Shale Law Weekly Review – April 2, 2019

State Regulation: Pennsylvania Bill Amending Well Permit Requirements Advances
On March 26, 2019, House Bill 828 was reported by the Environmental Resources and Energy Committee of the Pennsylvania House of Representatives. The bill proposes to amend Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes to allow for several changes to the well permitting process. Specifically, the bill would allow drillers to apply for a multi-well pad permit.  The bill would also allow drillers to apply for a one-year, two-year, or three-year permit, rather than limiting drillers to a one-year permit.  In addition, operators would be allowed to drill within a fifty-foot radius of the originally-proposed surface location.

Pipelines: Third Circuit Stays Construction of PennEast Pipeline in New Jersey
On March 19, 2019, the United States Court of Appeals for the Third Circuit issued an order granting a motion to stay the construction of the PennEast pipeline in New Jersey (In re Penneast Pipeline Co., No. 3-18-cv-01597). The order prevents the commencement of physical construction of the pipeline, but it does allow for continued testing and surveying along the proposed route. The proposed pipeline, if completed, will stretch 120 miles from northeastern Pennsylvania to central New Jersey and will deliver nearly one billion cubic feet of natural gas per day.

Pipelines: President Trump Issues New Presidential Permit for Keystone XL Pipeline
On March 29, 2019, President Donald Trump issued a presidential permit authorizing the construction of pipeline facilities for the Keystone XL pipeline along the international border between the United States and Canada.  Specifically, the permit allows for the maintenance of a border facility in Phillips County, Montana.  The permit includes a mainline shut-off valve in the United States, located approximately 1.2 miles from the Canadian border.  This order also supersedes and revokes the March 23, 2017, presidential permit that was vacated by the United States District Court for the District of Montana in November 2018.

State Regulation: New Mexico Governor Signs Renewable Energy Bill
On March 22, 2019, the Office of Governor Michelle Lujan Grisham of New Mexico announced that the Governor had signed the Energy Transition Act (SB 489).  The act sets a statewide standard of 50 percent electricity generated from renewable sources by 2030 and 80 percent by 2040. The bill also appropriates several million dollars for economic assistance and career training for communities that currently rely on coal plants for employment.

Pipelines: Michigan Governor Orders Construction Halt on Mackinac Straits Tunnel
On March 28, 2019, Governor Gretchen Whitmer of Michigan issued an executive directive ordering all state agencies to cease implementation of Public Act 359 on the advice of Michigan Attorney General Dana Nessel.  Attorney General Nessel found the act to be in violation of the state constitution’s Title Object Clause. In addition, the Attorney General found that the title of the Act did not “adequately express the content of the law” and was, therefore, unconstitutional.  The Act allows for the creation of a utility tunnel between the Upper and Lower Peninsulas of Michigan at the Straits of Mackinac.  Relying on this language in the act, in December 2018, the Mackinac Straits Corridor Authority approved plans for Enbridge Energy to construct a utility tunnel for the Line 5 pipeline.

National Energy Policy: Congressional Research Service Releases Carbon Tax Report
On March 22, 2019, the Congressional Research Service (CRS) released a report on the potential effects of instituting a nationwide tax on carbon emissions. The report found that several proposed tax rates from current members of Congress would result in sufficient emissions reductions to bring the United States into compliance with the standards set by the Paris Agreement. CRS also noted that the imposition of a carbon tax could have negative economic effects on several sectors of the American economy, most notably the fossil fuel industry, and those communities that rely on them for employment.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (March 22, 2019)
Charles Sartain, Operator Runs Out the Clock on Co-Tenant, (March 27, 2019)
Aaron Powell and Conrad Hester, Amber Harvest: Texas Supreme Court Affirms Deductions of Post-Production Costs, (March 26, 2019)
John McFarland, Net Royalty Acres Defined, (March 25, 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:
“Duke Energy needs ‘Plan B’ if Atlantic Coast Pipeline fails, CEO says” – Bloomberg
“Shale suffers growing pains that could slow U.S. oil production” – Yahoo Finance
“Texas need another 10,000 miles of gas, oil pipelines by 2050: study” – S&P Global Platts
“They grew up around fossil fuels. Now, their jobs are in renewables” – New York Times
“FERC reviews two pipeline expansions in Pennsylvania” – Shale Gas Reporter
“From Texas to the world: Surge of U.S. oil exports on the way” – Rigzone
“Shell sees new role for former steel region: Plastics” – New York Times
“New Mexico launches interactive map of methane emissions” – Associated Press
“Permian region crude oil prices have increased with additional pipeline takeaway capacity” – EIA
“Idaho Power aims to end use of coal and natural gas – a ‘big deal,’ conservationist says” – Idaho Statesman

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