Current Legal Issues in Marcellus Shale Development, September 2011
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Transcript of Current Legal Issues in Marcellus Shale Development, September 2011
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8/3/2019 Current Legal Issues in Marcellus Shale Development, September 2011
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Current Legal Issuesin Marcellus Shale
Development
Penn State Extension
Marcellus Shale Webinar Series
September 15, 2011
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Overview of Presentation
Legislation
Regulations
Municipal Regulation
Case Law
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Overview of Presentation
Legislation Enacted Legislation Pending Pennsylvania Legislation Pending Federal Legislation
Regulations Municipal Regulation Case Law
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Enacted Legislation
2009-2010 Session Production Reporting Requirements
(SB 297 / Act 15)
Clean and Green Amendment
(SB 298 / Act 88) Coal Bed Methane Review Board
(HB 1847 / Act 4)
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Enacted Legislation
2011-2012 Session Coal and Gas Resource Coordination Act
Amendment (SB 265 / Act 2)
Clean and Green Amendment (HB 144 / Act 35)
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Pending PA Legislation
Pipeline Safety and Oversight HB 344 / SB 325
911 Emergency Response Information SB 995
Royalty Statement Information SB 460
Leasing of State Land SB 367
Impact Fee SB 1100
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Senate Bill 1100 Impact Fee
Annual fee for first ten years of production
Exclusion for traditional wells and marginalwells Distribution of funds:
Conservation Districts State Fire Commissioner
Local Governments Environmental initiatives
Development of Model Ordinance
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Pending Federal Legislation
FRAC Act HB 1084 / SB 587
Marcellus Shale On-the-Job Training Act SB 588 / HB 1396
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Overview of Presentation
Legislation
Regulations Pennsylvania DEP Susquehanna River Basin Commission Delaware River Basin Commission U.S. Environmental Protection Agency Pennsylvania Public Utility Commission
New York / New Jersey Municipal Regulation
Case Law
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Department of Environmental Protection
Well casing standards
Heightened standards promulgated on Feb. 5, 2011. Implemented to minimize incidents of methane migration.
Air quality studies
SW PA Nov. 1, 2010
NE PA Jan. 31, 2011 NC PA May 19, 2011
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Susquehanna River Basin Commission
Proposed Rulemaking published in Federal
Register on July 13, 2011. Changes approval process for interbasin transfers of
flowback and production fluids
Public comment period ended on Aug. 23, 2011.
On Sept. 15, 2011, SRBC will consider extensionof comment period to Nov. 1, 2011.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Delaware River Basin Commission
Draft Regulation published on Dec. 9, 2010.
Addresses water sourcing, well pad siting, and wastewaterdisposal
Public comment period ended on April 15, 2011.
Special meeting will be held on Oct. 21, 2011 toconsider adoption of regulation.
Two lawsuits have been filed alleging that DRBC failedto conduct an appropriate environmental assessment.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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U.S. Environmental Protection Agency
Hydraulic Fracturing Study Timeline:
Summer 2010 EPA conducted four public meetingsnationally.
Feb. 7, 2011 EPA published draft plan for study.
June 23, 2011 EPA announced seven study sites:
Prospective case study Washington County
Retrospective case studies Washington County / Bradford and
Susquehanna Counties
Aug. 4, 2011 EPA Science Advisory Board providedcomments to EPA.
End of 2012 First report of results
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Pennsylvania Public Utility Commission
Laser Northeast Gathering Co., LLC Jan. 19, 2010 Application filed for public utility status
Nov. 22, 2010 Administrative Law Judge recommendationto deny petition
June 14, 2011 PUC refused to adopt ALJ recommendation;remanded case for determination of whether grantingapplication is necessary or proper for the service,
accommodation, convenience, or safety of the public. Aug. 25, 2011 - PUC issues clarification of public utility
standard.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Pennsylvania Public Utility Commission
Pentex Pipeline Co. Mar. 8, 2011 application filed
Sept. 13, 2011 public hearings conducted
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Marcellus Shale Advisory Commission
July 22, 2011 Final report issued Contained 96 policy recommendations
May serve as the basis for future regulatory or
legislative actions
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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NY Dept. of Environmental Conservation
Supplemental Generic Environmental Impact Statement
Revised draft SGEIS / recommendations issued on July 1, 2011.
Would authorize activities on private land under rigorous
controls
Would prohibit activities in NYC and Syracuse watersheds
Public comment period opened on Sept. 7, 2011 and will close onDec. 12, 2011.
DEC will promulgate regulations on topic beginning in Oct. 2011.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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New Jersey Moratorium
June 29, 2011 Senate Bill 2576 passed bylegislature to permanently ban hydraulic
fracturing.
Aug. 25, 2011 Governor Christie issued a
conditional veto and recommended a one-year
moratorium.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Overview of Presentation
Legislation Regulations Municipal Regulation
Court Opinions Recent Litigation
Municipal Bans of Drilling Activities Oil and Gas Act Preemption
Case Law
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Huntley & Huntley v. Borough ofOakmont
Zoning restrictions permitted in R-1district.
Range Resources v. Salem Township
Comprehensive regulatory scheme notpermitted.
Supreme Court Case Law
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Commonwealth Court opinion Issued on July 22, 2010
Facts: County zoning ordinance allowedwells only by special exception in residential,
industrial, and airport zones.
Penneco Oil Co. v. County of Fayette
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Ordinance was reflection of traditionalzoning principles rather than acomprehensive regulatory scheme.
Although there was some overlap with
purposes of Oil and Gas Act, primarypurpose of ordinance was to encouragecompatible land use.
Penneco Oil Co. v. County of Fayette
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Range Resources v. South Fayette
Aug. 16, 2011 Complaint filed Allegation that zoning ordinance creates
a constructive ban on drilling throughenforcement of buffer zones
Claim that ordinance is preempted byPennsylvania Oil and Gas Act.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Municipal Bans onDrilling Activities
Nov. 16, 2010 Pittsburgh ordinance Numerous other municipalities have
instituted or are considering bans. Legality of total bans have not yet been
challenged. Municipal ordinances must be analyzed in light of
section 602 of Oil and Gas Act. Likelihood of success???
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Except with respect to ordinances adopted
pursuant to the . . . Municipalities Planning Code,and the . . . Flood Plain Management Act, all localordinances and enactments purporting to regulateoil and gas well operations regulated by this act arehereby superseded. No ordinances or enactmentsadopted pursuant to the aforementioned acts shall
contain provisions which impose conditions,requirements or limitations on the same features ofoil and gas well operations regulated by this act orthat accomplish the same purposes as set forth inthis act.
Oil and Gas Act 602
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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. . . The Commonwealth, by this enactment, hereby
preempts and supersedes the regulation of oil andgas wells as herein defined.
Oil and Gas Act 602
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Overview of Presentation
Legislation
Regulations
Municipal Regulation Case Law
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Case Law
Berish v. Southwestern Energy, 2011 WL 382420(M.D. Pa. Feb. 3, 2011) Applicability of strict liability for claim of water
contamination
Lauchle v. The Keeton Group, 2011 WL 782024(M.D. Pa. Mar. 8, 2011) Primary lease term not extended due to litigation over
validity of lease
Shafer v. Range Resources
Appalachia, 2011WL 677479 (M.D. Pa. Feb. 16, 2011) Interpretation of management approval clause
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Expiration of Secondary Term
T.W. Phillips v. Jedlicka, 964 A.2d 13 (Pa. Super.
Ct. Dec. 29, 2008). Facts:
Lease was executed in 1928.
Lease extended so long as oil or gas is produced in
paying quantities.
Wells were drilled in 1929, 1986, 2004, and 2005.
Jedlicka argued that lease terminated in 1959 becauselease was not profitable in that year.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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T.W. Phillips v. Jedlicka
Superior Court opinion Court relied upon Young v. Forest Oil Co. (Pa.
1899) to apply subjective test.
Court ruled that Jedlicka had failed to carry
burden of establishing lack of good faith.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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T.W. Phillips v. Jedlicka
Issue before Supreme Court: Did the Superior Court misapply [Young v.
Forest Oil] by holding that Pennsylvaniaemploys a purely subjective test to determinewhether an oil or gas lease has produced in
paying quantities.
Argument held on April 13, 2010.
Agricultural Law Resource and Reference Center
Professor Ross H. Pifer
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Web-based Resources
www.law.psu.edu/marcellus
Marcellus Shale Resource Area Penn State Resources Case Law Statutes Regulations
Legal-related links Marcellus Shale Blog
www.pennstatelawmarcellusblog.com
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Professor Ross H. Pifer
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The Agricultural Law Resource and Reference Center
Prof. Ross Pifer, Director
Phone: (814) 865-3723
Email: [email protected]
Web: www.law.psu.edu/aglaw
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