September 3, 2024

Shale Law Weekly Review—Week of September 3, 2024

Pipelines: U.S. Court of Appeals for the District of Columbia Vacates Four of the Pipeline Hazardous Materials Safety Administration’s Safety Standards for Pipelines ⚡
On August 16, 2024, in a case regarding safety standards for pipelines, the U.S. Court of Appeals for the District of Columbia vacated four safety standards promulgated by the Pipeline Hazardous Materials Safety Administration (PHMSA) in its opinion. Interstate Natural Gas Association of America v. PHMSA, et al, Docket No. 23-01173. At issue were five safety standards, four of which the court agreed were inadequate and one which was proper. First, the court discussed the “High-Frequency-ERW standard” (49 C.F.R. §§ 192.714(d)(1)(v)(C) and 192.933(d)(1)(iv)), explaining that the PHMSA’s cost analysis is “unsupported by the record” because the PHMSA failed to consider new costs of a repair requirement. Second, the court examined the “Crack-MAOP Standard” (C.F.R. 192.933(d)(1)(v)(C)), determining that it also failed to show a “reasoned final cost-benefit analysis” that is required by 49 U.S.C. § 60102(b)(5). Third, the court discussed the “Dent-Safety-Factor Standard” (49 C.F.R. § 197.712 (c)), also finding that there was no cost analysis present. Fourth, the court examined the “Corrosive-Constituent Standard” (49 C.F.R. § 192.478), additionally finding that the “final cost-benefit analysis” was improper because the cost descriptions were “internally inconsistent,” making their reasoning not understandable. Last, the court explained that the last standard, the “pipeline-segment standard” (49 C.F.R. § 192.929(b)(3)), would not be vacated because the Plaintiffs only brought “language-change” arguments, which the court found “unconvincing.”

Infrastructure: DOI Announces the Availability of $775 Million for Orphaned Oil and Gas Well Cleanup
On August 14, 2024, the Department of the Interior (DOI) announced the availability of $775 million in funding for states to clean up orphaned oil and gas wells and well sites. These funds are made available through the Bipartisan Infrastructure Law and are awarded as initial grants, formula grants, and performance grants. This $775 million in funding is made available to 21 states during Phase 2 of the grant awarding process. $444 million in formula grants to 18 states and a $2 million performance grants to one state were already awarded in Phase 1. States who apply for and receive grants must 1) measure methane emissions from orphaned wells plugged with formula grants, 2) screen for groundwater and surface water impacts caused by orphaned wells, and 3) include their prioritization methods polluting wells creating burdens for nearby disadvantaged communities. Eligible states will have until December 13, 2024, to submit applications for formula grants with additional phases to be announced. Under the Phase 2 schedule, Pennsylvania is eligible to apply for up to $152.6 million in formula grants of the of the over $305 million in total they are eligible for under the Bipartisan Infrastructure Law. [Dillon]

Oil and Gas Leasing: District Court Vacates the Biological Opinion Analyzing the Impact of Oil and Gas Leases in the Gulf of Mexico on Endangered Species
On August 19, 2024, the U.S. District Court for the District of Maryland issued a memorandum opinion granting Plaintiff’s, Sierra Club and several other environmental advocacy groups, motion for summary judgment. Sierra Club v. National Marine Fisheries Service, No: 8:20-cv-03060. The Court determined that Biological Opinion (BiOp) issued by the National Marine Fisheries Service (NMFS) in 2020 to support a series of oil and gas leases in the Gulf of Mexico violates both the Administrative Procedures Act (APA) and the Endangered Species Act (ESA). Plaintiffs brought this case in October 2020 challenging the BiOp under the APA and ESA, alleging that NMFS’s assessment of the impact the oil and gas leases would have on the environment and safety of the Gulf’s Rice whale population was flawed and the proposed reasonable and prudent alternatives (RPAs) were similarly flawed and inadequate. The Court determined that the BiOp underestimated risks posed to endangered species by oil spills, made incorrect assumptions about the population levels of relevant endangered species, did not address all relevant stressors the operations would pose to Rice whales, and did not recognize oil spills as a “take” incident, one that would cause harm to the Rice whale populations. In the opinion, the Court vacated NMFS’s 2020 BiOp in full. This vacatur will take effect December 20, 2024.

State Regulation: California Governor Announces Proposal to Prevent Gasoline Price Spikes
On August 15, 2024, California Governor Gavin Newsom issued a press release announcing a plan to help prevent gasoline price spikes. The proposed plan would require California’s oil refiners to maintain minimum supply inventories and resupply measures. The proposal also states that the California Energy Commission (CEC) would be authorized to “require petroleum refiners to maintain enough fuel inventory to keep the fuel supply stable.” Governor Newsom commented on the plan, saying, “Price spikes at the pump are profit spikes for Big Oil. Refiners should be required to plan ahead and backfill supplies to keep prices stable, instead of playing games to earn even more profits. By making refiners act responsibly and maintain a gas reserve, Californians would save money at the pump every year.” This plan follows Senate Bill X1-2, signed into law by Governor Newsom in March 2023, which aims to protect “Californians from experiencing price gouging at the pump by oil companies.” CEC currently tracks gas prices as part of SB X1-2’s implementation.

Community Impacts: Shell USA Partners with Penn State with Sustainability as the Goal
On August 12, 2024, Penn State University announced it will be collaborating with Shell USA to help further the university’s goal of “research, education and community impact.” Specifically, Shell donated over one million dollars to fund Penn State’s research and transition to more sustainable energy usage, through educational activities and field experiences. In the press release, Shell noted that this partnership can also help them “provide more and cleaner energy for today and the future.” Both organizations state they hope the benefits of this partnership are just beginning.

State Regulation: Texas Railroad Commission Proposes Updated Oil and Gas Waste Management Rules
On August 15, 2024, the Texas Railroad Commission (RRC) proposed an amendment to the current oil and gas waste management rules. This amendment updates sections 3.8: Water Protections, 3.14: Plugging, 3.22: Protection of Birds, 3.30: Memorandum of Understanding Between The RRC and Texas Commission of Environmental Quality, 3.57: Reclaiming Tank Bottoms, 3.91: Cleanup of Soil Contaminated by a Crude Oil Spill, and 3.98 Standards for Management of Hazardous Oil and Gas Waste, and would make informal guidance’s part of the statue, along with updating the technologies and strategies used in waste management plants. The proposed rule also focuses on revamping groundwater protection. The proposition is currently open for comments.

 

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CENTER PROGRAMS & RESOURCES

Starting and Improving Farms Conference – Penn State Extension will host the Starting and Improving Farms Conference in-person at the Toftrees Golf Resort in State College, Pennsylvania. On September 14, 2024 at 3:15 p.m. Center Staff Attorney Brook Duer will present “Legal and Tax Structures for Business and Land Ownership” as part of the conference.

National Agricultural Law Center’s webinar series. – Center Director Ross Pifer will present “Right to Repair and Agriculture” as part of the National Agricultural Law Center’s webinar series. More Infromation Here

2024 Pennsylvania Agricultural Law Symposium – The Center for Agricultural and Shale Law will host the 2024 Pennsylvania Agricultural Law Symposium in-person at Penn State Law, Lewis Katz Building in University Park, PA. This day-long symposium will offer 6 CLE credits for Pennsylvania-licensed attorneys.

Understanding the Basics of PA Food Establishments & Cottage Food Regulations – The Penn State Center for Agricultural and Shale Law, alongside the Pennsylvania Department of Agriculture’s (PDA) Agricultural Business Development Center (ABDC), will present the next webinar in the Understanding Agricultural Law educational series. More Information Here

Follow us on Twitter @AgShaleLaw—Top #ShaleLaw HotLinks 

DC Appeals Court Shoots Down White House’s Pipeline Safety Rules  (Hart Energy)

Baltimore sues shale producers in price-fixing class action in US court (Reuters)

US shale firms boost output goals on efficiency gains (Argus)

Federal court throws out parts of new pipeline safety rule because of faulty cost-benefit analyses (Oil and Gas Journal)

Fracking is being forced onto some Ohio property owners’ land: Here’s why it’s legal (ABC News)

Connect with us on Facebook.

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

Oil & Gas Law & Policy Resources:

Bibikos, At the Well Weekly (August 27, 2024)

Sartain, How Much “Climate Justice” Do We Need … How Much Can We Stand? (August 27, 2024)

Bloomberg, Oil Steadies After Technical Drop as US Stockpiles Seen Falling (August 28, 2024)

Bray, Poston, Climate Change Litigation Turns Toward Animal Agriculture (August 26, 2024)

Kay, Metzger, This Is How We Solve a Heat Crisis (Aug 30, 2024)

FEDERAL ACTIONS—EXECUTIVE & LEGISLATIVE

U.S. DEPARTMENT OF ENERGY PRESS RELEASES

DOE Report Shows Clean Energy Jobs Grew at More Than Twice the Rate of Overall U.S. Employment (August 28, 2024)

Biden-Harris Administration Announces Arizona’s Launch of First Phase of Federal Home Energy Rebates Program Helping Lower Families’ Utility Bills (August 29, 2024)

U.S. ENVIRONMENTAL PROTECTION AGENCY PRESS RELEASES

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

Environmental Protection Agency

89 FR 70177 Notice: “Use of Advanced and Emerging Technologies for Quantification of Annual Facility Methane Emissions Under the Greenhouse Gas Reporting Program” (August 29, 2024)

89 FR 68433 Notice: “Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Greenhouse Gas Reduction Fund Accomplishment Reporting” (August 26, 2024)

Federal Energy Regulatory Commission

89 FR 68891 Notice: “Gulfstream LNG Development, LLC; Notice of Scoping Period Requesting Comments on Environmental Issues for the Planned Gulfstream LNG Project and Notice of Public Scoping Sessions” (August 28, 2024)

Safety and Environmental Enforcement Bureau

89 FR 70664 Notice: “Agency Information Collection Activities; Oil and Gas Production Safety Systems” (August 30, 2024)

89 FR 71076 Notice: “Oil and Gas and Sulfur Operations in the Outer Continental Shelf-High Pressure High Temperature Updates” (August 30, 2024)

STATE ACTIONS—EXECUTIVE & LEGISLATIVE 

PENNSYLVANIA DEPT. OF ENVIRONMENTAL PROTECTION PRESS RELEASES

DEP to Hold a Public Conference on Proposed Land Use Change by RES Coal LLC on Mine Sites Located in Clearfield County (August 30, 2024)

PENNSYLVANIA EXECUTIVE AGENCIES (Pa. Bulletin Vol. 54, No. 35 – August 31, 2024)

Pennsylvania Public Utility Commission

[54 Pa.B. 5595]  “Natural Gas Service (August 31, 2024)

 

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