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Oil and Gas Update

Marcellus

Pennsylvania Appellate Court Decides "Rule of Capture" Does Not Preclude Liability From Trespass Due To Hydraulic Fracturing

In a decision which may have severe consequences on oil and gas operations not only in Pennsylvania, but nationwide, the Superior Court of Pennsylvania held on April 2, 2018, in Briggs. v. Southwestern Energy Production Company, 2018 PA Super 79 (Apr. 2, 2018) that the “rule of capture” would not preclude liability for trespass of oil and gas operations due to hydraulic fracturing.

 

The rule of…

Supreme Court of Ohio Declines to Recognize Implied Covenant to Explore Further

In Alford v. Collins-McGregor Operating Co., 2018-Ohio-8, the Supreme Court of Ohio decided that Ohio does not recognize an implied covenant to explore further, separate and apart from the implied covenant of reasonable development. In Alford, the Appellants were landowners and lessors of an oil and gas lease with Appellees. The lease was held by the production of a single well drilled to the…

Sixth Circuit stays NEXUS pipeline construction in Green, Ohio pending review of Ohio EPA’s CWA §401 certification

On November 22, 2017, in one of many ongoing challenges to pipeline construction, a three-judge panel of the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”), in a 2-1 decision, granted an emergency stay of pipeline construction within the city of Green, Ohio (“Green”) pending a decision on the merits of Green’s petition seeking review of the Clean Water Act (“CWA”) §401…

Northern District of Ohio Addresses Royalty Issue in Lutz Opinion

Issues regarding the deduction of post-production costs from royalty payments to landowners were recently addressed by a Memorandum Opinion and Order filed in Lutz v. Chesapeake Appalachia, LLC, Case No. 4:09-cv-2256-SL, United States District Court, Northern District of Ohio, Eastern Division.

Lutz has a long procedural history and involved somewhat novel questions under Ohio law. The Northern…

Sierra Club Links Up with Libertarian Landowners in Continued Opposition to Gas Development

Opponents of natural gas development do not have the resources to challenge individual well permits in the Marcellus and related shale gas basins. Instead, they understand that the future of the industry depends on assembling the rights to draw gas from fractionated ownership and on the ability to attract higher prices by building transmission pipelines to carry the gas to new markets.  So, the…

Ohio Supreme Court to Hear Appeal on Expansion of Implied Covenants

Ohio Supreme Court to hear case seeking to expand the implied covenant to reasonably develop to include the obligation to explore deeper formations in Alford v. Collins-McGregor Operating Company, Washington App. No. 16CA9, 2016-Ohio-5082.

In this case, the plaintiff landowners sought a declaration of partial forfeiture of their leases, as to all depths below the Gordon Sand Formation, on the…

Federal court in Pennsylvania Invalidates Township Ordinance Prohibiting Oil and Gas Waste Disposal

By opinion of March 31, 2017, the U.S. District Court for the Western District of Pennsylvania invalidated an ordinance adopted by Pennsylvania’s Grant Township.  The Township’s “Community Bill of Rights Ordinance” prohibited corporations from “engaging in the depositing of waste from oil and gas extraction” and invalidated any “permit, license, privilege, charter or other authority issued…

Little Known Agency Assumes New Enforcement Powers

A little known federal agency in charge of pipeline safety has just issued a new regulation that represents a major change in its enforcement authority over regulated pipelines. The Pipeline and Hazardous Materials Safety Administration (PHMSA), an independent agency within the U.S. Department of Transportation, has announced an “Interim Final Rule” (IFR) on its website which will authorize it to…

EPA’s Science Advisory Board Critiques EPA Assessment of Hydrofracking Impacts on Water Resources

In 2009, Congress asked EPA to examine the relationship between hydraulic fracturing and drinking water resources. In June 2015, EPA released for external review a draft report entitled “Assessment of the Potential Impacts for Oil and Gas on Drinking Water Resources.”  The Executive Summary observed that the Assessment “synthesizes available scientific literature and data to assess the…

There is an Implied Right to Pool an Oil and Gas Lease

In a case of first impression in West Virginia, on April 15, 2016, Judge David W. Hummel, Chief Judge of the 2nd Judicial Circuit (Marshall, Wetzel and Tyler Counties, West Virginia), entered an order ruling that there is an implied right to pool an oil and gas lease. The case, American Energy – Marcellus, LLC v. Poling, et al., Civil Action No. 15-C-34 H, involved an 1894 lease held by…

 

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