Litigation

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    Radicals File Lawsuit Against WV DEP for Approving MV Pipeline

    A group of profoundly radical “environmental” organizations filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit last Friday against the West Virginia Dept. of Environmental Protection–for doing their job. Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network has sued the DEP because the department had the audacity to conduct a very thorough review, and then issue a stream and water-crossing permit (demanded under federal law) for the Mountain Valley Pipeline (MVP). MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners. This is now SOP–standard operating procedure–for Big Green groups with deep pockets. Sue and keep suing in an attempt to slow and eventually kill off any project that remotely involves fossil fuels. Yes, they are RADICAL, they are EXTREME, waaaaaay outside the mainstream of American society. And they MUST BE STOPPED. When will someone launch weekly lawsuits against these Big Green organizations? Here’s the latest maddening development…
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    Exxon Takes Aim at NY AG’s “Heads I Win, Tails You Lose” Witch Hunt

    On Friday, Exxon Mobil took the gloves off and went after the out-of-control New York Attorney General Eric Schneiderman. Last year Schneiderman decided he would try to shake down Exxon for billions of dollars, claiming the company wasn’t being honest with shareholders about the threat of man-made global warming, which doesn’t actually exist. He said Exxon should have done more to warn shareholders that they invest in a filthy, rotten, human-killing Big Oil company–a company whose stock will someday implode. We’ve covered Schneiderman’s witch hunt from the beginning (see our stories here). Schneiderman tried to enlist the assistance of other attorneys general, including the fruity Maura Healy from Massachusetts. Some (like Healy) have stayed with him, others abandoned him when it became obvious Scheiderman was behaving like Captain Ahab in Mody Dick, hunting his own great white whale. Schneiderman originally said Exxon underplayed the threat of global warming. Recently, he changed it up and now says Exxon has overplayed the threat. He’s desperate. On Friday, Exxon, in responding to this latest change in tactic, said Scheiderman is making “inflammatory, reckless and false allegations.” You don’t get any more plain-spoken than that! This is now a bare knuckles fist fight. We’re betting on Exxon…
    Read More “Exxon Takes Aim at NY AG’s “Heads I Win, Tails You Lose” Witch Hunt”

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    Dela. Riverkeeper Loses Martian Case to Stop Rex Energy Drilling

    THE Delaware Riverkeeper (i.e. Maya van Rossum) and a small group of anti-drilling parents from the Mars School District (“Martians”) in Butler County, PA, have just suffered a crushing defeat in their years-long battle to prevent Rex Energy from drilling wells “near” a local school. Backed by money and legal help from Philadelphia Big Green groups Delaware Riverkeeper and Clean Air Council, the Martians filed frivolous lawsuit after frivolous lawsuit. The effort is aimed at denying landowners in Middlesex Township revenue from legally permitted drilling. The lawsuits have cost the taxpayers of Middlesex Township over $80,000 in legal fees. Even amid the back and forth lawsuits, at least two of the wells were permitted and drilled by Rex Energy, despite the bleatings of the Martians (see Martian Victory! 2 Wells Near Mars School Nearly Done Drilling). But that didn’t stop the frivolous lawsuits. Using legal assistance from THE Delaware Riverkeeper, the Martians appealed a town ordinance that allows the wells to be drilled about 3/4 of a mile from the local Mars School. A panel of three western PA judges in Commonwealth Court heard arguments in the case last November (see Martians Use Riverkeeper to Continue Court Battle Against Rex). This week the three-judge panel ruled–against Riverkeeper and the Martians… Read More “Dela. Riverkeeper Loses Martian Case to Stop Rex Energy Drilling”

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    Wyoming County Landowners Organize re Low Royalties; Arbitration?

    Pennsylvania’s landowners, at least many of them, continue to be angry about getting low–or no–royalty checks. That’s not what they signed up for when leasing their property. A group of 200+ landowners packed a meeting last week in Wyoming County, PA to discuss the situation, and what to do next. The meeting was organized by the Pennsylvania Chapter of the National Association of Royalty Owners (NARO). One distinct possibility raised at the meeting: force Chesapeake (and others) into arbitration. NARO’s approach is to push for legislation, specifically PA House Bill (HB) 557 (see PA Rep. Garth Everett Reintroduces Minimum Royalty Bill, 3rd Time). NARO encouraged attendees to share their royalty stories with lawmakers, telling attendees such stories have an impact. Here’s what happened last week in Wyoming County… Read More “Wyoming County Landowners Organize re Low Royalties; Arbitration?”

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    PA Court Rules Compressor, Gas Well Not “Single” Emission Source

    A somewhat obscure court case in Pennsylvania has potentially big implications for drillers who also own pipeline subsidiaries. In Lycoming County, PA, Seneca Resources (subsidiary of National Fuel Gas Company) drilled a series of wells on a pad called Well Pad E. Another NFG subsidiary, NFG Midstream, connected gathering lines to Well Pad E. NFG Midstream operates a compressor station to push the gas through the pipeline system. Both the well pad and the pipeline/compressor station are subject to air emissions regulations by the state Dept. of Environmental Protection (DEP). Each subsidiary on its own–the well pad, and the compressor station–don’t produce enough emissions to trip a costly upgrade in technology. However, if you combine both together into a single “source,” the two together do cross the threshold and would cost NFG big bucks in emissions technology to comply. The DEP lumped both together and told NFG to upgrade their emissions technology. Thing is, if another company owned the pipeline system, say Williams, the DEP would not have tried combining the two into a single source. So NGF appealed the DEP decision to the Environmental Hearing Board (EHB), a quasi-court set up to hear appeals of DEP decisions. The EHB found in favor of the DEP, so NFG appealed it again, this time to PA Commonwealth Court. Last week the court overturned the DEP decision and said just because two subsidiaries have the same parent, you can’t just lump them together as a single source for air emissions regulations… Read More “PA Court Rules Compressor, Gas Well Not “Single” Emission Source”

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    Liberal DC Court Asks EPA to Respond to Lawsuit by Radical Enviros

    Yesterday we reported on the federal Environmental Protection Agency’s wise move to begin the process of rolling back Obama-era regulations on methane, designed to regulate the oil and gas industry (see Beginning of the End: EPA Issues 90-Day Stay for Methane Rule). Big Green groups with deep pockets sued a few days later, claiming the agency that instituted the rules in the first place (the EPA) shouldn’t be able to roll back the rules they themselves made up. Now, a federal court has somewhat agreed, telling the EPA they have to justify themselves by next week. Funny, the same court never tried to stop these rules in the first place, when 15 states sued to block their implementation. It seems the door only swings one way for the far-left Court of Appeals in Washington, D.C…. Read More “Liberal DC Court Asks EPA to Respond to Lawsuit by Radical Enviros”

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    Beginning of the End: EPA Issues 90-Day Stay for Methane Rule

    The federal Environmental Protection Agency (EPA), under the Obama/McCarthy reign of terror, far overstepped its charter by seizing power that didn’t belong to it. In May 2016, the EPA issued new methane rules in a back-door way to try and regulate the oil and gas industry (see EPA Does it Again: Tries to Destroy O&G with New Methane Rule). In pretty short order several states sued to stop the order, which eventually turned into 15 states (see 15 States File Lawsuits to Block EPA O&G Methane Rule). The EPA claimed, at that time, that methane is leaking out of bore holes, pipelines, valves–just about everywhere on a well pad. And methane (as the fairy tale goes) is a gajillion times more “potent” than carbon dioxide when it comes to causing man-made global warming. The problem is, the EPA used estimates, calculations, algorithms, and spreadsheets as their “evidence.” They never went into the field and actually measured anything. Such a field study was done–by the EPA–in the Uinta Shale Basin in Colorado. In research published just last month, the EPA found it had overestimated methane leakage by 97% (see Study Finds Fugitive Methane from O&G 97% Less than EPA Estimates). The only rational thing to do is to stop the EPA’s rule and reevaluate it in light of this new evidence, which the EPA did last week. The EPA put a 90-day “stay” on implementing the Obama methane rule–which marks the beginning of the end for this terrible rule. Earlier this week, a group of radical environmental organizations (some of the worst of the worst) sued the EPA for stopping implementation of this illegal rule based on faulty science…
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    NFG’s Northern Access Pipeline Wins Eminent Domain Case…in NY!

    Talk about mixed signals. In April, MDN brought you the sad (and angering) news that once again Gov. Andrew Cuomo has caved to political pressure and instructed the Dept. of Environmental Conservation (DEC) to deny stream crossing permits for National Fuel Gas Company’s (NFG) Northern Access Pipeline project (see Cuomo’s Corrupt NY DEC Blocks NFG Northern Access Pipeline Permit). Not long after, NFG filed a lawsuit against the DEC for their arbitrary, capricious and politically-motivated denial of the permits (see NFG Sues NY DEC in Fed Court re Northern Access Pipe Rejection). Meanwhile, another series of court cases has been working its way through NY’s court system–eminent domain cases against a few holdout landowners who refuse to allow the Northern Access Pipeline across their properties. Some 97% of all landowners along the proposed route have signed easements with NFG, but there’s always a few holdouts. Last Thursday one of those holdouts lost in New York Supreme Court in Cattaragus County. (Don’t be confused, in NY, “Supreme Court” is just one level up from county court. The state’s highest court is called the Court of Appeals.) Camp Duffield in Cattaraugus County lost its court case against NFG, and consequently is now being forced, by court order, to submit to the pipeline–when and if it gets built. And that’s the conundrum. The courts obviously recognize NFG’s right, under a FERC (Federal Energy Regulatory Commission) order to build the pipeline. But the Cuomo-corrupted DEC does not… Read More “NFG’s Northern Access Pipeline Wins Eminent Domain Case…in NY!”

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    WV Drillers & Landowners Want New Law re Post-Production Issue

    Earlier this week MDN reported on the recent West Virginia Supreme Court decision to reverse it’s earlier decision and allow EQT (and by extension, other drillers) to deduct some post-production expenses from royalties paid to landowners (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). The Leggett v. EQT case turned on the meaning of three short words: “at the wellhead” (see WV Supreme Court Post-Production Royalty Case Hinges on 3 Words). This latest final final decision must be the…well…final decision, right? Not so fast. There is another Supreme Court case from 2006, Tawney v. Columbia Natural Resources, which also dealt with post-production expenses and found drillers do not have the right to deduct them from royalties. But there are differences. “Leggett deals with the statute on royalties, while Tawney is about lease contracts.” It’s a pretty safe bet that a new case will be filed challenging Tawney in light of the Leggett decision. All of this back and forth in the courts is unsettling for both drillers and landowners. Both sides are in agreement about one thing: They both want the WV legislature to pass a new law clarifying the issue of post-production deductions…
    Read More “WV Drillers & Landowners Want New Law re Post-Production Issue”

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    WV Supreme Court: Non-Participating Rights Owner Can’t Stop Lease

    Just yesterday we told you about an important court case that had gone to the West Virginia Supreme Court of Appeals (see WV Rights/Pooling Case May have Big Impact on Shale Industry). In brief, the case was appealed from a lower court where a judge found that a “non-participating” mineral rights owner, someone who owned a quarter of the rights for a property in Marshall County, had the power to object and stop a lease of the property for oil and gas drilling. We thought it strange that the lower court judge would make such a decision, which threatens to up-end thousands of leases in WV that are similar. Little did we know that as we were publishing that story, the WV Supreme Court was rendering its decision. All five justices voted to overturn the lower court ruling and preserve sanity for leases in the Mountain State… Read More “WV Supreme Court: Non-Participating Rights Owner Can’t Stop Lease”

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    PA Hearing Board Reduces EQT Fine from $4.5M to $1.1M

    In October 2014, the Pennsylvania Dept. of Environmental Protection (DEP) fined Marcellus driller EQT a whopping $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine is unreasonable and arbitrary. EQT appealed the fine and the case all the way to the PA Supreme Court. In December 2015, the high court handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine (see PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case). The Supreme Court sent the case back to a lower court, PA Commonwealth Court, for follow up work, and in January 2017, a three-judge panel ruled that the method the DEP currently uses to assess fines–by how many days pollution lingers, instead of by how many days the initial release of pollution lasted–is not legal nor common sense (see EQT Wins Court Case Against PA DEP re $4.5M Wastewater Leak Fine). The judges said such a method in fining, “would result in potentially limitless continuing violations.” Under the old way of calculating fines, the DEP was considering upping the fine on EQT to an insane $157 million. Calculating it under the new way will mean a fine of around $120,000. We thought with that ruling it was all done and dusted. Not so. The soap opera continued when the DEP appealed the Commonwealth Court panel’s ruling back up to the PA Supreme Court where the Supremes will consider it all over again (see DEP Appeals $4.5M Wastewater Leak Fine Against EQT to Supremes). Into this mess, let’s now throw in another wrinkle. While the courts have been grappling with issues of procedure and whether or not the DEP can assess fines the way it claims it can (that is, Constitutional issues), at the same time the matter was brought up before the PA Environmental Hearing Board (EHB), a sort of quasi-court set up to hear appeals of decisions made by DEP. The EHB has decided to adjust the fine down significantly–from the DEP’s initial levy of $4.53 million down to $1.1 million. Here was their reasoning… Read More “PA Hearing Board Reduces EQT Fine from $4.5M to $1.1M”

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    WV Rights/Pooling Case May have Big Impact on Shale Industry

    A court case from Marshall County, WV decided in April 2016 is heading to the WV Supreme Court of Appeals (the state’s highest court). The stakes in Contraguerro v Gastar Exploration could not be higher for the Marcellus industry in the Mountain State. In brief, 70 years ago a 106-acre track of property was sold. The sellers retained a one-quarter “non-participating interest” in the oil and gas rights. That means the buyer got to decide when/if to lease the property for drilling, and if so, has the right to negotiate the price, etc. The remaining one-quarter non-participating interest holders would get royalties, but nothing else. Fast forward several generations and the heirs of the original sellers didn’t even know they owned an interest in the land until contacted by Gastar, which needed a signature in order to send them checks for royalties. The heirs decided to sue to stop the deal, either in a bid to negotiate a better deal or perhaps because they don’t like fossil fuels. Who knows? The case went to the Circuit Court of Marshall County and a judge there found in favor of the heirs–giving them, and by extension any minority rights owner, the power to stop lease deals. An unmitigated mess that threatens many lease deals because divided rights ownership is common in WV. Perhaps this case was part of the motivation to pass a new law this year addressing “co-tenancy” (see Analysis of New WV Bill SB 576 re Co-Tenancy & Joint Development). The co-tenancy law, if passed, means if there are multiple owners for the mineral rights under a property, you would only need a simple majority of those owners to approve a drilling lease. Currently, if one person with a teeny tiny share objects, it stops the process. In the Contraguerro case, although the heirs are owners, they are “non-participating”–so they should not have had a say anyway. However, a lower court judge found otherwise. So the case was appealed and is now before to the WV Supreme Court… Read More “WV Rights/Pooling Case May have Big Impact on Shale Industry”

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    Antis Score Small Victory Against ME2 Pipeline re Eminent Domain

    The radical Philadelphia-based Clean Air Council (CAC) has scored a very small, but notable, victory in it’s battle to block Sunoco Logistic Partners’ from building the Mariner East 2 Pipeline project. Last Thursday a judge with the Philadelphia Court of Common Pleas allowed a case filed by CAC to proceed. The case claims that Sunoco cannot use eminent domain powers granted by the State of Pennsylvania to force its way through properties where the landowner refuses to cooperate, because (CAC claims) the pipeline is technically not an intrastate pipeline (only located in PA), but is instead an interstate pipeline (crossing the border into Ohio). The judge said the case has enough merit that it can go to trial. We call it a small victory because Common Pleas court is the lowest trial court in the state. There are several layers higher where appealed cases are decided. This is more of a statement than a serious threat. But let’s play “what if.” What if CAC wins, and on appeal, wins again?…
    Read More “Antis Score Small Victory Against ME2 Pipeline re Eminent Domain”

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    WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry”

    Last December the West Virginia Supreme Court ruled in a case to disallow Marcellus driller EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” Last week, just five months later, four of five justices (including a newly elected judge) reversed their December decision (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). The lone judge voting against the decision was Robin Jean Davis. Yesterday she released her dissenting opinion. In very strong language, Judge Davis said the court’s other four members “used legal sophistry” to prop up their decision, and that “the majority opinion is simply wrong.” Here’s what else Judge Davis had to say… Read More “WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry””

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    WV Supreme Court Reverses Itself, Post-Production Deductions OK

    In a decision that will thrill drillers, but anger landowners, the West Virginia Supreme Court decided last week to overturn its own previous decision (from just last December) and allow driller EQT to deduct post-production expenses from royalty payments. Last December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). Those who won the case say newly elected Supreme Court Justice Elizabeth D. Walker has conflicts of interest and should not have been allowed to vote to rehear the case in the first place (which she did). On that basis, they tried to avoid the rehearing altogether, but that failed, and lawyers were in court arguing the case earlier this month. As it turns out, the lawyers mainly argued over the meaning of three short words: “at the wellhead” (see WV Supreme Court Post-Production Royalty Case Hinges on 3 Words). On Friday, the justices reversed their earlier decision, voting 4-1 in favor of allowing EQT to deduct “reasonable” post-production expenses (copy of the decision below). Newly elected Justice Beth Walker, with (according to the other side) conflicts of interest, voted in favor of EQT. This has BIG implications for landowners and drillers in the Mountain State… Read More “WV Supreme Court Reverses Itself, Post-Production Deductions OK”

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    Chesapeake Scores Court Victory to Prevent PA Royalty Class Action

    Sometimes we wish we had gone to law school–to better understand some of the cases involved with oil and gas. This is one of those times. When you read words like “arbitrability,” the eyes start to glaze over. We’ll do our best to summarize some important news for landowners who want to sue Chesapeake over shorted royalty checks. Starting in 2008, Chesapeake Energy, under then-CEO Aubrey McClendon, began leasing acreage in northeastern Pennsylvania for shale drilling. Said drilling happened and in 2013, Scout Petroleum purchased royalty rights from some NEPA landowners. That is, Scout took over receiving the royalty payments in return for giving those landowners an up front, lump sum. In 2014, when it became obvious Chesapeake was using aggressive deductions from royalty payments (i.e. landowners were getting hosed), Scout filed a lawsuit against Chesapeake, requesting (under the lease language) that their grievances against Chessy be arbitrated AND (not specifically under the lease language) that Scout and thousands of other landowners be lumped together into class action arbitration (see Bad to Worse: PA Royalty Owner Asks Court for Chessy Class Action). Scout lost the case over class action and appealed. In late April, an appeals judge found that class action arbitration is not part of the original lease language, express or implied, and therefore is not allowed. Scout is appealing the decision once again. This is far from over, but for now, Chesapeake has a small victory in forcing landowners to file individual lawsuits…
    Read More “Chesapeake Scores Court Victory to Prevent PA Royalty Class Action”