Shale Law Weekly Review – Week of March 8, 2021

Water Quality: Court of Appeals Reverses Lower Court Decision that Enjoined Use of New Clean Water Act Rule in Colorado ⚡
On March 2, 2021, the U.S. Court of Appeals for the Tenth Circuit reversed a lower court decision that had enjoined the use of section 404 of the Clean Water Act in Colorado.  (State of Colorado v. EPA, Nos. 20-1238, 20-1262, 20-1263).  In April 2020, the Environmental Protection Agency and the Army Corps of Engineers (Agencies) published the Navigable Waters Protection Rule: Definition of the “Waters of the United States.”   The Navigable Waters Protection Rule (NWPR) defines Waters of the United States (WOTUS) as “territorial seas and traditional navigable waters; perennial and intermittent tributaries . . . ; certain lakes, ponds, and impoundments of jurisdictional waters; and wetlands adjacent to other jurisdictional waters,” while specifically excluding groundwater, diffuse stormwater runoff, and prior converted cropland, among other things.  Colorado originally asked the district court to prevent the Agencies from administering the NWPR in Colorado, which request the court granted.  The Court of Appeals, however, reversed the district court order, finding that the district court abused its discretion in issuing a preliminary injunction against the Agencies because Colorado did not prove that it would suffer irreparable harm if the injunction was not issued.  For more information on WOTUS, see the Center’s issue tracker here.

Pipelines: Pennsylvania DEP and Pipeline Company Reach Agreement on Recommencing Operation of Revolution Pipeline
On February 26, 2021, ETC Northeast Pipeline, LLC and the Pennsylvania Department of Environmental Protection (DEP) entered into a Settlement Agreement allowing the Revolution pipeline to re-commence operations. (ETC Northeast Pipeline, LLC v. Commonwealth of Pennsylvania, et al., EHB No. 2020-110-R).  In 2018, an explosion occurred at the Revolution pipeline in Beaver County, Pennsylvania following a landslide at one of the pipeline’s stations.  After issuing an order in October 2018 for ETC to cease operations and submit a plan to restabilize the pipeline, DEP issued subsequent orders in January 2020 and November 2020 to address ETC’s failures to effectively stabilize the slope around the pipeline.  ETC appealed the November 2020 order to the Environmental Hearing Board, stating that they complied with all regulations and plans implemented for the safe operation of the pipeline.  The current settlement includes a consent order and agreement allowing ETC to begin operating the pipeline and requiring ETC to submit revised stabilization plans and amended permits.

Air Quality: Federal Court Orders $14.2 Million Penalty Against Exxon Mobil for Clean Air Act Violations
On March 2, 2021, the U.S. District Court for the Southern District of Texas Houston Division ordered over $14.2 million in penalties against Exxon Mobil (Exxon) for violations of the Clean Air Act.  (Environment Texas Citizen Lobby, Inc v. ExxonMobil Corp., No. H-10-4969).  The District Court amended previous findings in the case after the U.S. Court of Appeals for the Fifth Circuit reversed and remanded the previous penalty of $19.95 million, requiring additional analysis on penalties, traceability, and the Act of God defense.  On remand, the District Court ultimately concluded that the number of days of traceable violations by Exxon was lower than previously found, but the traceable violations included “higher levels of emissions.”  The court calculated penalties by determining Exxon’s economic benefit of not complying with the Clean Air Act and added a 10 percent multiplier to the amount after considering mitigating factors.

Shale Law/Policy Resources of Interest:

Brigit Rollins, The Clean Water Act, the Corps, & Section 404 (March 4, 2021)

Charles Sartain, Fixed-or-Floating NPRI Principles Applied to Texas Mineral Reservation (March 3, 2021)

John McFarland, Due Process and the No-Extrinsic-Evidence Rule: Challenges to Default Judgments When Service Was By Publication (March 2, 2021)

Amy Turner, When State Preemption Of Local Climate Laws Undermines Equity (March 3, 2021)

AGENCY PRESS RELEASES – STATE/FEDERAL

Pennsylvania Department of Environmental Protection

Latest Settlement Between DEP and ETC Addresses Revolution Pipeline Stability Concerns, Commits ETC to Corrective Actions (March 1, 2021)

United States Department of Energy

DOE Invests $24 Million to Advance Transformational Air Pollution Capture (March 5, 2021)

DOE Announces Contract Awards for Sale of Crude Oil from the Strategic Petroleum Reserve (March 5, 2021)

FEDERAL ACTIONS—EXECUTIVE/LEGISLATIVE

Federal Executive Agencies (Federal Register March 1-5, 2021):

Federal Energy Regulatory Commission

86 FR 11995 Notice—Comments Period “Tennessee Gas Pipeline Company, L.L.C.; Notice of Availability of the Environmental Assessment for the Proposed; East 300 Upgrade Project” (March 1, 2021)

86 FR 12257 Final Rule “Natural Gas Pipelines; Project Cost and Annual Limits” (March 3, 2021)

86 FR 12678 Notice—Comments Period “Northern Natural Gas Company; Notice of Availability of the Environmental Assessment for the Proposed Lake City 1st Branch Line Abandonment and Capacity Replacement Project” (March 4, 2021)

86 FR 12879 Notice of proposed rulemaking “Standards for Business Practices of Interstate Natural Gas Pipelines” (March 5, 2021)

86 FR 12934 Notice—Comments Period “Mountain Valley Pipeline, LLC; Notice of Application and Establishing Intervention Deadline” (March 5, 2021)

Justice Department

86 FR 12035 Notice—Comments Period “Notice of Proposed Settlement Agreement Under the Oil Pollution Act and Clean Water Act” (March 1, 2021)

Federal Trade Commission

86 FR 12091 Confirmation of Rule “Prohibition of Energy Market Manipulation Rule Review” (March 2, 2021)

Pipeline and Hazardous Materials Safety Commission

86 FR 12834 Final rule; withdrawal of enforcement discretion; delay of effective date “Pipeline Safety: Gas Pipeline Regulatory Reform” (March 5, 2021)

86 FR 12835 Final Rule; correction “Pipeline Safety: Gas Pipeline Regulatory Reform; Correction” (March 5, 2021)

86 FR 13016 Notice—Comments Period “Pipeline Safety: Request for Special Permit; Natural Gas Pipeline Company of America, LLC” (March 5, 2021)

House Energy and Commerce Committee Actions:

H.R. 1600 “To reduce methane emissions from flaring and venting natural gas during oil and natural gas production activities, and for other purposes” Referred to the Committee on Energy and Commerce (March 3, 2021)

H.R. 1599 “To amend the Department of Energy Organization Act to secure the supply of critical energy resources, including critical minerals and other materials, and for other purposes” Referred to the House Committee on Energy and Commerce (March 3, 2021)

H.R. 1575 “To repeal restrictions on the export and import of natural gas” Referred to the House Committee on Energy and Commerce (March 3, 2021)

H.R. 1542 “To amend the Farm Security and Rural Investment Act of 2002 to provide grants for deployment of renewable fuel infrastructure, to finalize proposed rules relating to requirements for E15 fuel dispenser labeling and underground storage tank compatibility, and for other purposes” Referred to the Committee on Energy and Commerce (March 3, 2021)

H.R. 1512 “To build a clean and prosperous future by addressing the climate crisis, protecting the health and welfare of all Americans, and putting the Nation on the path to a net-zero greenhouse gas economy by 2050, and for other purposes” Referred to the Subcommittee on Environment and Climate Change (March 3, 2021)

H.R. 859 “Protecting American Energy Jobs Act” Referred to the Subcommittee on Conservation and Forestry (March 3, 2021)

H.R. 806 “Clean Energy and Sustainability Accelerator Act” Referred to the Subcommittee on Commodity Exchanges, Energy, and Credit (March 3, 2021)

H.R. 1492 “To prevent methane waste and pollution from oil and gas operations, and for other purposes” Referred to the Committee on Natural Resources (March 2, 2021)

Senate Energy and Natural Resources Committee Actions:

1. 607 “A bill to discourage speculative oil and gas leasing and to promote enhanced multiple use management of public land and National Forest System land, and for other purposes” Read twice and referred to the Committee on Energy and Natural Resources (March 4, 2021)
2. 531 “A bill to provide additional funds for Federal and State facility energy resiliency programs, and for other purposes” Read twice and referred to the Committee on Energy and Natural Resources (March 2, 2021)

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks March 1-5, 2021:

“FERC Pipeline Eminent Domain Fight Heats Up” Energywire

“Oil Trade Group Is Poised to Endorse Carbon Pricing” Wall Street Journal

“Senator Yaw Calls DRBC Natural Gas Drilling Ban An Assault On Private Property Rights” Oil and Gas Online

“Natural Gas Can Help Solve Climate Change, Industry Reminds Policymakers” Reuters

“Texas Oil, Natural Gas Employment Rebounding as Energy Prices, Demand Recover” Natural Gas Intelligence

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