Some may be surprised to learn that the storage and production of natural gas do not always complement one another.  A conflict can occur when one gas company stores its gas by injecting it back into the ground, typically into a depleted gas field.  So long as gas pressure can be maintained underground, the depleted field provides a natural reservoir for storing gas.  If areas of low pressure are created near the storage area, the stored gas tends to migrate toward these areas. The drilling for and extraction of natural gas can create such low pressure zones.  Effectively, production activities near an underground storage area suck the gas away from where it is being stored. Read More »

Share | Email| Comments|  Topics: Drilling, Exploration, Marcellus Shale, Natural Gas, Nuisance, Oil and Gas, Storage

On Tuesday, in Citizens for Pennsylvania’s Future v. Ultra Resources, Inc., No. 4:11-CV-1360 (M.D.PA. Sept. 24, 2012) — a case watched closely by natural gas stakeholders in Pennsylvania — Judge Mariani of the U.S. District Court for the Middle District of Pennsylvania refused to dismiss a citizen suit brought by an environmental group challenging the validity of state air permits issued to the operator of a series of natural gas compressor stations, potentially opening the door for similar Federal court challenges to air permits previously issued by state regulators in Pennsylvania and elsewhere.  Approximately three years ago, the Pennsylvania Department of Environmental Protection (“PADEP”) issued separate authorizations for Ultra Resources, Inc. (“Ultra”) to construct seven compressor stations pursuant to a state general permit generally known as “GP-5.”  In issuing these authorizations, PADEP considered each of the compressor stations as a separate “facility.” If PADEP had considered the compressor stations to be a single “major” facility, then Ultra would have been required to obtain a more stringent non-attainment new source review (“NNSR”) permit before commencing construction. Read More »

Share | Email| Comments|  Topics: Air, Cases to Watch, Clean Air Act, Drilling, Emissions, Federal Procedure, Marcellus Shale, Oil and Gas, Pennsylvania, Permits

The Delaware River Basin Commission (“DRBC”) was created with the approval of Congress in 1961 through the Delaware River Basin Compact, an agreement between the New York, Pennsylvania, New Jersey, Delaware, and the federal government for planning, conservation, utilization, development, management and control of the water resources of the Delaware River Basin (the “Basin”).  In June, 2010, the DRBC placed  a moratorium on natural gas development in the Basin, which includes areas within the Marcellus Shale formation, pending the adoption of regulations governing such development.  Draft regulations were published for comment in 2010, and revised draft regulations were published in November, 2011.  However, they have not yet been adopted by the DRBC, leaving the moratorium in place. Read More »

Share | Email| Comments|  Topics: Cases to Watch, Decisions of Note, Drilling, Exploration, Marcellus Shale, NEPA, Oil and Gas, Standing

In April, we reported on an Arkansas Supreme Court case which held that, at least as of 1934, the term “mineral rights” included oil and gas as a matter of law.  But what about deeds of an older vintage?  Last week, the Arkansas Supreme Court, inNicholson v. Upland Industrial Development Co., 2012 Ark. 326 (Sept. 13, 2012), ruled that a 1903 deed reserving “mineral rights” included oil and gas rights because at the time of the deed and in the general region where the deed was executed, that was the common understanding.  In other words, the per se rule announced in Staggs v, Union Pacific RR Co.* did not apply. Read More »

Share | Email| Comments|  Topics: Arkansas, Deeds, Drilling, Exploration, Leases, Mineral Rights, Oil and Gas, Procedure, Real Estate

Pennsylvania’s Act 13 of 2012, signed in February of this year, revised the Commonwealth’s Oil and Gas Act to accommodate and address the increased activity associated with the extraction of natural gas from the Marcellus Shale.  It included provisions for impact fees, environmental protections, and set-back restrictions.  In addition, it also required local municipalities to adhere to uniform zoning laws that would provide for the development of oil and gas resources in the Commonwealth.  Yesterday, in the case of Robinson Township v. Commonwealth of Pennsylvania, No. 284 M.D. 2012 (July 26, 2012), the Commonwealth Court in a 4-3 decision held that provision of the law to be unconstitutional. Read More »

Share | Email| Comments|  Topics: Act 13, Cases to Watch, Drilling, Due Process, Leases, Marcellus Shale, Oil and Gas, Pennsylvania, Procedure, Real Estate, Standing, Zoning

With increasing frequency, courts around the country are using their inherent power to control the proceedings before them in order to structure environmental and toxic tort cases in such a way as to reduce, as much as possible, cases to their essence and, more importantly, ensure that the time and resources of parties are not needlessly wasted on discovery or lengthy proceedings when spurious claims are brought.  And that’s exactly what has happened in the case of Strudley v. Antero Resources Corp., No. 2011 CV 2218 (Denver Co. Dist. Court  May 9, 2012), where the Court dismissed plaintiffs’ claims against companies involved in drilling natural gas wells when the plaintiffs failed to show, prior to the initiation of discovery, that there was a prima facie basis for associating their personal injury claims with the defendants’ activities. Read More »

Share | Email| Comments|  Topics: Decisions of Note, Drilling, Marcellus Shale, Medical Monitoring, Multi-District Litigation, Oil and Gas, Procedure, Real Estate, Toxic Torts

As we reported previously, recent exploration and production in the Marcellus Shale has forced Pennsylvania courts to address interpretation of oil and gas leases which may be over 100 years old, relying on cases that are similarly over 100 years old, and to harmonize or reject those cases as they impact the people and property in the 21^stcentury.  On March 26, the Pennsylvania Supreme Court attempted to do just that in T.W. Phillips Gas and Oil Co. v. Jedlicka, No. 19 WAP 2009 (Mar. 26, 2012).  The case involved a 1926 oil and gas lease which provided, in relevant part, that the lease would continue for “as long . . . as oil or gas is produced in paying quantities” and required interpretation of the term “in paying quantities.”  Read More »

Share | Email| Comments|  Topics: Decisions of Note, Drilling, Exploration, Leases, Marcellus Shale, Oil and Gas, Pennsylvania, Real Estate, Royalties

Last fall we wrote about the decision in Butler v. Estate of Powers in which the Pennsylvania Superior Court appeared to overturn more than 100 years of case law to cast doubt on whether the natural gas found in shale is a “mineral” for purposes of deed interpretation.  We called it a “Case to Watch,” and it looks like we were right because earlier this month the Pennsylvania Supreme Court agreed to hear the case. Read More »

Share | Email| Comments|  Topics: Cases to Watch, Drilling, Leases, Marcellus Shale, Mineral Rights, Oil and Gas, Real Estate

On January 4, 2011, the Pennsylvania Superior Court issued its opinion in Hite v. Falcon Partners, No. 197 WDA 2010, 2011 PA Super 2, holding that productive activities at premises leased for oil and gas activity were essential for the lessee to retain control of the property after the primary lease period, even though the oil and gas lease provided for an indefinite extension of the lease upon the payment of small delay rental payments. Relying on long-standing case law, the Court determined that despite the “unusual” wording of the lease at issue, the equitable principles that require such leases to be interpreted to promote development of the land and resources for the benefit of both the lessor and the lessee remained paramount. Importantly, though, both the lower court and the Superior Court left a slight opening for lessees. The trial court opined that an indefinite period for exploration was not completely foreclosed to lessees, but that the lease language must be “clear and unequivocal.” Similarly, the Superior Court noted that a lessee who wished to preserve exploration rights could enter into a lease with a significantly longer primary term. Read More »

Share | Email| Comments|  Topics: Decisions of Note, Drilling, Exploration, Leases, Oil and Gas, Real Estate, Royalties