24 May 2017

Sidley Shale and Hydraulic Fracturing Report

Vol. 6, No. 21

Topics discussed in this week’s Report include:

  • District of Columbia Circuit granted the EPA’s request to hold in abeyance litigation over final rule governing methane emissions from new and modified oil and gas sources.
  • Property owners sued FERC and Nexus Gas Transmission to stop Ohio natural gas pipeline.
  • Colorado: Agency appealed intermediate court ruling that state Oil and Gas Conservation Act requires oil and gas development to proceed in a manner protective of the environment.
  • New York: New York State unveiled plan to reduce methane emissions.

Federal

District of Columbia Circuit grants the EPA’s request to hold in abeyance litigation over final rule governing methane emissions from new and modified oil and gas sources. A panel of the U.S. Court of Appeals for the District of Columbia Circuit granted the Environmental Protection Agency’s (EPA) request to indefinitely hold litigation in abeyance concerning the June 2016 New Source Performance Standards for the oil and natural gas sector (Rule) while the agency reevaluates the Rule. The D.C. Circuit’s order requires the EPA to provide the court with updates on the status of its reevaluation every 60 days and the parties to file motions regarding the future of the litigation within 30 days of the EPA’s notification to the court of its decision on whether to revise the Rule.      

Property owners sue FERC and Nexus Gas Transmission to stop Ohio natural gas pipeline. A group of over 60 Ohio property owners has sued the Federal Energy Regulatory Commission (FERC) and Nexus Gas Transmission (Nexus) in the Northern District of Ohio to stop the construction of the Nexus Gas Transmission pipeline. The property owners claim that the pipeline project violates various statutory and constitutional provisions, such as the due process clause, by threatening them with physical harm due to its proximity to their properties. The property owners have requested that the court grant various forms of injunctive and declaratory relief, including preliminary and permanent injunctions prohibiting the FERC from issuing Nexus a certificate of public convenience and necessity. Upon completion, the Nexus pipeline would carry roughly 1.5 billion cubic feet per day of natural gas approximately 255 miles from eastern Ohio to southeastern Michigan. DTE Energy and Spectra Energy Partners, L.P., are the lead developers of the Nexus project.

States

Colorado: Agency appeals intermediate court ruling that state Oil and Gas Conservation Act requires oil and gas development to proceed in a manner protective of the environment. Colorado’s Oil and Gas Conservation Commission (Commission) filed a writ of certiorari with the Colorado Supreme Court, asking it to review a court of appeals opinion from March holding that the Commission has statutory authority to determine that new oil and gas projects do not harm the environment before issuing them permits. In its 2-1 opinion, the court of appeals panel held that the Colorado Oil and Gas Conservation Act’s requirement that oil and gas development be promoted “in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and natural resources” established a condition precedent to issuing permits rather than describing a balancing test between oil and gas development and protection of other interests. The Commission’s petition alleges that the opinion upends the Commission’s “long-settled interpretation” of its authority to balance various factors in making decisions, instead permitting it to “disregard the Act’s policy of fostering oil and gas development in Colorado.” The state’s attorney general filed the appeal over the objections of the governor.

New York: New York State unveils plan to reduce methane emissions. New York State recently released its Methane Reduction Plan (Plan), a collaborative effort by five state agencies that is intended to help New York meet its goals of reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050. The Plan contains 25 actions targeted at three main sectors: oil and gas, landfills and agriculture. The Plan has three overarching goals for the oil and gas industry: to reduce infrastructure emissions, improve management of methane emissions by requiring monitoring and reporting and improve consistency across regulatory jurisdictions and programs. Examples of the concrete actions the Plan requires for the oil and gas sector include revising regulations and policies on leak detection and repairs and implementing policy changes to reduce methane emissions from gathering lines.

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