Shale Law Weekly Review – December 16, 2019

Public Lands: BLM Issues Decision on Environmental Impact Statement for Bakersfield
On December 13, 2019, the U.S. Bureau of Land Management (BLM) issued the final decision on the Hydraulic Fracturing Supplemental Environmental Impact Statement (EIS) for the Bakersfield Field Office planning area in California.  The supplemental EIS states that the analysis showed no notable increase for hydraulic fracturing impacts.  In addition, the EIS found that estimated impacts and the program goals were consistent.  According to BLM, the EIS was prepared in response to a May 2017 court order.  As part of the settlement negotiations, BLM agreed to cease oil and gas lease sales pending the publication of the supplemental EIS and final decision.  The BLM also stated that this decision promotes energy development in support of Executive Order 13783: Promoting Energy Independence and Economic Growth and Secretarial Order 3349: American Energy Independence.

Climate Change: NY Supreme Court Dismisses Lawsuit Against Exxon Mobil
On December 10, 2019, the Supreme Court of the State of New York dismissed the claims against Exxon Mobil Corp. brought by the Office of the Attorney General. (People of the State of New York, et al. v. Exxon Mobil Corp., NYSCEF Doc. No. 567). The Attorney General claimed that Exxon violated the Martin Act or Executive Law §63(12) for the manner in which it disclosed the company’s climate change policies to the public.  In its dismissal, the court found that Exxon did not violate either law and that the Attorney General failed to show that Exxon’s statements or omissions “misled any reasonable investor.”  The court noted that while the Attorney General failed to prove Exxon’s legal responsibility in the present securities fraud case, its opinion did not address any legal responsibility that Exxon had with regard to the company’s contributions to climate change.  In a press release, Exxon criticized climate change lawsuits and reiterated that their investors were provided with “accurate information on the risks of climate change.”

Public Lands: District Court Suspends Drilling Permits in Colorado’s Bull Mountain Unit
On December 10, 2019, the U.S. District Court for the District of Colorado issued an order suspending drilling permits in the Bull Mountain Unit in Colorado and remanded the case to the Bureau of Land Management (BLM) for further analysis. (Citizens for a Healthy Community, et al. v. U.S. Bureau of Land Management, et al., Case 1:17-cv-02519-LTB-GPG).   This case was brought by several environmental organizations that allege BLM failed to take a hard look when considering alternatives and impacts of the master development plan for the Bull Mountain Unit.  In the March 27, 2019, ruling, this court found that BLM violated the National Environmental Policy Act by failing to “take a hard look at the reasonably foreseeable indirect impacts of oil and gas.”  At that time, the court deferred the final ruling and ordered the parties to endeavor to reach a good faith agreement on remedies.  No agreement was reached, and the court in the present order suspended all approved drilling applications and enjoined BLM from issuing new permits until BLM can complete their analysis on the reasonably foreseeable oil and gas impacts.

Infrastructure: Puget Sound Clean Air Agency Approves LNG Project in Washington
On December 10, 2019, the Puget Sound Clean Air Agency (CAA) issued an order of approval for the construction of Puget Sound Energy’s (PSE) liquefied natural gas facility in Tacoma, Washington.  According to the CAA executive director, PSE’s Notice of Construction Application met all agency requirements for emissions standards.  With the order of approval, CAA “imposed conditions on the permit designed to address greenhouse gas emissions” in light of comments received during the review process.  The PSE facilities are designed to hold 8 million gallons of LNG which will provide natural gas to local consumers and will not be used for exports.  PSE also states that transitioning ships from diesel to LNG fuel will reduce emissions and improve air quality.

Community Impacts: Study Analyzes Impact of Oil and Gas Development on Housing Prices
On December 1, 2019, researchers from West Virginia University published the online issue of a study analyzing the impact of oil and gas development on housing prices.  The researchers examined housing sales and data from shale oil and gas well locations from 2006 to 2014.  According to the study results, nearby drilling activity lowered housing prices.  Visible wells decreased house prices by 0.8%, or approximately $3,000, and for every additional well within a mile of the home, the price decreased by 0.1% in value.  The study is titled Household Valuation of Energy Development in Amenity-Rich Regions, and it can be found in the journal Growth and Change.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly (Dec. 9, 2019)
Charles Sartain, No Sovereign Immunity for the Texas Land Commissioner (Dec. 12, 2019)
Nick McTyre, LNG Update: U.S. Eases Restrictions on Small-Scale LNG Export Projects (Dec. 11, 2019)
John McFarland, More Focus on Environmental Consequences of Methane Emissions (Dec. 16, 2019)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Oil: OPEC Nations Grapple With Oversupply” – Energy Wire
“Germany tells Trump not to Meddle in Europe’s Energy Issues” – E&E News
“States look to Supreme Court to save pipeline” – AP
“Russia’s Gas Pipeline to Europe Faces Sanctions Under U.S. Defense Bill” – WSJ
“Big Oil Lobby Showing Subtle Shifts on Climate Change” – Axios
“Federal Judge Dismisses Ohio Property Owners’ Plea to Stop Nexus Construction” – Shale Gas Reporter
“America Blows Past The World in Oil And Natural Gas” – Axios
“Padep Using Act 13 to Demand New Compliance Requirements for Gas Storage Following National Trends” – Mondaq

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Written by:
Jackie Schweichler – Staff Attorney