First Installment of Quadrennial Energy Review Recommends Investment in Energy Infrastructure

The White House recently released a report from the first Quadrennial Energy Review (QER), focusing on U.S. energy transmission, storage and distribution infrastructure.  In January 2014, President Obama directed the administration to conduct the QER as part of his Climate Action Plan, in order to provide a “multi-year roadmap for U.S. energy policy”.  This first QER report includes a recommendation for the U.S. to invest in the modernization of its aging energy infrastructure, including accelerating pipeline replacement and the maintenance of natural gas distribution systems.  The QER report indicates that such investments will increase the safety, security, resiliency and reliability of the U.S. energy infrastructure while promoting economic, consumer service, climate protection and system reliability benefits.

Pennsylvania DEP Releases 2013 Emissions Inventory for Natural Gas Industry

Earlier this week the Pennsylvania Department of Environmental Protection (DEP) released the 2013 air emissions inventory for the natural gas industry.  Operators submit emissions data to DEP on an annual basis.  Compared to 2012, the 2013 inventory includes data from 1,590 additional well sites and 33 additional midstream facilities.  Despite an increase in the number of facilities reporting emissions data, the 2013 inventory shows a decrease in methane and carbon monoxide emissions compared to 2012.  The 2013 inventory also shows increased emissions of nitrogen oxides, particulate matter, sulfur dioxide and volatile organic compounds.

Ohio Appeals Court Reaffirms Decision in Hupp v. Beck Energy Corp.

The Seventh District Court of Appeals has reaffirmed its prior decision in Hupp v. Beck Energy Corp. In Belmont Hills Country Club v. Beck Energy Corp. and Bentley v. Beck Energy Corp., the appeals court relied on Hupp in holding that a conditional secondary term does not make a lease perpetual in nature and that the lease at issue contained an express waiver of implied covenants of reasonable development. Further, a lease that allows production in paying quantities to be determined “in the judgment of the lessee” does not create a perpetual because courts impose a good faith standard on the paying quantities determination. The court also held that the delay rental provision did not allow the lease to be held in perpetuity by making nominal payments.

CONSOL Energy Earns CSSD Certification For Appalachian Basin Operations

The Center for Sustainable Shale Development (CSSD), a collaborative of environmental organizations and energy companies that encourages responsible practices in development of shale gas resources in the Appalachian region, and CONSOL Energy, Inc. each announced the certification of CONSOL Energy’s Appalachian Basin operations.  In order to be certified, CONSOL had to show that it met CSSD’s 15 Performance Standards by meeting or exceeding state and federal air and water management regulatory requirements.  CONSOL joins Royal Dutch Shell and Chevron Corp. as the third natural gas producer to earn the certification.

EPA Proposes Prohibition on Discharge of Unconventional Wastewater to POTWs

Today the U.S. Environmental Protection Agency (EPA) published a proposed rule under the Clean Water Act that would prohibit the discharge of unconventional oil and gas extraction wastewaters to publicly owned treatment works (POTWs).  The rule would apply to wastewater associated with production, field exploration, drilling, well completion and well treatment for unconventional operations, but would not apply to wastewater produced by conventional operations.  According to EPA, the industry does not currently discharge unconventional wastewater to POTWs and this rule “will ensure that such current industry best practice is maintained over time.”  The rule would be immediately effective on the date of publication of the final rule.  Comments on the proposed rule must be received on or before June 8, 2015.

Clean Water Act Jurisdiction Rule Sent to White House for Review

This week the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) announced that they have submitted to the White House Office of Management and Budget (OMB) a joint final rule aimed at clarifying which water bodies are subject to Federal jurisdiction under the Clean Water Act.  On April 6, 2015, the agencies announced on an EPA blog that the draft final rule was recently submitted to OMB for interagency review.  EPA and the Corps published their initial rulemaking proposal in early 2014 and reportedly received more than one million stakeholder comments since then.  Interagency review of a final draft rule is generally considered the last step in the federal rulemaking process.

Constitution Pipeline Can Be Built Across Holdout Properties

FuelFix.com reports that the U.S. District Court for the Middle District of Pennsylvania recently ruled that the Constitution Pipeline can be built across seven northeastern Pennsylvania properties despite the fact that the respective landowners had not agreed to the construction.  The Constitution Pipeline is a 124-mile pipeline project designed to transport Marcellus Shale gas from Pennsylvania to New York and New England.  It would connect with the existing Tennessee and Iroquois pipelines in New York.  Its partner companies, including Williams Partners LP and Cabot Oil & Gas Corp., sought access to 130 properties in Pennsylvania and filed condemnation proceedings regarding 20.  Agreements were reached with 13 of the 20 landowners.  Judge Malachy Mannion ruled that the pipeline has the necessary permits from the Federal Energy Regulatory Commission, and that it serves the public interest by increasing gas pipeline capacity.  Judge Mannion also noted that the landowners stood to gain adequate compensation from the pipeline’s owners.  A spokesman for Williams stated that the group hopes to begin construction by June 1st after obtaining additional permits and posting the necessary bond.

BLM Announces Final Rule for Hydraulic Fracturing on Federal and Indian Lands

Today the U.S. Department of the Interior, Bureau of Land Management (BLM) announced the release of a highly-anticipated final rule addressing hydraulic fracturing on millions of acres of Federal and Indian lands.  According to BLM, there are more than 100,000 oil and gas wells on federally-managed lands, and more than 90 percent of wells currently being drilled use hydraulic fracturing.  This rulemaking supplements existing BLM requirements for oil and gas operations and now requires, for example, the disclosure of hydraulic fracturing fluid information within 30 days  of completing fracturing operations for each well.  The agency reportedly received more than 1.5 million public comments during the rulemaking process.  The final rule will be effective 90 days after it is published in the Federal Register.

Third Circuit Affirms Decision to Dismiss Doctor’s Act 13 Challenge

In a recent non-precedential opinion, the Third Circuit affirmed a decision of the Middle District of Pennsylvania dismissing an action on the basis that a doctor lacked standing to challenge what he refers to as the “Medical Gag Rules” of Act 13.  In Rodriguez v. Secretary of Pennsylvania Department of Environmental Protection, the plaintiff, a doctor specializing in the treatment of renal diseases, hypertension and advanced diabetes, asserted he is unable to obtain critical information about the quality of local water.  Specifically, he claimed that he needed the information to properly diagnose and treat patients whose illnesses or medical conditions allegedly resulted from contact with environmental contaminants.  He therefore challenged Section 3222.1 of Act 13, which provides two mechanisms for health professionals to learn proprietary information about the chemicals used in hydraulic fracturing—one for medical emergencies and one for non-emergency situations.  Dr. Rodriguez argued Act 13′s non-emergency provision, which requires a written statement and the execution of a confidentiality agreement, impermissibly restricts his speech and is unconstitutionally vague and overbroad.

The Middle District of Pennsylvania held that Dr. Rodriguez’s alleged injury was too speculative to satisfy the requirements of standing under Article III of the U.S. Constitution.  In this regard, Dr. Rodriguez did not allege that he had ever been in a situation where he needed or attempted to obtain such information, or that he had ever been forced to sign a confidentiality agreement under Act 13.  In short, he never suffered an injury-in-fact.

On appeal, the Third Circuit agreed with the District Court, holding that it was insufficient for Dr. Rodriguez to rely on “naked assertions devoid of further factual enhancement.”  Rather, he must allege that he suffered an invasion of an interest that is actual or imminent, not conjectural.  The Third Circuit also distinguished Dr. Rodriguez’s reliance upon the Supreme Court of Pennsylvania’s 2013 opinion in Robinson Twp., Washington Cty. v. Com.  The court ruled that Dr. Rodriguez’s reliance on Pennsylvania law as authority regarding federal standing requirements was misplaced.

 

 

Ohio Trial Court Rejects Local Drilling Ban

Relying on the recent authority in State ex rel. Morrison v. Beck Energy Corp., the Cuyahoga County Common Pleas Court struck down a local Ohio drilling ban. In Bass Energy, Inc. v. City of Broadview Heights, the court held that a charter amendment prohibiting new oil and gas drilling was in conflict with Ohio’s comprehensive statutes regulating oil and gas drilling. Because the local ban conflicted with the statewide regulatory scheme, it did not meet the requirements of Ohio’s Home Rule Amendment and was ruled to be unenforceable. The court specifically stated that the charter amendment was an invalid exercise of Broadview Heights’ home rule authority.