July 21, 2024

Shale Law Weekly Review—Week of July 22, 2024

GHG Emissions: DC Court Denies Challenge to EPA’s Recent Emissions Rule ⚡
On July 9, 2024, the U.S. District Court for the District of Columbia denied a motion filed by twenty-four states to stay the recent rule promulgated by the Environmental Protection Agency (EPA) regulating greenhouse gases (GHGs) and volatile organic compounds (VOCs) emissions by oil and gas companies. State of Texas v. EPA, No. 24-1054. In the original complaint, the plaintiff states argued that EPA’s rule, which went into effect on May 7, 2024, was “onerous” and that it would cost states millions of dollars to be in compliance with the new rule. The states argued that any performance standards developed by the EPA must consider the cost they would impose. For background, see SLWR—Apr. 29, 2024, “States Ask DC Court to Stay EPA’s Recent Emissions Rule.”

National Energy Policy: State of Alaska Challenges New Federal Regulation Halting Oil and Gas Leasing
On July 3, 2024, the State of Alaska filed a complaint against the Bureau of Land Management, claiming the BLM’s new rule that limits oil and gas leasing in the National Petroleum Reserve in Alaska (NPR-A) violates several federal laws. State of Alaska v. Bureau of Land Management et al, Docket No. 3:24-cv-00144 (D. Alaska Jul 03, 2024). The BLM’s rule designates portions of the NPR-A as Special Areas, treating them as protected wilderness areas. The State of Alaska claims the rule failed to meet the standards required by the Administrative Procedure Act, and the rule violates the National Environmental Policy Act, and wishes for the rule to be vacated.

National Energy Policy: ConocoPhillips Sues the Bureau of Land Management Challenging Oil and Gas Regulations in the National Petroleum Reserve in Alaska
On July 5, 2024, ConocoPhillips filed a complaint against the Bureau of Land Management (BLM) claiming that the new rule promulgated by the BLM prohibiting the development of oil and gas projects of the National Petroleum Reserve in Alaska violates federal law. Conocophillips Alaska, Inc. v. Dept. of Interior et al, Docket No. 3:24-cv-00142 (D. Alaska Jul 03, 2024). The rule prevents any petroleum-based activities from being conducted in designated Special Areas with valuable surface resources. ConocoPhillips claim the BLM rule expands their authority passed the limits set in the Naval Petroleum Reserves Production Act, that such expansion additionally violates the Administrative Procedure Act, and that the BLM failed to conduct a sufficient review as mandated by the National Environmental Policy Act.

National Energy Policy: State of Alaska Sues the United States for Breach of Contract for Lease Cancellations
On July 2, 2024, the state of Alaska filed a claim against the United State for breach of contract, breach of the covenant for good faith and fair dealing, and taking, resulting from the Bureau of Land Management’s (BLM) cancellation of nine oil and gas leases. State of Alaska v. USA, Docket No. 1:24-cv-01017 (Fed. Cl. Jul 02, 2024). The BLM cancelled the oil and gas leases after changing their policy regarding the development of mineral resources in the Coastal Plain of the Arctic National Wildlife Refuge. The BLM first suspended the leases on June 1, 2021, before cancelling the leases on Sep. 6, 2023. Alaska claims they were a third-party beneficiary to the lease and claim to have lost significant tax revenue due to the cancellation.

National Energy Policy: Department of Justice and Environmental Protection Agency Settle with Marathon Oil for $241.5 Million
On July 11, 2024, the Department of Justice (DOJ) and the Environmental Protection Agency (EPA) announced a settlement agreement with Marathon Oil for $241.5 million. The settlement resolves an EPA complaint alleging violations of the Clean Air Act relating to Marathon Oil’s activities in the Fort Berthold Indian Reservation in North Dakota. Alleged violations included failure to comply with storage tank design, operation, and maintenance requirements and failure to obtain preconstruction and operating permits. Attorney General Merrick Garland stated that, “Clean Air Act violations at nearly 90 Marathon facilities resulted in thousands of tons of illegal emissions.” Garland then went on to outline the five-year plan that the settlement established for Marathon Oil. According to DOJ, this is the highest penalty served upon an oil producer for violations of the Clean Air Act.

Surface Owner Rights: Court of Appeals Reserves Injunction Against Landowner
On July 8, 2024, the United States Court of Appeals for the 4th Circuit overturned a preliminary injunction aimed at enjoining landowners’ attempts to block an energy company from accessing their right of way, citing a lack of irreparable harm. Williams Ohio Valley Midstream, LLC v. Kittle, No. 23-2185 (4th Cir. July 8, 2024). Williams Ohio Valley Midstream (WOVM) owned a pipeline right of way agreement for a system of pipelines underneath the Kittle’s land. In September of 2023, WOVM entered the Kittle’s land to begin preventative maintenance, attempting to protect their pipelines from an upcoming mining operation. After WOVM excavated the pipelines and stored the soil on the land, the Kittles parked a tractor trailer that blocked WOVM’s access to the land. WOVM sued for breach of contract, and requested a preliminary injunction be granted, enjoining the Kittle’s from blocking their access. The district court granted the preliminary injunction, and the Kittles appealed. The appeals court reasoned that in order for a preliminary injunction to be granted, the party seeking it must show that they are likely to succeed on the merits, they are likely to suffer irreparable harm, the balance of equities is in their favor, and the injunctions serves the public interest. The court examined if WOVM would suffer irreparable harm and determined that WOVM had already performed the emergency maintenance to the pipelines to protect them before the mining operation began, therefore alleviating the urgency. Furthermore, securing the loose soil from the excavations before it drifted away and the West Virginia Department of Environmental Protection issued a permit violation is purely conjectural, as it may never happen. As such, the alleged irreparable harm suffered by WOVM is speculative and unsupported, and the ruling of the district court is reversed.

 

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CENTER PROGRAMS & RESOURCES

Opportunities in Agriculture for a Thriving Chesapeake Bay Watershed Beyond 2025,” Brook Duer to Participate in Interactive Workshop Discussion – the Thriving Ag Project will sponsor “Opportunities in Agriculture for a Thriving Chesapeake Bay Watershed Beyond 2025” at the Chesapeake Bay Beach Club in Stevensville, Maryland. Center Staff Attorney Brook Duer will attend as a stakeholder participant in workshop conversation. More information here

Understanding Agricultural Law – A free monthly Zoom webinar series for all agricultural and rural business advisors. One hour of substantive CLE credit available for Pennsylvania-licensed attorneys at no charge. Recordings and materials from the series, more information, and registration available here.

Ag Progress Days – the Penn State College of Agricultural Sciences will host its annual Ag Progress Days, “Pennsylvania’s largest outdoor agricultural exposition,” at the Russell E. Larson Agricultural Research Center in Pennsylvania Furnace. Throughout the event, the Penn State Center for Agricultural and Shale Law will host an information booth in the Horizon Farm Credit Exhibit Building at W. 6th Street & Main. Come visit us in booth A509!

Solar Law Symposium – Penn State Extension will host its virtual Solar Law Sympium. As part of the symposium, Center Staff Attorney Brook Duer will co-present a session on Penn State research about the impact of solar development on rural areas. Registration available with optional CLE credits.

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

Shell’s bet on gas boom takes shape with string of deals (Reuters)

Trump’s proposed tariffs spark concerns for oil industry, even as the industry likes a lot of the Trump agenda (MarketWatch)

North America Adds Rigs for 8th Consecutive Week (Rigzone)

US federal court sends Commonwealth LNG approval back to FERC for rereview, threatening plant timeline (Oil and Gas Journal)

Puerto Rico files $1B climate lawsuit against oil companies (Politico Pro)

Connect with us on Facebook.

Penn State Farmland Energy Legal Podcast: Listen to the latest episode here.

Oil & Gas Law & Policy Resources:

Bloomberg, Energy Transfer and Sunoco announce strategic Permian Basin crude oil joint venture (July 17, 2024)

Sartain, Sole Discretion Not to Close Renders Texas Oil Deal Unenforceable (July 15, 2024)

Chin, Oil Wavers With Dollar Strength in Focus After Trump Shooting (July 15, 2024)

Heri, Guest Blog: Implementing KlimaSeniorinnen: Evaluating the Initial Swiss Response (July 18, 2024)

Bloomberg, Oil Steadies as Traders Look to Dollar and China for Next Cues (July 16, 2024)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Announces Intent to Fund Solar and Battery Storage for Community Healthcare Facilities and Multi-Family Housing Serving Low-and-Moderate-Income Communities in Puerto Rico (July 18, 2024)

Biden-Harris Administration Invests Additional $10 Million To Build Domestic Supply Chain for Critical Minerals and Materials (July 16, 2024)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

EPA Reaches Settlement with Fuel Refiner and Distributor Over Violations of the Clean Air Act’s Fuel Requirements (July 18, 2024)

FEDERAL EXECUTIVE AGENCIES (Federal Register June 1, 2024 – June 7, 2024)

Land Management Bureau

89 FR 58749 Notice: “Notice of Availability of the Proposed Resource Management Plan Amendment and Final Environmental Impact Statement for Big Game Habitat Conservation for Oil and Gas Management in Colorado” (July 19, 2024)

89 FR 58181 Notice: “Special Areas Within the National Petroleum Reserve in Alaska” (July 17, 2024)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 54, No. 29 – July 20, 2024)

 

Written by:
Victoria Dutterer, Research Assistant
Riley Amdor, Research Assistant
Caden Dean-Sauter, Research Assistant
Jose Rojas, Research Assistant
Samuel Sweeten, Research Assistant
Jackie Schweichler, Staff Attorney