Litigation

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    OH Landowner Loses Lawsuit to Stop Eclipse Drilling New Wells

    A Harrison County, OH landowner signed a lease back in 2006 granting a driller “broad rights” to extract oil and gas on and beyond his property. The lease was signed for $1 plus royalty payments. Obviously the landowner (frankly, nobody) at the time had any idea the Utica Shale miracle would happen just a few years later. The lease signed by the landowner was, in retrospect, a bad one. But that doesn’t excuse the landowner from living up to the obligations under that lease, which the landowner has learned the hard way. The lease was sold to Eclipse Resources and Eclipse wanted to, under the terms of the lease, drill new wells which would not only drain that landowner’s property (136 acres), but also drill under neighboring properties where Eclipse also owned the lease rights. That is, the well would be located on the landowner’s property but access gas under other properties–yielding royalties to others but not the landowner. The landowner objected to new wells on his property without a new lease (can’t blame him). However, first a district court and now the U.S. Sixth Circuit Court of Appeals decided for Eclipse against the landowner. Below is a summary of Eclipse Res. Ohio, LLC v. Madzia, followed by a copy of the full decision from the Sixth Circuit…
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    PA Radicals Sue to Stop $1.1B in DCNR Funding from Gas Leases

    In June, radical anti-drillers from the Pennsylvania Environmental Defense Foundation won a case at the PA Supreme Court by the skin of their teeth (PA Supreme Court Hands Antis Partial Victory re State Land Drilling). The case dealt with the narrow issue of how PA can spend revenue raised by leasing and allowing drilling for oil and gas under state-owned land. A divided court ruled that money from royalties must be used only for Big Green causes, and cannot be used even to fund operations at the Dept. of Conservation and Natural Resources (DCNR). The decision was based, in part, on PA’s so-called Environmental Rights Amendment, “guaranteeing” the “right” to “clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment”–without defining how those “rights” are to be administered. The radical lawyer who won the case then attempted to use that narrow decision–in a case about funding the DCNR–to make the preposterous claim that PA’s state budget, as drafted, is “unconstitutional” (see Lawyer Says PA Budget Unconstitutional Based on Enviro Rights Law). The same radicals are back making the same wild claims–putting $1.1 billion in DCNR funding at risk…
    Read More “PA Radicals Sue to Stop $1.1B in DCNR Funding from Gas Leases”

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    Belmont OH Family Sues Summit Midstream for Mud Spill Near Home

    Summit Midstream Partners was drilling underneath a road and a creek in Belmont County, OH on Oct. 19 to install a pipeline when they experienced an “inadvertent return” (i.e. leak) of drilling mud into the creek. If you’ve read MDN for any length of time, you will have read about other such instances by other companies. Because we constantly have new readers, we post the following explanation, which will sound like a broken record for long-time readers: Drilling mud is bentonite, a form of non-toxic clay also used to make kitty litter, cosmetics and toothpaste–among many, many other consumer products. The only threat posed by a spill of bentonite is that enough of it spills to clog the gills of fish or smother little critters like salamanders. That’s it. Think about taking half a dozen bags of kitty litter to a creek nearby and dumping them all in. It’s nothing. No pollution. We’d certainly rather not have any such accidents–but the reality is, they sometimes happen. That’s why non-toxic bentonite is used. The Ohio EPA stepped in and cited/fined Summit for the spill. Fair enough. But that’s not what this story is about. This story is about a family that lives near the spill. They hated Summit’s “loud” drilling before the spill, and now are using Summit’s spill and cleanup work (some of it happening in their front yard) as an excuse to sue Summit, hoping to score big bucks. Good luck with that…
    Read More “Belmont OH Family Sues Summit Midstream for Mud Spill Near Home”

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    Lancaster Farmland Trust Settles Lawsuit Against Atlantic Sunrise

    Lancaster Farmland Trust, a leftist group that seeks to stop all development of land in and around Lancaster County, PA, sued a farmer and Atlantic Sunrise Pipeline after the Lancaster farmer signed an easement on a piddly 1.5 acres of land. The Trust claimed according to the terms of the deed the landowner didn’t have the right to sign the easement (see Atlantic Sunrise Files 13 Eminent Domain Cases in 4 Counties). The previous owners of the property “donated a conservation easement to the trust that specifically stated various man-made activities, and specifically listing pipelines, could not be built on the property.” We think that’s particularly sleazy (and should be illegal)–forever saddling future owners of the property with restrictions. No matter–it’s frequently done, and a lesson to landowners to beware, DON’T buy properties with such restrictions. If enough people refused to buy such properties, property owners would quit doing it because their property is no longer salable. But we digress. Transco Pipeline (of which Atlantic Sunrise is a part) tried to get the case tossed, but a Lancaster County judge refused. So Transco terminated the easement with the property owner, then turned around and filed a eminent domain lawsuit against the property owner and the Trust, which got the Trust’s attention. They’ve just settled the case, fearing (knowing) a judge would rule against them anyway. In the end, it seems to have come down to the Trust wanting money. They got $12,470 for the easement plus another $25,000 to cover their legal fees. The actual landowner got (as near as we can tell), nothing…
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    FERC Acting Chairman Vents About Big Green Groups Blocking Pipes

    FERC Acting Chairman Neil Chatterjee

    You know why Donald Trump is so popular out here in “flyover country,” where there are real, hard-working Americans? Because he’s not afraid to speak his mind. He doesn’t bother with appearances and inside-the-Beltway decorum where swamp dwellers never say what they really mean or think. Trump just says it–Tweets it, says it in speeches, in meetings. We love it! And we think more people in government should behave like Trump and just say what they really think. It looks like we have someone doing just that–a Federal Energy Regulatory Commission (FERC) member, no less! Acting Chairman of FERC, Neil Chatterjee, had the temerity to tell the truth at an industry meeting yesterday. Chatterjee said that national enviro groups (antis) are using the legal system to delay approval of natgas pipeline projects. Er, a, OK. There’s really no mystery there. No revelation. No speaking out school. But the very fact that he said it has enviro antis up in arms–that he dared to simply utter the truth. Reuters is all concerned because uttering such truths is “rare for a regulator”–like maybe we should check Chatterjee to see if he has a fever. Since some of the worst of the worst–the Sierra Club and 350.org–have been repeatedly suing FERC (dozens of lawsuits!), it stand to reason (says Reuters), Chatterjee is talking about (gasp) those very groups! Ding ding ding ding. Give that Reuters reporter a prize. Chatterjee does, however, see a silver lining to all of these lawsuits: “Ultimately, lengthier approvals mean projects are better able to withstand legal challenge.” And that just ticks off the radicals all the more…
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    U.S. Supreme Court Rejects Appeal of WV EQT Royalty Case

    The United States Supreme Court has refused to hear an appeal of an important West Virginia case, which means the current ruling stands that allows EQT and other drillers to deduct “reasonable” post-production expenses from landowner royalty checks. It is a victory for drillers and a blow to some landowners. How did we get here? A brief history: Last December MDN reported on the huge WV Supreme Court decision against 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). In February this year, 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). In May the WV Supreme Court ruled on the reheard case, overturning its previous decision from last December. The court ruled to allow EQT to deduct “reasonable” post-production expenses (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). Those who won the original case (and lost the reheard case) say newly elected Supreme Court Justice Elizabeth Walker had 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. Newly elected Justice Walker, with (according to the losing side) conflicts of interest, voted in favor of EQT. On the basis that Walker should not have been part of the process at all, the case was appealed to the U.S. Supreme Court in September (see Lawyers ask US Supreme Court to Hear WV EQT Royalty Case). On Monday, with no explanation, the Supremes denied the request for an appeal…
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    NJ Radical Organization Sues FERC in Bid to Stop PennEast Pipeline

    PennEast Pipeline is a $1 billion, 120-mile primarily 36-inch natural gas pipeline that will stretch from Dallas (Luzerne County), PA to Transco’s pipeline interconnection near Pennington (Mercer County), NJ. The pipeline is an important conduit to move gas from the prolific gas fields of northeastern PA to markets in southeast PA and New Jersey. From the beginning of the project there have been a collection of so-called environmental organizations opposing it–including THE Delaware Riverkeeper, NJ Sierra Club, and the NJ Conservation Foundation. All radical groups, far far out of the mainstream. They also share something else besides an irrational hatred of fossil fuels–they’re part of a conspiracy to defeat PennEast funded by the William Penn Foundation. William Penn funds the aforementioned groups, as well as buying their own “media” in news outlets by funding StateImpact Pennsylvania and a news site called NJ Spotlight. William Penn sits in the background, pretending to be apart and aloof (to protect their IRS non-profit status) while pulling the strings and directing the opposition. Why the IRS turns a blind eye, we can’t say. At any rate, William Penn pulled another string this week–prompting their serfs at the NJ Conservation Foundation to file a lawsuit against the Federal Energy Regulatory Commission (FERC). The cockamamie claim is that IF FERC approves PennEast, the pipeline will then be able to invoke eminent domain to allow it to enter properties and complete route mapping for the pipeline. Right now some hardened antis who live along the route refuse to allow PennEast to step one foot on their property. So NJ Conservation Foundation has filed a lawsuit (copy below) to prevent FERC from issuing a final certificate for PennEast because PennEast will then gain the right of eminent domain. The lawsuit claims PennEast using eminent domain to build the pipeline would be an improper “taking” of private property under the Constitution. The only problem (for the William Penn-backed NJ Conservation Foundation) is that no “taking” has actually happened until FERC approves the project. That is, the lawsuit anticipates a harm that hasn’t happened. We expect that little fact will not escape the judge’s notice and that the lawsuit will be tossed in short order…
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    Federal Court Clarifies Ohio Law for Calculating Gas Royalties

    A month ago MDN brought you the news that the U.S. District Court in Akron, OH had made a major ruling that affects all Utica landowners and drillers (see Federal Court Says Chesapeake Royalty Deductions Allowed in Ohio). The case, known as Lutz v. Chesapeake Appalachia, is about whether or not drillers (Chesapeake in this case) are allowed to deduct certain post-production costs from landowner royalty checks. The Ohio Supremes were asked to decide whether Ohio follows the “at the well” rule, which permits the deduction of post-production costs, or if the state follows the “marketable product” rule, which limits the deduction of post-production costs under certain circumstances. The Supremes refused to tackle the ultimate issue, which is: What does “at the well” really mean? How is it defined? Instead, the Supremes bounced the issue back to the U.S. District Court in Akron for further clarification. The federal court defined what is meant by “at the well.” The court’s decision means that Chesapeake Energy (and by extension other drillers) CAN deduct post-production expenses from landowner royalty checks–at least in certain instances. We spotted an explanation of the case and the decision by the Akron court from our friends at powerhouse energy law firm BakerHostetler. They do a great job putting the ruling in language we laypeople can understand…
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    Monroeville Seismic Testing Ordinance Court Case Settled

    Monroeville, PA (Allegheny County, suburb of Pittsburgh) is hostile toward the shale industry. In September, Monroeville Council voted to enact a super-restrictive seismic testing ordinance (see Monroeville, PA Passes Restrictive Seismic Testing Ordinance). The ordinance is meant to hassle Huntley & Huntley (H&H), which wants to conduct seismic testing in two rural areas of the municipality. In October, the contractor hired to do the seismic work for H&H, Geokinetics, took Monroeville Council to court over their punitive seismic ordinance (see Monroeville Seismic Testing Ordinance Challenged in Court). In the complaint, Geokinetics said, “Monroeville’s intransigence is not motivated by any legitimate concerns for the health and safety of its citizens, but rather by its council’s concerns about November elections.” The elections have come and gone and the hostile-to-shale Monroeville Council has settled the court case with Geokinetics. And yes, seismic testing will now begin!…
    Read More “Monroeville Seismic Testing Ordinance Court Case Settled”

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    Fed Court Grants Green, OH Request to Stop NEXUS Pipe Construction

    Who says you can’t buy a court decision–at least a temporary one? Back in May MDN told you about the antis running the City of Green, Ohio hellbent on stopping the NEXUS Pipeline, all of it (see Green, OH Paying Lawyers $100K to Fund Stop NEXUS Crusade). Green City Council voted to use $100,000 of taxpayer money to hire a Cleveland law firm to file a lawsuit “aimed at stopping the pipeline from being built or stopping the project altogether.” NEXUS, a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada, was the first major pipeline project to get approved after the Federal Energy Regulatory Commission (FERC) once again had a quorum (see New FERC Quorum Votes Final Approval for NEXUS Pipeline). Green’s high-priced lawyers filed their lawsuit in the 6th U.S. Circuit Court of Appeals, requesting an emergency stay blocking construction. Late last week a three-judge panel voted 2-1 in favor of Green’s request for an emergency stay, which temporarily blocks further construction of an 8-mile segment of the NEXUS Pipeline in the vicinity of Green (but not anywhere else). The judges believe Green’s lawsuit is likely to prevail in court–hence stop any construction for now around Green. The big problem, from our limited legal understanding, is that the underlying lawsuit filed by Green challenges the Ohio EPA’s decision to grant water crossing permits for the ENTIRE 257-mile pipeline through Ohio. If Green prevails in that case, construction on the entire pipeline (as it passes through Ohio) is stopped–not just an 8-mile segment around the pipeline-phobic Green…
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    DRBC Lawyer Nearly Faints 2nd Time When Questioned by Fed Judges

    This is getting pretty old, fast. Two weeks ago MDN told you about a lawsuit that finally got it’s day in court–a case brought by a Wayne County, PA landowner against the Delaware River Basin Commission (DRBC) over its ongoing, 10+ year ban on fracking in the Delaware River Basin (see DRBC Attorney Faints in Federal Court During Questioning). Under “heaving questioning” the attorney for the DRBC fainted in the court room, ending the session that day. Both sides were back in court yesterday to finish what began two weeks ago, and the judges once again turned up the heat on the DRBC attorney–and he almost fainted again, having to sit down (delaying proceedings for a time). Every time this lawyer gets tough questions that he doesn’t like, he pulls this fainting routine. Is it legitimate? Does he have a “condition?” Frankly, we don’t care. His “condition”–if that’s what it is–keeps blocking justice. If he’s not up to the job, remove him. Get someone who can handle the pressure. At least the session yesterday finished. Oral arguments are now done. MDN friend Tom Shepstone listened to a recording of the session and filed a fantastic report, recounting the back and forth–and how the DRBC’s defense collapsed (metaphorically) under the sharp eye of the judges doing the questioning. The DRBC and its shill leader Steve Tambini (a MAJOR disappointment since he was appointed in 2014) were exposed yesterday as the obstructionists they are…
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    New England Lawsuit Claims Utilities “Constrained” NatGas Pipeline

    A class action lawsuit was filed last week by 12 New England power customers who claim that two New England utility companies–Eversource and Avangrid–intentionally manipulated the flow of gas along the Algonquin natural gas pipeline by placing and later withdrawing orders, in order to spike the cost of gas which then spiked the cost of electricity generated by the resulting higher cost gas. It is a convoluted, cockamamie charge first brought by the radical antis at the Environmental Defense Fund (see EDF Accuses New England Gas Utilities of $3.6B Market Manipulation). EDF published a “report” that makes the preposterous claim that New England customers have overpaid utility bills by $3.6 billion due to collusion between the natural gas and electricity industries. EDF spins the outlandish theory that Avangrid and Eversource brilliantly conspired to create Enron-style fake gas shortages involving a whopping 3.5% of the capacity of the Algonquin pipeline–all in order to drive up electric clearing prices for a wind farm Avangrid didn’t yet own, a rarely dispatched Avangrid oil peaker, and three crappy, rarely operated oil and coal plants in New Hampshire (plus nine little hydro dams that Eversource was trying to unload for years, sold recently). EDF’s tall tale is so bizarre (and hard to follow) it’s laughable. Yet now a class action lawsuit has launched based on EDF’s fictional report…
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    NFG and NY DEC Go At It in Federal Court Over Pipeline Rejection

    Last week lawyers for National Fuel Gas Company and the New York Dept. of Environmental Conservation (DEC) were in federal court doing battle over the DEC’s arbitrary and capricious rejection of an important Marcellus pipeline project. Three years ago NFG proposed and filed to build the Northern Access Pipeline project–a $455 million project includes building 97 miles of new pipeline along a power line corridor from northwestern Pennsylvania up to Erie County, NY. The project also calls for 3 miles of new pipeline further up, in Niagara County, along with a new compressor station in the Town of Pendleton. The Federal Energy Regulatory Commission (FERC) granted final approval for the project in February of this year (see NFG’s Northern Access Pipe in NY/PA Gets FERC Approval). However, in April of this year, the DEC ruled against granting the project stream crossing permits, effectively killing it, at least for now (see Cuomo’s Corrupt NY DEC Blocks NFG Northern Access Pipeline Permit). In April, NFG sued the DEC in the Second Circuit of the U.S. Court of Appeals to overturn the denial (see NFG Sues NY DEC in Fed Court re Northern Access Pipe Rejection). That case was argued last week before a panel of three judges from the Second Circuit…
    Read More “NFG and NY DEC Go At It in Federal Court Over Pipeline Rejection”

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    Sunoco Continues to Rack Up ME2 Drilling Mud Spill Violations

    Sunoco Logistics Partners (part of and owned by Energy Transfer Partners) has had its fair share of “inadvertent returns” (i.e. leaks of drilling mud) while drilling underground for the Mariner East 2 pipeline project that stretches across the width of Pennsylvania. Some would say Sunoco has had more than its fair share of mud spills. Bear in mind that drilling mud is otherwise known as bentonite–the nontoxic clay mixture used to cool the drill bit as it chews away underground. Bentonite is the same chemical compound used to make kitty litter, toothpaste and all sorts of cosmetics. It’s totally safe for the environment–unless you spill a lot of it and smother little critters like salamanders and fishies. When installing a pipeline, you don’t just dig a trench across a roadway or dam up a creek or river. Instead, you use horizontal directional drilling (HDD) to dig under it. ME2 is some 350 miles long, so there are a number of places where HDD must be used. There are always small drilling mud spills, or inadvertent returns, associated with HDD work. However, Sunoco has had, at last count, 96 such instances (see the list below). Antis seek to make the most of each and everyone spill episode. The most recent such spill is associated with a sink hole believe caused by HDD drilling in Delaware County last week (see ME2 Drilling in Delaware Co. Creates Small Sinkhole, Antis Swarm). The PA Dept. of Environmental Protection (DEP) sent a notice of violation for last week’s mud spill (see it below). DEP officials admit they are somewhat overwhelmed with trying to keep an eye on the project and are considering “additional enforcement” actions against Sunoco LP for ME2…
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    Sierra Club Withdraws Federal Lawsuit to Stop NEXUS Pipeline

    The uber-litigious Sierra Club and it’s vaunted stable of attorneys have been caught with their pants down–legally speaking. One of the (many) pipelines the Clubbers oppose is NEXUS, a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. NEXUS got final approval for the project from FERC in August (see New FERC Quorum Votes Final Approval for NEXUS Pipeline). The Ohio EPA granted a water permit for the project in September (see Ohio EPA Grants Water Permit to NEXUS Pipe, “Learned” from Rover). Seeing the NEXUS freight train moving on down the tracks, the Clubbers filed a request for “rehearing” with FERC in September (see CORNballs, Sierra Club Continue to Fight NEXUS Pipeline in Court). Before anyone can sue to stop a federal pipeline project, the first step is to request a rehearing. If FERC delays or rejects a rehearing request, the “aggrieved” party can then launch a lawsuit in federal Appeals Court. And that’s what the Sierra Club did last week. They filed a lawsuit against NEXUS in the Federal Court of Appeals for the District of Columbia, asking the court to force FERC to conduct a new review of the project, and in the meantime, shut it all down (see Sierra Club Files Federal Lawsuit to Stop NEXUS Pipeline). There’s just one teeny tiny problem: The landowner the Clubbers was using as their excuse to file the lawsuit recently sold his property to NEXUS. Oops. Now the Clubbers don’t have a reason to sue, so with tail between legs, they withdrew the lawsuit yesterday…
    Read More “Sierra Club Withdraws Federal Lawsuit to Stop NEXUS Pipeline”

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    PA Class Action Royalty Lawsuit Against XTO Settles for $11M

    A journey which began for Pennsylvania landowners in Butler County, PA in July 2015 is nearing an end. Two Butler County, PA landowners with a combined 245.7 acres of land leased to XTO Energy sued XTO in 2015 claiming that XTO is breaking the lease agreement by paying royalties below 1/8 of what XTO receives in revenue for the gas (see PA Landowners Sue XTO Energy for Shorting Them on Royalties). The case, known as Marburger et al V. XTO Energy Inc., asserted the lease signed with landowners did not include language that would allow XTO to deduct post-production charges (that they had been deducting). The two landowning families that launched the lawsuit, the Marburgers and the Thieles, sought to turn the lawsuit into a class action, involving potentially hundreds or thousands of others. It didn’t take long for XTO to oppose the lawsuit and its certification as a class action (see XTO Files Motion to Dismiss Royalty Lawsuit in Butler County, PA). Since that time we’ve not heard much of anything about the lawsuit. And then out the blue comes word that via arbitration, XTO has agreed to settle the lawsuit. The settlement includes turning it into a class action, and paying out a total of $11,010,000. As part of the settlement, XTO admits to nothing. That is, they do not concede the plantiffs have a valid case against them. It’s simply cheaper to settle it and move on rather than to keep fighting. Below we have the relevant court documents with the details of the settlement…
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