Constitution Pipeline Can Be Built Across Holdout Properties 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In a recent non-precedential opinion, the Third Circuit affirmed a decision of the Middle District of Pennsylvania dismissing an action on the basis that a doctor lacked standing to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.

West Virginia Fair Pooling Bill Defeated on Last Day of Legislative Session

On Saturday, March 14, 2015, the last day of the West Virginia legislative session, the Fair Pooling bill (H.B. 2688) was defeated by a tie vote in the West Virginia House of Delegates.  The Fair Pooling bill, which we first discussed two weeks ago, was passed initially in the House of Delegates by a vote of 60-40.  The Senate subsequently passed an amended version of the bill early on Saturday morning before sending the bill back to the House of Delegates for approval.  However, by a tie vote of 49-49, the House of Delegates ultimately voted to reject the Fair Pooling bill in the final hours of the 2015 legislative session.

Tioga County, PA Utica Well Shows Strong Production

Business Wire reports that Seneca Resources Corporation (“Seneca”) announced the initial production results from its recently completed well producing from the Utica shale formation in Tioga County, Pennsylvania.  The well’s 24-hour peak production rate was 22.7 million cubic feet of natural gas per day.  According to Seneca’s President, Ronald J. Tanski, the well’s production reports, along with others in the area, lower the risk of the Utica potential in Seneca’s DCNR 007 tract where the well is located.  Tanski also estimated the resource potential for the DCNR 007 tract to be approximately 1 trillion cubic feet.  Seneca plans to drill another Utica exploration well in 2016.

Marcellus Shale Coalition Releases Statement On PA Governor Wolf’s Budget Proposal

During his March 3, 2015 budget address, Pennsylvania Governor Tom Wolf again proposed higher energy taxes.  In response, the Marcellus Shale Coalition issued a statement, reiterating the vast benefits that have been realized by the Commonwealth as a result of natural gas development, including job creation and tax revenue.  According to MSC President Dave Spigelmyer, the proposed budget “would undercut Pennsylvania’s positioning in the global fight to attract capital investments and stunt this economic momentum rather than fully capitalize on it.”  Spigelmyer also stressed the concerns shared by small businesses, labor unions and local governments alike that higher energy taxes could result in job losses and revenue losses.  In light of the fact that Pennsylvania voters overwhelmingly support policies that lead to the creation of affordable energy supplies and local jobs, the MSC stated that it will continue to collaborate with Governor Wolf and the General Assembly to help advance policies that seek to grow and expand opportunity.

West Virginia House Approves Fair Pooling Bill

The West Virginia Fair Pooling bill, which we first described last week, has been approved in the West Virginia House of Delegates by a vote of 60-40.  In order to become law, the bill must be approved by the State Senate before March 14, when the legislative session ends.  Governor Tomblin of West Virginia must then sign the bill in order for it to become law.

EIA Reports on Natural Gas Storage Capacity

The U. S. Energy Information Administration (EIA) recently released a report indicating that the overall natural gas storage capacity in the lower 48 states was relatively unchanged between November 2013 and November 2014.  The EIA measures natural gas storage capacity in November of each year, at a time when it is typical for storage withdrawals to begin exceeding storage injections.  Looking at levels by region, the report indicates that storage capacity fell slightly in the East between November 2013 and November 2014.

Pennsylvania Natural Gas Operator Prevails in Air Aggregation Case

Earlier this week, the U.S. District Court for the Middle District of Pennsylvania granted a motion for summary judgment in favor of a natural gas operator in a closely-watched case involving air aggregation issues.  In 2011, Citizens for Pennsylvania’s Future (PennFuture) filed suit alleging that Ultra Resources, Inc. (Ultra) constructed a major source of nitrogen oxides (NOx) without the appropriate New Source Review (NSR) permit.  The case involved eight compressor stations in Tioga and Potter counties for which Ultra had obtained separate authorizations from the Pennsylvania Department of Environmental Protection (DEP) to use the General Plan Approval/General Operating Permit known as “GP-5″.  PennFuture viewed the compressor stations as functionally interrelated, operating in concert with a metering station as a single facility with potential NOx emissions in excess of the NSR major source threshold, thereby subjecting Ultra to heightened permitting requirements.

In granting Ultra’s motion for summary judgment, the District Court concluded that Ultra’s compressor stations did not constitute a single facility.  The regulatory definition of a single facility requires, in relevant part, that sources be “located on one or more contiguous or adjacent properties” in order to be aggregated into a single facility.  The central issue in this case was whether Ultra’s compressor stations are on “adjacent” properties.

The District Court found that Ultra’s compressor stations are not on “adjacent” properties under either the distance-based, plain meaning approach advocated by Ultra, or the functional relationship theory put forth by PennFuture.  According to the District Court, the stipulated facts showed that the compressor stations are not “sufficiently close to, or near enough, each other to be considered adjacent.”  Also, with respect to functional relationship, the District Court found no unique facts suggesting that Ultra’s emission sources were “unusual or outside of the normal oil and gas configurations and arrangements contemplated by [DEP].”

Although the District Court concluded that “the plain meaning of ‘contiguous’ and ‘adjacent’ should control a determination of whether two or more facilities should be aggregated,” it specifically “decline[d] to hold that functional interrelatedness can never lead to, or contribute to, a finding of contiguousness or adjacency.”  Read our Administrative Watch for additional information regarding the District Court decision in Citizens for Pennsylvania’s Future v. Ultra Resources, Inc.