Oil + Gas Update - SCOTUS Punts on Pipeline Cases.
The rig count dropped several more units since our last report alongside flat oil and slightly higher natural gas prices. In pipeline news, SCOTUS denied two cert petitions, one lodged by North Carolina regulators challenging Transco's rates following expansions such as Atlantic Sunrise and another challenging Mountain Valley's condemnation authority under the Natural Gas Act. PennEast and NJ regulators clashed over new permit applications, drawing criticism from the pipeline company and PA's leading trade industry. The PA PUC will hold a hearing in challenges to Mariner East this week while MVP hit several permit roadblocks. In court news, issues ranged from mineral reservations and mutual mistake, federal preemption of state confidentiality/trade secret misappropriation claims for oil and gas equipment, and the Sage-Grouse habitat in oil and gas areas out west.
Here's your week in review...
Rig Counts, Spot Prices + Oil Prices
Rigs: National (-851); Marcellus (-44); Utica/Point Pleasant (-11)
Brent Crude: +$59.42/bbl
West Texas Intermediate: +$53.87/bbl
NYMEX: November 2019 Contract @ $2.303/MMBtu
Spot Prices: Henry Hub (+$2.25/MMBtu); Dominion South (+$1.82/MMBtu); Tenn. Zone 4 (+$1.87/MMBtu)
("+" or "-" or blank denotes increase, decrease, or flat. )
WOPL - Appalachia
In our new section, WOPL ("waiting on pipelines"), we provide the latest news on the status of various pipeline projects in Appalachia:
Adelphia Project (Greater Philadelphia Region): A Pennsylvania board denied a challenge to an air quality permit for lack of jurisdiction over decisions made by federal agencies (see below for more detail).
Atlantic Coast (W. Va. to Va. and NC): Nothing new to report.
Atlantic Sunrise (Northeastern PA to SE Pennsylvania): The Supreme Court denied a petition filed by the North Carolina Utilities Commission challenging Transco's interstate natural gas pipeline expansions, including Atlantic Sunrise in Appalachia.
Constitution (Northeastern PA to NY): Nothing new to report.
Empire Pipeline (NY to PA): Nothing new to report.
Leidy South - Benton Loop Expansion (PA): Nothing new to report.
Mariner East (Western PA to Eastern PA): A crowd of about 60 protesters with the groups "Halt Mariner Now" and the "Mama Bear Brigade" gathered to ask Governor Wolf to close down Mariner East. Meanwhile, a PUC administrative law judge will hold a hearing in a case in which numerous individuals, local governments, and environmental groups claim Mariner East poses a threat to the health and safety of the communities in which the pipeline is located.
Mountaineer XPress (WV): Nothing new to report.
Mountain Valley Pipeline (Northern WV to Southern Va. and NC): The Fourth Circuit issued an order staying a permit from the U.S. Fish and Wildlife Service pending the outcome of a lawsuit brought by the Sierra Club challenging permit decisions. The Commonwealth of Virginia reached an agreement with Mountain Valley Pipeline that will force the company to submit to court-ordered and court-supervised compliance with environmental protections; impose additional layers of independent, third-party monitoring on the project; and require the payment of a $2.15 million civil penalty. FERC also informed MVP that it must cease construction activity along all portions of the project immediately, with the exception of “restoration and stabilization” in certain areas, following the Fourth Circuit’s decision to stay the FWS permit.
NEXUS (Ohio to Michigan): Nothing new to report.
NFG FM100 Project (NC PA to Transco): Nothing new to report.
Northeast Supply Enhancement Project (NJ/NY): Nothing new to report.
Northern Access (NW PA to Western NY): Nothing new to report.
PennEast (PA to Central Jersey): The New Jersey DEP denied permit applications for PennEast in light of the Third Circuit’s recent decision to vacate condemnation orders for properties along the pipeline route. In addition, two members of Congress from New Jersey want FERC to issue a stop-work order for all land-clearing and construction activities on the project. In a letter sent to the DEP, PennEast informed the NY agency that its action was incorrect based on the DEP’s own rules and that the application had already been “deemed administratively and technically complete based on the Department’s failure to respond within the time period allowed by the Department’s own regulations.” Pennsylvania Chamber of Business and Industry President and CEO Gene Barr also issued a statement criticizing the denial of permits for the proposed pipeline.
Regional Energy Access (NE PA to PA/NJ): Nothing new to report.
Revolution Pipeline (PA): Nothing new to report.
Rover (OH, WV, PA to Michigan): Nothing new to report.
TransCanada Eastern Panhandle Project (PA to WV): Nothing new to report.
Headlines & Holdings - Appalachia
SCOTUS Passes on Challenge to MVP Condemnation Authority. The U.S. Supreme Court denied a petition for a writ of certiorari that challenged a circuit court’s order affirming the authority of pipelines under the NGA to access condemned properties for pipeline activities before paying just compensation to affected landowners. Givens v. Mountain Valley Pipeline, LLC, --- S. Ct. ---, No. 19-54, 2019 WL 4923505 (U.S., Oct. 7, 2019). Click here for more.
Ohio Federal Court Finds Mutual Mistake in Mineral Reservation. A federal court in Ohio recently reformed a deed to reflect a mineral reservation expressed in a separate real estate contract, reasoning that the real estate contract reflected the parties’ actual intent that the grantor reserve mineral rights despite the deed’s suggestion otherwise. Gorsha v. Clark, --- F. Supp. 3d ---, No. 2:18-CV-508, 2019 WL 4918670 (S.D. Ohio, Oct. 4, 2019).
Second Circuit Rejects Request to Transfer Empire 401 Certification Dispute. The Second Circuit rejected NFG’s request to transfer an appeal involving NYDEC’s late rejection of a Section 401 water quality certification to the DC Circuit where a similar appeal is pending. NYDEC v. FERC, Nos. 19-1610 and 19-1618 (2nd Cir.) (pending).
EHB Tosses Challenge to Adelphia Expansion. The Environmental Hearing Board dismissed an appeal from an air quality plan approval for lack of jurisdiction, holding that the Third Circuit has original and exclusive jurisdiction to review federally delegated PADEP permitting decisions associated with interstate projects. Cole v. DEP, EHB Docket No. 2019-046-L (EHB, Oct. 9, 2019).
Headlines & Holdings - Beyond Appalachia
Ninth Circuit Upholds Citizen-Suit Standing Under Energy Policy Act. The Ninth Circuit concluded that DOE had a non-discretionary duty to publish four energy conservation standards in the Federal Register after it adopted an "error-correction rule" and rejected the agency's claim that the plaintiffs lacked standing under the citizen-suit provision of the Energy Policy Act, reasoning instead that the act provides the necessary "clear and unequivocal waiver" of sovereign immunity from citizen suits predicated on a non-discretionary duty imposed either by statute or regulation. Natural Resources Defense Council v. Perry, --- F.3d ---, No. 18-15380 (9th Cir., Oct. 10, 2019).
Kansas Federal Court Nixes Royalty Claim Against Exxon. Applying Oklahoma law, a federal court in Kansas dismissed a claim by purported royalty owners alleging that Exxon failed to pay or underpaid royalties on production after plaintiffs failed to demonstrate that the parties actually had an oil and gas lease with Exxon. Wheeler v. Exxon Mobil Corp., --- F. Supp. 3d ---, No. CV 19-4025-KHV, 2019 WL 5188738 (D. Kan., Oct. 15, 2019).
Federal Law Preempts State-Law Claims of Unfair Competition and Misappropriation in Fight over Perf Gun. A federal court in Texas held that federal copyright and patent laws preempted state law claims based on unfair competition and misappropriation of confidential information relating to an 8-inch perforating gun used in oil and gas development. Dynaenergetics v. Hunting Titan, Inc., & Hunting Energy Servs., Inc., --- F. Supp. 3d ---, No. CV H-19-1615, 2019 WL 5191024 (S.D. Tex., Oct. 15, 2019).
Federal Court Enjoins BLM From Implementing Sage-Grouse Plan. A federal judge in Idaho enjoined BLM from implementing the 2019 BLM Sage-Grouse Plan Amendments for Idaho, Wyoming, Colorado, Utah, Nevada/Northeastern California, and Oregon until the Court adjudicates the plaintiffs' challenges to fifteen Environmental Impact Statements issued in 2015 that allegedly minimized the impact of various development activities (including oil and gas) on the Sage-Grouse habitat. Western Watersheds Project v. Schneider, --- F. Supp. 3d ---, No. 1:16-CV-83-BLW, 2019 WL 5225454 (D. Idaho Oct., 16, 2019).
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