Shale Law Weekly Review—Week of May 08, 2023

Pipelines: Supreme Court Reopens Landowner Eminent Domain Case Against Mountain Valley Pipeline ⚡
On Monday, April 24, 2023, the Supreme Court granted an appeal filed by six landowners in their case brought against the Federal Energy Regulatory Commission (FERC) for a statute that has allowed private companies, like Mountain Valley Pipeline LLC, to exercise eminent domain authority to construct pipelines across Virginia and West Virginia. Cletus Woodrow Bohon et al. v. Federal Energy Regulatory Commission et al., No. 22-256, The D.C. Circuit originally affirmed the district court’s dismissal of the suit, holding that, as required by the Natural Gas Act, the landowners should have brought the case in the D.C. Circuit. That decision has dismissed been by the Supreme Court, and the circuit must now reconsider the case in light of the recently decided Axon Enterprise, Inc. v. FTC. In Axon, the Supreme Court found that the mechanisms for statutory review enabled by the Securities Exchange Act and Federal Trade Commission Act do not limit or modify the federal-question jurisdiction of district courts answering constitutionality challenges to the structure of the Securities and Exchange Commission or the Federal Trade Commission. Now, using Axon, the D.C. Circuit must decide whether it has jurisdiction over this constitutional challenge to FERC’s delegatory authority.

Pipelines: 37-mile Louisiana Natural Gas Pipeline Approved by FERC
On Friday, April 21, 2023, the Federal Energy Regulatory Commission (FERC) issued an order authorizing the construction of Driftwood Pipeline LLC’s project, which will consist of 36.9 miles of dual 42-inch-diameter pipelines and various other facilities necessary for the transmission of the gas. The pipeline will begin in Ragley, Louisiana and extend to Driftwood’s LNG terminal in Carlyss, Louisiana. As explained in the order, various organizations including Healthy Gulf and Sierra Club, have protested Driftwood’s application, but FERC found the demonstrated need for the project sufficient. In the rationale for the approval, FERC cited a lack of adverse economic impacts on other pipelines and a minimal impact on the community.

Pipelines: Ohio Appeals Court Denies Easement Rights for Pipeline Construction Through Protected Farmland
On Monday, April 17, 2023, Ohio’s Third District Court of Appeals reviewed Columbia Gas’ appeal of the Union County Court of Common Pleas decision denying its request to appropriate easement rights on private farmland for the construction of a natural gas pipeline. Columbia Gas v. Bailey, 2023-Ohio-1245. Specifically, Columbia Gas seeks the necessary easement rights through eminent domain power to construct and operate a natural gas pipeline passing through the Arno Renner farm, which is subject to an agricultural easement granted by the Ohio Department of Agriculture. The landowners have cross-appealed for review of the trial court decision, arguing that it erred in determining that an agricultural easement dos not prevent Columbia Gas’s petitions. In their decision, the appeals court explained that the trial court acted properly in determining that Columbia Gas was not entitled to appropriation of the easement rights, as it acted in bad faith to satisfy its burden to show that the taking is necessary. With respect to the landowners’ cross-appeal, which asserts that the agricultural easement prohibits the installation of any gas pipeline on the property, the court agrees that there is strong evidence that the agricultural easement constitutes a prior public use. The court also acknowledged the power of public utilities to appropriate protected property, but it noted that this power is limited if it results in the destruction of an existing public use. Because the trial court did not resolve this issue of balancing the competing public uses to determine which best serves the public interest, the appeals court declined to make a factual determination and reversed the trial court’s determination that an agricultural easement prevents eminent domain action. The trial court will now determine whether Columbia Gas’s easement will negate the existing public use of the Arno Renner farm.

Climate Change: Supreme Court Declines to Hear Five Cases Between Municipalities and Fossil Fuel Companies for Carbon Emissions
On Monday, April 24, 2023, the Supreme Court denied petitions for a writ of certiorari filed by five companies in their individual lawsuits brought by numerous municipalities and counties throughout the country. The plaintiffs include state and local governments in Colorado, Maryland, California, Honolulu, Hawaii, and Rhode Island. The defendants include major oil companies, including Exxon Mobil, Suncor Energy, Chevron, and others. While these five cases involve different governments and oil companies, they all bring similar climate change related claims, which assert that their state, counties, or municipalities have been harmed by emissions from the burning of fossil fuels. Following the appeal denials, these cases will now be heard in their respective state courts.

Oil and Gas Leasing: D.C. Circuit Dismisses Lawsuit Against BOEM for 2021 Oil and Gas Lease Sale
On Friday, April 28, 2023, the D.C. Circuit Court of Appeals dismissed as moot the case against the Bureau of Ocean and Energy Management (BOEM) for Lease Sale 257, which auctioned oil and gas leases for natural resource extraction from the Gulf of Mexico’s federal waters. The case was brought by several environmental groups, who initially found a favorable ruling from the district court, which vacated the lease sale for BOEM’s failure to comply with the National Environmental Policy Act (NEPA). An appeal was filed, and the Inflation Reduction Act (IRA) was signed into law, requiring the leases won in Lease Sale 257 be issued within 30 days. As explained by the circuit court, because of the new requirements of the IRA, which requires the highest bidders to receive their leases, the case has been rendered moot, even if the sale violated NEPA.

 

Oil & Gas Law & Policy Resources:

Bloomberg, Shell Is Selling Its Stake in Australian Gas Project to BP (April 29, 2023)

Bloomberg, US to Permit Court-Ordered Auction of Citgo Parent’s Shares (May 1, 2023)

Sartain, Texas Supreme Court Decides Arbitrability of Offshore Agreements (May 2, 2023)

Bloomberg, Oil’s Dramatic Open Leaves Traders Puzzled After WTI Crashes (May 4, 2023)

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks April 29 – May 5, 2023:

Australian government to permit fracturing in Beetaloo (Oil & Gas Journal)

MEXICO PRESIDENT SEES $14 BLN INVESTMENT FROM MEXICO PACIFIC ON PIPELINE, LIQUEFACTION PLANT (Natural Gas World)

WVU and partners to study geothermal energy, carbon capture (Shale Gas Reporter)

25 shale drilling permits issued in Ohio, Pa., W. Va. for week ended April 23 (Shale Gas Reporter)

Ohio appeals court blocks pipeline construction through preserved farmland (Shale Gas Reporter)

Connect with us on Facebook. 

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

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY

Secretary Granholm and Minister Lee Commit to Strengthening Clean Energy Cooperation (May 1, 2023)

U.S. ENVIRONMENTAL PROTECTION AGENCY

EPA Orders U.S. Air Force to Address Oil Discharge at Travis Air Force Base (May 4, 2023)

EPA Proposes to Establish First-Time Clean Water Act Protections for Over 250 Tribes (May 3, 2023)

EPA Issues Emergency Fuel Waiver for E15 Sales (April 28, 2023)

FEDERAL EXECUTIVE AGENCIES (Federal Register April 29–May 5, 2023):

Energy Department

88 FR 28780: Rule: “Energy Conservation Program: Test Procedures for Walk-In Coolers and Walk-In Freezers” (May 4, 2023)

88 FR 27312: Rule: “Energy Conservation Program: Test Procedure for Fans and Blowers” (May 1, 2023)

Environmental Protection Agency

88 FR 29184: Proposed Rule, Comments Close 7/5/23: “Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles” (May 5, 2023)

88 FR 29496: Proposed Rule, Comments Close 8/3/23: “Federal Baseline Water Quality Standards for Indian Reservations” (May 5, 2023)

88 FR 28450: Proposed Rule, Comments Close 7/3/23: “State of Louisiana Underground Injection Control Program; Class VI Program Revision Application” (May 4, 2023)

88 FR 28918: Proposed Rule, Comments Close 7/3/23: “Revision and Promulgation of Air Quality Implementation Plans; Texas; Regional Haze Federal Implementation Plan; Disapproval and Need for Error Correction; Denial of Reconsideration of Provisions Governing Alternative to Source-Specific Best Available Retrofit Technology (BART) Determinations” (May 4, 2023)

88 FR 28284: Proposed Rule, Comments Close 7/3/23: “Methylene Chloride; Regulation Under the Toxic Substances Control Act (TSCA)” (May 3, 2023)

Federal Energy Regulatory Commission

88 FR 28348: Rule: “Incentives for Advanced Cybersecurity Investment” (May 3, 2023)

Safety and Environmental Enforcement Bureau

88 FR 27528: Notice, Comments Close 6/1/23: “Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Application for Permit To Drill (APD, Revised APD), Supplemental APD Information Sheet, and All Supporting Documentation” (May 2, 2023)

Ocean Energy Management Bureau

88 FR 28610: Notice: “Notice on Outer Continental Shelf Oil and Gas Lease Sales” (May 4, 2023)

Other Agencies

88 FR 29013: Proposed Rule, Comments Close 7/5/23: “Electronic Submission of Mariner Course Completion Data” (May 5, 2023)

88 FR 28459: Notice: “Rural Community Development Initiative (RCDI) for Fiscal Year 2023” (May 4, 2023)

88 FR 28656: Proposed Rule, Comments Close 6/5/23: “Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to the Coastal Virginia Offshore Wind Commercial Project Offshore of Virginia” (May 4, 2023)

88 FR 27427: Proposed Rule, Comments Close 6/1/23: “Endangered and Threatened Wildlife and Plants; Threatened Species Status for Black-Capped Petrel With a Section 4(d) Rule” (May 2, 2023)

U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE

S.1456 “A bill to provide for certain energy development, permitting reforms, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (May 4, 2023)

S.1410 “A bill to amend the Federal Power Act and the Natural Gas Act with respect to the enforcement of certain provisions, and for other purposes.” Read twice and referred to the Committee on Energy and Natural Resources. (May 3, 2023)

S.1399 “A bill to provide for American energy security by improving the permitting process.” Read twice and referred to the Committee on Energy and Natural Resources. (May 2, 2023)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 53, No. 18 May 6, 2023)

DEPARTMENT OF ENVIRONMENTAL PROTECTION

53 Pa.B. 2482: Notices: “Availability of Technical Guidance”

53 Pa.B. 2485: Notices: “Planning Grant Awards under Section 901 of the Municipal Waste Planning, Recycling and Waste Reduction Act, Act 101 of 1988”

Pennsylvania Energy Development Authority

53 Pa.B. 2504: Notices: “Electric Generation Supplier License Cancellation of Companies with an Expired Financial Security, Insufficient Financial Security Amount or Language”

53 Pa.B. 2527: Notices: “Pennsylvania Public Utility Commission, Bureau of Investigation and Enforcement v. Columbia Gas of Pennsylvania, Inc.”

SUSQUEHANNA RIVER BASIN COMMISSION

Environmental Quality Board

53 Pa.B. 2418: Rules and Regulations: “VOC RACT Requirements for Shipbuilding and Ship Repair Surface Coatings, Large Petroleum Dry Cleaning Facilities and Synthetic Organic Chemical Manufacturing Industry Processes for the 2015 Ozone NAAQS”

 

Written by:
Kole Zellers, Research Assistant
Kendal Ashman, Research Assistant
Jackie Schweichler, Staff Attorney