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Bulletin: Pennsylvania's "Clean and Green Act" Amended to Limit the Tax Consequences of Oil, Gas and CBM Development. Read more.
Bulletin: Marcellus Shale Well and Waste Production Report Now Due Biannually, Beginning August 15, 2010. Read more.
Bulletin: Fiscal Code Amendment Extends Development Permits. Read more.
Bulletin: Preemption in Pennsylvania and the Power of Local Governments to Regulate Oil and Gas. Read more.
Bulletin: Significant Changes Proposed to Air Permitting Exemptions to Oil and Gas Operations in Pennsylvania. Read more.
The Natural Resources Practice Group at BCCZ is uniquely positioned to provide creative solutions to the most complex legal challenges facing the gas industry.
For more information:
Joe Reinhart
(412) 394-5452
jreinhart@bccz.com
For more information:
Matthew Moses
(412) 394-5624
mmoses@bccz.com
Our nationally-recognized, multi-disciplinary practice group understands the legal issues facing operators who seek to develop the Marcellus Shale, such as:
The Marcellus Shale presents unparalleled energy supply and economic opportunities for the citizens and businesses of Pennsylvania, West Virginia, Ohio and New York.
While the Marcellus Shale is attracting new businesses, creating new jobs, generating new income sources and producing much-needed energy, its development presents wide-ranging and complicated legal issues. These issues include environmental concerns, such as water withdrawal and disposal issues; transportation issues, such as pipeline construction and rapid expansion of rural roadway systems; and land use challenges, including the scope of municipal authority to regulate gas well development. Horizontal drilling techniques that have made development of the Marcellus Shale possible have also created new legal issues not previously encountered in vertical well drilling development.
BCCZ has counseled clients in oil and gas matters for over 20 years. Our natural resource attorneys have "hands-on" experience with the issues that matter most to producers, service providers and pipeline operators. Our attorneys not only know the issues, they also know the key industry players and governmental officials. Our natural resource attorneys are active in the most prominent oil and gas associations in Pennsylvania, including the Marcellus Shale Coalition and the Pennsylvania Independent Oil and Gas Association. We frequently speak at industry-related functions and on a regular basis our lawyers represent clients before local government agencies and the Pennsylvania Department of Environmental Protection (PADEP). In addition, through our participation on PADEP advisory committees such as the Department’s Water Resources Advisory Committee and the Solid Waste Advisory Committee, our lawyers are in a position to understand both existing laws impacting the industry, as well as emerging issues likely to impact the gas industry in the future.
BCCZ is built on a commitment to providing skilled legal advice in a timely manner at a competitive rate. We welcome the opportunity to assist your business with its Marcellus Shale challenges.
Marcellus Shale Well Drilling Permit Requirements
If you are an operator looking to obtain a drilling permit for a Marcellus Shale well, it involves providing much more than the operator’s contact information and general information regarding the well’s construction. BCCZ uses its experience to counsel Marcellus Shale developers on the many issues associated with obtaining a well drilling permit. Marcellus Shale drilling requirements may include developing a water management plan, a preparedness, prevention and contingency (PPC) plan and an erosion and sediment control (E&SC) plan/permit, obtaining the permits and approvals to cross streams and/or wetlands, permitting and constructing a storage impoundment and searching for endangered and threatened species. Using our experience and existing knowledge of the regulatory framework in Pennsylvania, our Natural Resources Practice Group can help you navigate through these varied requirements in an efficient and cost-effective fashion.
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Land Use and other Local Government Authorizations
Legal aspects Marcellus Shale development are complicated by the split regulatory jurisdiction between state environmental agencies and local governments, particularly in a state such as Pennsylvania, where there are over 2000 counties, cities, boroughs, townships and other general purpose local governmental entities. Weaving through this regulatory maze is complicated by the still uncertain legal dividing line between state and municipal authority, and by the fact that each of these communities can have a completely different set of regulations.
BCCZ’s attorneys have handled the myriad of issues that arise at the local government level related to natural gas extraction, processing and transmission. With respect to zoning and other land use issues, our attorneys can:
- Identify and evaluate up-front the specific ordinance requirements and processes on a community-by-community basis.
- Develop an application and permitting template for use by our clients’ permitting and land personnel in each community.
- Handle special exception, conditional use and other public hearings for wells, pipelines and compressor/processing facilities.
- Where local ordinances unduly restrict natural gas activity, work to facilitate a voluntary amendment to those ordinances, or where necessary, develop an appropriate legal challenge strategy.
In addition to traditional zoning issues, BCCZ attorneys also regularly advise clients on related local government matters, including:
- The enforcement and legality of noise restrictions.
- Excess maintenance (heavy hauling) agreements and associated bonding requirements on weight restricted roads.
- The legality of excessive permitting fees.
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Water Withdrawal Registrations
Water withdrawal issues associated with Marcellus Shale development have attracted much attention from PADEP and the public. Our Natural Resources Practice Group counsels clients regarding the drafting and implementation of Water Management Plans.
We have a strong legal and technical understanding of the Water Management Plan requirements, including:
- stream impact and low flow analyses
- withdrawal impacts analyses
- water use and source monitoring
- Act 220 water use registration and reporting
In addition, our attorneys advise clients regarding the water withdrawal and use monitoring requirements of the Susquehanna River Basin Commission and Delaware River Basin Commission ("SRBC" and "DRBC").
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Wastewater management and Disposal Requirements
The development of a Marcellus Shale well can generate a large volume of wastewater. The proper management and disposal of this wastewater is a continuing area of interest to government regulators and the public.
Through direct experience in counseling Marcellus Shale developers, our Natural Resources attorneys understand the legal and technical issues associated with hydraulic fracturing. We have extensive experience in navigating PADEP’s regulatory requirements and guidance regarding wastewater storage, treatment, transportation and disposal. We have substantial knowledge of the Pennsylvania Residual Waste Regulations and regularly assist clients in complying with PADEP's reporting and record keeping requirements, including the reporting requirements associated with PADEP’s Chemical Analysis of Residual Waste Annual Report ("Form 26R"), which is applicable to wastewater generated during the drilling, completion and production of Marcellus Shale.
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Permitting of Impoundments for Fresh Water and Flowback Storage
Managing the large quantity of water involved in Marcellus Shale development presents unique challenges to natural gas developers. Issues may include permitting and constructing necessary storage impoundments and managing the flowback following fracturing activities. BCCZ’s Natural Resources Practice Group is experienced in dealing with these issues. We counsel clients in determining whether a permit under the PADEP’s Dam Safety Program is necessary for such impoundments and oversee obtaining such a permit, as necessary. We also assist in ensuring such impoundments are constructed according to PADEP’s guidance on the Design, Construction, and Maintenance Standards for Pits and Dam Embankments Associated with Impoundments for Oil and Gas Wells, as well as with the PADEP’s construction standards for impoundments. In addition, BCCZ has extensive experience regarding the groundwater monitoring requirements for these impoundments and the application of the Pennsylvania Residual Waste Regulations to these groundwater monitoring wells.
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Joint Ventures, Farmouts and Joint Development Arrangements
With so much acreage under lease, and some leases approaching the end of their primary terms, many E&P companies and large-scale property owners look for partners to provide financing or expertise to jointly develop their Marcellus Shale properties.
This approach can be undertaken through an array of joint ventures, farmouts and joint development arrangements to share costs, risks and benefits. BCCZ’s cross-disciplinary team of attorneys is able to assist clients in navigating the challenges of selecting partners and planning, documenting and implementing such arrangements to take maximum advantage of the strengths of the respective parties.
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Pooling and Unitization Agreements
Most modern oil and gas leases permit the pooling and/or unitization of the leased tracts for purposes of applications for well permits and efficient operation of a producing reservoir. However, unlike most significant gas producing states, Pennsylvania does not have a compulsory pooling or unitization law for shallow wells, or a great deal of case law on pooling and unitization.
It is also not unusual for properties in a unit to be held by different lessees. The nuances of pooling and unitization are sometimes missed in the rush to implement pooling or unitization plans, resulting in friction with lessors and disputes among lessees in the unit. BCCZ’s attorneys are well positioned to assist our clients in the legal aspects of these measures in order to obtain optimal efficiency in their pooled or unitized operations.
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Marcellus Shale Leasing Disputes
Disputes over oil and gas rights are becoming increasingly frequent and contentious, particularly where the Marcellus Shale is found. Many are initiated by property owners trying to avoid valid leases so that they can take advantage of lucrative aspects of Marcellus Shale development. Such disputes typically entail application of legal principles developed in the conventional natural gas arena, some of which have not yet caught up with technological advances in gas drilling and production. BCCZ’s team of natural resources litigators is experienced in litigating these issues, understands the shifting legal landscape, and is equipped to defend these claims effectively and efficiently. BCCZ’s attorneys are well-qualified and experienced, not only in litigating these disputes when necessary, but also in preventing disputes from ripening into litigation.
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Stream Crossings and Wetland Disturbances
In Pennsylvania, it is very likely that the construction of an oil or gas facility (such as a Marcellus Shale well site), including access roads and/or pipelines, will encounter a stream or wetland. Navigating the U. S Army Corps of Engineers (“USCOE”) and state permitting, construction and mitigation requirements associated with disturbing a stream or wetland can be complicated.
BCCZ’s attorneys have extensive experience addressing these issues for a wide array of clients, including natural gas developers and pipeline companies. We counsel clients regarding the applicability and use of USCOE state programmatic general permits, nationwide permits and individual permits, as well as state general and individual authorizations. By applying our substantial experience to specific circumstances, we are able to efficiently assess the applicable regulatory requirements and counsel our clients on how to comply with these requirements in a cost-effective manner.
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Surface and Subsurface Ownership Rights
Frequently, the surface, mineral, and oil and gas estates of properties in the Marcellus Shale regions are held by different parties with divergent interests. Questions frequently arise as to how and when owners and lessees of different estates (for example, coal and gas owners) have the right to develop their respective estates or to protect their interests from adverse impacts (for example, subsidence).
Depending on the subject matter, those questions are sometimes settled by reference to the instruments of severance or conveyance, sometimes by reference to statutes (such as the Oil and Gas Act and the Coal and Gas Resource Coordination Act) and associated regulations, and sometimes by reference to rights under common law. BCCZ’s cross-disciplinary team of attorneys has deep experience in evaluating our clients' respective interests, assisting them in coordinating their development with other interest holders, and in defending their rights in order to preserve their investments.
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Pipeline Right of Way Acquisitions
The recent perfection of horizontal drilling technology to enable the exploitation of oil and gas in the Marcellus Shale has created a sort of "Wild West Gold Rush" in Pennsylvania. Faced with the immediate need to obtain development rights ahead of their competitors, E&P companies sometimes find themselves in the situation of controlling the drilling rights with no way to get the product to the market.
BCCZ’s attorneys have years of experience in helping clients to navigate the complexities of right of way acquisition in Pennsylvania, where unlike in many other states, eminent domain rights are not commonly available for gathering lines. Our clients include not only producers but also several midstream pipeline companies which we have assisted in acquiring rights of way by providing, among many other services, title review and clearance and drafting and negotiating of critical agreements such as rights of way, ratification, straw party and subordination agreements. Many of our attorneys are long-standing members of industry trade organizations, including the International Right of Way Association ("IRWA"), through which we have developed contacts and relationships we can call upon to help our clients get the job done.
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Erosion and Sediment Control (E&SC) Plans and Permitting
A Marcellus Shale well operator must draft and implement an erosion and sediment control ("E&SC") plan prior to starting any drilling activities. In most cases, developers must also obtain an E&SC approval from PADEP, either by applying for an Erosion and Sediment Control General Permit ("ESCGP-1") or submitting an Erosion, Sediment and Stormwater Control Module.
Our Natural Resources Practice Group assists Marcellus Shale developers with issues involved in drafting and implementing these E&SC plans and approvals, including "Expedited" and "Phased" ESCGP-1 Permits. We provide advice regarding site restoration plans and restoration activities. In addition, we represent oil and gas developers before the Environmental Hearing Board in appeals of penalty assessments and permit blocks associated with alleged E&SC violations.
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Endangered and Threatened Species
Searching for and/or addressing threatened and endangered species near an oil or gas site can be a time consuming and complicated process. BCCZ uses its decades of experience to provide practical advice to Marcellus Shale clients regarding these searches and related restrictions. BCCZ has counseled clients regarding the use and limitations of the Pennsylvania Natural Heritage Program (formerly referred to as the Pennsylvania Natural Diversity Inventory (“PNDI”)) and similar databases for other states. We have examined when threatened and endangered species searches are necessary in obtaining permits for well drilling, stream and wetland crossings and obstructions and other activities encountered during Marcellus Shale development. BCCZ has also counseled clients on the potential impacts and requirements associated with the possible identification of such a species in the vicinity of an oil or gas facility. We have also worked with oil and gas developers regarding threatened and endangered species search and mitigation requirements proposed by the U.S. Forest Service for oil and gas development in the Allegheny National Forest.
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Air Quality and Greenhouse Gases
Air quality issues are often among the most important environmental considerations facing the energy industry. The extraction and transportation of natural gas associated with the Marcellus Shale play will pose regulatory compliance issues for the industry regarding both hazardous and traditional criteria air pollutants as well as construction (NSR and NSPS) and operating (Title V and state-only) permitting issues.
BCCZ’s air lawyers have been counseling companies in the energy sector on compliance with the multitude of federal and state air quality regulatory programs for over 25 years. Our lawyers are also experienced in resolving air enforcement cases and developing litigation strategies to address toxic tort cases brought by private parties.
Additionally, BCCZ actively tracks the emerging implications of greenhouse gas regulation on the natural gas industry and has experience working with energy companies to develop strategies to address these programs.
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