS) under the Clean Water Act. The rule is titled “The Navigable Waters
Protection Rule: Definition of ‘Waters of the United States’” and replaces
the previous 2015 WOTUS rule. The new rule follows President Trump’s
Executive Order 13778, which required review of the 2015 WOTUS rule
to ensure navigable waters were kept pollution-free while also promoting
economic growth. Additionally,
the Executive Order directed EPA to define “navigable waters” in a way that was
consistent with Justice Scalia’s opinion in Rapanos v. United States,
547 U.S. 715 (2006). The
final rule’s interpretation of WOTUS includes: “territorial seas and
traditional navigable waters; perennial and intermittent tributaries; . .
. certain lakes, ponds, and impoundments of jurisdictional waters; and
[adjacent] wetlands.” The
final rule also defines waters that are considered “non-jurisdictional,” and as
such are excluded from the definition of WOTUS. The final rule will take effect on June 22,
2020.
Production and
Operation: Government Accountability Office Finds Thousands of Approved Oil and
Gas Drilling Permits Not Being Used
In March 2020, the U.S.
Government Accountability Office (GAO) issued a report finding that thousands of the Bureau of Land Management’s (BLM)
approved drilling permits were not in use. (p. 2). The report is titled, Oil and Gas
Permitting: Actions Needed to Improve BLM’s Review Process and Data System.
The report states that between 2014 and
2019, BLM approved 19,941 drilling permits for wells, out of which 9,991
permits were not being used. Additionally,
during the same time period, 2,628 applications for permits remained under
review and 1,137 of the applications were denied by BLM. GAO made three recommendations to BLM,
suggesting that they develop a consistent and documented process for
prioritizing permit applications and that BLM should formalize its data
processing systems. BLM only agreed with GAO’s third recommendation to
“document and implement corrective actions for the data system based on lessons
learned.”
From the National Oil & Gas Law Experts:
Charles Sartain, Who Said What
at the Railroad Commission Market Demand Prorationing Hearing? (Apr. 20, 2020)
Joshua Downer, Railroad
Commission of Texas Declines to Order Prorationing – For Now (Apr. 22, 2020)
John McFarland, Proration at
the Railroad Commission: Sitton’s Motion to Conditionally Order Texas Operators
to Reduce Their Oil Production By 20% is Tabled (Apr. 21, 2020)
AGENCY PRESS
RELEASES—STATE/FEDERAL
Pennsylvania
Department of Energy Press Releases:
U.S.
Department of Energy
Department of
Energy Announces $28 Million to Develop Ultra-high Temperature Materials for
Gas Turbine Applications (Apr. 21, 2020)
Department of
Energy Announces $25 Million for Grid Management Systems and Risk Assessment
Systems (Apr. 23, 2020)
U.S.
Environmental Protection Agency
EPA and Federal
Partners Commemorate 10-Year Anniversary of Deepwater Horizon Oil Spill (Apr. 20, 2020)
STATE
ACTIONS—EXECUTIVE/LEGISLATIVE
Pennsylvania
Executive Agencies—Actions and Notices:
No actions Apr. 27,
2020.
Pennsylvania
Legislature:
No actions Apr. 20 - 27,
2020.
FEDERAL
ACTIONS—EXECUTIVE/LEGISLATIVE
Federal
Executive Agencies—Actions and Notices:
Energy Department
85 FR 23013 “Epcilon LNG LLC; Application for Long-Term,
Multi-Contract Authorization to Export Domestically Produced Natural Gas
Through Mexico to Non-Free Trade Agreement Countries After Liquefaction to
Liquefied Natural Gas” Notice (Apr. 24, 2020)
85 FR 23014 “Sabine Pass Liquefaction, LLC; Application for
Blanket Authorization to Export Previously Imported Liquefied Natural Gas to
Non-Free Trade Agreement Countries on a Short-Term Basis” Notice (Apr.
24, 2020)
Federal Energy
Regulatory Commission
85 FR 22730 “Port Arthur LNG Phase II, LLC, PALNG Common
Facilities Company, LLC; Notice of Schedule for Environmental Review of the
Port Arthur LNG Expansion Project” Notice (Apr. 23, 2020)
85 FR 22730 “Guardian Pipeline LLC; Notice of Request Under
Blanket Authorization” Notice (Apr. 23, 2020)
Land Management Bureau
85 FR 22750 “Notice of Proposed Reinstatement of Terminated
Oil and Gas Lease COC-77358, Colorado” Notice (Apr. 23, 2020)
85 FR 22750 “Notice of Proposed Reinstatement of Terminated
Oil and Gas Lease COC-77272, Colorado” Notice (Apr. 23, 2020)
House
Energy and Commerce Committee Actions:
No new actions Apr.
20–27, 2020.
Senate
Energy and Natural Resources Committee Actions:
No new actions Apr.
20–27, 2020.
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