2015 Student Award

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Texas A&M Journal of Property Law 2015 Student Award

Congratulations to Widener University student Marc Propokchac for receiving this honor for writing his article, “Renewing Respect for Record Notice: Cleaning Up the Pennsylvania Title Wash.”

The article can be found Here

Pennsylvania Supreme Court Gives Towns More Control Over Drilling Rights

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HARRISBURG, Pa. (AP) — The Pennsylvania Supreme Court on Thursday struck down portions of a law that stripped some of the powers municipalities have to decide where the natural gas industry can operate — portions that the industry had sought from Gov. Tom Corbett and lawmakers.

The justices ruled the 2012 law unconstitutionally restricted the power of municipalities, although the 4-to-2 majority disagreed as to why it was unconstitutional.

Seven municipalities challenged a law known as Act 13, which restricted local municipalities’ ability to control where companies may place rigs, waste pits, pipelines and compressor and processing stations.

Among the objectionable provisions cited by the lawsuit are requirements that drilling, waste pits and pipelines be allowed in every zoning district, including residential districts, as long as certain buffers are observed.

“It’s a tremendous victory for local governments, for local democracy, for public health and for the environment,” said one of the plaintiffs’ lawyers. “It’s a huge, huge victory for the people of Pennsylvania.”

The booming drilling industry had sought the changes, and Corbett and Republican lawmakers approved them over the objections of Democrats.

A narrowly divided lower court had said the zoning rules ran afoul of the state constitution, but Corbett appealed, saying lawmakers have clear authority to override local zoning.

The municipalities said the zoning restrictions run counter to objectives of protecting the environment, health and safety of people who live there, and three of the six justices agreed. A fourth justice ruled that the law violated the municipalities’ constitutional rights to due process.

A lawyer for Senate President Pro Tempore Joe Scarnati, R-Jefferson, said the decision is a setback that will reopen the door to legal fights between municipalities and the drilling industry that the Legislature had sought to settle.

Efforts by communities to limit drilling, in some cases imposing an effective ban, drew complaints from the companies.

The law also imposed new safety regulations for drilling and an impact fee tax for areas where the drilling occurs. Through the end of last year the industry had paid out more than $406 million in impact fees.

http://www.syracuse.com/news/index.ssf/2013/12/pa_supreme_court_strikes_down_key_portions_of_natural_gas_drilling_law.html

Truckers Tap into Gas Boom

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October 30, 2013 Wall Street Journal on how truck fleets are rapidly adapting to the lower cost of natural gas.

By

Mike Ramsey              
Oct. 29, 2013 6:37 p.m. ET
Operators of some of the largest U.S. truck fleets, including Lowe’s,  Procter & Gamble Co. United Parcel Service Inc., are accelerating a shift to natural gas fueled trucks, betting on new engine technology that promises to drop the cost of shifting from diesel fuel.

Home-improvement retailer Lowe’s wants its delivery company to shift all of its several hundred trucks to natural gas by 2017. P&G already has 7% of its trucks on gas and could reach as much as 20% within two years. UPS says it plans to buy 1,000 natural gas trucks by the end of next year.  FedEx Corp. plans to shift 30% of its long-distance trucks to natural gas over the next decade.

The nation’s supply of relatively cheap natural gas is helping spur this shift. So are new natural gas engines that can power heavy-duty trucks that weigh up to 80,000 pounds. The first, a 12-liter Cummins Westport Inc. natural gas engine went on sale in July. Next year,   Volvo AB, the Swedish heavy truck maker, will introduce a natural gas engine for its trucks.

Please see the full Wall Street Journal Article Here:

http://online.wsj.com/news/articles/SB10001424052702304200804579165780477330844

Gas Leaks in Fracking Less Than Estimated: NY Times Article

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Gas Leaks in Fracking Disputed in Study

By Michael Wines, NY Times, 16 Sept 2013

(Click on the link above to see the entire article at NYTimes.com.)

The study, conducted by the University of Texas and sponsored by the Environmental Defense Fund and nine petroleum companies, bolsters the contention by advocates of fracking — and some environmental groups as well — that shale gas is cleaner and better than coal, at least until more renewable-energy sources are developed. More than 500 wells were analyzed.

The Texas study concluded that while the total amount of escaped methane from shale-gas operations was substantial — more than one million tons annually — it was probably less than the Environmental Protection Agency estimated in 2011.

In particular, it indicated that containment measures captured 99 percent of methane that escaped from new wells being prepared for production, a process known as completion.

The Environmental Protection Agency has begun to require drillers to control leaks during completions, which are believed to be one of the major sources of methane losses at fracking wells. Although controls will not be required until January 2015, a number of companies already capture escaped gases at wells being prepared for production.

“Can we control it? Thanks to new E.P.A. regulations coming online, the answer to that is good news,” Eric Pooley, a senior vice president at the Environmental Defense Fund, said in an interview.

The report was published Monday in The Proceedings of the National Academy of Sciences. With the study, which ran from May through December of last year, the university was the first to conduct detailed examinations of individual drilling sites. It did so with the consent of petroleum companies, which provided about 90 percent of the financing for the study. Previous E.P.A. estimates relied on engineering calculations, and other studies gathered data via aircraft flights over drilling sites.

The study’s connection to the petroleum industry — among its sponsors and financiers are Shell, Anadarko Petroleum Corporation, Exxon Mobil and Chevron — may lead some to question its objectivity, some outside experts said. But most said the research and the reputations of the researchers appear solid.

“Previous studies that have gotten a lot of attention have had red flags jumping out all over them. This one didn’t,” said Michael A. Levi, the director of the program on energy security and climate change at the Council on Foreign Relations. In an e-mailed statement, Shell’s president, Marvin Odum, called the study “a prime example of key groups — that may not have the exact same interests — working collaboratively and taking a science-based approach” to the methane problem.

Mr. Odum said that collecting actual emissions data, rather than relying on estimates, would “ensure that both improvement efforts and regulatory changes can be focused on the areas that will have the biggest impact.”

The report comes at a time when shale-gas drilling is growing at a breakneck pace — production, now 30 percent of all United States natural gas, is expected to reach 50 percent by 2040 — but also when the industry is beset by controversy.

Citizen groups accuse drillers of despoiling streams and water supplies, and suppliers of wrecking local roads with parades of massive trucks. Environmental groups have split sharply over whether to support shale-gas development as a cleaner fuel that will suffice until wind and solar power assume a greater share of the nation’s energy supply.

The Texas study is the most comprehensive look to date at a contentious issue in the debate over fracking: the extent to which methane leaks during drilling and production offset the environmental benefits of the clean-burning natural gas the wells produce.

When burned as fuel, methane — the main component of natural gas — is comparatively clean, producing less carbon dioxide than coal and oil. But vented to the air, it is a short-lived but extremely potent greenhouse gas, trapping heat at a much higher rate than carbon dioxide, the main greenhouse gas.

Such potency means that even a small loss of methane to the air — just 3.4 percent, scientists say — can negate its climate-changing advantage over coal.

Some previous studies suggested that as much as 7.9 percent of all shale gas was lost to the atmosphere, a figure that included every stage of the gas process, from well to stove or furnace burner.

The Texas study did not examine potential losses outside the drilling pad. But its conclusion that losses at the well were comparatively low could remove one issue from the debate. The Environmental Defense Fund is leading other research efforts that should address losses elsewhere, including a look at methane leaks in municipal gas-distribution lines.

The American Petroleum Institute hailed the study’s conclusions, saying in a statement that its own efforts to reduce methane emissions “are paying off.” But while E.P.A.-mandated measures appear to have reduced emissions during well completions, the study also concluded that leaks elsewhere in the fracking process were higher than the E.P.A. had previously estimated.

Estimates of leaks from chemical pumps, while small, were twice past estimates, while leaks from pneumatic controllers, or valves, were pegged at more than 639,000 tons a year, roughly a third greater. None of those components are currently subject to federal regulation.

US Energy Environment Continues to Favor Natural Gas

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Two articles in today’s NY Times show how cheap natural gas continues to replace coal and nuclear as the preferred power source in the US.   Nuclear power production is more expensive after new regulations imposed since the Fukushima disaster.  Coal production and use, dirtier than natural gas, is now looking for more export opportunities.  But is that the right thing to do?

Nuclear Plants, Old and Uncompetitive, Are Closing   Earlier Than Expected

By MATTHEW L.   WALD

Even reactors still licensed to operate may close, because the price of the electricity they generate doesn’t warrant costly repairs and maintenance.

A Fight Over Coal Exports and the Industry’s Future

By CLIFFORD   KRAUSS

Environmental worries complicate an energy company’s plan to mine an Indian tribe’s large deposit of coal and ship it to Asia.

Bailey v. Elder: Order to Strike Quiet Title Default Judgment

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The order, which was in favor of Hoyt Royalty, is pasted below and can also be seen here:

http://www.lycolaw.org/Cases/opinions/2013/bailey052913a.pdf

IN THE COURT OF COMMON PLEAS OF LYCOMING COUNTY, PENNSYLVANIA

NO. 08 – 02,327  : CIVIL ACTION – LAW

DAVID C. BAILEY, :

Plaintiff :

vs. :

:

GEORGE A. ELDER a/k/a G.A. ELDER, :

WILLIAM HOYT and MARY HOYT, :

MARK HOYT and ANN A. HOYT, :

EDWARD C. HOYT and CORDELIA IDA :

HOYT, THEODORE R. HOYT, GEORGE :

S. HOYT, ELK TANNING COMPANY, :

CENTRAL PENNSYLVANIA LUMBER :

COMPANY, their successors, heirs, :

administrators and assigns or anyone :

claiming by, through or under them, :

Defendants

Petition to Strike or Open Default Judgment

 

OPINION AND ORDER

Before the court is the Petition to Strike or Open Default Judgment filed by Hoyt Royalty, LLC on February 27, 2013. Argument on the petition was heard April 23, 2013, at which time Plaintiff’s counsel requested an additional thirty days in which to file a brief. That brief was filed May 22, 2013.

On October 7, 2008, Plaintiff filed a Complaint in Action to Quiet Title, alleging ownership of a 168 acre tract of land in Pine Township. Plaintiff alleges that the Hoyt Defendants reserved all oil, gas and mineral rights to themselves when deeding the property to Elk Tanning Company in 1893, and that he acquired the property from his mother, who acquired it in 1942 after a tax sale. Plaintiff claims to have acquired title to the mineral rights by virtue of a lost deed, adverse possession, abandonment, and the tax sale. On October 9, 2008, Plaintiff’s counsel filed a Motion and Affidavit for Leave to Obtain Service by Advertisement, and said motion was granted by Order dated October 13, 2008. On December 1, 2008, Plaintiff filed a Motion for Default Judgment, and by order dated December 2, 2008, a preliminary default judgment was entered. Following a praecipe for final judgment on January 21, 2009, final judgment was entered that date.

In its Petition to Strike or Open Default Judgment, Hoyt Royalty claims it was formed to acquire and manage all oil, gas and mineral rights owned by William Hoyt, Mark, Hoyt, Edward Hoyt, Theodore Hoyt and George Hoyt, and their heirs, successors and assigns, and that it now owns 83.9% of the Hoyt mineral estate, which includes the mineral rights retained in the 1893 deed to Elk Tanning Company. Hoyt Royalty contends the default judgment must be stricken because the underlying complaint is not self-sustaining and the record reflects improper service, or, in the alternative, that the judgment must be opened because no good faith effort was made to locate the defendants and Hoyt Royalty has a meritorious defense to the Complaint. As the court finds the judgment must be stricken for lack of a self-sustaining complaint, the remaining grounds will not be addressed.

If a Complaint fails to state a cause of action upon which relief may be granted, such is a fatal defect appearing of record and on that basis, any default judgment entered for want of an answer may be stricken. Navarro v. George, 615 A.2d 890 (Pa. Commw. 1992); Calesnick v. Redevelopment Authority of City of Philadelphia, 529 A.2d 528 (Pa. Super. 1987). A review of the Complaint filed in the instant matter shows that none of the four counts contained therein sufficiently states a cause of action.

In Count I, Plaintiff asserts he has “actual title to all mineral rights, including oil and gas, in the premises by virtue of a deed which was lost wherein the Defendants reconvey all of their right, title and interest, including mineral rights, to the Plaintiffs and/or their predecessors in title.” This contention is insufficient to support a finding of actual title as Plaintiff fails to allege when, by whom or to whom the deed was executed. See Burke v. Hammond, 76 Pa. 172 (1874). To establish title to land based on a lost deed, all terms and conditions of the transaction, including the facts and circumstances of delivery, must be alleged and proven. See Manley v. Manley, 357 A.2d 641 (Pa. Super. 1976). Since Plaintiff has not set forth the specifics of the alleged “lost deed”, he has not stated a claim to the mineral rights upon which relief may be granted.

In Count II, Plaintiff asserts he and his mother “have been in actual, continuous, visible, distinct, open, exclusive, notorious and hostile adverse possession of the premises in excess of 21 years.” Where the mineral rights have been severed from the surface rights by a reservation 3 in a deed, however, in order to claim title to the mineral rights by adverse possession, the claimant must show continuous drilling and/or production for an uninterrupted twenty-one year period. Hoffman v. Arcelormittal Pristine Resources, Inc., 2011 U.S. Dist. LEXIS 50170 (W.D. Pa. May 10, 2011)(citing Thomas v. Oviatt, 5 Pa. D. & C. 4th 83)(Warren County 1989). Plaintiff does not allege such drilling and/or production and thus has failed to set forth a claim for adverse possession of the mineral estate upon which relief may be granted.

In Count III, Plaintiff claims that Defendants have abandoned their mineral rights by non-use and non-payment of taxes. Mere non-use does not support a finding of abandonment, Buffalo Township v. Jones, 813 A.2d 659 (Pa. 2002); nor does non-payment of taxes. Kreamer v. Voneida, 24 Pa. Super 347 (1904). There must be some affirmative act which expresses an intent to abandon, and Plaintiff has failed to allege any such act. Therefore, Plaintiff has failed to set forth a claim of abandonment upon which relief may be granted.

Finally, in Count IV, Plaintiff alleges that “[b]ecause Defendants failed to pay taxes on the premises, all rights, exceptions and reservations for oil, gas and minerals were extinguished by the 1940 tax sale”. Plaintiff also alleges, however, that “[n]o assessment was ever made by Lycoming County on the mineral rights”. Where mineral rights have been severed from surface rights and are not separately assessed, only the surface passes in a tax sale for failure to pay taxes. See New York State Natural Gas Corp. v. Swan-Finch Gas Development Corp., 173 F. Supp. 184 (W.D. Pa. 1959). See also Babcock Lumber Co. v. Faust, 39 A.2d 298 (Pa. Super. 1944)(“The lien for unpaid taxes attaches only to the estate assessed, and that estate, but no more, passes at a public sale even though the authorities assume to convey land against which there had been no valid assessment.”)1 Plaintiff has alleged no facts which would support a finding that the tax sale passed title to the mineral rights. Thus, this count also fails to state a claim for which relief may be granted.

1 Plaintiff cites Proctor v. Sagamore Big Game Club, 166 F.Supp. 465, 475 (W.D. Pa. 1958), for the proposition that where there is no separate assessment of the mineral estate, “a purchase of the whole by the owner of the surface divests the title of the owner of the minerals.” There, the Court found that an owner of surface rights in unseated land had no legal obligation to pay the taxes and could purchase the property at a tax sale and thus acquire title to the previously reserved gas rights. The court fails to see how the holding of Proctor supports Plaintiff’s position in this matter since Plaintiff alleges that at the time of the sale, George A. Elder was the owner of the surface, not his mother. The holding of Proctor does not apply.

In summary, as none of Plaintiff’s claims would entitle him to relief, he was not entitled to a default judgment and such must be stricken.

 

ORDER

AND NOW, this 29th day of May 2013, for the foregoing reasons, the Petition to Strike is hereby GRANTED. The default judgment entered January 21, 2009, is hereby STRICKEN.

BY THE COURT,

Dudley N. Anderson, Judge

cc: Scott A. Williams, Esq.

Ronald Hicks, Esq., Meyer, Unkovic & Scott, LLP

535 Smithfield Street, Suite 1300, Pittsburgh, PA 15222

Gary Weber, Esq.

Hon. Dudley Anderson

Rise in US Gas Production Fuels Unexpected Plunge in Emmissions

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Wall Street Journal Article. April 18, 2013

By RUSSELL GOLD

U.S. carbon-dioxide emissions have fallen dramatically in recent years, in large part because the country is making more electricity with natural gas instead of coal.

Energy-related emissions of carbon dioxide, the greenhouse gas that is widely believed to contribute to global warming, have fallen 12% between 2005 and 2012 and are at their lowest level since 1994, according to a recent estimate by the Energy Information Administration, the statistical arm of the U.S. Energy Department.

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While other factors, including a sluggish U.S. economy and increasing energy efficiency, have contributed to the decline in carbon emissions from factories, automobiles and power plants, many experts believe the switch from coal to natural gas for electricity generation has been the biggest factor. Carbon-dioxide emissions account for nearly 84% of greenhouse-gas emissions, while methane—the main ingredient in natural gas—makes up 8.8%, according to a recent Environmental Protection Agency report.

Natural gas emits half as much carbon dioxide as coal when used to make electricity, though the calculation fails to take into account the release of methane from natural-gas wells and pipelines, which also contributes to climate change.

Few people predicted this drop in carbon emissions. “Everybody just figured that emissions were just going to continue to increase rapidly,” says Ted Nordhaus, chairman of the Breakthrough Institute, an energy and climate think tank based in Oakland, Calif. “Nobody was expecting the worst recession since the Great Depression, but also no one was really expecting this remarkable shift from coal to gas either.”

Last year, 30% of power in the U.S. came from burning natural gas, up from 19% in 2005, driven by drilling technologies that have unlocked large and inexpensive new supplies of the fuel.

More of this article is available here:  http://online.wsj.com/article/SB10001424127887324763404578430751849503848.html?KEYWORDS=rise+in+US+gas+production

Should Fracking be Regulated by the Federal Government?

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From the Wall Street Journal:  April 15, 2013.  This is not the complete article, which can be found here:  http://online.wsj.com/article/SB10001424127887323495104578314302738867078.html?mod=WSJ_JREnergy_4_2_RIGHT

Fracking supporters say it could set America on the road to energy independence and drastically change our economic prospects while helping address climate change.

But who should be in charge of regulating fracking?

Fracking—short for hydraulic fracturing—involves injecting fluids into the ground to access hard-to-reach reserves of oil and natural gas, including shale gas, which the U.S. has in vast abundance but hasn’t been able to reach easily up to now.

Many advocates argue that the federal government should step in and regulate the practice more forcefully because fracking can have big environmental impacts that can’t be managed effectively by individual states alone. At scale, they say, those hazards inevitably reach across state lines and become a national problem. The result could be widespread bans on the practice and a premature end to the shale-gas revolution, they say.

But others say states are well equipped to regulate fracking. They say the risks of fracking are overstated, and the impacts of fracking—both positive and negative—are mostly local, and different people balance them differently. So regulation should be left to the people who feel them most directly. Existing federal authority can handle whatever problems may spill across state lines, they say.

Jody Freeman argues for federal regulation of fracking. She is the Archibald Cox professor of law at Harvard Law School and was counselor for energy and climate change in the White House in 2009-10. Making the case that regulation should be handled by the states is David Spence, associate professor of law, politics and regulation at the McCombs School of Business and School of Law at the University of Texas.

Yes: A National Issue Can’t Be Addressed State by State

By Jody Freeman

Harvard Law School

Jody Freeman

We need stronger federal regulation of fracking for a simple reason: It affects the entire nation, not just individual states.

Fracking has the potential to help the U.S. achieve energy independence, boost the economy and reduce greenhouse-gas pollution.

Yet the cumulative environmental impact of drilling at this scale is great, and it needs to be addressed in a comprehensive way. We won’t achieve the full promise of fracking if environmental impacts and public reaction cause land to be pulled out of production.

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No: States Can Best Balance The Competing Interests

By David Spence

Korey Howell

Like all forms of energy production, fracking entails risks. States are better equipped than the federal government to regulate most of those risks.

Why? Because both the benefits and the costs of fracking fall mostly on states and local communities. States gain the most from added jobs and tax revenue; they face the truck traffic, noise, pollution risks and rapid industrial growth. Consequently, states are in the best position to figure out how best to balance fracking’s costs and benefits.

It is true that the natural-gas industry risks losing public trust if it doesn’t perform to high standards. But turning the regulatory framework over to Washington isn’t the answer.

Craig Mayer Testifies Regarding Title Wash and SB 258

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Craig Mayer, General Counsel of Pennsylvania General Energy testified before the State Environmental Resources and Energy Committee on March 19th, 2013 regarding title wash as it relates to oil and gas mineral estates and mineral rights in Pennsylvania. His comments were in opposition to SB258.  In them, he states, “SB 258 alters basic property law in Pennsylvania and would destabilize subsurface land titles.” Mayer put together a database of 124 quiet title cases from 2008 to 2012 in 7 counties where Hoyt Royalty has sizeable mineral interests: Bradford, Tioga, Susquehanna, Sullivan, Lycoming, Clinton, and Wyoming.  Mayer, who also relies on statements by Attorney Jay Wilkinson, finds a large potion of the title wash cases to be at some level defective and he finds that they add a large amount of uncertainly to an operator relying on them. This is a well thought-through analysis of the title wash situation in Pennsylvania and a very interesting read.

See the full testimony here:  http://wallaby.telicon.com/pa/library/2013/20130319TZ.PDF