US Circuit Court: NY Landowners Released from Marcellus Leases
The U.S. Court of Appeals for the Second Circuit, located in New York State, released a decision yesterday in a case known as Beardslee v. Inflection Energy, LLC (copy of the decision is embedded below) that may create problems for future shale drilling in New York State–should the existing statewide ban ever be lifted. Yesterday’s decision is good news for landowners in one sense–it officially upholds the right of Tioga County, NY landowners party to the lawsuit to be released from old leases made in pre-Marcellus days when landowners signed leases for $3 per acre. Those leases were signed before the words “Marcellus” or “Utica” meant anything other than municipalities in New York State. (Interesting factoid: both shale plays are named after the NY towns where they were first identified. Further interesting factoid: both Marcellus, NY and Utica, NY banned fracking before the statewide ban was official.) The Second Circuit upheld a previous decision which we first wrote about in 2012 (see Judge Rules Against Chesapeake, Inflection in NY Lease Case), a decision appealed to NY’s highest court that upheld it (see NY High Court Decision Creates Toxic Environment for O&G Companies). The energy companies then appealed the decision to U.S. District Court, where they have now lost. The ultimate issue at the core of this case is whether or not New York’s government action in disallowing fracking of shale wells should be considered a “force majeure” event that extends a lease beyond the initial term. It is the one issue the none of the courts ever directly answered, including the Second Circuit…
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The gloves are now off and everything is out in the open: President Barack Hussein Obama wants to destroy the oil and gas industry in the United States of America. Yesterday Obama’s preferred tool of destruction, the federal Environmental Protection Agency (EPA), released a plan that brings the jackboots of the federal government down on the necks of the industry–forcing them to “reduce” methane emissions by 40-45%. Methane, you may recall, is what drillers actually extract from the ground and sell. Methane is what they get paid for–the very thing they are incentivized to capture so they can sell it. Drillers have reduced their methane emissions–the stuff leaking out around the edges–by at least 40-45% over the past few years. In other words, the industry is already doing what the EPA wants them to do. Which means this action is a blatant attempt at stifling drilling in this country. Let us be crystal clear: This action by the EPA is illegal. This is an outright attempt to regulate the oil and gas industry, contrary to the U.S. Constitution which reserves such regulation to the individual states. Just have a look at the so-called “rule” the EPA has published (all 591 pages of it). It is a top to bottom set of unlegislated regulations that will put all oil an gas drilling in the regulatory hands of the EPA.
As for the good guys, the guys in the white hats who support clean-burning natural gas and fossil fuels, they also weighed in on the EPA’s lawless new methane reduction rule, otherwise known as 40 CFR Part. Here’s what the good guys from ANGA, API, Marcellus Shale Coalition, WVONGA and even what three U.S. Senators had to say…
If you wonder whether or not a new regulation is good or bad, you can always tell by who supports it and who doesn’t. In the case of the EPA and their lawless new methane reduction rule, otherwise known as 40 CFR Part 60, national radical environmental groups like Earthjustice and the Sierra Club, along with regional and local radical groups like the Ohio Environmental Council and the Philadelphia-based Clean Air Council, are applauding the action taken by the Obama EPA…
You know what happens when you elect Big Government liberals to important positions, like governor? You get high taxes and onerous regulations across all industries–but particularly on the drilling industry. Welcome to Pennsylvania and the floundering administration of Gov. Tom Wolf and his PennFuture sidekicks who pretty much run the whole show for Wolf–including the PennFuture Sec. of the Dept. of Environmental Protection, John Quigley. PennFuture is an anti-drilling environmental group that Quigley used to work for prior to being appointed by Wolf to run the DEP, the agency in charge of drilling (how’s that for ironic?). On a conference call yesterday Quigley said, of the current round of new drilling rules and regulations, you ain’t seen nothin’ yet. He plans to attack the Marcellus industry with even more onerous rules and regulations in the coming months and years of a (hopefully) one-term Wolf administration. Quigley is making his onerous list and checking it twice; gonna find out who’s naughty and naughtier (there is no nice in fossil fuels, ya know)…
GreenHunter Resources, the fresh water and wastewater subsidiary of driller Magnum Hunter Resources, has changed strategies and has backed off their tough talk in dealing with the U.S. Coast Guard (USCG) with respect to barging brine down the Ohio River. You may recall MDN was the first to decipher just what was going on between GreenHunter and the USCG with respect to GreenHunter’s intention on barging (see 
The Chief of the Division of Oil and Gas Resources Management for the Ohio Dept. of Natural Resources (currently Rick Simmers) is a man with a lot of power. He has the power, according to a ruling just handed down on August 12, to make his own decisions about suspending permits to operate in the absence of specific violations of a law or regulation. In September 2014 Simmers suspended permits for two wastewater injection wells in Trumbull County, OH after a very low level earthquake was detected close to those wells (an earthquake that couldn’t be felt at the surface and caused no damage of any kind). American Water Management Services sued saying they hadn’t violated any laws or regulations on the books and their permits could not just be arbitrarily revoked like that. But the Ohio Oil and Gas Commission said nope–Tom Cruise, er, a, Mr. Simmers can arbitrarily do what he wants when there is no specific rule or guideline or law–because he has the best interests of the people at heart…
Major changes are on the way for Pennsylvania’s conventional (vertical) and unconventional (shale/horizontal) drillers. In 2011 PA began a process that’s gone on way too long, to update certain regulations that apply to oil and gas drillers known as Chapter 78 of the 1984 Oil and Gas Act. Along the way the PA legislature decided there should be separate rules governing conventional and unconventional drilling–so Chapter 78 has become Chapter 78 (conventional) and 78a (unconventional). PA was close to adopting the new rules at the end of the Tom Corbett administration but then he lost his bid for re-election, throwing the process into turmoil once again with newly elected Tom Wolf and his PennFuture buddies wanting to put their own stamp on drilling regulations in the Keystone State (see