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At the Well Weekly (v.11.20.2020)

Oil + Gas Update | Challenges to BLM-Issued O+G Leases

Spot prices in Appalachia dropped by about $0.30/MMBtu since our last report while the rig count lost a few units despite a small spike in oil prices. In pipeline news, the Fourth Circuit denied a request to stop MVP construction activities at the request of environmental groups concerned about various species affected by the project. All is quiet in the courts of Appalachian states on the oil + gas front, but the Third Circuit is poised to decide the constitutionality of the PA Governor's COVID-related shut-down orders and the majors have urged the U.S. Supreme Court to decide whether climate-change cases belong in state or federal court. In other regions, the BLM received seemingly conflicting decisions in similar cases involving the agency's environmental review before issuing oil and gas leases in Wyoming and the Permian.

Here's your week in review...

Rig Counts, Spot Prices + Oil Prices

  • Rigs: National (-310); Marcellus (27); Utica/Point Pleasant (4)

  • Brent Crude: +$45.46/bbl

  • West Texas Intermediate: +$42.79/bbl

  • NYMEX: December 2020 @ -$2.712/MMBtu

  • Spot Prices: Henry Hub (-$2.36/MMBtu); Dominion South (-$.1.12/MMBtu); Tenn. Zone 4 (-$1.09/MMBtu)

("+" or "-" or blank denotes increase, decrease, or flat. )

WOPL - Appalachia

  • Adelphia Project (Greater Philadelphia Region): Nothing new to report.

  • Atlantic Sunrise (Northeastern PA to SE Pennsylvania): Nothing new to report.

  • Dakota Access (Northwest US): Nothing new to report.

  • Empire Pipeline (NY to PA): Nothing new to report.

  • Keystone Pipeline (Canada/US): Nothing new to report.

  • Leidy South - Benton Loop Expansion (PA): Nothing new to report.

  • Mariner East (Western PA to Eastern PA): Nothing new to report.

  • Mountaineer XPress (WV): Nothing new to report.

  • Mountain Valley Pipeline (Northern WV to Southern Va. and NC): After staying a stream-crossings permit, the Fourth Circuit denied a separate request to halt MVP’s other construction efforts submitted by environmental groups that contend the pipeline will push two species of protected fish — the Roanoke logperch and the candy darter — to the brink of extinction.

  • NEXUS (Ohio to Michigan): Nothing new to report.

  • NFG (PA): Nothing new to report.

  • NFG FM100 Project (NC PA to Transco): Nothing new to report.

  • Northeast Supply Enhancement Project (NJ/NY): Nothing new to report.

  • Northern Access (NW PA to Western NY): Nothing new to report.

  • Northern Supply Access Project (Appalachia to Gulf Coast): Nothing new to report.

  • PennEast (PA to Central Jersey): Nothing new to report.

  • Regional Energy Access (NE PA to PA/NJ): Nothing new to report.

  • Revolution Pipeline (PA): Nothing new to report.

  • Rover (OH, WV, PA to Michigan): Nothing new to report.

  • TransCanada Eastern Panhandle Project (PA to WV): Nothing new to report.

  • Transco (Interstate): Nothing new to report.

Headlines & Holdings - Appalachia

  • Governor Wolf Says Federal Judge Erred by Invalidating COVID Orders. On appeal to the Third Circuit, the Governor argued that a federal judge erred when he struck down the Commonwealth’s COVID-related orders establishing limitations on public gatherings and closure of businesses. County of Butler v. Governor of Pennsylvania, No. 20-2936 (3d Cir.) (pending).

  • Energy Cos. Seek SCOTUS Review of Climate Change Venue Fights; Meanwhile, Fights Over Venue in Other Cases Proceed. A coalition of energy companies asked the U.S. Supreme Court to decide whether climate change cases belong in state or federal court. BP PLC v. City of Baltimore, 19-1189 (U.S.) (pending.

Headlines & Holdings - Beyond Appalachia

  • BLM Failed to Take a "Hard Look" at Climate Change Impacts of O+G Leases. The DC District Court concluded that although BLM produced a supplemental assessment of the potential effects that oil and gas leasing on the federal land in Wyoming at issue may have on climate change, the agency's supplemental assessment still failed to take the requisite "hard look" at the environmental impacts of the leasing decisions. Wildearth Guardians v. Bernhardt, --- F. Supp. 3d ---, No. CV 16-1724 (RC), 2020 WL 6701317 (D.D.C. Nov. 13, 2020).

  • Mont. Federal Court Entered Default Judgment Against Non-Op for O+G Well Costs. A federal judge in Montana entered default judgment and awarded damages to an operator alleging that its non-op failed to pay any costs associated with two wells drilled in the state. Continental Resources, Inc. v. Wyotex Oil Co., --- F. Supp. 3d ---, No. CV 17-148-BLG-TJC, 2020 WL 6701421 (D. Mont. Nov. 13, 2020).

  • N.M. Federal Court Defers to BLM on Issuing O+G Leases. Contrary to the D.C. District Court's decision (see above), a federal court in New Mexico deferred to BLM's determination on issuing three leases in the Permian despite allegations from environmental groups that BLM did not account for the cumulative environmental effects of existing development in the region and failed to frame these three leases within the broader global climate crisis, holding instead that (a) NEPA does not require that BLM adhere to specific methodologies related to the environment; (b) once BLM met statutory requirements the court's role ended; and (c) the political branches of government decide whether to maintain the status quo or to pursue environmental protection policies. Wildearth Guardians v. Bernhardt, --- F. Supp. 3d ---, No. 1:19-CV-00505-RB-SCY, 2020 WL 6799068 (D.N.M. Nov. 19, 2020).

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