Category: Energy

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By its 2-to-1 non-precedential decision that an oil and gas lease unilaterally can be severed horizontally and vertically, the Superior Court of Pennsylvania appears to have split from its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”

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”

You Made Your Bed, Now Lie in It: Samson Exploration, LLC v. T.S. Reed Properties, Inc.

Liz E. Klingensmith, Jeremy A. Mercer, Amy L. Barrette

In Samson Exploration, LLC v. T.S. Reed Properties, Inc., the Texas Supreme Court affirmed the decision by the Ninth Court of Appeals siding with royalty owners in concluding that the operator of a well within two overlapping units had to pay twice.

Samson’s leases contractually authorized unilateral pooling. Samson created Unit 1, which had boundaries of 6,000 to 13,800 feet subsurface, and obtained production from two wells within Unit 1’s boundaries, Well No. 1 and Well No. 2. Well No. 1 produced from 12,304 feet to 12,332 feet subsurface. Well No. 2 produced from 13,150 to 13,176 feet. Samson then unilaterally amended Unit 1 to reduce the surface acreage and change the depth to 12,400 feet subsurface and below (the “Amended Unit”). No production from Well No. 1 was attributed to the Amended Unit. Continue reading “You Made Your Bed, Now Lie in It: Samson Exploration, LLC v. T.S. Reed Properties, Inc.“

Blank Rome Launches Energy and Environmental Blog

Margaret A. Hill and Kevin J. Bruno

We are pleased to announce the launch of our new blog, Energy and Environmental Trends Watch, which will provide insight and analysis on the latest developments in energy and environmental law.

“Energy and environmental law are two of the most demanding practice areas for attorneys and clients due to nonstop developments in the energy industry and environmental activism,” said Margaret A. Hill, co-chair of the Firm’s Energy, Environment, and Mass Torts practice group. “Although the ever-changing landscape can be difficult to monitor, our seasoned attorneys have the necessary depth and knowledge to identify issues and cases in our blog that will enable you to better understand significant developments in these industries.”

“There is no question that we live in interesting, yet challenging, times in the energy space and our environmental regulatory scheme,” added Kevin J. Bruno, co-chair of the Firm’s Energy, Environment, and Mass Torts practice group. “We hope our blog can be a useful tool for our clients in being made aware of and understanding the latest trends in these areas.”

Our Energy and Environmental Capabilities
Blank Rome’s energy practice offers a full range of energy industry-specific services. With more than 60 attorneys practicing across the United States, the group provides strategic and forward-looking insight into an ever-evolving industry while also understanding the unique business concerns of our clients. Likewise, Blank Rome’s nationally recognized environmental practice covers every substantive area of environmental law. The group provides counsel to clients in every major business sector, municipal and county governments, and redevelopment authorities. Both groups are comprised of attorneys who bring a wealth of experience from diverse backgrounds in industry and government. The teams include former U.S. Secretary of Energy, former trial attorneys from the Department of Justice, former officials of the Environmental Protection Agency, and former assistant United States attorneys.

For more information, please contact us or visit Blank Rome’s Energy or Environmental practice pages. 

Robinson Rejected: Zoning Ordinance Permitting Oil and Gas Development in Residential-Agricultural Districts Is Constitutional

Jeremy A. Mercer, Margaret Anne Hill, and Frank L. Tamulonis III

Consistent with a line of recent Commonwealth Court decisions, the Commonwealth Court once again held that a township did not violate the Pennsylvania Constitution by passing an ordinance that allowed oil and gas development in various zoning districts, including residential-agricultural (R-A) districts. In Delaware Riverkeeper Network, et al. v. Middlesex Township Zoning Hearing Board, 2017 Pa. Commw. Unpub. LEXIS 415 (Pa. Cmwlth. June 7, 2017), the Court upheld an ordinance and the zoning hearing board’s approval of an oil and gas permit in an R-A district over the objections of numerous entities, including the Clean Air Council (“CAC”) and the Delaware Riverkeeper Network (“Riverkeepers”), who claimed that the township and/or board actions violated several provisions of the Pennsylvania Constitution. Continue reading “Robinson Rejected: Zoning Ordinance Permitting Oil and Gas Development in Residential-Agricultural Districts Is Constitutional”

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