Posts Authored by Zachary D. Eddy

Marathon Petroleum will split off Speedway and replace CEO

Findlay-based Marathon Petroleum Corp. announced plans to “spin off its Speedway gas-station business” and replace Chairman and CEO Gary Heminger, who will retire next year, The Columbus Dispatch reports. The announcement reverses Marathon’s position from recent statements that the company intended to continue under its current structure despite pressure from investors (see our October 15, 2019 blog post). Elliott Management Corp., part of the group of shareholders that pushed for the split, said in a statement the move “will unlock substantial value for shareholders,” according to the article. For more, read the full article.

National

10 permits for horizontal drilling in Utica-Point Pleasant Shale issued

The Ohio Department of Natural Resources (ODNR) issued 10 permits for horizontal well drilling in the Utica-Point Pleasant for the week ending October 5, 2019, The Business Journal reports. Five permits were awarded to Antero Resources Corp. for wells in Seneca Township. Three were granted to Equinor USA Onshore Properties Inc. for Salem Township sites, and two were issued to EAP Ohio LLC for wells in German Township. ODNR had issued 3,177 horizontal drilling permits as of October 5, with 2,707 wells being drilled, 2,339 of which are active. For more, read the full article.

Ohio

Ohio’s Q2 shale production up from last year

Production totals from the Ohio Department of Natural Resources (ODNR) show the state’s horizontal shale wells “produced 5.8 million barrels of oil and 614 billion cubic feet of natural gas during the second quarter” of 2019, CantonRep.com reports. Oil production increased nearly 30 percent from a year ago, and natural gas production increased almost 11 percent. ODNR reported production from 2,317 Utica and Marcellus wells during the second quarter. For more, read the full article.

Ohio

WV high court sides with Antero in implied surface easement dispute

Law 360 reports that the West Virginia Supreme Court has issued its ruling in the matter of Robert L. Andrews et al. v. Antero Resources Corp. et al. The court addressed whether the plaintiff landowners were unreasonably and substantially burdened by the defendant gas developers’ activities on and around their land. The majority opinion held that the plaintiffs failed to present evidence of such a burden, particularly on the issue of whether Antero’s activities to develop the mineral estate were reasonably necessary. In addition, the court found that the landowners’ stated “…annoyances, inconveniences, and discomforts” in relation to Antero’s activities on the property “simply do not rise to the level of a substantial burden” as required by West Virginia case law.

The 3-2 decision affirms the lower court’s ruling that the defendants acted in accordance with their implied rights to use the surface estates. Justice Jenkins wrote the majority opinion. In dissent, Justice Workman criticized the majority for failing to provide any guidance on the interplay of the competing rights of a surface landowner and a mineral estate owner. Law 360 notes that this type of conflict between oil & gas E&P companies and landowners is on the rise in West Virginia; it's expected that the number will only continue to grow because of the prevalence of split surface and mineral estates in the Appalachian region.

West Virginia

Investment in Ohio shale reaches $74 billion, continues to grow

A quarterly report commissioned by JobsOhio and issued by Cleveland State University’s Energy Policy Center shows continued strong investment in oil and gas production in eastern Ohio, reaching $74 billion for the period between 2011 and the second quarter of 2018. The Energy Policy Center based its findings on investment data from companies in the region. Most of this investment has been in the upstream applications of oil and gas production. Other developing investments include ironmaking plants in Toledo and Ashtabula County; potential investments include PTT Global’s proposed petrochemical plant in Belmont County. Read the full story.

Ohio

Power companies ask Supreme Court to strike down nuclear power subsidies; Supreme Court denies petitions for writs of certiorari (update)

Update:  On April 15, 2019, the U.S. Supreme Court denied, without decision, two petitions for writs of certiorari that were filed by one of the nation’s leading trade associations representing independent power producers. Those cases alleged, among other things, that ZEN legislation out of both New York and Illinois were preempted by federal law. The Court upheld the dismissal of the complaint in each case, and the Zero Emission Nuclear (ZEN) legislation in New York and Illinois was effectively upheld as not in violation of the Federal Power Act.

On January 7, 2019, the Electric Power Supply Association, one of the nation’s leading trade associations representing independent power producers, filed two petitions for writs of certiorari with the U.S. Supreme Court. The writs for cert arise from appeals of a Second Circuit Court of Appeals decision, which is summarized here, and a Seventh Circuit Court of Appeals decision, which is summarized here, that both upheld state subsidies for nuclear power generation facilities in New York and Illinois, respectively. The question presented by both appeals is “[w]hether the [Federal Power Act (FPA), 16 U.S.C. § 791a et seq.] preempts only state subsidies that explicitly require a wholesale generator to sell its output in FERC-approved auctions, or whether the FPA also preempts state subsidies that lack such an express requirement but that, by design, subsidize only generators that sell their entire output via such auctions, thereby achieving the same effect.”

Both petitions urged the Court to recognize the great importance of the decisions from the Second Circuit and Seventh Circuit if upheld. “The economic and policy stakes are enormous,” and the subsidies will grossly distort market outcomes. “Unless this Court intervenes, these subsidy schemes will impose huge costs and threaten serious distortions of the FERC-authorized mechanisms for setting wholesale rates at economically efficient levels and sending appropriate price signals to wholesale market participants.” To the petitioners, the decisions ratify “a fundamental transfer of regulatory authority to the States and away from the federal government and its policy of relying on market forces to set just and reasonable wholesale rates and send economically efficient signals regarding market entry and exit.”

This case will have major ramifications across the country but particularly here in Ohio, as the outcome could work to either essentially permit or effectively preempt future attempts at providing nuclear subsidies to failing generation facilities. The response date for both petitions has been set for February 7, 2019.

National, Oil & Gas Litigation

2019 Infrastructure Funding: How to get it and spend it wisely

On January 14, 2019, the President signed the Water Infrastructure Improvement Act (H.R. 7279), granting municipalities new statutory tools to affordably confront expensive infrastructure challenges using Integrated Planning. Bricker & Eckler, McMahon DeGulis and Muskingum Watershed Conservancy District are hosting a series of free public infrastructure planning events to discuss these tools and the integrated planning process.

This program will be offered in various Ohio locations February through May. For more information, including schedule, location details and to register, visit the event page.

Ohio

$86 million Risberg Line project approved for construction

The $86 million Risberg Line project was approved by the Federal Energy Regulatory Commission on Dec. 14, according to Star Beacon. The project will extend the natural gas pipeline by 28 miles through northwest Ashtabula County and is expected to increase job opportunities and tax revenue for the surrounding areas. For more, read the full story.

Ohio, Pennsylvania

Funding approved for new railyard facility in Hannibal

U.S. Senator Sherrod Brown announced $20 million in funding for the construction of a new railyard and pipeline facility in the town of Hannibal, Ohio on Dec. 6, according to The Daily Jeff. The rail transloading project is expected to increase the area’s energy exports and connectivity to global markets. For more, read the full story.

Ohio

Second Circuit follows lead of Seventh: Nuke subsidies upheld

On September 27, 2018, the Second Circuit Court of Appeals issued its decision in Coalition for Competitive Electricity v. Zibelman, 2nd Cir. No. 17-2654, 2018 U.S. App. LEXIS 27605 (Sep. 27, 2018). This decision, which follows the Seventh Circuit’s decision in Elec. Power Supply Assn. v. Anthony M. Star, summarized here, is the second decision in the span of two weeks to affirm a state’s subsidization of nuclear generation facilities. As in Star, the principal issue in Zibelman was whether the Federal Power Act, specifically 16 U.S.C. § 824(b)(1), which provides that the Federal Energy Regulation Commission (FERC) is to regulate the sale of electricity in interstate commerce, and the states are to regulate local distribution and the facilities used to generate power, preempts a state law that seeks to subsidize some of the state’s nuclear generation facilities in the form of zero emission credits (ZEC) credits. Following the Seventh Circuit’s lead, the Second Circuit held that the state program was not preempted by the Federal Power Act; however, the decision differed in two main respects. For more, read the full publication.

National
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