U.S. Supreme Court Hears PennEast vs. NJ Tomorrow – What’s at Stake
Tomorrow the nine justices of the U.S. Supreme Court will hear oral arguments from the U.S. Solicitor General (and attorneys for FERC and PennEast Pipeline) on one side, and arguments from the State of New Jersey on the other side. The surface issue is whether or not PennEast can use a federally-delegated right of eminent domain to build a pipeline across several parcels of property NJ claims it controls (but doesn’t own). The deeper issue is whether or not the Natural Gas Act, amended by Congress in 1947, that allows eminent domain to be used by private companies when delegated by the government, will be ripped to shreds or not. The deeper issue is whether any new interstate pipelines will ever get built again.
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The American Energy Alliance (AEA) is raising the alarm of a conspiracy by Democrat Attorneys General from deep blue states colluding with Big Green groups to bypass Congress with a new round of sue-and-settle lawsuits. It is the equivalent of an overthrow of the legislative branch of the federal government. Here’s how the conspiracy works…
In what can only be characterized as a complete and utter failure of a Big Green lawsuit, yesterday a Pennsylvania Public Utility Commission (PUC) judge ordered Sunoco Logistics, builder of the Mariner East pipeline system, to pay a $2,000 fine (the equivalent of a few high-priced lunches) and talk more to local groups around Philadelphia that want to complain about the project. That’s the end result of a request by seven antis that began in November 2018 asking the PUC to shut down the entire three-pipeline project (see 
Last week MDN told you that Epsilon Energy, which concentrates most of its effort on the Marcellus in Susquehanna County, PA, had sued its joint venture partner Chesapeake Energy over Chessy’s refusal to allow Epsilon to drill four shale wells on land Chessy doesn’t want to drill (see 
Last week the State of New Jersey, along with co-conspirator the New Jersey Conservation Foundation, filed their responses to defend their indefensible actions in blocking PennEast Pipeline’s eminent domain taking of land owned or controlled by NJ. It was their last, desperate attempt to avoid having a lower court ruling overturned. They gave it their best shot, but we think they came up short.
Epsilon Energy concentrates most of its effort on the Marcellus in Susquehanna County, PA. Epsilon doesn’t typically do its own drilling. The company joint venture partners with (gives money to) other companies, like Chesapeake Energy, and the other company typically does the drilling. Epsilon, according to its website, owns ~4,000 net acres in the PA Marcellus. Epsilon sued Chesapeake Energy earlier this month over lack of access to drill wells on acreage Chesapeake says it doesn’t want to drill. A Texas bankruptcy court judge has tossed Epsilon’s lawsuit. Looks like bankruptcy is a “get out of your contracts for free” card for Chesapeake.
Whether or not drilling companies have the right to deduct post-production expenses (processing the gas, pipeline transportation, etc.) has raged for more than a decade here in the Marcellus/Utica. Even if landowners have ironclad, very specific language in the contract prohibiting post-production deductions from royalties, some companies (*cough* Chesapeake Energy *cough*) still find ways to claim deductions anyway, leading to expensive and years-long lawsuits that benefit the lawyers more than anyone else. A decision in a recent Texas Supreme Court case gives landowners in the M-U some hope.
In May 2020 the Pennsylvania Supreme Court heard oral arguments in a case challenging whether or not the state Attorney General’s office has the right to use a consumer protection law to prosecute companies like Chesapeake Energy and Anadarko over royalty payment shenanigans (see 
In a brilliant move aimed at boxing in the Delaware River Basin Commission (DRBC), two northeastern Pennsylvania State Senators–Gene Yaw and Lisa Baker–along with members of the PA Senate Republican Caucus (27 Senators in all), filed a lawsuit in January against the DRBC accusing the quasi-governmental agency of “taking” the property rights of PA residents without just compensation under the law (see 
When Equitrans’ 303-mile Mountain Valley Pipeline, which will connect West Virginia and bountiful supplies of Marcellus/Utica gas to southern Virginia (eventually beyond), is finally done, will Equitrans send a bill to the odious Sierra Club and other Big Green groups that have intentionally held up the project *for years* with a blizzard of frivolous lawsuits? Frivolous lawsuits holding up the MVP project have had very real costs. For example, Equitrans’ “all-in” cost to ship an Mcf of gas through the pipeline (when it finally is in-service) has doubled because of the delays. We think Equitrans should sue the litigious enviro groups to recover the escalating cost they will pay. Let’s put the Sierra Club out of business.
All the wheels have officially come off the cart for a proposed $346 million pipeline project in northeastern Virginia called the Header Improvement Project. Virginia Natural Gas (VNG) filed a plan last December to build the Header Improvement Project, 24 miles of new pipeline and two new compressor stations (expanding a third compressor) connecting to the mighty Transco pipeline system to flow Marcellus/Utica gas to the northeast Virginia region (see 
In July 2018 three radical environmental groups dropped their objections to permits the Pennsylvania DEP previously granted for the Mariner East 2 Pipeline. Clean Air Council, Mountain Watershed Association, and THE Delaware Riverkeeper “settled” their appeal of 20 permits issued to Sunoco for the ME2 project (see