Shale Law Weekly Review – September 30, 2019

Pipelines: PHMSA Issues Three Final Rules Reinforcing Pipeline Safety Standards
On September 24, 2019, U.S. Secretary of Transportation Elaine L. Chao announced in a press release that the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued three major final rules relating to federal pipeline safety.  The three final rules include the gas transmission rule, the hazardous liquid rule, and the “Enhanced Emergency Order Procedures” rule.  The gas transmission rule requires operators to confirm the Maximum Allowable Operating Pressure of older pipelines.  In addition, this rule requires additional reporting and record retention standards.  The hazardous liquid rule requires inspections after extreme weather or disaster events and requires leak detection for non-gathering hazardous liquid pipelines.  The Enhanced Emergency Order Procedures rule will allow PHMSA to issue safety emergency orders, including restrictions or prohibitions, in the event of imminent danger. The three final rules are expected to be published in the Federal Register on October 1, 2019.

Landowner Royalties: The Pennsylvania Independent Fiscal Office (IFO) Forecasts an Increase in Natural Gas Royalty Incomes for Pennsylvania Landowners
On September 20, 2019, the Pennsylvania Independent Fiscal Office (IFO) issued a research brief reporting an increase in natural gas royalty incomes for the state landowners in 2017 and predicted a further increase in 2018.  According to the brief, in 2017, Pennsylvania landowners received $1.06 billion in natural gas royalty income.  This amounts to a 63.9% increase from 2016, where the income amounted to $645 million.  The brief estimates that the royalty income for 2018 will amount to $1.64 billion, a 55% increase.  The highest landowner royalty income was recorded in 2014 when Pennsylvania landowners received $1.62 billion in payments.

LNG Terminal: FERC Authorizes the Construction and Operation of the Jacksonville LNG Terminal Project
On September 19, 2019, the Federal Energy Regulatory Commission (FERC) authorized Eagle LNG Partners Jacksonville LLC  to construct and operate the Jacksonville LNG terminal project on the St. Johns River in Jacksonville, Florida.  This project involves the construction and operation of three LNG liquefaction trains with a total capacity of approximately 132 MMcf per day.  The project will also include pretreatment facilities for each train, a 45,000m³ LNG storage tank, compressors, and other supporting infrastructure.  FERC concluded in its order, issued under Section 3 of the Natural Gas Act, that the effects of the project will be environmentally acceptable, so long as the operators comply with the prepared environmental impact statement (EIS).

National Energy Policy: U.S. EIA Releases Key Recommendations on U.S. Energy Policy Making
On September 13, 2019, the U.S. International Energy Agency (IEA) released  a comprehensive review of United States energy policies, specifically addressing the impacts of the shale revolution on the policy-making process.  The report notes that a primary effect of the shale revolution was to make the United States a major producer and exporter of oil and gas.  The resulting policy change now emphasizes “energy dominance,” a method which focuses on eliminating regulatory barriers and increasing industry competitiveness.  The report states that the United State is currently the “largest oil and gas exporter in the world,” and estimates that the United States will be a net energy exporter by 2020.  Energy consumption, however, has decreased by 3.3% since 2007 and energy-related emissions have decreased by 16% in the country.  The report is entitled, Energy Policies of IEA Countries, United States 2019 Review.

From the National Oil & Gas Law Experts:
Bud Earley, FERC Proposes Changes to PURPA Rules (September 27, 2019)
Blake Urban, Catherine McCarthy, Stephen Hug, FERC Proposes Significant Reforms to its QF Regulations (September 25, 2019)

Pennsylvania Legislation
SB 694: Amends Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in development, further providing for well permits (Third consideration and final passage – September 25, 2019)
SB 790: Relates to conventional wells and the development of oil, gas and coal; imposes powers and duties on the Department of Environmental Protection; provides for preliminary provisions, for general requirements, for enforcement and remedies, for related funds and for miscellaneous provisions, and making an appropriation (Re-referred to Appropriations – September 25, 2019)
HB 1875: Provides for plain language requirements in oil and gas real property contracts, for remedies and for penalties (Referred to Environmental, Resources and Energy – September 25, 2019)
HB 1557: Amends the act of September 24, 1968 (P.L. 1040, No. 318), known as the Coal Refuse Disposal Control Act, further providing for designating areas unsuitable for coal refuse disposal (Presented to the Governor – September 26, 2019)

Follow us on Twitter at PSU Ag & Shale Law (@AgShaleLaw) to receive ShaleLaw HotLinks:
“When it comes to acknowledging humans’ role in climate change, oil and gas industry lawyer says ‘that ship has sailed’” – Climate Nexus
“Gas flare blips are world’s biggest methane source – report” – E&E Publishings
“Swedish newspaper stops taking adverts from fossil fuel firms” – Climate Nexus
“NJ’s decision deadline on gas pipeline pushed back a month” – Climate Nexus
“Inside the Supreme Court showdown over Atlantic Coast” – E&E News
“US Shale Won’t Go Bankrupt” – Shale Smart Brief
“New Colorado Oil & Gas Law Already Impacting Industry” – Shale Smart Brief
“Beefed up regulations agreed upon for proposed Ohio cracker plant” – Shale Gas Reporter
“Rules restricting methane emissions to move forward in Pa.” – Shale Gas Reporter
“Residents concerned about pipeline for new LNG export facility, but others see economic driver” – Climate Nexus
“‘A muddy mess.’ Ill. Landowners fight FERC over pipeline” – Climate Nexus
“Texas Charges Oil Port Protesters Under New Fossil Fuel Protection Law” – Inside Climate News

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Written by:
Chloe Marie – Research Specialist
Jackie Schweichler – Staff Attorney