Shale Law Weekly Review—Week of July 11, 2022

Oil and Gas Regulation: PA General Assembly Passes Well Plugging Bill ⚡
On July 7, 2022, the Pennsylvania Senate and House both passed HB 2644. The bill would establish and allocate funds to the Orphan Well Plugging Grant Program (Program). Funding through this program would be used to receive and approve applications, provide civil liability for well pluggers, and issue grants to plug oil and gas wells. The bill would also set criteria for which wells qualify for the program and who qualifies as a well plugger. The bill was presented to Governor Wolf on July 8, 2022.

Municipal Regulation: PA Governor Vetoes Bill Restricting Utility Service Bans
On July 11, 2022, Pennsylvania Governor Tom vetoed SB 275, returning the bill to the Senate for consideration. SB 275 would have prevented municipalities from adopting policies restricting or discriminating against certain types of utility services or utility service providers, including electric, natural gas, fuel oil, renewables, etc. In the veto, Gov. Wolf stated the bill would “limit the tools available” for municipalities to address climate change, and that it was “unnecessary” in light of the Public Utility Commission’s ability to regulate utility services in the Commonwealth.

Pipelines: Court Rules FERC Can Consider Agreements to Transport Gas for Export
On July 8, 2022, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion denying a petition to review the Federal Energy Regulatory Commission’s (FERC) grant of a certificate of public convenience and necessity to NEXUS Gas Transmission, LLC for its natural gas pipeline from Ohio to Michigan. Oberlin v. FERC, Case No. 20-1492. The petition was originally filed by the city of Oberlin, Ohio, and claimed that FERC improperly relied on agreements to transport gas for export to Canada as evidence of necessity. However, the court ruled FERC’s reliance on said agreements was “well-reasoned and comports with both the Natural Gas Act and the Takings Clause.”

GHG Emissions: PA Court Grants Injunction Blocking CO2 Trading Program
On July 8, 2022, the Commonwealth Court of Pennsylvania granted a preliminary injunction blocking the Commonwealth from instituting its CO2 Budget Trading Program (Program). Bowfin KeyCon Holdings, et al., v. PA Dept. Of Env’t Prot. and PA Env’t Quality Board, Case No. 247 MD 2022. The Program would have limited CO2 emissions from Pennsylvania fossil fuel factories as part of Pennsylvania’s institution of the Regional Greenhouse Gas Initiative. The suit was originally filed by energy companies and labor groups against the Pennsylvania Department of Environmental Protection (DEP) and Environmental Quality Board, with the purpose of blocking the institution of the Program. Three days after the injunction, on July 11, 2022, DEP filed notices of appeal.

Pipelines: BLM Releases Draft Environmental Impact Statement for Willow Project
On July 8, 2022, the Bureau of Land Management released its (EIS) of ConocoPhillips Alaska, Inc.’s proposed Alaska project, also termed the Willow Project. According to BLM in its press release and the EIS proper, the EIS was prepared to “address deficiencies identified by the U.S. District Court for the District of Alaska” in a prior decision striking down approval of the Willow project. BLM will accept comments on the EIS until August 29, 2022, and will later announce scheduled public meetings and hearings.

Pipelines: FERC Grants Northern Access Request for Extension of Time
On June 29, 2022, the Federal Energy Regulatory Commission granted a request for a 35-month extension submitted by National Fuel Gas Co regarding its Northern Access pipeline project. The Northern Access pipeline is designed as 99 miles of pipeline that will traverse “McKean County, Pennsylvania and Allegany, Cattaraugus, Erie, and Niagara Counties, New York.” National Fuel Gas Co will now have until December 2024 to complete the pipeline connecting Pennsylvania and New York.

Oil and Gas Leasing: PA Federal Court Rules Seneca Did Not Abandon Wells by Paying Royalties to Lessors
On July 7, 2022, the U.S. District Court for the Middle District of Pennsylvania issued an order granting summary judgment to Seneca Resources Company (“Seneca”), the defendant in a lawsuit filed by the Salevskys, landowners in Tioga County. Salevsky, et al. v. Seneca Resources Co., Case No. 4:19-CV-02180. The Salevskys originally filed suit seeking declaratory relief, ejection of Seneca from their land, and quiet title to over 1,000 acres of said land which they had leased to SWEPI LP, which had assigned its interests to Seneca. The court found that Seneca had properly maintained its lease by paying “shut-in royalties” to the Salevskys in timely manner, and, as a result, that Seneca had not abandoned the wells on the property. The court granted summary judgment to Seneca on both the original claim and Seneca’s counterclaim seeking declaratory relief.

Oil & Gas Law & Policy Resources:

Sartain & Lawhorn, Exculpatory Clause Does Not Save Operator From Liability (July 5, 2022)

Tysse, et al., ‘Major Questions’? Supreme Court Decision in Climate Change Case Sends Ripples Across the Regulatory Landscape (July 6, 2022)

Energy Connects, QatarEnergy selects Shell as final partner in world’s largest LNG project (July 6, 2022)

Elkin, THE NEW YORK DEPARTMENT OF ENVIRONMENTAL CONSERVATION DENIES AN AIR QUALITY PERMIT TO A CRYPTOCURRENCY MINING FACILITY, CITING SABIN CENTER WHITE PAPER (July 6, 2022)

Mitchell, et al., StEPing Up to the Plate: Justice Department Restores Favored Enforcement Resolution Tool (July 7, 2022)

McFarland, James V Allred and the Land Cut: Where is the Shore of the Laguna Madre? (July 7, 2022)

Bloomberg, Shell Sees $1 Billion Gain in Refining on Record Fuel Prices (July 7, 2022)

Bloomberg, Germany Sees Russian Pipeline Part Released in Gas De-Escalation (July 8, 2022)

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks July 1, 2022-July 8, 2022:

Calif. gives ‘new life’ to gas plants in emergency overhaul (E&E News)

E.U. countries adopt mandatory gas storage amid Russia’s cuts (E&E News)

TSA Eases Pipeline Cybersecurity Rules Issued After Colonial Hack (Wall Street Journal)

Biden administration offshore drilling plan delayed (Reuters)

With state climate action in the spotlight, Wolf’s carbon rule takes effect (Pittsburgh Post-Gazette)

Connect with us on Facebook.  Every week we post the CASL Ledger detailing our publications and activities from the week. 

Penn State Shale Law Podcast: Listen to the latest episode here.

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY

Biden Administration Launches $500 Million Program to Transform Mines Into New Clean Energy Hubs (June 29, 2022)

Ukraine Launches Electricity Exports To European Union With Support From The U.S. Department Of Energy (July 2, 2022)

Biden Administration Announces $2.3 Billion for States and Tribes to Strengthen and Modernize America’s Power Grid (July 6, 2022)

DOE Awards $14 Million to Improve Climate Change Predictions (July 7, 2022)

U.S. ENVIRONMENTAL PROTECTION AGENCY

EPA fines Oxnard manufacturer over $1 million for selling ‘defeat devices’, harming air quality (July 7, 2022)

FEDERAL EXECUTIVE AGENCIES (Federal Register July 1 – July 8, 2022):

Energy Department

87 FR 40590: Proposed Rule, Comments Period Ends 9/6/2022: “Energy Conservation Program: Energy Conservation Standards for Consumer Furnaces” (July 7, 2022).

Environmental Protection Agency

87 FR 39824: Notice, Comments Period Ends 8/4/2022: “Methylene Chloride; Draft Revision to Toxic Substances Control Act (TSCA) Risk Determination; Notice of Availability and Request for Comment” (July 5, 2022)

87 FR 39756: Rule: “Significant New Uses of Chemical Substances; Updates to the Hazard Communication Program and Regulatory Framework; Minor Amendments to Reporting Requirements for Premanufacture Notices” (July 5, 2022).

Bureau of Land Management

87 FR 40262: Notice, Comments Period Ends 8/22/2022: “Notice of Intent to Amend Multiple Resource Management Plans Regarding Gunnison Sage-Grouse (Centrocercus minimus” (July 6, 2022).

Ocean Energy Management Bureau

87 FR 40859: Notice, Comments Period Ends 10/6/2022: “Notice of Availability of the 2023-2028 National Outer Continental Shelf Oil and Gas Leasing Proposed Program and Draft Programmatic Environmental Impact Statement” (July 8, 2022).

Other Agencies

87 FR 40795: Notice: “Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico” (July 8, 2022).

87 FR 40034: Proposed Rule, Comments Period Ends 8/4/2022: “Small Business Size Standards: Adoption of 2022 North American Industry Classification System for Size Standards” (July 5, 2022).

U.S. HOUSE ENERGY AND COMMERCE COMMITTEE

H.R.8314 “To amend the Energy Policy Act of 2005 to remove a limitation on amounts provided under the clean school bus program, and for other purposes.” Referred to the House Committee on Energy and Commerce (July 7, 2022).

STATE ACTIONS—EXECUTIVE & LEGISLATIVE

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 52, No. 28- July 9, 2022)

PENNSYLVANIA LEGISLATURE

HB2528: “An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in development, providing for well plugging contracts.” Referred to Environmental Resources and Energy [Senate] (June 21, 2022).

HB2724: “An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in development, further providing for well reporting requirements.” Referred to Environmental Resources and Energy [House] (July 1, 2022).

HB1780: “An Act amending the act of July 6, 1989 (P.L.169, No.32), known as the Storage Tank and Spill Prevention Act…” Presented to the Governor (July 1, 2022).

Written by:
Kendal Ashman, Research Assistant
Ethan Durand, Research Assistant
Jackie Schweichler, Staff Attorney