Pennsylvania – On August 15, 2012, the Pennsylvania Commonwealth Court upheld an injunction on provisions of Act 13 that could preempt local drilling ordinances. The Commonwealth court initially struck down the preemption provisions in July in a 4-3 decision that was immediately appealed by the Public Utility Commission. Attorneys for the townships were concerned that the injunction could be set aside during the pendency of the appeal. Their concern arose from an obscure appellate rule, known as supersedeas, that requires injunctions to be set aside in favor of the state until the appeals are resolved. The intent of supersedeas is to prohibit lower courts from issuing decisions that significantly restrain important state functions without some appellate review. Counsel for the townships moved successfully to stop the automatic injunction by showing a reasonable likelihood of success on appeal and irreparable harm if the injunction were to be set aside.
Pennsylvania – On August 21, 2012, Cabot Oil & Gas Corp was cleared by the U.S. Environmental Protection Agency to resume drilling in Dimock Township. Dimock, and the methane contamination occurring therein, were featured in the movie Gasland. Last month, EPA, after extensive testing by the Agency and Cabot, found that Dimock’s water wells were not contaminated by fracking fluid.
New Jersey and New York Pipelines – Attempts to bring Marcellus shale gas to market are meeting stiff resistance in the New York metropolitan area. While exploration and development of natural gas have been moving at a brisk pace, the infrastructure necessary to bring the gas to markets has lagged significantly. Landowners itching for royalty checks have seen wells on their property (or that they are pooled into) capped until pipelines and other infrastructure are in place to economically bring the gas to market. Attempts to develop the midstream infrastructure often meet the same resistance as upstream exploration and production. In New Jersey, following a FERC announcement that Transco Gas Pipeline LLC’s Northeast Supply Link Project would not “constitute a major federal action,” the Sierra Club petitioned the New Jersey Department of Environmental Protection to deny Transco permits because the project crosses wetlands and bog turtle habitat. The Northeast Supply Link Project is a $350 million dollar project to bring Marcellus share gas to New York City and surrounding areas.
Meanwhile, in New York, Cabot Oil & Gas Corp and Williams Partners L.P. are meeting resistance from its proposal to pipe Marcellus shale gas through Northeast Pennsylvania to New York. Here, however, the concern is not squarely environmental. Opponents of the pipeline are concerned that it will be used as a first step toward exporting liquefied natural gas out of New York Harbor. As the United States once again emerges as a major energy producer, there is growing friction over whether domestically produced natural gas should only be used in the United States or whether the U.S., like other energy producers, should participate in the global market. The protectionists want the historically low gas prices to endure for the exclusive benefit of American consumers. The free-traders argue that oil and gas companies need global markets and modest price increases to make domestic gas production viable. As an indicator of how hot this issue has become, the pipeline opposition in New York has materialized despite the fact that no LNG exists, or is proposed, for New York Harbor.