Author: Blank Rome LLP

It’s Catching On—Hydraulic Fracturing Is Not an Abnormally Dangerous Activity in Pennsylvania

Jeremy A. Mercer, Amy L. Barrette, and Elizabeth E. Klingensmith

Yes, a federal court made the determination in 2014 and 2015 that hydraulic fracturing associated with unconventional oil and gas development in Pennsylvania is not an abnormally dangerous activity that is subject to strict liability. See Ely v. Cabot Oil & Gas Corp., 38 F. Supp. 3d 518 (M.D. Pa. 2014) (Report & Recommendation issued in January; adopted in April); see also Kamuck v. Shell Energy Holdings GP, LLC, Civil No. 4:11-CV-1425, 2015 U.S. Dist. LEXIS 37538 (M.D. Pa. March 25, 2015) (concluding hydraulic fracturing is not abnormally dangerous or subject to strict liability). In the Ely decision, the court undertook an extensive review of the factual record developed after years of discovery and concluded that there simply was no support for a view that hydraulic fracturing was an abnormally dangerous activity. Now, a Pennsylvania appellate court has reached the same conclusion—twice. Continue reading “It’s Catching On—Hydraulic Fracturing Is Not an Abnormally Dangerous Activity in Pennsylvania”

FERC Slaps Down State Overreach on Federal Jurisdictional Pipelines—Now Congress Needs to Act, Too

Michael L. Krancer, Frederick M. Lowther, and Margaret Anne Hill

FERC issued a key and very welcome decision on September 15, 2017, when it held that New York, by its passive aggressive handling of a Clean Water Act (“CWA”) §401 certification, had waived its authority to issue the certification. FERC here slaps down on States treating CWA certifications as political footballs to veto pipeline infrastructure projects without regard to law or facts but on politics and pressure by ideological anti-natural gas interest groups. Continue reading “FERC Slaps Down State Overreach on Federal Jurisdictional Pipelines—Now Congress Needs to Act, Too”

Under Scrutiny: PA Superior Court Splits from Own Precedent and Allows Unilateral Oil & Gas Lease Severance in Montgomery

Jeremy A. Mercer

Lessees of oil and gas leases in Pennsylvania who have been assigned or are assigning less than all of the geologic strata under lease should give careful attention to whether those leases have been severed vertically by unilateral actions. A lease may not be held by production if that production is in a geologic strata not included in the assignment of rights. This article explains a recent decision on the issue.

By its 2-to-1 non-precedential decision that an oil and gas lease unilaterally can be severed horizontally and vertically, the Superior Court of Pennsylvania appears to have split from its own published precedent and created new law in Pennsylvania—leaving lessees in limbo, possibly giving unscrupulous lessors a unilateral tool to terminate oil and gas leases, and ultimately harming both lessors and lessees in the process. Continue reading “Under Scrutiny: PA Superior Court Splits from Own Precedent and Allows Unilateral Oil & Gas Lease Severance in Montgomery“

Not So Fast—Your Oil and Gas Lease Primary Term May Be Longer Than You Thought

Jeremy A. Mercer, Amy L. Barrette, and Elizabeth E. Klingensmith

Under Pennsylvania law, a defined primary term of an oil and gas lease may actually be longer than that stated term of year. In a September 12, 2017, unreported decision, the Pennsylvania Superior Court remanded a case to the trial court for consideration of whether a “limitation of forfeiture” provision, which required notice and opportunity to cure, extended the primary term by the length of the cure period. See L.D. Oil & Gas Enters., Inc. v. Loop, No. 1883 WDA 2016, 2017 WL 4001655 (Pa. Super. Ct. Sep. 12, 2017). In overturning the trial court’s grant of judgment on the pleadings to the lessor, the Superior Court returned the case to allow the trial court to take parol evidence of the impact of the “limitation of forfeiture” provision on the length of the primary term. Continue reading “Not So Fast—Your Oil and Gas Lease Primary Term May Be Longer Than You Thought”

Mountain Valley Pipeline: West Virginia Cements the Need for FERC and Congressional Action to Curb State Overreach on FERC Jurisdictional Pipelines

Michael L. Krancer, Frederick M. Lowther, and Margaret Anne Hill

As we have noted in our prior blog posts on the Constitution Pipeline and Millennium Valley Lateral projects, §401 of the Federal Clean Water Act has become a focal point in the growing efforts by States to exercise dominant authority over FERC jurisdictional pipelines. This time, the West Virginia Department of Environmental Protection (“WVDEP”) has taken the unprecedented step of actually revoking a §401 certification it had granted in March 2017 and then reaffirmed in May. This action by WVDEP may be the final straw in State authority to review FERC jurisdictional pipelines as FERC and the Congress will be energized to react to the oversteps by New York in Millennium and now West Virginia in Mountain Valley. Continue reading “Mountain Valley Pipeline: West Virginia Cements the Need for FERC and Congressional Action to Curb State Overreach on FERC Jurisdictional Pipelines”

Millennium’s Valley Lateral Project: Yet Another New York State Veto under the Clean Water Act

Frederick M. Lowther and Michael L. Krancer

On August 30, 2017, the New York State Department of Environmental Conservation (“NYSDEC”) issued a two-page letter (signed by the General Counsel of NYSDEC), which denies “conditionally” a water quality certification under §401 of the Federal Clean Water Act (“CWA”). As with the two prior denials (noted below), this denial has the effect of preventing construction of the eight-mile Valley Lateral Pipeline, which is part of the Millennium Pipeline intended to serve the 680 MW gas-fired CPV Valley Energy Center in Wayawanda, Orange County, NY, currently under construction. The “conditional” denial becomes unconditional in the event Federal Energy Regulatory Commission (“FERC”) does not grant NYSDEC’s petition to FERC filed last month to reconsider its approval of the line in light of “new law,” namely the recent D.C. Circuit decision Sierra Club v. FERC, 2017 WL 3597014 (D.C. Cir., August 22, 2017) (“Sierra Club”). Continue reading “Millennium’s Valley Lateral Project: Yet Another New York State Veto under the Clean Water Act”

D.C. Circuit Significantly Expands the Scope of FERC Pipeline Reviews

Frederick M. Lowther and Frank L. Tamulonis III

In an abrupt departure from long-standing precedent, the D.C. Circuit ruled on August 22, 2017 that, in approving a natural gas pipeline project, the Federal Energy Regulatory Commission (“FERC”) failed to consider potential “downstream” greenhouse gas emissions from power plants burning natural gas supplied by the pipeline when preparing an environmental impact statement (“EIS”) pursuant to the National Environmental Policy Act (“NEPA”). Continue reading “D.C. Circuit Significantly Expands the Scope of FERC Pipeline Reviews”

New PA DEP Data Confirms That Methane Emissions Continue to Plummet from Unconventional Natural Gas Production in Pennsylvania

Michael L. Krancer

Pennsylvania DEP’s 2015 Air Emissions Inventory for Unconventional Natural Gas Operations is out. It was released late in the day on Thursday before the Labor Day weekend so there will be a lot of “debrief” as time goes on. But here is an early take. Continue reading “New PA DEP Data Confirms That Methane Emissions Continue to Plummet from Unconventional Natural Gas Production in Pennsylvania”

CONSTITUTION PIPELINE: The 2d Circuit Reaffirms a State’s Right to Veto a FERC-Approved Interstate Pipeline Project

Frederick M. Lowther

On August 18, 2017, the U.S. Court of Appeals for the Second Circuit issued a long-awaited decision in Constitution Pipeline Company LLC v. New York State Department of Environmental Conservation et al., Docket No. 16-1568 (“Constitution”). At issue—once again—was whether a single State (in this case, New York) has the power under §401 of the Federal Clean Water Act, 33 U.S.C. §1341 (“CWA”), to deny a water quality certification for an interstate pipeline previously certificated by the Federal Energy Regulatory Commission (“FERC”), when the effect of the denial is to veto a pipeline project that would serve multiple States. In 2008, the 2d Circuit determined that such a veto power exists. Islander East Pipeline Co. v. McCarthy, 525 F.3d 141 (2d Cir, 2008) (“Islander East”). Although the factual situation in Constitution differs in some respects (noted below) from that in Islander East, the end result is the same: if a State determines that a FERC-approved pipeline is not consistent with its water quality standards approved by the Environmental Protection Agency, and the Court finds (as it did here) that the determination was not arbitrary and capricious (i.e., is supported by “sufficient evidence to provide rational support” for the denial, Constitution, sl. op. at 24), the federally-approved interstate pipeline cannot proceed. Continue reading “CONSTITUTION PIPELINE: The 2d Circuit Reaffirms a State’s Right to Veto a FERC-Approved Interstate Pipeline Project”

FERC Gets Quorum and New Acting Chairman

Joseph McMonigle

First business meeting set for September 20. NEXUS Natural Gas Pipeline leads the list of backlog of projects awaiting approvals.

New FERC Commissioner Robert Powelson, formerly of the Pennsylvania Utility Commission and former President of NARUC, was sworn last Thursday, giving the Commission a quorum for the first time in six months.

Continue reading “FERC Gets Quorum and New Acting Chairman”