Litigation

Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Regulation

Trump Administration Delays Listing Bumble Bee as Endangered
February 16, 2017February 16, 2017

We’ve written before about the thuggish nature of U.S. Fish and Wildlife Service (USFWS). The USFWS is responsible for recommending and listing varies species as threatened or endangered–empowered to do so under the Endangered Species Act (ESA). USFWS has WAY too much power under dictatorial rulers like the ignominious B.H. Obama. On September 22, 2016 the USFWS published a proposed rule to list the rusty patched bumble bee (Bombus affinis) as “endangered” under the ESA. The rusty patched bumble bee is found in the Midwest and eastern parts of the U.S. If it gets listed, it will have SIGNIFICANT impacts on drillers and midstreamers (see “Endangered” Bumble Bee May Slow/Stop O&G Projects in Northeast). With just a few days left in Obama’s reign of terror, the USFWS pulled the trigger and did it (see USFWS Pulls the Trigger and Lists Bumble Bee as Endangered). Except happily, that’s not the end of the story. The white knight rode into town (D.J. Trump) and with the stroke of his pen, delayed implementation of the onerous new listing. Which has antis, like the Rockefeller-backed Natural Resources Defense Council, up in arms. They’ve just sued…
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Energy Services | Industrywide Issues | Litigation | NGLs | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Maya & Friends Sue (Once Again) to Stop Mariner East 2 Pipe
February 15, 2017February 15, 2017

Mariner East 2 map – click for larger version

Well that didn’t take long. On Monday the Pennsylvania Dept. of Environmental Protection (DEP) issued their final water and erosion permits to Sunoco Logistics to build the 306-mile Mariner East 2 natural gas liquids (NGL) pipeline (see Finally! PA DEP Issues Final Permits for Mariner East 2 Pipeline). Even though anti-drilling radicals, like Maya van Rossum (THE Delaware Riverkeeper), the Philadelphia-based Clean Air Council and the Mountain Watershed Association have repeatedly sued (and lost) to stop the project, they sued again on Monday following the DEP announcement. The three groups filed an appeal with the Pennsylvania Environmental Hearing Board, a special type of court set up to hear appeals of decisions by the DEP. In an interview, Miss Maya lashed out at her own party, blaming Democrat Gov. Tom Wolf for supporting the pipeline project. She is, of course, on the leftmost fringe of the environmental movement–no pipeline anywhere for any reason is acceptable because pipelines flow evil fossil fuels. But you can’t just file a lawsuit to stop a pipeline because you have batty beliefs about them. You need an excuse, something a liberal judge can use as justification to grant your wish. In the case of Miss Maya & friends, they claim Mariner East 2 provided an “incomplete and deficient” application, and that by granting the permits, the DEP is covering up and/or ignoring the deficient application…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

PA Landowner Wins Case Against Chesapeake re Royalty Deductions
February 13, 2017February 17, 2017

Paul Sidorek, an accountant representing some 60 northeastern Pennsylvania landowners who receive royalty income from drilling, is also a landowner himself. In 2009 Sidorek leased 145 acres, a lease that was eventually sold to Chesapeake Energy. Because of the troubles encountered by others, Sidorek wrote into his lease a 20% royalty and made sure the lease explicitly stated that no expenses could be deducted from the sale of the gas produced on his property. That is, NO post-production expenses could be deducted. And yet, Chesapeake disregarded the lease and deducted as much as 30 percent from his royalties, attributing it to “gathering” and “third party” expenses, an amount that adds up to some $40,000 a year (see Chesapeake Short-Changes PA Landowner on Royalty Checks). Sidorek fought Chesapeake in court, and ended up in arbitration. The arbitrator has just ruled–in Sidorek’s favor. The good news is that a PA landowner has gotten some justice against Chesapeake’s sleazy practice. The bad news is that it’s not a precedent and can’t be used in other court cases…
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Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Lycoming County | Pennsylvania | Range Resources Corp | Statewide PA

PA Case Highlights Risk in Using Non-Lawyer to Negotiate Lease
February 10, 2017February 10, 2017

In August 2013 an extensive investigative article about a then-director for the Pennsylvania Game Commission, William A. Capouillez, appeared in the Philadelphia Inquirer (see PA Director of Game Commission Double-Dipping with Gas Leases?). The article spotlighted a potential conflict of interest between Capouillez’s day job and his moonlighting side job as an agent for property owners who lease their land for oil and gas development. The issue? He was signing private deals with the same companies that often work with his state agency. The State Ethics Commission did a lengthy investigation and three years later, the Commission levied a $75,000 fine, which Capouillez agreed to pay (see Former PA Game Commissioner Fined $75K for Lease Moonlighting). Although he paid the fine, Capouillez remained defiant and said the fine is a tiny fraction of the original fine sought–an indication of his vindication. There is new litigation involving Capouillez. One of the leases he negotiated was on behalf of the Laurel Hill Game and Forestry Club with Range Resources. The way Capouillez constructed his leases was that he would get a cut, a percentage, of any lease signing bonus and ongoing royalty payments, in return for the leases he brokered. Range never drilled on Laurel Hill’s property, but they did start to push dirt around a few hours before the lease expired as a way of holding the acreage (some would call their action a less-than-honorable practice). Laurel Hill sued Range and the lawsuit was later settled by drafting up a new lease with new terms. The new lease/terms were not brokered by Capouillez and he was cut out of the deal–so Capouillez sued both Laurel Hill and Range. The moral of the story, according to lawyers writing about the case, is to never use non-lawyers to represent you in lease negotiations…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Litigation | Ohio | Pipelines | Statewide OH

Time’s Up – Rover Pipe Uses Eminent Domain on Holdout OH Landowners
February 8, 2017February 8, 2017

The clock just ran out for Ohio landowners who either thought Energy Transfer’s Rover Pipeline would not get authorized, or hoped to hold out and get higher rates of payment to agree to allow the pipeline to cross their land. As pipeline companies often say, the use of eminent domain to gain access to property is a “last resort.” The time of last resort has come. As soon as Rover received its final authorization from the Federal Energy Regulatory Commission on Friday (see ET Rover Pipeline Gets Final Approval by FERC), it filed eminent domain lawsuits against landowners who have refused for over a year to negotiate. Now those landowners must allow Rover access–their bargaining position is gone. Rover intends to fell trees by March 31 to comply with batty laws to protect federally-protected bats. The chainsaws are revved and ready to go. The courts will decide how much compensation holdout landowners will receive–far less than if they had struck a deal before now…
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Allegheny County | Electrical Generation | Industrywide Issues | Litigation | Pennsylvania

Invenergy Proposes Deal to Elizabeth Twp to Move Gas Power Plant
February 7, 2017February 7, 2017

In January 2016, Invenergy announced their intention to build a natgas-powered electric plant in Elizabeth Township, in Allegheny County (see Invenergy Eyes SWPA for Second Marcellus-Powered Electric Plant). Compared to Invenergy’s other PA plant now under construction in Jessup, PA (1,480 megawatts), the proposed Elizabeth plant is much smaller, at 550 megawatts. It would be built on a brownfield site near Pittsburgh. Even though the site is a former landfill where fly ash was dumped, making it unusable for just about any other purpose, a group of local residents would prefer to keep the site a contaminated dump rather than convert it to a beneficial use like generating electricity (see Invenergy Gets Pushback on Proposed Natgas Power Plant in SWPA). Such is the kooky world of antis. Unfortunately, the local antis enlisted the support of Elizabeth Township’s zoning board, which rejected the plan in June (see Elizabeth Twp Rejects Clean Invenergy Power Plant at Dump Site). So Invenergy sued the town in October (see Invenergy Sues Elizabeth Twp to Allow NatGas-Fired Electric Plant). Rather than drag out the lawsuit, causing Elizabeth taxpayers big money to defend a defenseless decision, Invenergy has offered an olive branch. Invenergy is proposing to locate the plant at a new, more rural location about 10 miles away. If Elizabeth Twp agrees to the plan, Invenergy will drop the lawsuit. The new location is a junk yard–so Invenergy is proposing to change locations from one kind of dump to another. Meanwhile, the residents who live near the first location will continue to live near a contaminated dump instead of a cleaned-up, clean-burning natural gas plant…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Ohio | Statewide OH

Radical Enviro Groups Suing to Block Wayne Natl Forest Drilling
February 6, 2017February 6, 2017

In December the Bureau of Land Management proceeded with an online auction for BLM-controlled land in Ohio’s Wayne National Forest (see 10-Yr Wait is Over, BLM Auctions Wayne Natl Forest Leases Today). The BLM plan was to auction 33 parcels totaling 1,600 acres. As it turns out, only 17 parcels totally 719 acres actually got auctioned (see BLM Auction Leases 17 Parcels, 719 Acres in OH Wayne Natl Forest). At the last minute the BLM withdrew 881 acres (16 parcels) because there were remaining issues with ownership title of the mineral rights. The 719 acres was all leased by noon and brought bids ranging from $2,000 to $5,000 per acre–a laughably small (but important) amount of acreage because it will allow drilling units to be formed with nearby private acreage. The BLM recently announced they will hold another auction in March (see BLM Leasing Another 1,186 Acres in Wayne Natl Forest on March 23). Progress! We suppose it’s not surprising that four radical environmental organizations–on the far outreaches of the environmental movement–have just issued a notice to announce they are suing to stop any drilling in WNF. Which four groups?…
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Energy Companies | EQT Corp | Industrywide Issues | Lease & Royalty Payments | Litigation | Statewide WV | West Virginia

EQT Catches Big Break in WV Supreme Court re Royalty Deductions
February 1, 2017February 1, 2017

In 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). Specifically, 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.” We can’t stress just how big a deal this is. So the following news is equally as big: In a rare and unusual move, the same WV Supreme Court has agreed to rehear the case…
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CNG/LNG | Commodity Price | Economic Impact | Industrywide Issues | Litigation | NGLs | Pennsylvania | Pipelines | Regulation | Statewide PA | Taxation

Exclusive: MSC’s Dave Spigelmyer Goes On the Record with MDN
January 30, 2017January 30, 2017

Dave Spigelmyer

Last Friday MDN editor Jim Willis had the pleasure of speaking (via phone) with the president of the Marcellus Shale Coalition, David Spigelmyer. Some 300 companies make up the membership of the organization–including all of the top exploration & production (E&P) companies and midstream (pipeline) companies operating in our region. Dave himself used to work for Chesapeake Energy once upon a time. He is a Pennsylvania boy, born and bred, and knows the industry inside and out. Dave made time to speak with MDN about a wide range of issues. We should note nothing was “off limits”–Jim asked some tough questions. Below is a transcript of that interview. We tackle topics including the Marcellus industry outlook for 2017, the commodity price of natural gas in our region vs. other locations, the proposed severance tax in PA, various pipeline projects, the Shell cracker, MSC’s lawsuit against DEP Chapter 78a regulations, and the “civil war” between drillers and landowners over the royalty issue. It’s all in there…
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Industrywide Issues | Litigation | Regulation

Waters of U.S. Case on Hold Until U.S. Supreme Court Weighs In
January 27, 2017January 27, 2017

In May 2015 Obama’s rogue Environmental Protection Agency (EPA) along with the Obama U.S. Army Corps of Engineers (USACE) released a finalized rule clarifying what “Waters of the United States” (WOTUS) means vis a vis what can be regulated under the federal Clean Water Act (see EPA Power Grab: Redefines Waters of the U.S. to Include Everything). Essentially the rule change redefines everything down to muddle puddles (we’re not exaggerating) as subject to the federal Clean Water Act. In October 2015 a federal judge stopped WOTUS from going into effect, while it’s litigated (see Sixth Circuit Court Stops EPA from Implementing WOTUS Anywhere). It took a year, but in November 31 states along with other entities filed briefs with the 6th U.S. Circuit Court of Appeals opposing the rule (see 31 States Ask Court to Dump Obama WOTUS Rule as Unconstitutional). Right after that, 21 U.S. Senators and 67 House of Representatives members (Congresspersons) filed a “friend of the court” (amicus) brief urging the court to vacate the EPA’s WOTUS rule (see 21 Senators, 67 Representatives Join Case Against EPA WOTUS Rule). However, the 6th Circuit Court hearing the case has temporarily stopped the case, until the U.S. Supreme Court decides if the 6th Circuit has the right to be the court hearing the case…
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Electrical Generation | Energy Services | Industrywide Issues | Litigation | Millennium Pipeline | New York | Orange County | Pipelines | Regulation

Millennium Pipeline Sues Cuomo’s Corrupt DEC Over Expansion Delay
January 23, 2017January 23, 2017

MDN has previously reported on a $900 million natural gas-fired electric generating plant coming to Orange County, NY (see Orange County, NY Marcellus-Fired Electric Plant OK’d by Judge). The CPV (Competitive Power Ventures) Valley Energy Center project is being opposed by local anti-drilling ninny nannies, including Hollywood star James Cromwell. No matter. It’s already under construction. Unfortunately the very worthy project is marred by corruption inside the Cuomo Administration (see NY NatGas-Fired Electric Plant an Inside Job for Corrupt Cuomo Aide). However, construction continues and the plant will get built. The problem now is getting a 7.8 mile pipeline, an off-shoot pipeline from the mighty Millennium Pipeline, built to the plant to supply the natural gas it will need to run. In November the Federal Energy Regulatory Commission (FERC) approved the short pipeline (see FERC Approves Pipeline to Orange County, NY NatGas Power Plant). However, as with the Constitution Pipeline, the Cuomo Dept. of Environmental Conservation (DEC) is intentionally blocking this pipeline using delays–no doubt at Cuomo’s direction. Millennium is not, like Williams did with the Constitution, sitting on its hands waiting for the DEC. The Millennium is aggressively pushing the DEC to grant the necessary water crossing permits and has just sued the DEC to make it happen…
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Butler County | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Rex Energy

Handful of Butler Co. Residents Still Suing Rex Energy 5 Years Later
January 23, 2017July 11, 2018

For years MDN has reported on a lingering/ongoing story of a community in western Pennsylvania (in Butler County) who say that nearby drilling by Rex Energy led to contamination of their well water supplies (see PA Residents Weary of Fight with Rex over Water Contamination and Rex Energy Water Contamination Case Shifts Focus to Water Pipeline). Several of the families sued Rex. The PA Dept. of Environmental Protection, after an extensive investigation, said that Rex’s drilling is not at fault in the situation. However, for most of the families, the issue progressed beyond blame–apparently water quality in the area was never the greatest to begin with. Rex had built a water line in the area to supply water for fracking and had expected to turn over control/ownership of that line in 2013. That water line can potentially be used to supply fresh water to the affected homes. The debate has been: Who will pay to hook up the homes and to maintain the pipes and infrastructure required? Since Rex, according to the DEP, is not to blame for the poor water quality in the area, the company understandably doesn’t want to pay big bucks to connect and maintain the line to residences in the area. As far as we can tell, the line is not hooked up. The families with bad water still have bad water and depend on donated water to this day for drinking and cooking…
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Industrywide Issues | Litigation | Pipelines

CT Heating Oil Companies Lose Bid to Block NatGas Pipelines
January 19, 2017January 19, 2017

You would think if consumers want natural gas, and private companies are willing to build the pipelines to get the gas to their homes and businesses, such a thing would be possible here in the Land of the Free and the Home of the Brave. However, a trade organization in Connecticut tried to block such activity–in court. What makes it doubly distressing is that the trade organization opposing new natgas pipelines represents heating oil distributors (a sister fossil fuel), afraid that they may lose market share to natural gas. So trade group filed a lawsuit to prevent a state initiative that would expand the state’s natural gas pipeline network. Shame on them. Fortunately the Connecticut Supreme Court ruled–and the heating oil distributors lost…
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Industrywide Issues | Litigation | Ohio | Statewide OH

US Supreme Court Rejects Appeal of Ohio Dormant Mineral Act Case
January 18, 2017January 18, 2017

MDN has reported on the Ohio Dormant Minerals Act (DMA) for years. In a nutshell, there are two DMAs in Ohio–one passed in 1989 that went into effect in 1992, and another in 2006 which added certain additional procedural requirements to the 1989 version. The DMA in its various versions provides for mineral rights that had previously been separated from surface rights to transfer back to the surface owner under certain conditions. The problem, for drillers and for landowners in Ohio, is in knowing which set of DMA rules to use (1989 or 2006) in determining who owns the mineral rights. A number of DMA cases went before the Ohio Supreme Court. In September the Ohio Supreme Court ruled in three cases, saying all of the other cases come under those three (see Important: OH Supreme Court Finally Rules on Dormant Mineral Act). The three cases receiving full opinions were: Corban v. Chesapeake Exploration, L.L.C.; Walker v. Shondrick-Nau; and Albanese v. Batman. The Walker in Walker v. Shondrick-Nau didn’t like the outcome and appealed his case to the U.S. Supreme Court, asking for a “writ of certiorari”–which is essentially a request to review the case. The U.S. Supremes rejected the request–which means the Ohio Supremes’ rulings last September stand and are Ohio law with respect to the DMA…
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Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Regulation | Rice Energy | Washington County

Rice Energy Sues West Pike Run Twp re Compressor Station Approval
January 17, 2017January 17, 2017

Tired of having their application to expand a pipeline compressor station blocked, Rice Energy has sued West Pike Run Township in Washington County, PA. In the lawsuit, Rice says that the town had 90 days (under law) to render a decision on the request and did not do so. Eventually the town told Rice “no” to expanding an existing compressor station. The lawsuit asks the court to force the town to approve the application forthwith…
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Apex Energy | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Regulation | Westmoreland County

Penn Township Allows Drilling to Avoid $300M Lawsuit by Apex
January 17, 2017January 17, 2017

This news is a bit dated, from last December, but important nonetheless. Under threat of a $300 million lawsuit, Penn Township (Westmoreland County, PA) voted to allow Apex Energy to build two Marcellus well pads, and arranged for more hearings on four more well pads. In April 2016 Penn Township blocked permits for Apex well pads (see Penn Twp Blocks Apex Energy Well Pad Request, What Next?). In May it happened again (see Penn Twp Commissioners Block Apex Shale Well Request in 3-2 Vote). In June the town began to ramp up talk of uber-restrictions on drilling, via zoning ordinances (see Penn Township Considering More Restrictions on Drilling). And in August, the town held a hearing on a proposed new Marcellus-killing ordinance (see Penn Twp Hearing Discusses Marcellus-Killing Ordinance). Meanwhile, Apex was losing $70,000 PER DAY by not drilling on land for which they held valid, legal leases, and for wells that were duly permitted by the PA Dept. of Environmental Protection. So Apex launched a lawsuit to make the town pay for its harmful actions. By December, the town board was singing a different tune (about time)…
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