Shale Law Weekly Review – August 19, 2019

GHG Emissions: States, Environmental Groups File Lawsuit Challenging EPA’s Affordable Clean Energy Rule
On August 13, 2019, several states filed a Petition for Review with the U.S. Court of Appeals for the District of Columbia Circuit regarding the Environmental Protection Agency’s Affordable Clean Energy Rule (State of New York v. EPA, No. 19-1165). Several environmental groups filed a similar Petition the next day on August 14th (Appalachian Mountain Club v. EPA, No. 19-1166). The Affordable Clean Energy Rule, officially titled, Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions From Existing Electric Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations (Rule), was finalized on July 8, 2019.  The Rule replaces the Obama Administration’s Clean Power Plan and instructs states to create standards in order to reduce greenhouse gas emissions for energy development from fossil fuels. According to EPA, heat rate improvement is the “best system of emission reduction” for coal-fired energy units. The States’ Petition requests that the court determine the Rule to be unlawful under section 7607(d)(9) of the Clean Air Act. Both suits follow the American Lung Association’s Petition for Review filed the same day the final Affordable Clean Energy rule was finalized (American Lung Association v. EPA, No. 19-1140).

Pipelines: Environmental Groups File Petition for Court of Appeals to Review Mountain Valley Pipeline Decision
On August 12, 2019, environmental groups filed a Joint Petition for Review with the United States Court of Appeals for the Fourth Circuit (Wild Virginia v. U.S. Dep’t of the Interior, No. 19-1866). The petition was filed as a request for the court to review the U.S. Fish and Wildlife Service’s Biological Opinion and Incidental Take Statement regarding the Mountain Valley Pipeline. In the Biological Opinion, the Fish and Wildlife Service designated critical habitat areas only for the Indiana bat and stated that pipeline construction was not expected to affect the bat’s habitat. The environmental groups, however, complain that the Fish and Wildlife Service did not set take limits for the amount of endangered bats that could be harmed during construction.  Additionally, the incidental take statement anticipated a small percentage of different species would be harmed or killed during pipeline construction, but it included “reasonable and prudent measures” to be implemented by the pipeline to minimize take. The petitioners, however, claim that the agency failed to measure impacts on other endangered wildlife species. The petitioners request that the Petition be set for “expedited consideration.”

Municipal Regulation: Activists Request Colorado Court Reinstate Local Hydraulic Fracturing Ban
On August 13, 2019, the activist group, Our Health, Our Future, Our Longmont (Our Longmont), filed a Motion to Reopen a case which previously found that banning hydraulic fracturing within city limits was not permitted by law (Colorado Oil and Gas Ass’n v. City of Longmont, No. 2013CV63). Our Longmont argues that the case can be revisited due to the adoption of Senate Bill 19-181, which was signed into law on April 16, 2019. SB 19-181 titled, Protect Public Welfare Oil and Gas Operations, gives local governments more authority to regulate oil and gas land use to minimize the effects of oil and gas operations on public safety and the environment. The Motion states that a local hydraulic fracturing ban would no longer be in conflict with Colorado law, allowing the case to be reopened and moved forward.

Induced Seismicity: Bureau of Ocean Energy Management Issues Permit for Seismic Survey Near Alaskan Coast
On August 14, 2019, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (Bureau) approved a permit for Hilcorp Alaska, LLC (Hilcorp) to conduct “geophysical exploration operations” in federal waters near Southcentral Alaska. Operations include a seismic survey of the Lower Cook Inlet area covering approximately 969 square kilometers (press release). According to the Bureau’s press release, data gathered from the survey can be used to find “potential offshore oil and gas resources.” The permit approval included several stipulations to be followed by Hilcorp including monitoring ships in the area and reporting birds found on at-sea equipment. The survey is expected to begin August 31, 2019, and be completed by October 31, 2019.

From the National Oil & Gas Law Experts:
Charles Sartain, Water: The Hot Commodity in the Permian and Elsewhere, (August 15, 2019)
John McFarland, North Dakota Supreme Court Decides for Royalty Owner on Post-Production Costs, (August 14, 2019)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Southwestern to Reduce Rig Count in Appalachian Basin” – Shale Gas Reporter
“Oil Exports Boost US Trade Balance Says Pulitzer Prize Winner Daniel Yergin” – Fox Business
“Mountain Valley Pipeline Faces New Legal Challenge, This One Over Endangered Species” – The Roanoke Times
“Long Reliant on Oil, State Faces Budget Reckoning” – E&E News
“U.S. Shale Oil Output to Rise to Record 8.77 mln bpd in Sept -EIA” – Reuters
“Oil Companies Push to Halt Climate Cases” – E&E News
“Army Corps Readies Decision on Enbridge Line 5 Supports” – The Associated Press
“Oil Rebounds From Seven-Month Low” – Bloomberg

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This week we published a new Shale Law in the Spotlight article: Shale Law in the Spotlight – North Dakota Supreme Court Rules that Post-Production Costs Cannot be Deducted from Royalties Paid to State

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Written by:
Sara Jenkins – Research Assistant
Jackie Schweichler – Staff Attorney