Shale Law Weekly Review – June 5, 2020

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

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