Articles, Alerts & Perspectives

The American Oil & Gas Reporter
(by Jean M. Mosites, Keith J. Coyle and Krista-Ann M. Staley)
PITTSBURGH–The Marcellus and Utica shale plays account for some 30 percent of total U.S. natural gas output, compared with only 3 percent a decade ago. The Appalachian Basin’s rapid growth in natural gas and natural gas liquids production has occurred despite relatively low natural gas prices, driven by greater well productivity from improved drilling and completion techniques, including longer laterals and optimized well spacing.
Additionally, infrastructure build-out in the region, including the development of significant interstate pipeline projects featuring large-scale transmission of natural gas and NGLs (such as the Rover, Nexus and Mariner East 1 projects), has allowed access to Northeast population centers to increase demand for Appalachian-derived natural gas resources. Continued innovations in the industry, such as improvements to water logistics, likely will be important to reduce operational costs and further improve efficiency to maintain growth.
While the industry continues forging ahead in the Marcellus, Utica and conventional Appalachian plays, the legal landscape continues to evolve with everchanging federal and state environmental and safety regulations, along with a variety of local government requirements across the basin. The federal and state courts, legislatures and regulatory agencies continue to address a variety of issues that affect all facets of oil and gas development in the multistate region.
These decisions and developments not only affect drilling and production, but also the midstream and transportation infrastructure that is so critical to Appalachian producers’ ability to market their production. This article summarizes developments in the legal and regulatory landscape facing oil and gas producers and midstream operators in the Appalachian Basin.
In October 2016, the Marcellus Shale Coalition filed a petition in the Pennsylvania Commonwealth Court challenging seven new provisions in 25 Pa. …

The PIOGA Press

(by Blaine A. Lucas and Robert Max Junker)

On October 26, the Pennsylvania Commonwealth Court published an en banc opinion in Frederick v. Allegheny Township Zoning Hearing Board, et al., No. 2295 C.D. 2015, 2018 WL 5303462 (Pa. Cmwlth. Oct. 26, 2018) rejecting a challenge to the validity of the Allegheny Township, Westmoreland County, zoning ordinance. The court addressed the contention of oil and gas industry opponents that an unconventional natural gas well pad can be permitted only in an industrial zoning district. After reviewing the detailed record developed in the substantive validity challenge decided by the township Zoning Hearing Board and addressing recent Pennsylvania Supreme Court decisions on shale gas drilling, the court in a 5-2 decision rejected this “one size fits all” proposition. It found that state law empowers municipalities to determine where well sites are appropriate and compatible with other land uses within their boundaries.

Background

In 2010, the township Board of Supervisors enacted a zoning ordinance amendment that allowed oil and gas well operations in all zoning districts as a use permitted “as of right,” provided the applicant satisfied numerous specified standards to protect the public health, safety, and welfare. A use permitted “as of right” requires administrative approval; it does not require public notice or a hearing.

In 2014, CNX Gas Company, LLC applied to the township for a zoning permit to develop an unconventional well pad (Porter Pad) in the R-2 Agricultural/Residential Zoning District and submitted all the information required by the 2010 ordinance. Once CNX received the zoning permit, three nearby individuals (the objectors) appealed to the board. They challenged the granting of the permit and raised a substantive validity challenge to the 2010 ordinance. …

The PIOGA Press

(by Lisa M. Bruderly and Gary E. Steinbauer)

Recent developments regarding two facets of Clean Water Act (CWA) regulation could affect natural gas pipeline siting/permitting and exploration and production activities in Pennsylvania and elsewhere. The first issue is the ongoing challenge to define “waters of the United States,” with the definition recently changing in Pennsylvania. The second issue is the concept of Clean Water Act liability extending to releases to ground water that eventually make their way to surface water (known as the “conduit” theory of liability).

Definition of “water of the United States”

It is widely known that in 2015 the Obama administration promulgated a new definition of the term “water of the United States” (WOTUS) in a rule commonly referred to as the Clean Water Rule (CWR). Industry and states promptly filed lawsuits challenging the CWR as an unlawful expansion of the types of waters subject to regulation under the CWA. Among other issues, the expanded definition increased the types of waters that were subject to U.S. Army Corps of Engineers and Environmental Protection Agency (EPA) jurisdiction. With the increased scope of federal jurisdiction, a pipeline project or exploration and production activities could impact a larger quantity of waters that were now considered to be regulated and require more complicated, costly and time-consuming permitting under Section 404 of the CWA. In some instances, a project could not be permitted due to the extent of impacts.

Almost immediately after the CWR was issued, lawsuits challenged it. Until 2018, the CWR was stayed (i.e., suspended) throughout the United States based on a nationwide injunction issued by the Sixth Circuit Court of Appeals. The nationwide judicial stay was lifted following a decision by the U.S. …

Insitute for Energy Law Oil & Gas E-Report

(by Jean M. Mosites)

On June 1, 2018, the Pennsylvania Supreme Court largely affirmed and partially vacated a November 8, 2016 temporary injunction granted to the Marcellus Shale Coalition (MSC) in its challenge to several new regulations that had been promulgated by the Pennsylvania Environmental Quality Board on October 8, 2016.

MSC had filed a Petition for Review of limited sections of the new Chapter 78a Regulations on October 13, 2016, seeking expedited relief in the form of a temporary injunction of the challenged regulations pending review and resolution on the merits.

For the full article, click here.

The PIOGA Press

(by Keith J. Coyle)

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is expected to finalize new regulations for issuing emergency orders in the coming weeks. The new regulations represent the culmination of a rulemaking process that PHMSA began two years ago during the final months of the Obama administration.

The Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act) gave PHMSA the authority to issue emergency orders if “an unsafe condition or practice, or a combination of unsafe conditions and practices, constitutes or is causing an imminent hazard[.]” 49 U.S.C. § 60117(o)(1). The PIPES Act directed PHMSA to establish temporary regulations for exercising that authority by no later than August 21, 2016, and final regulations by no later than March 19, 2017.

On October 14, 2016, PHMSA adopted temporary regulations for issuing emergency orders in an interim final rule. Federal agencies can adopt regulations in an interim final rule without providing the public with prior notice or the opportunity to comment, provided that good cause is shown under the Administrative Procedure Act. Stating the statutory deadline in the PIPES Act met the good cause standard, PHMSA established the temporary emergency order regulations as an interim final rule and provided a 60-day, post-publication comment period.

The temporary regulations set out the procedural requirements for issuing emergency orders and obtaining administrative review. Like the good cause exception in the Administrative Procedure Act, the PIPES Act authorizes PHMSA to issue an emergency order without providing prior notice or the opportunity for a hearing if an imminent hazard exists. PHMSA must consider certain factors before issuing an emergency order, and the order itself must contain specific information about the nature of the imminent hazard, the entities affected, the restrictions, prohibitions, or safety measures imposed, and the procedures for obtaining relief. …

Pratt’s Energy Law Report
(by James Curry, Keith J. Coyle, and Brianne K. Kurdock)
The Pipeline and Hazardous Materials Safety Administration recently published an advance notice of proposed rulemaking asking for public comment on whether the Agency should change its class location requirements for gas pipeline facilities. The authors of this article discuss the class location requirements, the notice of proposed rulemaking, and what’s next.
The Pipeline and Hazardous Materials Safety Administration (“PHMSA” or the “Agency”) has published an advance notice of proposed rulemaking (“ANPRM”) in the Federal Register asking for public comment on whether the Agency should change its class location requirements for gas pipeline facilities. Specifically, PHMSA sought comment on alternatives to pipe replacements driven by class location changes. Adopted nearly five decades ago, PHMSA’s class location requirements use population density and surrounding land uses to categorize the potential risk that gas pipeline facilities pose to public safety.
OVERVIEW
The Agency asked the public to comment on whether the class location requirements should be updated to account for recent developments in the pipeline industry, particularly the widespread use of integrity management (“IM”) principles and new technologies. The current regulations require operators to reduce pressure, replace pipe, or conduct hydrostatic pressure testing in response to class location changes, and PHMSA is considering whether other alternatives should be available. Comments were due to the Agency on or before October 1, 2018.
The ANPRM is PHMSA’s first new pipeline safety rulemaking proceeding in the Trump era. The Agency began examining the need to modernize the class location regulations several years ago in response to a mandate that Congress included in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, and PHMSA is framing the ANPRM as an extension of that earlier effort. …

PGHTECH FUSE

(by Justine Kasznica)

Mobility can be broadly defined as the movement of people, goods and information, and is consciously used here as a catchall term to describe a rapidly evolving ecosystem. Advancements in machine learning, artificial intelligence (AI), big data and connected systems (Internet of Things-IoT), applied against a backdrop of increased social and cultural acceptance of new technologies (such as autonomous systems, as well as enhanced capabilities of electric batteries and power/communications systems), as well as new economic models (such as the shared economy and Robot as a Services (RaaS) business models), have led to an unprecedented disruption of industries within the mobility ecosystem.

These industries range from automotive, rail, shipping, aviation industries to last-mile logistics and commercial space – essentially, any industry that builds or supports vehicles or systems that move on or through land, air, sea and space.

It is difficult to ignore the changing mobility landscape. For perspective, market forecasts predict that the IoT market alone will grow to $267 billion by 2020 and $640 Billion by 2022, and that as much as half of the IoT market will be attributable to spending on discrete manufacturing, transportation and logistics.

Despite these optimistic projections, full realization of the beneficial potential of this new era of mobility will be impossible unless industry participants give adequate priority and attention to critical policy issues related to system functionality/safety, data rights, security/rogue users, and product liability that, if left unaddressed, will become a barrier to widespread and sustainable adoption of these technologies. Specifically, industry participants should consider the following.

• System Functionality; Safety. “Is it safe?” This is the threshold question asked by those interacting with any autonomous or AI-enabled mobility technology. …