The United States District Court for the Western District of Pennsylvania has accepted in part the recommendations of a magistrate judge, and has granted the motion to certify two classes of plaintiffs in Pollock v. Energy Corp. of America. A third class was denied certification. In February, District Judge Joy Flowers Conti ruled on a summary judgment motion.
The plaintiffs, owners of various oil and gas interests under lease to Energy Corporation of America (ECA), brought suit for the alleged miscalculation of royalty payments by ECA. The classes, as certified, now encompass two groups: 1) “all Pennsylvania lessors holding an oil and gas lease with ECA for which interstate pipeline service charges were deducted prior to March 26, 2012;” and 2) “all Pennsylvania lessors holding an oil and gas lease with ECA for which marketing fees were deducted from royalties prior to March 26, 2012.” The third requested class, based on the failure to pay royalties on gas used as plant fuel, was denied.
Devon Energy Corporation, Crosstex Energy, Inc. and Crosstex Energy, L.P. announced that they have entered into a definitive agreement to combine midstream assets, including gathering and transportation pipelines, gas processing, fractionation and logistics assets, the Pittsburgh Business Times reports. The transaction, which is scheduled to close in the first quarter of 2014, includes assets in many of North America’s largest oil and gas regions, including the Utica and Marcellus. The combination will lead to the formation of a new company, the name of which will be announced prior to the closing of the transaction. Devon, with a strong upstream portfolio, is expected to be the new company’s largest customer.
The Marcellus Shale Coalition announced today that David Spigelmyer has been named as the organization’s new president. Mr. Spigelmyer will assume the position effective Monday. The Wall Street Journal reports that Mr. Spigelmyer is a former Chesapeake Energy executive and Marcellus Shale Coalition chairman. He succeeds Kathryn Klaber, who helmed the Marcellus Shale Coalition from 2009 until last Friday.
Chem.info reports that GreenHunter Water has obtained all of the permits necessary to begin removing old structures at a former oil service site in Warwood, West Virginia. Development of the site for its frack water recycling plant could be finished as soon as February of 2014. John Jack, vice president of business development of GreenHunter Water, indicated that the site will contain 19 storage tanks, and that GreenHunter Water is expecting approximately 30 trucks per day to arrive at the site, with each truck carrying 100 barrels of fracking brine water. Eventually, GreenHunter Water would like to implement a barging aspect to the plant, which would help alleviate road traffic. GreenHunter Water hopes to hire 12 to 20 employees to work at the site.
WVU’s Health and Safety Extension Division has announced the opening of a new Oil and Gas Training and Assistance Center to provide training and credentials to WV employees working in the oil and gas field. The training center utilizes the knowledge of local experts to offer current and prospective oil and gas employees training on various safety topics. Courses anticipated to be offered by the Training Center include fall protection, transportation safety, confined space safety, and a PEC/SafeLandUSA Basic Awareness Orientation course. Once an individual completes a training course, the Training Center can then provide valuable credentials to the current and prospective employees, including registration in an online database accessible by employers. Costs of the courses vary by topic.
The Marcellus Shale Coalition (MSC) announced that it has updated its recommended practices to include the Drilling and Completions phases of natural gas exploration. These recommendations cover a wide range of topics with regard to bringing a well into production, including regulatory planning and well flowback. The MSC had previously released seven additional sets of guidelines that cover site planning, motor vehicles, water pipelines, and more. The addition of the Drilling and Completions documents will help exploration and production companies in the region carry out their business in a safe, responsible manner, according the MSC.
Transcontinental Gas Pipe Line Company, LLC (“Transco”) recently filed an application with the Federal Energy Regulatory Commission (“FERC”) for authorization to construct and operate the Leidy Southeast Project. According to the application, the Leidy Southeast Project would involve the installation of approximately 30 miles of new 42-inch pipeline and associated facilities in Northeastern Pennsylvania and Northern New Jersey. The new pipelines, if approved by FERC, would be used to transport gas produced in North Central Pennsylvania. Transco asked FERC to issue a certificate of public convenience and necessity for the Project by August 1, 2014, so that the company could meet its targeted in-service date of December 1, 2015. The Times Tribune provides additional coverage here.
Penn State Marcellus Shale Law Blog reports that the U.S. District Court for the Western District of Pennsylvania recently granted in part and denied in part Texas Eastern Transmission, L.P.’s motion to dismiss and or strike a personal injury complaint by a neighboring land owner. In Koziel v. Texas Eastern Transmission, L.P., the land owner alleged that he suffered severe health problems related to his hearing and sleep after he heard a high pitched noise emanating from Texas Eastern’s nearby compressor station for nearly 15 minutes. He initially claimed that Texas Eastern was liable on the basis of negligence and strict liability, but conceded his strict liability claim following Texas Eastern’s motion to dismiss. As a result, the court granted Texas Eastern’s motion to dismis the strict liability claim. The court denied Texas Eastern’s motion to strike a particular paragraph of the plaintiff’s negligence claim as moot because the allegation related solely to the period of alleged action/inaction by the operator while the noise occurred, rather than any remedial or post-incident actions or inactions.
State officials are considering new rules to regulate storage of wastewater used to stimulate wells for the production of oil and gas. The new rules would potentially create new options for shale well producers to store millions of gallons of water in lagoons so that it can be cleaned and re-used in the drilling process. A spokesman for the Ohio Department of Natural Resources says that the state is drafting safety standards for the construction of the lagoons and their length of use.
Two Ohio groups recently issued a press release regarding a lawsuit which has been filed against the Muskingum Watershed Conservancy District over its oil and gas leasing practices and its sale of water for hydraulic fracturing. The MWCD, tasked with reducing flooding, conservation and providing recreational opportunities, as earned over $78 million through its leases and water sales which the organization can use to further its conservation efforts. The lawsuit was filed in Franklin County Common Pleas Court by local property owners.
The New York Court of Appeals on September 30, 2013 set a schedule for the parties to file briefs in two cases that will likely have a substantial impact on the future of hydraulic fracturing in the state. In August of this year, the Court of Appeals granted review of two cases which upheld local natural gas drilling bans in the upstate towns of Dryden and Middlefield. The Appellants in the two cases, which include Norse Energy Corp. and an owner of several oil and gas leases, must file their initial briefs by October 28, 2013, and the towns must file their response briefs by December 16, 2013. Reply briefs from the Appellants are due by January 6, 2014. The Court of Appeals has not set a date for oral arguments.
The Court will determine whether the New York Oil, Gas, and Solution Mining Law preempts a municipality’s authority to enact a zoning ordinance that prohibits drilling within its jurisdiction. To date, more than 50 municipalities in New York have banned gas drilling.
Aubrey McClendon, former CEO of Chesapeake Energy, is planning to close on $1.8 billion in equity and debt financing to fund American Energy Utica, his new exploration and production company, as reported by CNBC. American Energy Utica will buy and develop land in Ohio’s southern Utica Shale area. The company expects to close on the purchase of 80,000 acres in three separate transactions and hopes to have 12 rigs operating within the next two to three years.
IGS Energy CNG Services (IGS) has opened its first compressed natural gas (CNG) fueling station in West Virginia, reports the State Journal. IGS president Scott White stated that the Bridgeport, WV station is the first of three that are planned to serve the I-79 corridor between Pittsburgh and Charleston, and is the first publically accessible station to open in West Virginia in the past twenty years. West Virginia has taken aggressive steps to promote the use of CNG as an alternative fuel for public and commercial fleet vehicles. At the grand opening of the Bridgeport CNG station, Governor Earl Ray Tomblin made the following statement: “With the opening of this station, West Virginia once again is taking a bold step and leading the way toward national energy independence. Not only are we utilizing a cleaner burning fuel, but we are putting to use one that is produced right in our own state by hard-working West Virginians.”
On September 26, 2013, in the case of Thornsbury v. Cabot Oil & Gas Corporation (2013 W. Va. LEXIS 958), the Supreme Court of Appeals of West Virginia ruled that, although an oil and gas lease to Cabot affecting surface lands owned by Thornsbury contained road provisions, a subsequent 2006 right-of-way contract controlled the design and use of the well access road on the land. The Supreme Court Opinion reversed a prior decision of the McDowell County Circuit Court granting summary judgment to Cabot, further holding that genuine issues of material fact remain as to the possible breach of the 2006 contract, and remanded the case for further proceedings.
Steered by an executive of Philadelphia Energy Solutions, a group of business and political leaders is discussing the extent to which a natural gas pipeline can be constructed that would connect the natural gas fields of the Marcellus Shale to the City of Philadelphia. According to the group, “We’re trying to work on how to get that gas here to valorize it.” The group, however, recognizes that there will be challenges, including how to feed the pipeline through the city’s densely populated suburbs. The Philadelphia Inquirer has more here.