Litigation

American Energy Partners | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Problematic: McClendon’s AEP Not Paying Some of its Bills
June 15, 2015June 15, 2015

Does Aubrey McClendon’s American Energy Partners (AEP)–the new company he founded after being unceremoniously booted from Chesapeake Energy–have cash problems? You certainly wouldn’t think so. At last check in May 2014, McClendon had raised a staggering $8.7 billion in little more than a year (see Aubrey McClendon Raises Huge $8.7B for Shale Drilling…So Far). But the evidence keeps piling up that Aubrey isn’t paying his bills. In April, McClendon created a “blank check” company to raise $200 million in cash (see Aubrey McClendon’s New “Blank Check Company” Looks to Raise $200M). In May, Paloma Resources said a 3-way deal including McClendon’s AEP to lease 130,000 acres in the Ohio Utica Shale went bust because Aubrey didn’t have enough money to close the deal (see McClendon Running Out of Money?! Paloma Utica Deal Goes Bust). Last week MDN told you about a contractor working for AEP with several hundred thousand dollars in outstanding invoices that have gone unpaid–for more than 120 days (see Big McClendon News: Sells 35K Utica Acres, Creates New Company). Now the latest: a group of Ohio landowners have sued McClendon’s AEP along with an affiliate company and a land services company working for AEP, for non-payment of lease bonuses…
Read More “Problematic: McClendon’s AEP Not Paying Some of its Bills”
Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Regulation | Snyder Brothers | Statewide PA | Taxation

PA PUC Sues Snyder Bros to Collect $500K in Unpaid Impact Fees
June 15, 2015June 15, 2015

CORRECTION: The PUC misspoke in the figures given to the Pittsburgh Post-Gazette. Snyder Brothers were actually fined a total of $499,520 — $390,250 for impact and administrative fees, $11,707.50 in interest and a fine of $97,562.50. Our thanks to NGI’s Shale Daily for tracking down the mistake and alerting us to it!

Last year we brought you the interesting story of strippers in the Marcellus–stripper wells, that is (see High-Priced Strippers in PA: Semantic Gymnastics with Impact Fee). Synder Brothers is an oil/gas producer in Pennsylvania. Most of the wells they drill are vertical-only wells. Among them are 24 wells from 2011 and 21 wells from 2012 that are vertical only–but all targeting the Marcellus. According to the definition of a stripper well under the Act 13 law passed in 2012, a well qualifies as a stripper well if it doesn’t produce over 90 thousand cubic feet (Mcf) of natural gas per day. Synder Bros. says their wells don’t, ergo their wells are stripper wells and not liable to pay an impact fee. The PA Public Utility Commission (PUC), charged with evaluating what does and does not qualify, says nope–your wells target the Marcellus formation and produced above 90 Mcf for at least one month out of the year, therefore must pay the impact fee. So the PUC has sued Snyder Bros. and intends to collect $500,000 in unpaid fees in the next 20 days, PLUS a $50,000 fine for inconveniencing the PUC…
Read More “PA PUC Sues Snyder Bros to Collect $500K in Unpaid Impact Fees”
Bradford County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Regulation

Bradford County, PA May Join Royalty Lawsuit Against Chesapeake
June 12, 2015June 12, 2015

In 2013, a group of Bradford County, PA landowners joined a lawsuit against Chesapeake Energy over Chessy’s apparent cheating them out of royalties using a ploy to pay high fees for pipelines in return for investments from that pipeline company later on (see Bradford County, PA Landowners Sue Chesapeake over Royalties). Some Bradford landowners were getting royalty checks from Chessy for a few dollars–literally. At issue is a state law that stipulates drillers must pay a minimum of 1/8 of revenue from gas and oil in royalties to the landowner. The controversy comes in that Chesapeake claims their contracts allow them to deduct reasonable expenses, like getting the gas to market, from the total. And with low prices–oh well–those royalty checks go far below 1/8. So what is at issue is how you define 1/8 for the purposes of paying royalties. Is it 1/8 of the gross? Or 1/8 of the net? And what would be allowed to be deducted for the net number? MDN previously told you about PA House Bill (HB) 1684 meant to clear up the confusion. HB 1684 went no where in the legislature last year (see Does PA Royalty Bill 1684 Still Have a Chance This Year?). Looks like the bill will come back around again this year–but before it does, the supervisors of Bradford County, which has land under lease with Chesapeake, are seriously considering joining the lawsuit against Chesapeake. They’re tired of waiting for 1684 to become law and tired of being shorted on their royalties…
Read More “Bradford County, PA May Join Royalty Lawsuit Against Chesapeake”
Accidents | Industrywide Issues | Litigation | Lycoming County | Pennsylvania | Seismic Testing

PA Rabbit Breeder Settles Lawsuit w/Land Co for 168 Dead Rabbits
June 12, 2015June 12, 2015

It took more than a year, but a lawsuit filed by a rabbit breeder in Lycoming County, PA has reached an out of court settlement for the death of some of her rabbits. MDN first told you about this case in May 2014 (see Fracking Killed the Rabbits!). The rabbit breeder, Susan Knowlden and her husband Terry, claim they had an agreement with CGG Land to not fly helicopters near the rabbit farm. CGG was doing seismic testing in the area at the time. CGG was supposed to stay at least 1,000 feet away–a “no fly zone” over the rabbits. But they got too close and “boo!” there goes another rabbit, keeled over dead. Nobody is saying what the settlement is for (confidentiality agreement), but rest assured CGG paid out big money for 168 hasenpfeffers–rabbits they scared, literally, to death…
Read More “PA Rabbit Breeder Settles Lawsuit w/Land Co for 168 Dead Rabbits”
Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Sunoco Logistics | Washington County

Mariner East Invokes Eminent Domain Against 2 SWPA Landowners
June 9, 2015June 9, 2015

Another “nobody wins” eminent domain lawsuit has been filed by a pipeline company. This time it’s Sunoco Logistics filing for their Mariner East pipeline against two different families/landowners in Washington County, PA. The landowners don’t want the pipeline but Sunoco insists it’s necessary to have those specific properties. The problem is, will an eminent domain claim hold up in court? Last July, two independent administrative law judges working for the PA Public Utility Commission (PUC) ruled that Mariner East is not, according to the definition, a “public utility” (see Setback for Mariner East NGL Pipe – Judges Say Not Public Utility). But then in October, the full board of Commissioners for the PUC voted to send the case back to those judges with instructions to “reconsider” their decision (see Major Milestone: PA PUC Rules Mariner East IS a Public Utility). Sunoco has a lot riding on whether or not their claim to be a public utility will hold up in court. If Mariner East is not a public utility, they have no claim to eminent domain powers…
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Anti-Drilling/Fossil Fuel | Butler County | Industrywide Issues | Litigation | Pennsylvania

Shoe Now on Other Foot: Landowners Sue Martian Anti-Drillers
June 8, 2015June 8, 2015

It’s about time. Twelve (12) leaseholders and a real estate developer in Middlesex and Adams Townships, in Butler County, PA (near the Mars School District) have filed a lawsuit against local anti-drillers as well as against THE Delaware Riverkeeper and the Philadelphia-based Clean Air Council, suing them for damages because their ongoing frivolous lawsuits have keep the leaseholders from realizing profits from their leased land. And get this, the Martians and Big Green groups being sued are upset, saying their free speech rights are being infringed. Talk about nuts! It’s OK for anti-drillers to launch lawsuit after lawsuit, but as soon as someone pushes back and files a lawsuit against them, they start squealing like little piglets…
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Industrywide Issues | Litigation | Research

Babst Calland Releases Report on Legal Challenges in Marcellus/Utica
June 5, 2015June 5, 2015

Ace energy law firm Babst Calland announced yesterday they have released their fifth annual energy industry report. Called “The 2015 Babst Calland Report – Appalachian Basin Oil and Gas Industry: Rising to the Challenge; Legal and Regulatory Perspective for Producers and Midstream Operators,” the annual review of energy and natural resources development activity acknowledges the continuing evolution of the drilling industry in the face of economic, regulatory, legal and local government challenges. Here’s an overview of the report…
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Columbiana County | Industrywide Issues | Litigation | MDN Sponsor | Ohio | Pipelines

NEXUS Pipeline Sues Columbiana County Landowners for Survey Access
June 4, 2015June 4, 2015

The NEXUS Gas Transmission pipeline, you may recall, is a $1.5 billion natural gas pipeline that will carry Utica and Marcellus Shale gas spanning 11 counties in Ohio, 3 counties in Michigan, and eventually connect to the Dawn Energy Hub in Canada (see NEXUS Gas Pipeline Pre-Files with FERC, New Details Come to Light). A number of landowners in Ohio have been less than cooperative when it comes to surveying their property. One old codger in Medina County, OH threatened he would meet anyone trying to survey his property with a gun (see Medina, OH Landowner Says He’ll Meet NEXUS Surveyors Packing Heat). Two couples in Columbiana County aren’t threatening guns, but they have denied access to NEXUS, repeatedly, and NEXUS has had enough. NEXUS sued the two couples in Columbiana County Common Pleas Court to force them to allow their surveyors on their property…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation

Anti-Drilling Groups File to Defend BLM’s New Federal Lands Frack Rule
June 4, 2015June 4, 2015

The “sue and settle” gang is back. A group of six virulently anti-drilling, fossil fuel-hating organizations, calling them (don’t laugh) “conservation groups” (nothing of the sort) have filed to intervene in two lawsuits brought by the individual states and the oil and gas industry against the federal government over the new fracking rules released by the federal Bureau of Land Management (see BLM Introduces “Final” Fracking Rules for Fed Lands – 3 Yrs Late). Here’s how it works with sue and settle: the federal government gets Big Green groups (with lots of money) to bring lawsuits against a department, like the EPA or BLM. The government agency then promulgates new restrictive and jobs-crushing rules that have the force of law because “the lawsuit and judge made us do it.” And unless those “rules” are challenged in court to get them repealed, we end up with laws created by government agencies and judges instead of the legislature, the way the Founders intended. So when the good guys sue to overturn these overreaching “rules”, the sue and settle gang with lots of Big Green money comes back to try and stop it. The groups are once again being led (by the nose) by Earthjustice and include the Sierra Clubbers, Earthworks, The Wilderness Society, Conservation Colorado Education Fund, Southern Utah Wilderness Alliance and Western Resource Advocates. None of them are truly concerned with “conservation,” contrary to what they say. They are all left-leaning political groups…
Read More “Anti-Drilling Groups File to Defend BLM’s New Federal Lands Frack Rule”
Anti-Drilling/Fossil Fuel | CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Litigation | Maryland | Processing Plants | Statewide MD

Earthjustice Asks Court to Stop Construction at Cove Point LNG
June 3, 2015June 2, 2015

Three weeks ago MDN told you about the frivolous lawsuit filed by Earth[in]justice attempting to stop the Cove Point, Maryland LNG export plant from being built (see DOE Grants Cove Point LNG Final Approval, Earthjustice Sues). Earth[in]justice sued on behalf of themselves (they are a small group of Washington, DC lawyers backed by Big Green money), and on behalf of Chesapeake Climate Action Network, Patuxent Riverkeeper, and the Sierra Clubbers. Meanwhile, Dominion, the owner of the project, has pushed forward with construction at the site. Dominion is about to begin construction on the foundation of the new facility sometime in June, so Earth[in]justice has just filed another lawsuit–a request for a cease and desist order to stop Dominion from constructing the foundation until after their frivolous lawsuit has a chance to get in front of a sympathetic judge…
Read More “Earthjustice Asks Court to Stop Construction at Cove Point LNG”
Accidents | Chevron | Energy Companies | Greene County (PA) | Industrywide Issues | Litigation | Pennsylvania

Chevron Settles PA Marcellus Wrongful Death Lawsuit for $5M
May 29, 2015May 29, 2015

In February 2014 there was an explosion and fire at a Chevron well pad that eventually spread from one Marcellus well to a second well on the same well pad in Greene County, PA (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). Ian McKee, 27, a Cameron International contractor working at the site was tragically killed in the blast (see Remains of Chevron Contractor Found at Greene County Well Site). The final report of the PA Dept. of Environmental Protection (DEP) investigating the accident concluded there was plenty of blame for Chevron, primarily from using overworked and inexperienced well site managers (see DEP Issues Final Report – What Caused Chevron Well Fire?). Ian’s girlfriend/partner was pregnant at the time of his death. Ian’s parents sued Chevron for wrongful death (see Parents of Worker Killed in Chevron Greene Co Fire Sue). That lawsuit has just been settled for $5 million, broken down as follows…
Read More “Chevron Settles PA Marcellus Wrongful Death Lawsuit for $5M”
Butler County | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Rex Energy

Rex Energy to Restart Drilling Near Mars School Following Vote
May 29, 2015May 29, 2015

Let the drilling begin! The three members of the Middlesex Zoning Hearing Board (Butler County, PA, where the Mars School District is located) voted unanimously on Wednesday to reject challenges by anti-drillers to changes in zoning laws that allow Rex Energy to drill a series of wells on a pad about 3/4 of a mile from the Mars School. Four Martian parents have worked themselves up into a frenzy, convincing themselves that faraway drilling will harm their precious, innocent lil’ chil’ren. The Martians have enlisted the help of anti-drilling groups from the opposite side of the state–the Philadelphia area–tapping into their deep pockets to fund endless lawsuits and appeals that are costing Middlesex taxpayers big bucks to defend (see Dela. RiverKeeper, Clean Air Council Cost Middlesex Residents $35K+). (By the way, when is the IRS going to investigate THE Delaware Riverkeeper for clear violations of their 501(c)(3) tax exempt status? Riverkeeper continues to operate, politically, far outside of the Delaware River Basin. Their tax exempt status should be revoked.) The zoning board vote was good news for Rex who says they won’t waste any time in returning to the drill site to begin work. By the time the Martians are done suing, the wells will already be drilled…
Read More “Rex Energy to Restart Drilling Near Mars School Following Vote”
Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Regulation | Washington County

Range Capitulates, Closing 4 Freshwater Ponds in Mt. Pleasant, PA
May 29, 2015May 29, 2015

More than two years of acrimony and lawsuits are now over for Range Resources in Mt. Pleasant (Washington County), PA. Mt. Pleasant is one of the original seven selfish towns that sued PA to overturn portions of the Act 13 oil and gas law. The town was giving Range a hard time over four freshwater ponds (called “impoundments,” not to be confused with wastewater impoundments) the company was using to drill wells in nearby non-Mt. Pleasant locations. The town served the company with notices of violation in July 2013 and then held a public hearing in August 2013 where things got heated between the town and Range (see Range Resources Argues with Mt Pleasant over Water Impoundment). Mt. Pleasant kept after them (see Mt. Pleasant Zoning Bd Says Range Water Impoundments in Violation), and after them (see Mt Pleasant Twp Shenanigans re Range Request for Water Ponds), and after them (see Mt. Pleasant, PA Continues to Ride Range Over Water Ponds). Sooner or later a company can take a hint that a township is anti-business. Range is throwing in the towel, closing down all four freshwater ponds, and leaving town…
Read More “Range Capitulates, Closing 4 Freshwater Ponds in Mt. Pleasant, PA”
Crime | Industrywide Issues | Litigation | Mahoning County | Ohio | Regulation

Hardrock Pleads Guilty to Illegal Wastewater Dumping, Fined $100K
May 29, 2015May 29, 2015

A final footnote to tell you about concerning the notorious case of illegal frack wastewater dumping near Youngstown, OH that happened in 2012 and 2013. Ben Lupo, previous owner of D&L Energy and its associated company Hardrock Excavating, directed employees to dump frack wastwater hauled by Hardrock into a drain that emptied into a stream that emptied into the Mahoning River near Youngstown, OH (see Youngstown Business Dumped >200K Gal of Untreated Wastewater). It was later discovered that from September 2012 to end of January 2013, Lupo was responsible for dumping at least 30 loads of frack wastewater literally down the drain and into the river. After an investigation and charges, last August Lupo plead guilty and was sentenced to 23 months in prison and a $25,000 fine (see Final Chapter for Youngstown Illegal Wastewater Dumper: Prison & Fine). The final final chapter has now been written. Lupo’s company, Hardrock Excavating, pleaded guilty on Thursday and was fined $100,000. In an interesting twist, the judge ordered $25,000 of that total to be paid to two environmental organizations…
Read More “Hardrock Pleads Guilty to Illegal Wastewater Dumping, Fined $100K”
Anti-Drilling/Fossil Fuel | Cuyahoga County | Hydraulic Fracturing | Industrywide Issues | Litigation | Ohio | Regulation

Broadview Hghts, OH Won’t Appeal Overturned Home Rule Law
May 27, 2015May 27, 2015

In March MDN told you about the crushing defeat of a home rule law in Broadview Heights, a Cleveland, OH suburb (see OH Antis Handed Crushing Defeat in Broadview Hghts Home Rule Case). A Cuyahoga County Common Pleas Court judge struck down Broadview Heights’ so-called community bill of rights that bans all oil and gas drilling–including shale drilling. The judge rightly ruled that only the state–and not localities–have the right to regulate oil and gas drilling. That caused the anarchists at the Ohio Community Right to Know Network (OHCRN) to call for an uprising. They “refuse” to recognize the court’s decision (i.e. they’re lawless). Fortunately for the citizens of Broadview Heights, city leaders do still recognize the rule of law. Last week the city announced it will not appeal the decision, because it has no basis on which to appeal it. But that doesn’t stop the nutters from an OHCRN associate group, calling itself Mothers Against Drilling In Our Neighborhoods, from filing yet another frivolous lawsuit, which they’ve done…
Read More “Broadview Hghts, OH Won’t Appeal Overturned Home Rule Law”
Boardwalk Pipeline Partners | Energy Services | Industrywide Issues | Kentucky | Kinder Morgan | Litigation | Pipelines | Tennessee Gas Pipeline | Williams

KY Court Decision Goes Against Pipelines re Eminent Domain
May 26, 2015May 26, 2015

In December of 2013, a group of people opposed to the Bluegrass natural gas liquids (NGL) pipeline in Kentucky called KURE (Kentuckians United to Restrain Eminent Domain) sued the Bluegrass, a joint venture of Williams and Boardwalk Pipeline Partners, to prevent them from using eminent domain (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court). The argument was that the NGLs flowing through the pipeline just pass through Kentucky and don’t benefit local Kentuckians, therefore the pipeline has no right to use the state’s eminent domain law to force landowners to accept the pipeline. That is, it’s not a permitted utility under the definition of the law. In March 2014, a circuit court judge agreed with KURE and told Bluegrass they could not use eminent domain (see Judge Rules Bluegrass Pipeline Cannot Use Eminent Domain in KY). That takes a pretty big stick away from the Bluegrass in their fight to lay the pipeline. Not long after the judge’s decision Williams gave up on the project, although Boardwalk didn’t (see Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”). The circuit court judge’s decision was appealed, and last week the Kentucky Court of Appeals upheld the previous no-eminent domain decision. This new decision has implications for the Bluegrass to be sure, but it has even more implications for an active project now under way by Kinder Morgan…
Read More “KY Court Decision Goes Against Pipelines re Eminent Domain”