At the Well Weekly – Oil and Gas Update for Week Ending 5/18/2018 – PA EHB’s Latest Decision on the Environmental Rights Amendment

Since our last report, oil prices surpassed $80/bbl before dipping slightly alongside a flat rig count and lower natural gas spot prices.  In Appalachia, the Pennsylvania Environmental Hearing Board issued its latest decision discussing the Pennsylvania “Environmental Rights Amendment” in a dispute over oil and gas well-drilling permits while a federal judge in Virginia issued sanctions to folks opposing the Mountain Valley Pipeline, forcing them out of their tree stands so clearing activities for the project can proceed. In other news, the federal government weighs in on a controversial climate-change lawsuit and a federal judge in California issued a decision on the bi-state sage grouse listing under the Endangered Species Act.  Here’s the week in review:

Rig Counts, Oil Prices, & Spot Prices oil  

  • Rigs: National (↑­­­­­1046); Marcellus (55); Utica/Point Pleasant (25)
  • Brent Crude: $79.69/bbl
  • West Texas Intermediate: $71.62/bbl
  • NYMEX: June 2018 contract @ $2.815/MMBtu.
  • Spot Prices: Henry Hub ($2.78/MMBtu); Dominion South ($2.19/MMBtu); Tenn. Zone 4 ($0.77/MMBtu)

Sources: BakerHughes; WSJ; EIA.

Developments in Appalachia mountains

  • PA EHB Denies Challenge to Oil/Gas Well Permits under ERA. The Environmental Hearing Board denied an appeal by the Delaware Riverkeeper challenging an operator’s well permits and renewal permits, again stating that every well permit issued by the PADEP requires a constitutional analysis but concluding that PADEP complied with constitutional environmental protection and trustee duties when issuing the permit.   Delaware Riverkeeper v. DEP, Docket No. 2014-142-B (consolidated with 2015-157-B) (May 11, 2018).
  • PEDF Challenges Funds for DCNR Operations under Article I, Section 27.  The Pennsylvania Environmental Defense Foundation challenged the Commonwealth’s use of revenues from the state’s “Oil and Gas Lease Fund” for operations of the Department of Conservation and Natural Resources.  The case is pending.
  • Mountain Valley Pipeline Opponents Ordered out of Tree. A federal judge in Virginia issued sanctions to opponents of a pipeline project who refused to come down from their tree stands as part of protest efforts.  Mountain Valley Pipeline v. Easements, — F. Supp. 3d —, No. 7:17-CV-00492, 2018 WL 2088762 (W.D. Va., May 4, 2018).
  • WV Supreme Court Interprets “Said Parcels” in Oil and Gas Reservation. The Supreme Court of West Virginia held that a grantor’s reservation of oil and gas rights from “said parcels” only applies to the specific parcels named in the reservation and not to other parcels mentioned in the deed without any reservation language.  Kupfer v. Chesapeake Appalachia, LLC, — S.E.2d —,  No. 17-0527, 2018 WL 2175553 (W. Va., May 11, 2018).

Developments Beyond Appalachia us-map

  • Federal Government Urges Court to Toss Climate Change Suits. The U.S. Government filed an amicus brief urging a California judge to dismiss lawsuits filed by local governments against major oil and gas companies alleging their activities knowingly caused climate change that, in turn, damaged government infrastructure, arguing that if there will be climate-change policy it should be set by Congress, not the courts. California v. BP, Nos. 3:17-cv-06011 and 3:17-cv-06012 (N.D. Cal.) (pending).
  • CA Federal Magistrate Judge Says FWS Erred in Battle over Bi-State Sage Grouse Listing. A federal magistrate judge in California concluded that the Fish and Wildlife Service erred in 2015 when it backed away from a proposal to give Endangered Species Act protection to a distinct population of “bi-state” sage grouse in California and Nevada, concluding that the decision lacked support and ordering that the agency reconsider federal protection of the species.  Desert Survivors v. U.S. Dep’t of the Interior, No. 16-CV-01165-JCS, 2018 WL 2215741 (N.D. Cal., May 15, 2018).
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At the Well Weekly
Welcome to At the Well Weekly, a blog designed for busy folks in the oil and gas industry. If you haven’t read a thing during the week, our hope is that you can breeze through the update and be up to speed on the basics such as current rig counts, commodity prices, and case law updates on legal issues of interest in Appalachia and elsewhere.
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Cozen O’Connor Blogs