Shale Law Weekly Review – April 8, 2019

State Regulation: Colorado Senate Passes Oil & Gas Regulation Bill
On April 3, 2019, the Colorado Senate voted to pass SB 19-181, entitled “Protect Public Welfare Oil and Gas Operations,” which alters the regulatory landscape of oil and gas extraction in the state (p.1). The bill amends the purpose of the state’s Oil and Gas Conservation Act by prioritizing public health, safety, welfare, and the environment when regulating oil and gas development.  Notably, the bill provides local governments with greater authority to regulate the siting of drilling operations, inspect facilities, and impose fines for spills (p.1-2).  In addition, the bill requires drillers to continuously monitor their air pollution and minimize their methane emissions (p.2-3).

Air Quality: EPA Finalizes New Self-Auditing Program for Oil & Gas Facilities
On March 29, 2019, the Environmental Protection Agency announced that it had finalized a new program that would allow owners of oil and gas facilities to identify and fix any Clean Air Act violations on their property. According to the agency, the program is designed to encourage voluntary compliance and to provide greater regulatory certainty to new owners. The EPA does, however, have the authority to deny applications for facilities which federal or state agencies have already discovered to be in violation of the Clean Air Act.

LNG Exports: Sempra Energy Receives Department of Energy Approval for LNG Exports
On March 29, 2019, the U.S. Department of Energy (DOE) issued an order granting authorization to Sempra Energy (Sempra) to export natural gas from the United States to Mexico and to re-export liquified natural gas from its facilities in Mexico to nations with which the United States does not have a free trade agreement.  The DOE authorization will allow for export from Sempra’s Energia Costa Azul (ECA) Mid-Scale Project and the ECA Large-Scale Project.  Sempra’s facilities in Baja California are being expanded in two phases: the first is a single train LNG facility near the company’s existing LNG terminal; the second will involve the construction of two more trains and a storage tank, bringing the facility’s total export capacity to 636 billion cubic feet a year of liquefied natural gas. According to Sempra, its facility was the first LNG receipt terminal built on the West Coast and will serve the company’s customers in Mexico and Asia.

Oil and Gas Leasing: Alaska District Court Issues Ruling on Arctic Leasing
On March 29, 2019, the U.S. District Court for the District of Alaska held that Section 5 of Executive Order 13795, which would have allowed for offshore drilling in parts of the Arctic Outer Continental Shelf, to be unlawful. Executive Order 13795, Implementing an America-First Offshore Energy Strategy, was issued on May 3, 2017, by President Trump.  This executive order would have revoked executive orders issued by President Obama that withdrew areas of the Arctic from leasing.  The court vacated Section 5 of Executive Order 13795 and stated that the previous leasing withdrawals “will remain in full force and effect unless and until revoked by Congress.”

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (April 5, 2019)
Charles Sartain, Louisiana Operator Can’t Deduct Post-Production Costs From Unleased Mineral Owners, (April 4, 2019)

Pennsylvania Legislation:
HB 887:  would require pipeline routes to be evaluated for community safety and pipeline operators would need to share information with emergency response teams (Referred to Consumer Affairs – March 25, 2019)
HB 828: would extend term for well permits, would allow one permit to apply to multiple wells, and would allow the well location to be within 50 feet of the requested location (Reported as amended – March 26, 2019)
SB 443: would restrict licensing for any new hazardous liquid pipelines in Pennsylvania for two years (Referred to Environmental Resources and Energy – March 28, 2019)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Brexit weighs on oil and gas firms” – Rigzone
“Pipeline in south Louisiana complete but litigation lingers” – AP
“FERC reviews two pipeline expansions in Pennsylvania” – Shale Gas Reporter
“As Wolf boosts natural gas tax plan, industry objects” – The Reading Eagle
“Pipeline blast in Ohio linked to earth movement” – Energywire
“Ohio, Pa., W. Va. to supply nearly half of US natural gas by 2040” – Shale Gas Reporter
“Citing climate differences, Shell walks away from U.S. refining lobby” – Reuters
“Oil-rich sovereign funds look to renewables alongside fossil fuels” – Reuters
“More oil and gas pipelines in the Permian Basin will boost both production and safety” – Dallas Morning News
“Google, GM, and other corporate giants form alliance to create a boom in U.S. clean energy” – CNBC

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This week we published one new Shale Law in the Spotlight article: Shale Law in the Spotlight – An Overview of the Pennsylvania Supreme Court Ruling Related to the Impact Fee.

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Written by:
Brennan Weintraub – Research Assistant
Jackie Schweichler – Staff Attorney