Energy & Environmental Law Blog : Energy & Environmental Lawyer & Attorney : Vorys, Sater, Seymour and Pease Law Firm : Oil, Gas & Green Technology

We reported previously on a district court decision enjoining the implementation of a settlement reached between the U.S. Forest Service and the Sierra Club that required the Forest Service to analyze future drilling proposals on split estates in the Allegheny National Forest (ANF) under the National Environmental Policy Act (NEPA) prior to issuing a Notice to Proceed (see here).

That decision was recently upheld by the United States Court of Appeals for the Third Circuit.  For a copy of the Court of Appeals' decision, see here (Case Nos. 10-1265 and 2332).

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The Heritage Foundation has an interesting report on proposed domestic natural gas policy.  From the abstract:  "Natural gas is a plentiful domestic resource with tremendous potential to increase the U.S. energy supply. Tapping this resource will create jobs and boost an ailing economy. More affordable energy will support additional business formation and growth. The role of the government is to regulate—not over-regulate and hamper—natural gas production. Hydraulic fracturing (fracking)—which has never been shown to cause environmental damage—should not be held hostage to unfounded concerns and narrow interests. U.S. policymakers should focus on commonsense access and reasonable safety measures—not burdensome over-regulation and market-distorting subsidies."  (Emphasis is ours.)

Hmmm ...

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The Ohio Oil & Gas Energy Education Program (OOGEEP) released its second economic impact study this past week:  "According to the study, Ohio's natural gas and crude oil industry could help create and support more than 200,000 Ohio-based jobs from the leasing, royalties, exploration, drilling, production and pipeline construction activities for the Utica shale reserve. The state could experience an overall wage and personal-income boost of $12 billion by 2015 from industry spending."  (From the press release.)  Nice.

For a copy of the study, see here.

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The Pennsylvania Department of Environmental Protection (PA DEP) has announced plans to create a new, stand-alone Oil and Gas Bureau.  From the Pittsburgh Post-Gazette:  "The Corbett administration's reorganization will create a new stand-alone Oil and Gas Bureau for the program that oversees regulation of the booming, and sometimes controversial, Marcellus Shale gas development in the state."

For a copy of the related press release, see here.

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The WSJ has an interesting article on how to think about the world's oil supply:  "But there is another way to visualize the future availability of oil: as a 'plateau.' *** In this view, the world has decades of further growth in production before flattening out into a plateau—perhaps sometime around midcentury—at which time a more gradual decline will begin. And that decline may well come not from a scarcity of resources but from greater efficiency, which will slacken global demand."  Take a look.

[Note:  Subscription may be required.]

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The National Petroleum Council has issued a new report entitled, Prudent Development: Realizing the Potential of North America’s Abundant Natural Gas and Oil Resources.  From the press release:  "First, the potential supply of North American natural gas is far bigger than was thought even a few years ago. As late as 2007, it was thought that the United States would have to become increasingly dependent on imported liquefied natural gas, owing to what appeared to be a constrained domestic supply. That is no longer the case. It is now understood that the natural gas resource base is enormous and that its development – if carried out in acceptable ways – is potentially transformative for the American economy, energy security, and the environment, including reduction of air emissions. These resources have the potential to meet even the highest projections of demand reviewed by this study."  (Emphasis is ours.)

What about our domestic oil resources you ask?  Hit the link to find out!

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We reported yesterday on several of the amendments approved by West Virginia's Joint Select Committee on Marcellus Shale (see here).  Forbes is reporting that the committee has also made some decisions regarding permit fees:  "Natural gas operators would pay $10,000 to drill a well in West Virginia's share of the Marcellus shale field, and $5,000 for each additional well at the initial site, under a proposal adopted Wednesday by a special legislative committee."

Not so in Ohio!

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We've reported several times on the application filed by Laser Northeast Gathering Company, LLC, with the Pennsylvania Public Utility Commission (see here and here, e.g.).  The Times Leader is reporting that Laser is now seeking to withdraw that application:  "In a filing dated Thursday, Laser asked the Pennsylvania Public Utility Commission for permission to withdraw the application it filed in January 2010. It said it is no longer willing to serve any and all potential customers, and that it is no longer committed to expand its facilities to meet demand as would a public utility."  Interesting.

For more, including a copy of the filing, see here.

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The State Journal is reporting that the West Virginia Legislature's Joint Select Committee on Marcellus Shale approved three amendments this past week:  "One amendment, which passed by a 4-3 vote, would abolish the Oil and Gas Board and transfer its duties to the Department of Environmental Protection. The second would allow for public comment and hearings on gas well permits, while the third would increase the number of people who would have to be notified when a company plans to drill a well. Those two passed unanimously."

For more on the committee's work, see here.

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While not new to the industry as a whole, the WSJ is reporting on recent attempts to enact local bans on oil and gas development in Pennsylvania:  "Challengers to natural gas drilling are taking a new approach in Pennsylvania, putting the rights of energy companies to drill in the massive Marcellus Shale basin on the ballot in what are believed to be the nation's first voter initiatives seeking to ban such activity."

Fortunately, Ohio law largely preempts these initiatives.

[Note:  Subscription may be required.]

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Yesterday the Ohio Supreme Court unanimously reaffirmed a 1878 decision in a dispute between the state and private property owners who border the Lake Erie shoreline.  The Court held that "the public trust in Lake Erie extends to the natural shoreline, which is the line at which the water usually stands when free from disturbing causes."   The court rejected the idea the the boundary is a movable line that changes moment to moment.  The decision, Merrill v. ODNR, can be found here.

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The American Petroleum Institute (API) has released the results of a new study concluding that "U.S. oil and natural gas policy changes could generate more than 1.4 million new jobs, $800 billion in additional government revenue, and 10 million barrels worth of added daily oil and natural gas production by 2030."  Click the link for more, including a copy of the study.

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The New York Department of Environmental Conservation (NY DEC) has finally released a revised Draft Supplemental Generic Environmental Impact Statement (SGEIS) for public review.  Interestingly, the NYT introduces its report on the document as follows:  "Natural gas drilling using a controversial technique known as hydraulic fracturing could create up to 37,000 jobs and generate from $31 million to $185 million a year in added state income taxes for New York at the peak level of well development."

For more, including a copy of the report itself, see here.

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We've reported previously on the Delaware River Basin Commission's (DRBC's) oil and gas rulemaking (see here and here, e.g.).  The Philadelphia Inquirer is reporting that the rule package will be considered in October:  "The Delaware River Basin Commission, which has not allowed natural-gas drilling in eastern Pennsylvania counties within the basin, announced Tuesday that it would not act on its proposed drilling regulations at its Sept. 21 meeting, as one commission member had demanded."

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Last week, the Marcellus Shale Coalition hosted its inaugural "Shale Gas Insight" conference at the Pennsylvania Convention Center.  From the Houston Chronicle:  "A who's who of Pennsylvania's emergent natural gas industry will meet in Philadelphia this week to talk about a shale gas boom that supporters say has boosted domestic energy supplies while creating tens of thousands of jobs. Drilling opponents, meanwhile, are planning a rival event to spotlight what they contend is the environmental and public health toll."

For more, see here (Philadelphia Inquirer); and here (Forbes).

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The LAT is reporting on possible utility rate increases due to pipeline upgrades being undertaken in response to the pipeline explosion last year in San Bruno:  "Three of California's largest utilities are asking customers to help pay for nearly $4 billion in pipeline safety projects needed after last year's deadly San Bruno disaster."  But, as you might expect:  "For many Southern California residents, the proposed hikes are coming on top of $3.2 billion in rate increases sought by Southern California Edison to upgrade its aging electrical grid. *** The effort to hike rates to finance pipeline projects could become just as controversial."

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You may be interested to know:

• Director of Ohio's Department of Natural Resources, David Mustine, has stepped down to become General Manager for Energy for JobsOhio, the state’s new private, nonprofit development corporation.  For more, see here (ODNR News Release).  Assistant Director, Scott Zody, will serve as interim director of the state agency.

• Two bills have been introduced in the Ohio Senate to (i) impose a moratorium on fracing until U.S. EPA finishes its hydraulic fracturing study (SB 213); and (ii) regulate the fluids used in the frac process, including disclosure (SB 212).  There is little likelihood that this legislation will be adopted.  Nonetheless, it was only a matter of time before something like these would be introduced ...

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Our mention yesterday of the jobs being created in North Dakota as a result of oil development of the Bakken reminded us of this article in the NYT on the promise of "green jobs":  "In the Bay Area as in much of the country, the green economy is not proving to be the job-creation engine that many politicians envisioned. President Obama once pledged to create five million green jobs over 10 years. Gov. Jerry Brown promised 500,000 clean-technology jobs statewide by the end of the decade. But the results so far suggest such numbers are a pipe dream."  (Emphasis is ours.)

When even the NYT is saying it, you know there's a problem ...

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Dominion Resources, Inc., has filed a request to export liquefied natural gas (LNG) from its Cove Point terminal, according to this article in the Pittsburgh Tribune-Review.  Very interesting.

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That's the finding of a report just issued by the Federal Trade Commission (FTC), according to this press release.  "The Federal Trade Commission today issued a Bureau of Economics staff report examining trends in the petroleum industry and how they have affected gasoline prices between 2005 and early 2011. It concludes that while a broad range of factors influence the price of gasoline, worldwide crude oil prices continue to be the main driver of what Americans pay at the pump."  You can find a link to the report there as well.

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U.S. EPA has published a proposed new rule intended to broadly impact our industry entitled, "Oil and Natural Gas Sector:  New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews."  We reported on it previously here (Beware of Greeks Bearing Gifts).  Comments are due October 24, 2011.  In addition, U.S. EPA has scheduled public hearings in Pittsburgh, PA (September 27, 2011), Denver, CO (September 28, 2011), and Arlington, TX (September 29, 2011) (see here).

Maybe we'll see the President intervene as he did here just recently (statement from the President requesting that U.S. EPA withdraw draft Ozone National Ambient Air Quality Standards).  Maybe ...

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We've reported previously on the benefits to North Dakota from production out of the Bakken (see here, e.g.).  Now USA Today is getting into the act:  "Unemployment is a national problem in the U.S., but you wouldn't know that if you travel through North Dakota. *** The reason?  Billions of dollars are coming into the state and thousands of people are following—all because millions of barrels of oil are flowing out."  For more, see here.

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