North America Shale Blog

North America Shale Blog

Pennsylvania Township Moves to Revive an Ordinance Banning Disposal of Wastewater from Hydraulic Fracturing Activities, After Federal Court Ruling Invalidated It

Posted in Hydraulic Fracturing, Pennsylvania

Shale gas

On October 26, 2015, Grant Township, Pennsylvania, filed a Motion for Reconsideration of  Western District of Pennsylvania District Court Magistrate Judge Susan Baxter’s October 14, 2015, ruling invalidating several elements of the township’s ordinance (the “Ordinance”).

On June 3, 2014, Grant Township adopted the Ordinance, which attempted to establish a “Community Bill of Rights for the people of Grant Township.” Doc. 113 (Memorandum Opinion) at 1. This Ordinance set forth “the framers’ beliefs that corporations should not have more rights than the people of its community and that the people have the right to regulate all activities pursuant to a right of local self government.” Id. at 2-3.

It also specifically proscribed numerous activities, including banning the disposal of wastewater from hydraulic fracturing activities, as well as prohibiting the right to challenge the Ordinance in court. Id. at 3. Continue Reading

Texas Supreme Court to Decide Whether Groundwater Estate Should Be Granted Accommodation Status Similar to Mineral Estate

Posted in Groundwater, Texas

TexasOn October 14, 2015, the Texas Supreme Court heard argument in a case styled Coyote Lake Ranch, LLC v. The City of Lubbock, which dealt with the question of whether the accommodation doctrine should apply when a groundwater estate has been severed from the surface estate. Coyote Lake Ranch, LLC owns a ranch in West Texas, near the New Mexico border. In 1953, the prior owner of the ranch conveyed some of the groundwater rights underneath the ranch to the City of Lubbock. The City of Lubbock recently released plans to develop approximately 80 additional municipal wells across the ranch. Coyote Lake argued that the city’s development of additional wells would cause surface erosion and affect the ranch’s ecosystem. Coyote Lake and Lubbock did not dispute that the groundwater purchase contract allowed Lubbock to use the ranch’s surface to develop wells to extract the groundwater, but disagreed regarding whether the city is bound by the same rule that governs mineral owners—the duty to reasonably accommodate existing surface uses whenever possible. Continue Reading

Pennsylvania Court Holds Oil and Gas Reservations Do Not Terminate Upon Expiration of Lease

Posted in Pennsylvania

Operating oil and gas well

On Friday, October 9, 2015, a three-judge panel of the Pennsylvania Superior Court held that a reservation of oil, gas and mineral rights in a deed does not terminate merely because the lease under which those rights were previously leased has expired. Rather, specific language is required in order to release oil, gas and mineral rights reserved by the grantor in a deed.

In Wright v. Misty Mountain Farm LLC, 2015 PA Super 218, Patricia Wright appealed an order granting summary judgment in favor of Misty Mountain Farm LLC, and the Superior Court affirmed the trial court’s decision. Patricia Wright had sought declaratory judgment that Misty Mountain Farm LLC has no ownership rights in the oil, gas or minerals beneath the surface of certain real property now owned by Ms. Wright, but the trial court ruled in favor of Misty Mountain Farm LLC.

In 1950, the property in question was conveyed by deed from Fred and Jeanetta Buck to Robert and Marjorie Wright. However, the Bucks reserved and excepted “all rights in oil, gas and minerals on the property” from this conveyance. The oil and gas rights had previously been leased by the Bucks under a lease that appears to have expired in or around 1971. Also in 1971, Robert and Marjorie Wright leased the property and the oil and gas rights, and in 1988 conveyed by deed both the land and oil and gas rights to David and Patricia Wright. David and Patricia Wright leased the land and subsurface rights in 2001 and again in 2005. The present dispute arose in 2010, when Shirley Matthews, administratrix of the estate of Jeanetta Buck conveyed the subsurface rights to Misty Mountain Farm LLC.

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BOEM’s “Proposed Guidance” Shakes Up the Agency’s Supplemental Bonding Requirements

Posted in Pipeline

Row of floating wind turbines during hazy day.

The Bureau of Ocean Energy Management (“BOEM”) has backed away from its proposed rulemaking regarding financial assurance requirements for the Outer Continental Shelf (“OCS”). On August 19, 2014, BOEM published an Advance Notice of Proposed Rulemaking (“ANPR”) seeking input on “risk management, financial assurance, and loss prevention,” all designed to overhaul the agency’s method of determining how much money a company must pledge or tie up to ensure compliance with financial and performance obligations arising from an offshore lease.

Even after it published the ANPR, the agency warned it would issue a new Notice to Lessees (“NTL”) in the interim while the rulemaking was pending. Now, the agency has confirmed its intent to modify its financial assurance criteria – but it apparently no longer intends to do so through a rulemaking. This means that new regulations will be issued through a revised NTL, without any corresponding changes to the Code of Federal Regulations. This allows the agency to tighten the screws on industry without implementing any of the other industry-recommended improvements. Continue Reading

Federal Judge Grants Preliminary Injunction Blocking Enforcement of New BLM Hydraulic Fracturing Rules

Posted in Hydraulic Fracturing, U.S. Bureau of Land Management

Natural_Gas_Drilling_Rig_PeekingOn September 30, 2015, the U.S. District Court for the District of Wyoming granted a motion for a preliminary injunction preventing enforcement of the U.S. Bureau of Land Management’s (BLM) recently issued hydraulic fracturing rule. BLM issued the rule in March, attempting to exert jurisdiction over hydraulic fracturing on federal and Indian lands. But the district court’s decision prohibits the BLM from implementing the new rule while litigation over the rule’s legality is pending.

The lawsuit, filed shortly after BLM issued the hydraulic fracturing rule, was originally brought by the Independent Petroleum Association of America (IPAA) and the Western Energy Alliance (the Alliance) in the U.S. District Court for the District of Wyoming. The lawsuit now includes challenges from four states—Wyoming, North Dakota, Colorado, and Utah—and the Ute Indian Tribe. Continue Reading

Migratory Bird Treaty Act: Question Of Unintentional “Take” Primed For Potential Fifth Circuit En Banc Or Supreme Court Review

Posted in Uncategorized
obrecht 1

Photo Courtesy of the U.S. Fish & Wildlife Service

Recently, industry won a major legal victory regarding liability—or lack thereof—for unintentional and indirect bird deaths under the Migratory Bird Treaty Act (MBTA). Unfortunately, that victory could be short lived, depending on the results of the rehearing and appeals process.

At first read, the MBTA’s statutory language seemingly subjects companies to criminal liability for any bird that may die in or around industrial operations. MBTA liability not only extends to typical industrial operations—wind farms, wastewater ponds, oil and gas equipment, transmission lines, logging, communication towers, etc.—but could also extend to absurd results such as criminal prosecutions for building owners or even house-cat owners. Continue Reading

Pennsylvania Appeals Court Reverses Lower Court Decision and Allows a Natural Gas Well Project to Proceed in a Residential Neighborhood

Posted in Natural Gas, Pennsylvania

On September 9, 2015, Judge Mary Leavitt of the Commonwealth Court of Pennsylvania reversed the Court of Common Pleas of Lycoming County’s ruling, which had set aside the Board of Supervisors of Fairfield Township’s (the “Board”) grant of a conditional use permit to Inflection Energy LLC for the construction and operation of a natural gas well.

Inflection Energy applied to the Board, which acts as a zoning hearing board, in 2013 for a permit to build a natural gas well pad on property owned by David and Eleanor Shaheen. The site in question was in a region of the township designated as a “Residential Agriculture” district under the township’s zoning ordinance. After public hearings and the imposition of certain restrictions, the township board approved the conditional use permit. Continue Reading

North Dakota Saltwater Disposal Enforcement Actions Highlight Key Legal and Social License Risks

Posted in North Dakota, Oil and Gas

Wastewater treatment - 165476814Spills or improper disposal of oilfield produced water—which can be more than 10 times saltier than seawater and may also contain heavy metals and other chemicals—can turn even staunchly pro-oil and gas residents against drilling in their area.[1] Improper disposal and spills also can attract serious civil, and in some cases, criminal penalties. Several recent enforcement actions by state and federal authorities in North Dakota suggest a more aggressive regulatory stance toward oil and gas activities that the government believes could threaten groundwater supplies. Continue Reading

Birds of a Feather? Greater Sage-Grouse Decision Shows That Conservation and Energy Development Can Flock Together

Posted in Oil and Gas

On September 22, energy developers in the West breathed a sigh of relief when the U.S. Fish and Wildlife Service (FWS) announced that the greater sage-grouse does not require protection under the Endangered Species Act (ESA).[i] The FWS noted that in 2010 it believed that “habitat loss, fragmentation, and inadequacy of existing regulatory mechanisms” could warrant ESA listing for the grouse.[ii] Yet five years later, focused public-private conservation partnerships have borne fruit, as FWS now says that “[b]ased on the best available scientific and commercial information, we have determined that the primary threats to greater sage-grouse have been ameliorated by conservation efforts implemented by Federal, State, and private landowners.”[iii]

sage grouse

Source: USFWS

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State Supreme Court Imposes Strict Limitations on Secretary of State’s Authority to Block Anti-Fracking Ballot Measures, Granting Oil and Gas Interests a Limited Victory

Posted in Hydraulic Fracturing, Ohio, Oil and Gas

Ohio Statehouse original_smThis week the Ohio Supreme Court denied three Ohio counties’ attempts to ban high-volume hydraulic fracking. But that denial was procedural, not substantive, so the victory is limited to the instance at hand and the counties are free to try again.

Earlier this summer, citizens of Medina, Fulton, and Athens counties petitioned their respective Boards of Elections to place on the November 3, 2015, general election ballot a measure to introduce a new county charter that would increase the ability of the electorate to make laws through popular voting methods, such as initiatives and referenda. The target of these proposed charters was to ban high-volume hydraulic fracking as well as new oil or gas exploration in each county. Following ballot protests filed by county electors against the petitions, Ohio Secretary of State Jon Husted invalidated the petitions and struck them from the November ballot. In August, the petitioners challenged Secretary Husted’s decision by seeking a writ of mandamus from the Ohio Supreme Court, asking the Court to order Secretary Husted to certify their petitions and allow their proposed charters on the ballot. The Ohio Supreme Court denied the petitioners’ requests and upheld Secretary Husted’s decision to block the county charters from a general election vote this November. Continue Reading