Shale Law Weekly Review – September 17, 2019

Pipelines: Circuit Court Rules PennEast Pipeline Cannot Move Forward on Condemnation Lawsuit Against New Jersey
On September 10, 2019, the U.S. Court of Appeals for the Third Circuit ruled PennEast Pipeline Company (PennEast) was barred by the Eleventh Amendment from bringing a suit against New Jersey to obtain property under eminent domain (In re: PennEast Pipeline Company, LLC, No. 19-1191). PennEast was granted approval for their pipeline project which required access to several properties owned by the state of New Jersey. PennEast filed suit under § 717f(h) of the Natural Gas Act (NGA), which allows the “necessary right-of-way” to construct a pipeline. The court noted that the power of eminent domain and the power to bring a state into federal court were two separate issues. The Eleventh Amendment to the U.S. Constitution gives states immunity from suit by private parties.  The court ultimately remanded the case back to the district court for dismissal under the grounds that “New Jersey’s sovereign immunity has not been abrogated by the NGA.”

Oil and Gas Leasing: California Legislature Passes Bill Limiting New Oil and Gas Leases for Infrastructure
On September 9, 2019 the California Senate passed Assembly Bill 342 prohibiting new oil and gas leases on public lands used to support production on certain federal lands. More specifically, the bill prevents leases on public lands for oil and gas-related infrastructure that would be used to support oil and gas production on federally protected lands. The bill defines “federally protected land” as “a national monument, park, wilderness area, wildlife refuge, or wilderness study area.” The bill does not prohibit maintaining and repairing current pipelines, and does not prohibit leases for oil and gas infrastructure used to support production on state lands. The bill previously passed the House on May 22, 2019, and was sent to the governor for signature on September 12, 2019.

State Regulation: New Hampshire Governor Approves Bill Prohibiting Offshore Oil and Natural Gas Exploration
On September 10, 2019, New Hampshire’s governor approved Senate Bill 76, prohibiting offshore oil and natural gas exploration, development, and production in coastal waters of the state. According to the Associated Press, Governor Chris Sununu signed the bill stating that it was “another step in the right direction.”  The bill prevents the Department of Environmental Services from issuing any permits, approvals, or endorsements for “oil or natural gas exploration, development, or production in coastal state waters.”  The bill will take effect on November 10, 2019.

Electricity Generation: Pennsylvania Public Utility Commission Releases Electric Power Outlook Showing Increase in Natural Gas Generation and Alternative Energy Usage
In August 2019, the Pennsylvania Public Utility Commission (PUC) released the Electric Power Outlook for 2018 to 2023. The report shows an increase in natural gas generation as well as increasing usage of alternative energy resources. More specifically, natural gas generation was projected to contribute “greater than 60 percent of on-peak capacity” in some areas.  According to the report, natural gas generation provides important adaptability that is “essential for managing wind and solar variability.”  The report predicts that the amount of electricity supplied by alternative resources will increase to a total of 18 percent by 2021.  Some alternative energy resources include solar, wind, biologically derived methane gas, and coal mine methane.

From the National Oil & Gas Law Experts:
George Bibikos, At the Well Weekly, (September 13, 2019)
Ann Navaro, Sara Burgin, & Daniel Pope, EPA Repeals Obama Rule Defining Waters of the U.S., (September 13, 2019)
Nina Howell, Ryan Pereira, Gaffney, Cline & Associates, LNG in Europe: Current Trends, the European LNG Landscape and Country Focus, (September 16, 2019)
Charles Sartain, Gas Well Operator’s Injunction Against Texas Town is Dissolved, (September 12, 2019)
John McFarland, Chesapeake v. Bell – Another Decision Construing an Express Drainage Offset Clause, (September 10, 2019)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“Exclusive: Exxon Agrees $4 Billion Sale of Norway Oil and Gas Assets – Sources” – Reuters
“New Permian Gas Pipelines Will Reduce Flaring, But What About Prices?” – Forbes
“House Approves Oil Drilling Ban Off Atlantic, Pacific Coasts” – Associated Press
“A Giant Bet Against Natural Gas Is Blowing Up” – Wall Street Journal
“Dutch Government Aims to Halt Gas Extraction By Mid-2022” – Associated Press
“Minn. Oil Pipeline Fight Highlights Democratic Dilemmas” – Associated Press
“Gas Plants Will Get Crushed by Wind, Solar by 2035, Study Says” – Bloomberg
“US Wants Energy Dominance Regardless Of What Happens To Oil Prices, Deputy Energy Secretary Says” – CNBC
“Loosening Methane Rule Could Hurt U.S. Gas Abroad — Experts” – E&E News
“N.Y. To Fight FERC’s Decision On Constitution Project” – Associated Press

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