PA Bill Would Permit Severance Tax Without Repealing Impact Fee

On August 25th, Rep. White (D-Allegheny, Beaver and Washington) introduced House Bill 2403 (2014) in order to repeal Section 2318 of Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes.  Section 2318 provides that upon the imposition of a severance tax on unconventional gas wells in the Commonwealth of Pennsylvania, the Secretary of the Commonwealth shall submit for publication a notice of the imposition of the severance tax and that Chapter 23 (Unconventional Gas Well Fee) shall expire upon the publication of the notice.  Repealing Section 2318 would allow a severance tax and the impact fee to co-exist.

West Virginia Officials Seeking Bids to Drill Under Ohio River

As reported by the West Virginia Press Association, the West Virginia Division of Natural Resources (“DNR”) is seeking bids for natural gas drilling on state-owned land under the Ohio River. A legal notice published on Friday, August 22 indicates that the DNR intends to grant leasing rights to drill under the river in Marshall, Wetzel and Pleasants counties. The notice further states that applications to bid on these rights must be submitted by the September 11 deadline.

Oil And Gas Bringing People And Jobs To The Region

Thanks in large part to the oil and gas industry, western Pennsylvania is experiencing a boom in job growth which is bringing young and talented individuals to the region.  According to the U.S. Bureau of Labor Statistics, Pennsylvania’s oil and natural gas industry employment between 2007 and 2012 increased by 259.3% – accounting for almost 245,000 jobs in Pennsylvania.  Of the new hires working in the industry, 96% are from Pennsylvania or an adjacent state.  The Young Adults report from PittsburghTODAY notes that roughly 70% of the people moving to Pittsburgh from larger cities are under the age of 35.  According to the Department of Labor and Industry, the average wage in the shale industry is nearly $90,000 – almost $41,000 greater than most other industries.  A 2014 PNC Financial Services report states that this economic growth can continue to increase in the coming decades.

Indian Firm Plans To Export Ethane From Marcellus Shale Fields

According to the Tribune Review, Reliance Industries, an Indian conglomerate with ties to the Marcellus Shale, plans to ship 1.5 million tons of ethane annually from the United States. Reliance has invested with Carrizo Oil and Gas Inc. and Chevron in the region, but the company’s spokesperson did not identify which shale sources will provide the ethane for shipment. According to the report, the announcement has sparked interest and potential competition for supplies with plants under consideration in the region.

Four Veteran West Virginia Attorneys Join Babst Calland’s Charleston Office as Shareholders

Veteran attorneys Timothy Miller from Robinson & McElwee, and Christopher ‘Kip” Power, Mychal Schulz and Robert Stonestreet from the Charleston office of Dinsmore & Shohl have joined forces with Babst Calland in providing senior-level legal counsel in key practice areas including environmental, litigation and employment.  The addition of the new attorneys and staff will double the size of Babst Calland’s Charleston office which opened in 2011.  For more information, please visit the firm’s website.

Kiskiminetas Township Approves Oil and Gas Ordinance

The Pittsburgh Tribune-Review reports that the Kiskiminetas Township supervisors unanimously enacted an ordinance that will allow for oil and natural gas exploration.  The ordinance allows for “reasonable development of land for oil and gas drilling while providing adequate health, safety and general welfare protections of the township’s residents.”  It includes restrictions for noise, traffic and setbacks, among other things.

Pennsylvania’s Natural Gas Production Hits New High in First Half of Year

As reported in the Pittsburgh Business Times, Pennsylvania’s reported natural gas production in the first six months of 2014 reached 1.9 trillion cubic feet.  Production is up from 1.7 trillion cubic feet reported over the second half of 2013 and 1.4 trillion over the first half of 2013.  The largest contributors to the gas production increase are wells located in Greene and Washington counties. 

Public Utility Commission Appeals Act 13 Ruling

The Pennsylvania Public Utility Commission appealed the Commonwealth Court’s July 17, 2014 Opinion and Order in the Act 13 case, which resolved a number of issues remanded by the Supreme Court.

Review Babst Calland’s Administrative Watches for in-depth analyses of the July 17, 2014 Commonwealth Court decision and December 19, 2013 Supreme Court decision.

Proposed PA Legislation Seeks to Require Use of Steel Products Produced in U.S.

Two pieces of proposed legislation were introduced to the Pennsylvania Senate on Thursday, July 31. Each has been referred to the Senate Environmental Resources and Energy Committee. Senate Bill 1458, if passed, would amend Title 58 by requiring that steel casings (or other steel safety devices) used in in the drilling of an oil or gas well only use steel products produced in the United States. Senate Bill 1460, provides that products containing both foreign and United States steel shall be determined to be a United States steel product if at least 75% of the cost of the articles, materials and supplies have been mined, produced or manufactured in the United States.

Ohio Supreme Court Accepts Dormant Mineral Act Case

The Ohio Supreme Court will review a key question of state law concerning application of the Dormant Mineral Act (“DMA”). In Corban v. Chesapeake Exploration, LLC, the United States District Court for the Southern District of Ohio certified the following questions to the Ohio Supreme Court for review:

(1) Does the 2006 version or the 1989 version of the DMA apply to claims asserted after 2006 alleging that the rights to oil, gas, and other minerals automatically vested in the surface land holder prior to the 2006 amendments as a result of abandonment?

(2) Is the payment of a delay rental during the primary term of an oil and gas lease a title transaction and “savings event” under the DMA?

The question of whether the 1989 or 2006 version of the DMA applies to current disputes concerning ownership of mineral rights has been the subject of numerous lawsuits throughout eastern Ohio. Trial courts have reached varying conclusions, but the Seventh District Court of Appeals recently ruled that the 1989 version is self-executing and can still be relied upon. A decision from the Ohio Supreme Court will presumably resolve this unsettled issue of law.