Shale Law Weekly Review - June 5, 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.

LNG Exports: FERC Approves Alaska LNG Project 
On May 21, 2020, the Federal Energy Regulatory Commission (FERC) approved a project for the construction and operation of liquified natural gas (LNG) export facilities.  The Alaska Gasline Development Corporation (AGDC) applied for FERC approval of the LNG project under section 3 of the Natural Gas Act.  FERC approved the project after agreeing with the conclusions in the Final Environmental Impact Statement that was prepared to meet the requirements of the National Environmental Policy Act.  The FERC order included an Appendix of 165 environmental conditions that AGDC must follow in their construction and operation of the export terminals and facilities.  According to FERC’s press release, the project will be located in Alaska’s Kenai Peninsula and produce up to 20 million metric tons of LNG per year.

Public Lands: Montana Court Invalidates BLM Oil and Gas Leasing Directive Due to Concerns about Sage Grouse Habitat
On May 22, 2020, the U.S. District Court for the District of Montana ruled against an Interior Department administrative directive, invalidating several oil and gas leases on federal lands.   (Montana Wildlife Federation v. Bernhardt, No. CV-18-69-GF-BMM).  The affected leases are located in Wyoming and Montana and interfere with sage grouse habitat, which requires sagebrush for food and nesting grounds for breeding.  The court concluded that the BLM leases violated the Federal Land Policy and Management Act and the National Environmental Policy Act.  

GHG Emissions: Ninth Circuit Appeals Court Remands Climate Change Cases to State Court 
On May 26, 2020, the U.S. Court of Appeals for the Ninth Circuit ruled that two climate change cases filed against several energy companies could be brought in state court.  (City of Oakland v. BP PLC, No. 18-16663 and County of San Mateo v. Chevron Corp., No. 18-15499). Both cases, one filed by the Cities of Oakland and San Francisco and the other filed by the County of San Mateo, allege nuisance claims against several energy companies for the role of fossil fuels in climate change.  Defendants, including BP, Shell, and Chevron among others, originally removed the cases to federal court claiming grounds for federal subject-matter jurisdiction.  In the Oakland case, the court ruled that an exception to review the state public nuisance claim in federal court did not apply because the claim failed to raise a substantial federal question.  In the San Mateo case, the court affirmed the district court’s remand to state court as proper because the case lacked subject-matter jurisdiction under the federal-officer removal statute.

Municipal Regulation: Pennsylvania Court Denies Appeal of City’s Unconventional Drilling Ordinance
On May 22, 2020, the Pennsylvania Westmoreland County Court of Common Pleas denied an appeal by the Murrysville Watch Committee challenging the Murrysville Zoning Hearing Board’s Unconventional Drilling Ordinance, according to TribLive.  TribLive reported that the court ruled the Watch Committee failed to show that the ordinance was “arbitrary, unreasonable and unrelated to the public health, safety, morals and general welfare.”  The news article further states that the court relied on a similar case in Pennsylvania, Protect P-T vs. Penn Township Zoning Hearing Board, that also upheld a drilling ordinance.  TribLive reports that unconventional well pads are zoned for in about 5% of the overlay district.  

From the National Oil & Gas Law Experts:
Charles Sartain, Marcellus Pipeline Permits Rejected by New York and New Jersey (May 25, 2020)

Charles Sartain, Devastated By Coronavirus, New York’s Pipeline Politics Ensure A Tougher Second Round (May 20, 2020)

John McFarland, Texas Supreme Court Weighs In On Application of Rule Against Perpetuities to Overriding Royalty Reservations (May 18, 2020)

AGENCY PRESS RELEASES—STATE/FEDERAL
Pennsylvania Department of Energy Press Releases:
DEP Accepting Feedback on Regulations to Reduce Air Pollution from Natural Gas Development (May 29, 2020)

U.S. Department of Energy
DOE to Provide $30 Million to Develop Small-Scale Solid Oxide Fuel Cell Systems and Hybrid Energy Systems (May 29, 2020).

U.S. Department of Energy Announces $53 Million for Small Business Research and Development Grants (May 21, 2020).

U.S. Environmental Protection Agency
EPA and State of Kansas Reach Agreement With HollyFrontier for Alleged Clean Air Act Violations at its El Dorado, Kansas Refinery (May 28, 2020).

EPA Opens Comment Period on Proposed Cleanup Plan for Keystone Corridor Superfund Site in Indianapolis (May 28, 2020).

STATE ACTIONS—EXECUTIVE/LEGISLATIVE

Pennsylvania Executive Agencies—Actions and Notices: 
Permit Requested by ARD Operating, LLC (E4129220-026) This will be a low pressure natural gas pipeline from Bohlin Pad A to Salt Run Pad A G in Cascade Township—Lycoming County for the purpose of constructing a natural gas pipeline for Marcellus well development (May 30, 2020). 

Pennsylvania Legislature:
HB 247, “An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in development, further providing for well permits,” Removed from table (May 27, 2020).

 SB 790, “An Act relating to conventional wells and the development of oil, gas and coal; imposing powers and duties on the Department of Environmental Protection; providing for preliminary provisions, for general requirements, for enforcement and remedies, for related funds and for miscellaneous provisions; and making an appropriation.” Referred to rules and Executive Nominations (May 28, 2020).

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE

Federal Executive Agencies—Actions and Notices: 

No significant actions May 25-29

 House Energy and Commerce Committee Actions:
No new actions May 25-May 29, 2020.

 Senate Energy and Natural Resources Committee Actions: 
S.3816 “A bill to authorize the Secretary of Energy to carry out a program to lease underused facilities of the Strategic Petroleum Reserve, and for other purposes” Read twice and referred to the Committee on Energy and Natural Resources (May 21, 2020).

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Pro-Gas States Pass Laws Barring Natural Gas Bans, Limits,” Bloomberg
“Marcellus Shale becomes go-to place for frack crews,” Houston Chronicle 
“New York’s Use of Landmark Climate Law Could Resound in Other States,” Inside Climate News
“Enbridge Pipeline Hits More Government Pushback,” Bloomberg
“States ask Trump administration to pay laid off oil workers to plug abandoned wells,” Reuters
“EQT reduces natural gas output in Ohio, Pa.,” Reuters
“Eight Countries Say Gas Industry Deserves Bailout as EU Readies 'Green Recovery' Fund,” Reuters

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

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.

Check out the February Agricultural Law Brief ! Each month we compile the most significant legal developments in agriculture. If you’d like to receive this update via email, check out our website and subscribe!

Shale Law in the Spotlight: Pennsylvania Environmental Quality Board Proposes Increase in Unconventional Well Permit Application Fee

Written by Chloe Marie - Research Fellow

On July 14, 2018, the Pennsylvania Environmental Quality Board (EQB) issued a notice of proposed rulemaking that proposes to increase the permit fees for unconventional wells by amending sections of Chapter 78a (25 Pa. Code, Ch. 78a). Currently, the well permit application fees are $5,000 for non-vertical unconventional wells and $4,200 for vertical unconventional wells. Pursuant to the proposed rule, the permit application fees will be increased to $12,500 for all unconventional well permit applications.

According to EQB, the fee increase is justified by the need to “address any disparity between income generated by the well permit application fees and the cost of administering [the Oil and Gas Program]” relating to oil and gas development. The notice of proposed rulemaking specifies that the fee increase does not apply to conventional well permit applications. 

The increase of unconventional well permit fees comes in response to a 3-Year Regulatory Fee and Program Cost Analysis Report prepared by the Pennsylvania Department of Environmental Protection (DEP) and submitted to EQB on April 17, 2018. In this report, DEP found there is a lack of funding to account for the increasing responsibility of the Oil and Gas Program. The agency pointed out that “given the low number of permits received over the past two fiscal years and all indications that permit volumes are not expected to rebound in the near term, the current well permit fee is no longer sufficient to fund DEP’s Oil and Gas Program; even with substantial cost-saving measures that have [already] been implemented.”

DEP anticipates that “approximately 2,000 well permit applications will be received annually following the adoption of this proposed rulemaking, which would result in an additional annual incremental permit application cost of $15 million to the regulated community.”

A comment period on this proposed regulation was open through August 13, 2018. EQB has not yet issued a notice of final rulemaking in the Pennsylvania Bulletin.

This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture. 
 

Shale Law Weekly Review - September 4, 2018

Written by:

Brennan Weintraub - Research Assistant

Jackie Schweichler - Education Programs Coordinator

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

State Regulation: Pennsylvania Commonwealth Court Invalidates Some Definitions within Unconventional Permit Regulations

On August 23, 2018, the Commonwealth Court of Pennsylvania declared various definitions in Pennsylvania’s unconventional well permit regulations to be void (Marcellus Shale Coalition v. Department of Environmental Protection, No. 573 M.D. 2016).  The Marcellus Shale Coalition (MSC) brought this case against the Pennsylvania Department of Environmental Protection (DEP) after the Environmental Quality Board published regulations on unconventional wells (Chapter 78a).  MSC challenged DEP’s definitions for “other critical communities,” “common areas of a school’s property,” “playground,” and “public resource agency.”  The opinion rejected DEP’s definition of “critical” plant and animal communities in the state as they included species which, according the court, do not merit “heightened conservation measures.”  The court found DEP’s definition of those terms was vague and overly broad and would cause permit compliance to be unduly burdensome.

Municipal Regulation: Federal Court Rules that West Virginia County Cannot Zone to Prevent Compressor Station

On August 29, 2018, the United States District Court for the Southern District of West Virginia issued an opinion granting a permanent injunction preventing Fayette County, West Virginia from enforcing their zoning code against Mountain Valley Pipeline, LLC’s  (MVP) construction activities (Mountain Valley Pipeline, LLC. v. Fayette County, No. 2:17-cv-04377).  MVP was granted a certificate of public convenience and necessity by the Federal Energy Regulatory Commission (FERC) to construct the Mountain Valley Pipeline through West Virginia and Virginia.  The certificate also granted MVP the authority to construct a compressor station in Fayette County. Fayette County denied MVP’s request to re-zone the compressor station property, thereby halting construction of the facility.  The court determined that Fayette County’s zoning code is preempted by the FERC certificate and that the code conflicts with congressional purposes under the Natural Gas Act.

Municipal Regulation: Court Rules in Favor of South Portland Ordinance Prohibiting Crude Oil Infrastructure

On August 24, 2018, the U.S. District Court for the District of Maine ruled in favor of a local ordinance prohibiting structures that could be used to load crude oil onto marine tank vessels (Portland Pipeline Corporation, et al., v. City of South Portland, et al., 2:15-cv-00054-JAW).  In 2014, the City of South Portland passed the Clear Skies Ordinance which prohibits the loading of crude oil onto any marine tank vessel.  In addition, the ordinance prohibits the installation or construction of any structure for the purpose of loading crude oil onto marine tank vessels with the potential to emit air pollutants.  Portland Pipe Line Corporation filed a complaint against South Portland arguing that the ordinance violates the dormant Commerce Clause or the Foreign Commerce Clause of the U.S. Constitution.  Portland Pipe Line Corporation operates a crude oil pipeline that begins in South Portland, Maine and ends in Montreal, Canada.  The court held that South Portland was legally permitted to enact the ordinance.

Federal Lands: BLM Approves Application for Natural Gas Drilling in Wyoming

On August 27, 2018, the Bureau of Land Management (BLM) approved an application for full-field development of natural gas and condensate resources in Sublette County, Wyoming. The project, Normally Pressured Lance Natural Gas Development Project (NPL Project), was proposed by Jonah Energy LLC. The area for the NPL project consists of 140,859 acres located on BLM and state lands. Jonah Energy plans to drill up to 3,500 directional natural gas wells over a period of 40 years.  BLM determined that the NPL Final Environmental Impact Statement is adequate and Jonah Energy is now approved to submit site-specific applications for drilling.

State Regulation: Colorado Ballot Initiative Would Require 2,500 Foot Oil and Gas Development Setback

On August 29, 2018, the Colorado Secretary of State announced the approval of a ballot initiative seeking to impose new setback requirements for oil and gas development.  If approved by voters, Initiative 97 would require new oil and gas development to be located at least 2,500 feet away from occupied structures or vulnerable areas.  Vulnerable areas include playgrounds, sports fields, parks, drinking water sources, lakes, and rivers.  According to language in the initiative, the setback requirements are intended to mitigate the negative effects of oil and gas development on health, safety, and the environment.  The organization behind the initiative, Colorado Rising, submitted over 172,000 signatures on August 6, 2018.

International Development: Canadian Court Nullifies Certificate for Trans Mountain Pipeline

On August 30, 2018, the Canadian Federal Court of Appeals quashed the certificate of public convenience and necessity for the Trans Mountain pipeline system (Tsleil-Waututh Nation, et al., v. Attorney General of Canada, et al., A-78-17).  This suit was brought by various Indigenous peoples and First Nations who argue that the Governor could not reasonably rely on the National Energy Board’s (Board) report and that Canada failed to consult Indigenous people regarding the project. The court agreed, stating that Board failed to assess the effects of project-related marine shipping under the Canadian Environmental Assessment Act, 2012. In addition, the court agreed that Canada failed to adequately engage in meaningful dialogue and discuss possible accommodations for the concerns of Indigenous peoples.

From the National Oil & Gas Law Experts:

Charles Sartain, Texas Accommodation Doctrine Claim Repudiated, Gray Reed (August 28, 2018)

 Pennsylvania Notices

News Release: DEP Appoints Executive Director for Citizens Advisory Council (September 4, 2018)

News Release: DEP is Offering Rebates for PA Residents Buying Alternative Fuel Vehicles (August 28, 2018)

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

“In America’s hottest drilling spot, gas is going up in smoke” - Wall Street Journal

“Ohio reports sharp uptick in unconventional oil production” - NGI

“Wyoming oil deals rise as companies look beyond Permian” - Hart

“In Virginia, governor and appointees at odds over gas pipelines” - Washington Post

“PennEnergy offers $600M for bankrupt shale driller Rex Energy” - Pittsburgh Post-Gazette

“Cowboy Up: Wyoming’s oil and gas proposal helps state lead on air quality” - Breaking Energy

“New pipelines to boost U.S. natural gas exports to Mexico” - Houston Chronicle

“Chinese state-owned company advances $84B U.S. shale gas deal” - Nikkei Asian Review

“Big oil calls proposed NAFTA agreement with Mexico encouraging” - The Hill

“Toomey: Shell project could be delayed because of tariff exemption delays” - Beaver County Times

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

This week we published a new Shale Law in the Spotlight article: Overview of Recent Legal Actions Relating to Oil and Gas Development on Public Lands in the United States

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.

Check the August Agricultural Law Brief! Each month we compile the biggest legal developments in agriculture. If you’d like to receive this update via email, check out our website and subscribe!