Emerging Issues Law Community Focus on Oil, Gas, Energy Law

Steptoe & Johnson PLLC: Production 'Irrelevant' Under Flat-Rate Leases

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Mon, 20 May 2013 17:05:00 -0400

By Bridget D. Furbee

A good outcome for oil and gas operators in West Virginia was provided by the U.S. Court of Appeals for the Fourth Circuit on May 7, 2013.

Referencing "... longstanding West Virginia law," the Court affirmed the validity of a 1933 lease finding "... the quantity of production is irrelevant to the expiration of the secondary term ..." of a flat-rate mineral lease. Despite the language in the term or "habendum" clause that extended the term "... as long thereafter as oil or gas ... is produced ...," the 4th Circuit found that production was not required if the quarterly flat-rate rentals were paid. The royalty provision required payments of $75 "... each three months

Steptoe & Johnson PLLC: WVDEP Issues New Storm Water Construction General Permit for Oil and Gas Projects

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Thu, 16 May 2013 16:24:00 -0400

By Armando F. Benincasa

The West Virginia Department of Environmental Protection (WVDEP) issued its long-delayed Storm Water Construction General Permit for Oil and Gas projects this past Monday. The permit which will impact greatly oil and gas industry support activities, such as pipeline construction, will become effective June 12, 2013 assuming no legal challenge to the permit and/or action taken to delay or stay the implementation of the permit.

Oil and gas project construction activities after June 12, 2013 will be required

State Net Capitol Journal: States Cooling on Renewable Energy

StateNet@placeholder.com (State Net) — Tue, 14 May 2013 15:37:00 -0400

States' recent passion for renewable energy appears to be running out of steam. Sixteen of the 29 states with renewable portfolio standards are considering legislation that would scale back those mandates, according to the North Carolina Solar Center, a partnership between the U.S. Energy Department and North Carolina State University.

"Activity against renewable portfolio standards has been increasing in the past year," said Justin Barnes, a senior policy analyst at the Solar Center. "There haven't been any outright repeals yet, but we've seen some watering-down."

North Carolina legislators began debating a bill in March that would cut the state's current renewable energy target for utilities'- 12.5 percent

State Net Capitol Journal: Ohio's $500 Billion Oil Resource Frustrating Drillers

StateNet@placeholder.com (State Net) — Tue, 14 May 2013 15:34:00 -0400

The Utica Shale formation in eastern Ohio grabbed the national spotlight two years ago when the state's Department of Natural Resources estimated it held 5.5 billion barrels of recoverable oil, more than twice Yemen's oil resource and worth nearly $500 billion. But U.S. drillers that set up rigs on the region's rolling farmland are now selling off their acreage because production is not meeting up with the initial predictions.

"The results were somewhat disappointing," said Philip Weiss, an analyst with Argus Research. Early data, he said, is showing "it's not as good as we thought it was going to be."

"We have a lot to learn about producing from these shales," said Jeff Daniels, who runs Ohio State

Steptoe & Johnson PLLC: Pennsylvania DEP Finds No Link Between Hydraulic Fracturing and Methane Contamination

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Fri, 03 May 2013 16:01:00 -0400

By Armando F. Benincasa, Brian J. Pulito and Thomas J. Sengewalt

After a 16-month investigation, the Pennsylvania Department of Environmental Protection announced Monday that hydraulic fracturing for natural gas by WPX Energy, Inc. was not responsible for methane contamination in three private water wells in Susquehanna County.

Following the filing of complaints by local landowners that methane resulting from natural gas exploration in the area had contaminated their drinking water wells, the agency undertook an investigation to determine the source of the methane. The agency compared samples taken from each of the water wells to samples of natural gas taken

Pennsylvania Supreme Court Upholds the Continuing Vitality of the 177-Year-Old Dunham Rule

FulbrightandJaworski@placeholder.com (Fulbright and Jaworski L.L.P. ) — Mon, 29 Apr 2013 17:14:00 -0400

The Pennsylvania Supreme Court has upheld the continuing vitality of the 177 year old Dunham rule in Pennsylvania, reiterating that a rebuttable presumption arises in any private deed or land conveyance that natural gas is not a "mineral" unless it is expressly designated as such in the document. To rebut that presumption, the party seeking to have it so considered must present "clear and convincing evidence that the parties intended to include natural gas or oil within" the word minerals.

This decision reaffirming the Dunham rule was made in relation to a deed executed in

Steptoe & Johnson PLLC: Pennsylvania Supreme Court Reaffirms Dunham Rule

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Thu, 25 Apr 2013 16:10:00 -0400

By Russell L. Schetroma and Nathaniel I. Holland

In a unanimous opinion (Butler v. Charles Power Estate, No. 27 MAP 2012) by Justice Baer issued April 24, 2013, the Pennsylvania Supreme Court reaffirmed the Dunham Rule, holding that a reservation of minerals in a deed does not reserve the gas in unconventional formations, such as the Marcellus Shale [enhanced version available to lexis.com subscribers]. The nineteenth century case Dunham v. Kirkpatrick [

Fulbright & Jaworski Releases Trade Secrets and the Regulation of Hydraulic Fracturing - Toward a Global Perspective

FulbrightandJaworski@placeholder.com (Fulbright and Jaworski L.L.P. ) — Fri, 19 Apr 2013 16:43:00 -0400

This Fulbright & Jaworski L.L.P. paper is in collaboration with the global law firm Norton Rose.

Trade Secrets and the Regulation of Hydraulic Fracturing provides a global view of how governments have attempted to strike a balance between the benefits of hydraulic fracturing technology innovation on the economy with the environmental and health concerns raised by this widely used technology.

In particular, the paper addresses the controversial issue of public disclosure of chemical compounds injected into the wellbore during hydraulic fracturing and the trade secrets issues such disclosure raises. This review highlights regions with the most developed experience in hydraulic fracturing, including the United States

William A. Ruskin: Among Environmentalists, Hydrofracking is Not a 'Yes or No' Issue

wruskin@placeholder.com (William A. Ruskin) — Mon, 15 Apr 2013 16:25:00 -0400

By William A. Ruskin

On April 10, 2013, I participated in "Justice Speaks," an event sponsored by the Justice Action Center at New York Law School on hydraulic fracturing.

Joining me on the podium was Daniel Raichel, a Project Attorney with the Natural Resources Defense Council ("NRDC"), and the lead

Steptoe & Johnson PLLC: West Virginia House Judiciary Amends Horizontal Well Legislative Rule

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Fri, 12 Apr 2013 10:38:00 -0400

By Armando F. Benincasa and G. Kurt Dettinger

On April 9, 2013, the House Judiciary Committee amended SB 243, the West Virginia Department of Environmental Protection ("WVDEP") rules bill which includes the promulgation of permanent legislative rules, 35 Code of State Rules, Series 8, regarding horizontal well development in West Virginia. The rule is mandated by provisions of the West Virginia's Natural Gas Horizontal Well Control Act, W.Va. Code Chapter 22, Article 6A.

The

Steptoe & Johnson PLLC: Power Line Rights of Way - FERC Approves New Vegetation Management Rules

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Tue, 26 Mar 2013 17:15:00 -0400

By Kurt L. Krieger and Nora C. Price

On March 21, 2013, the Federal Energy Regulatory Commission ("FERC") approved new rules for managing vegetation along power line rights of way. The purpose of the approved modifications to existing electric reliability standards is to ensure the continued reliable operation of the nation's electric grid, or "bulk-power system." A recurring cause in many blackouts has been vegetation-related outages. The revised standard is intended to prevent the risk of vegetation-related outages that could lead to a sustained outage, but it is not designed to address severe weather events and natural disasters.

FERC's final rule (Order

Steptoe & Johnson PLLC: West Virginia Supreme Court of Appeals Rules in Gas Utility Case

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Tue, 26 Mar 2013 16:57:00 -0400

By Lori A. Dawkins and Allison J. Farrell

The West Virginia Supreme Court of Appeals just issued an important decision for all natural gas utilities with operations in West Virginia with its Memorandum Decision No.11-1511 (Harrison County 10C391). In this decision, issued February 11, 2013, the state's highest court affirmed that a natural gas utility had no duty to re-inspect a natural gas appliance after it "red-tagged" the faulty appliance when it restored gas service to the plaintiffs' residence.

In this case, the utility had discontinued gas service at the plaintiffs' residence for non-payment

Court Rebuffs Miners: Withdrawal Law Constitutional

wppendley@mountainstateslegal.com (William Perry Pendley) — Mon, 25 Mar 2013 16:16:00 -0400

By William Perry Pendley

DENVER - An Arizona federal district court on March 20 rejected arguments by a 117-year-old nonprofit, non-partisan mining trade association with thousands of members that had argued that a federal law, which was used to lock-up a million acres of federal land in northwestern Arizona, is unconstitutional.

The Northwest Mining Association (NWMA) of Spokane, Wash., claimed in a March 2012 complaint and subsequent briefing and argument that Interior Secretary Salazar's January 2012 order withdrawing the land from entry under the General Mineral Law and blocking access to hundreds of millions of pounds of the highest-grade uranium ore in the nation violates federal laws. The NWMA argued that the

DLA Piper Energy Alert: Thinking Strategically on Pipe Build-out for the Shale Boom

DLAPiper@placeholder.com (DLA Piper) — Thu, 21 Mar 2013 16:27:00 -0400

By Lee A. Alexander, Stefan M. Krantz and Zachary S. Launer

Recent developments in horizontal drilling techniques have propelled natural gas production from shale formations to the forefront of domestic oil and gas production today. This rapid expansion is presenting opportunities and challenges for producers and pipeline developers seeking to capitalize on the need to move this gas to market. These challenges include the ability of the current federal and state regulatory structures to keep pace with increased production and the resulting need for additional infrastructure development

Steptoe & Johnson PLLC: Pennsylvania Judge Orders Marcellus Development Settlement Unsealed

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Thu, 21 Mar 2013 15:22:00 -0400

By Brian Pulito and Jamie Little

On March 20, 2013, in a 32-page opinion, President Judge Debbie O'Dell-Seneca of the Court of Common Pleas for Washington County, Pennsylvania ordered that a sealed, court-approved settlement between Plaintiffs, Stephanie and Chris Hallowich, and Defendants, Range Resources, MarkWest Energy Partners and Wiliams Gas/Laurel Mountain Midstream Partners, to be unsealed at the request of the Pittsburgh Post-Gazette and the Washington Observer-Reporter.

In their May 2010 lawsuit, the Hallowiches claimed that their health had been damaged by Defendants' Marcellus shale drilling. The Hallowiches and the Defendants were able to reach a settlement agreement in July 2011

William A. Ruskin: Hydrofracking And The Debate Over Municipal Infrastructure

wruskin@placeholder.com (William A. Ruskin) — Sat, 09 Mar 2013 11:58:00 -0400

By William A. Ruskin

On February 11, 2013, the IADC conducted a lively, interactive panel discussing the risks and benefits of shale oil and gas extraction at the IADC Mid-Winter Meeting. The panel represented the spectrum of political, regulatory and scientific views on the issue and debated perceived potential risks to human health and the environment.

In addition to me, the panel consisted of Blaine D. Edwards, Assistant General Counsel at Superior Energy Services, Inc.;Raymond G. Mullady, Jr., a partner at Blank

Power Plant Program Manager Sings Praises for the Mock Audit

tfox@tfoxlaw.com (Thomas Fox) — Sat, 09 Mar 2013 11:48:00 -0400

Last week I attended the Society for Corporate Compliance and Ethics (SCCE) Energy and Utilities Conference here in Houston. As usual, SCCE put on a great event, the speakers and topics were all first-rate. As you might expect at such an event, the informal conversations with other compliance practitioners gave an opportunity to learn about new and different approaches to compliance. At lunch on the second day, I had such a conversation, which to my surprise, was not with a Chief Compliance Officer (CCO) or even compliance practitioner of an energy

Fulbright & Jaworski Releases 'Analysis of Hydraulic Fracturing and Shale Drilling Litigation'

FulbrightandJaworski@placeholder.com (Fulbright and Jaworski L.L.P. ) — Wed, 06 Mar 2013 16:41:00 -0400

By Barclay Richard Nicholson and Stephen C. Dillard

Over the last four years, with the continued development and production of natural gas from shale formations throughout the country, lawsuits involving hydraulic fracturing activities have increased. Many of these lawsuits filed by landowners in Arkansas, Colorado, Louisiana, Ohio, New York, Pennsylvania, Texas, and West Virginia against oil and gas operating and drilling companies, allege contamination of groundwater or sources of drinking water. These landowners either

U.S. Continental Shelf Mining Policy Influenced By International Environmental Law

FC-RealEstate@placeholder.com (LexisNexis Emerging Issues Law Community Staff) — Tue, 05 Mar 2013 16:55:00 -0400

By Lawrence A. Kogan

Excerpt:

This article questions the extent to which U.S. continental shelf seabed mining policy, as reflected in the U.S. administration's recently issued five-year OCS development plan and accompanying agency regulations, is influenced by international environmental law, especially the deep seabed mining and environmental provisions (Parts XI-XII) of the United Nations Convention on the Law of the Sea ('UNCLOS') to which the U.S. has not yet acceded. It seeks answers in the first advisory opinion issued by UNCLOS' International Tribunal for the Law of the Sea ('ITLOS') which sets forth the legal responsibilities and obligations of UNCLOS State Parties that sponsor deep seabed mining

Steptoe & Johnson PLLC: Ohio EPA Could Change Air Permits for Oil and Gas Well Sites

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Mon, 25 Feb 2013 17:32:00 -0400

By Katerina E. Milenkovski

Ohio Environmental Protection Agency (EPA) has recently proposed several changes to its general permits for oil and gas well site production operations. These changes would:

Incorporate requirements from the recently issued New Source Performance Standards (NSPS), Subpart OOOO, for Crude Oil and Natural Gas Production, Transmission, and Distribution
Split the current oil and gas well site operations general permit into two separate general permits, based on

Steptoe & Johnson PLLC: Manchin Takes the Public Lands, Forests and Mining Subcommittee

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Fri, 22 Feb 2013 19:43:00 -0400

By L. Gil White

U. S. Senate Energy and Natural Resources Committee Democrats have given the public lands subcommittee gavel to Sen. Joe Manchin (D-W.Va.), his office said.

Manchin takes the Public Lands, Forests and Mining Subcommittee gavel from Sen. Ron Wyden (D-Ore.), who now chairs the full committee after former Sen. Jeff Bingaman's (D-N.M.) retirement.

Not only does the chairmanship help Manchin gain in profile, but the panel will now carry "mining" in its name. Mining is a top priority for Manchin and several other members of the panel.

"Senator Manchin has a deep well of experience on public lands and mining policy, which is why I am so glad he agreed to chair this subcommittee," Wyden

Reservations in Favor of a Stranger to Title

lisa.mcmanus@lexisnexis.com (Lisa McManus) — Tue, 12 Feb 2013 17:52:00 -0400

By Lisa McManus

Pursuant to common law, no interest in land may be created in favor of a stranger to the title by means of a reservation or exception in a conveyance of the land. Patrick H. Martin and Bruce M. Kramer, Williams & Meyers, Oil and Gas Law § 310 (LexisNexis Matthew Bender 2012); 1 Eugene Kuntz, A Treatise on the Law of Oil and Gas § 14.4 (Matthew Bender, Rev. Ed.). Numerous oil and gas cases hold void an exception or reservation in favor of a stranger, whether the attempted conveyance is made in a deed or in an oil and gas lease. While some cases have held the reservation or

State Net Capitol Journal: Renewable Energy Becoming Battleground Issue

StateNet@placeholder.com (State Net) — Tue, 05 Feb 2013 13:30:00 -0400

Last month's "fiscal cliff" deal temporarily extended several federal renewable energy incentives, such as the tax credit for producers of wind energy. But with investor confidence in renewable energy still somewhat shaky in comparison to more established energy sources like natural gas and coal, at least a couple of states are trying to give the economic sector an added boost.

With Democrats having reclaimed Minnesota's House and Senate in November, environmentalists are optimistic the state will enact major renewable energy incentives, including legislation requiring utilities to derive 10 percent of their power from solar sources.

"I will be very shocked if we don't pass significant solar legislation this year,"

U.S. EPA Creates Uncertainty in Appalachia with Air Quality Permitting Memorandum

Andrew.Fulton@Steptoe-Johnson.com (Steptoe & Johnson PLLC) — Thu, 31 Jan 2013 16:58:00 -0400

By Armando F. Benincasa

In the face of the Sixth Circuit Court of Appeals decision in late 2012 which struck down United States Environmental Protection Agency's (USEPA) use of "functional relatedness" in determining whether sources of air emissions should be aggregated for purposes of making permit determinations under the Clean Air Act, the agency announced that while it would amend its policy in the states covered by the Sixth Circuit, it would continue using its historic interdependency analysis in the rest of the states. As a result, industry operations subject to air permitting will find potentially diverging air aggregation decisions in Ohio where the Sixth Circuit ruling will control, and Pennsylvania and West Virginia

California Miner Appeals Denial of Attorneys' Fees

wppendley@mountainstateslegal.com (William Perry Pendley) — Wed, 30 Jan 2013 16:44:00 -0400

By William Perry Pendley

DENVER - A California miner who won the right to engage in placer mining on his claim in the mountains of northern California after a February 2007 ruling by the Interior Board of Land Appeals (IBLA) on Jan. 24 appealed the ruling of a California federal district court that he may not be reimbursed by the United States for all legal expenses leading to his major victory.

In 2007, the IBLA ruled against the U.S. Forest Service in upholding a December 2003 administrative law judge's (ALJ's) ruling that the claim of Donald Eno, a disabled veteran on fixed income, has an economic value that is more substantial than all the other uses argued by the Forest Service and is not located on sacred,