On July 21, the Pennsylvania Supreme Court revisited the Environmental Rights Amendment, Article I, Section 27, of the Pennsylvania Constitution when Pennsylvania Environmental Defense Foundation v. Commonwealth returned to the
Continue Reading Identifying the Natural Resources Subject to the Environmental Rights Amendment

On Feb. 19, 2020, the Internal Revenue Service released partial guidance on the implementation of section 45Q tax credits related to the capture and sequestration of carbon dioxide. The section 45Q tax credit was updated on Feb. 9, 2018, as part of the Bipartisan Budget Act (Pub. L. 115-123) to increase the amount of the tax credit per ton and to broaden the applicability to include “qualified carbon oxide.” The new IRS guidance is designed to assist in implementing the modified law.

The 2018 law removed the volume cap applicable to the tax credit, expanded the definition to include not just carbon dioxide but other carbon oxides such as methane, and raised the amount of the tax credit per ton. Carbon oxides captured and used for enhanced oil recovery can now receive a tax credit of up to $35 per ton, while carbon oxides deposited in secure geological storage can receive a tax credit of up to $50 per ton.
Continue Reading IRS Takes First Steps to Implement Carbon Capture Tax Credit

On Wednesday, the Pennsylvania Supreme Court overturned a lower court decision that appeared to make the “rule of capture” inapplicable to oil and gas wells subjected to hydraulic fracturing, or “fracking.” Briggs v. Sw. Energy Production Co., No. 63 MAP 2018 (Pa. Jan. 22, 2020) (see majority opinion; see concurring and dissenting opinion). However, the court has left open whether a well owner whose hydraulic fracturing fluids or proppants migrate under a property line, and perhaps even a well owner whose fracture traces extend across that line, has committed a trespass. Those issues are remanded, and their resolution remains uncertain.

Oil and gas (or, for that matter, any fluids) migrate into a well bore from the surrounding rock. If the well drains a conventional reservoir, the hydrocarbons may have originated at the other end of the reservoir under a different property. A well on one property can drain hydrocarbons originally located under another. Recall the “I drink your milkshake” scene from There Will Be Blood (Paramount 2007).
Continue Reading Rule of Capture is Back for Pennsylvania Oil and Gas Wells . . . Sort Of