The Sixth Circuit Court of Appeals recently held that an insurance agent did not have a duty to advise a petroleum company that the company should obtain pollution coverage, which would have covered a costly diesel spill. See Hardy Oil Co., Inc. v. Well Fargo Insurance-Indiana, Nos. 13-6373/6445 (6th Cir. Sept. 22, 2014) (unpublished opinion).
Yesterday, June 17, 2014, the Pennsylvania Commonwealth Court entered a decision regarding four matters that remained unsettled after the Pennsylvania Supreme Court’s ruling in the Robinson Township v. Commonwealth decision.
One, the Court held that it is not unconstitutional to limit notice by the DEP of spills to public water system facilities only. In reaching this decision, the Court found there are valid reasons for treating differently notification to public drinking water suppliers versus to private well owners. For example, the DEP does not regulate private wells, the DEP may have no knowledge of the location of all private wells, and public drinking water systems cannot be replaced easily if affected by a spill.
Two, the Court dismissed the issue of whether eminent domain powers are available to those private companies storing, selling, or transporting gas because the challenged statutory language “only confers upon a public utility possessing a certificate of public convenience the power to condemn property for the injection, storage and removal of natural gas for later public use.” In other words, the at-issue provision confers the right of eminent domain on a public utility only.
Three, the Court upheld the prohibition precluding medical professionals from disclosing chemicals associated with gas drilling. The Court found that the statute does not preclude a physician from sharing the disclosed confidential and proprietary information with another physician for purposes of diagnosis or treatment or from including such information in a patient’s medical records or evaluation.
Four, the Court enjoined the application and enforcement of the provision conferring the Public Utility Commission with the authority to review local zoning ordinances and to withhold impact fee money to municipalities.
In the wake of the Parr v. Aruba Petroleum, Inc. verdict, the media has speculated extensively on the potential impact of this purported “anti-fracking” result. In Parr, on April 22, a Texas jury awarded $ 2.9 million to a family after finding that Aruba Petroleum’s neighboring drilling activity had created a private nuisance. The significance of Parr jury verdict is diminished, however, when viewed in context with the jury verdicts recently entered in two other Texas lawsuits alleging that the defendant’s drilling operations constituted a nuisance, Anglim v. Chesapeake Operating, Inc., No. 2011-008256-1 (County Ct. at Law No. 1, Tarrant County, TX), and Crowder et al. v. Chesapeake Operating Inc., No. 2011-008169-3 (County Ct. at Law No. 1, Tarrant County, TX).
In the Anglim case, decided two weeks prior to the Parr verdict, the plaintiff-landowner lost. The jury found that the defendant’s natural gas operations were not a private nuisance. In Crowder, which was decided a month after Parr, the jury awarded $20,000 to the plaintiff-landowners after finding that the defendant’s drilling operations were a temporary nuisance. Thus, although these verdicts show that nuisance claims against operating companies may be viable, the Parr verdict appears to be an anomaly rather than a reflection of the current legal environment for companies engaging in drilling activities.
Today, May 15, 2014, in Towanda, Bradford County, Pennsylvania, Panda Power Funds broke ground for the first new power plant in Pennsylvania that was specifically developed to take advantage of its proximity to the Marcellus Shale gas formation. Governor Tom Corbett and other Pennsylvania officials joined the company in its groundbreaking ceremony.
This plant is expected to contribute an estimated $5.97 billion to the area’s economy during construction and the facility’s first 10 years of operation. The company also reports that approximately 500 jobs will be created during peak construction. Upon completion in 2016, the generating station will create an estimated 27 skilled jobs to operate the facility, as well as creating 45 indirect jobs within the community to support the plant.
Yesterday, May 14, 2014, the Pennsylvania Commonwealth Court heard oral argument regarding select matters that remain unsettled in the wake of the Pennsylvania Supreme Court’s ruling in the Robinson Township v. Commonwealth decision, including: (1) whether Act 13 can prohibit medical professionals from disclosing chemicals associated with gas drilling; (2) whether the Public Utility Commission retains the authority to review local zoning ordinances and withhold impact fee money to municipalities; (3) whether limiting notice by the DEP of spills to public well owners only is constitutional; and (4) whether eminent domain powers are available to those storing, selling, or transporting gas.
In anticipation of Pennsylvania’s gubernatorial primary on May 20, 2014, StateImpact Pennsylvania has provided a guide regarding where the candidates and the governor stand on energy and environmental issues: http://stateimpact.npr.org/pennsylvania/tag/election-2014/.
StateImpact Pennsylvania is a reporting project of NPR member stations that covers the fiscal and environmental impact of Pennsylvania’s energy economy, with a focus on Marcellus Shale drilling.
The Council of Canadian Academies has released an interesting panel report: Environmental Impacts of Shale Gas Extraction in Canada.