The 2020 Babst Calland Report Highlights Legal and Regulatory Challenges for the U.S. Oil and Gas Industry
Oversupply and pandemic bring on need to adapt to a changing market
Jun 23, 2020, 15:15 ET
PITTSBURGH, June 23, 2020 /PRNewswire/ -- The law firm of Babst Calland today published its 10th annual energy industry report: The 2020 Babst Calland Report – The U.S. Oil & Gas Industry: Federal, State, Local Challenges & Opportunities; Legal and Regulatory Perspective for Producers and Midstream Operators.
In this Report more than 50 energy attorneys provide perspective on the current state of the U.S. natural gas and oil production industry and its growth to historic highs due to more than a decade of advances in on-shore horizontal drilling and high-volume hydraulic fracturing. It asserts that despite current challenges, a maturing shale industry is poised for future growth as natural gas and oil producers have driven down the costs of production. Transportation options for moving these natural resources from growing areas of production to customers continue to be built, even with new hurdles from regulators and other stakeholders.
Joseph K. Reinhart, shareholder and co-chair of Babst Calland's Energy and Natural Resources Group, said, "The U.S. natural gas and oil industry has experienced tremendous growth and change since we first published this Report in 2011. Fast forward to an unprecedented 2020 with a pandemic, a corresponding economic slow-down and oversupply of natural gas and crude oil. With increased public and government pressure, sustained low prices, and less-reliable financing options, resiliency will continue to be the driving force of a dynamic energy market that continues to evolve."
Report highlights
The Babst Calland Report is an annual review of the issues and trends at the federal, state and local level in the oil and gas industry over the past year. The 102-page Report covers a range of topics from the industry's business outlook, regulatory enforcement and rulemaking to developments in pipeline safety and litigation trends. The Firm's collective legal experience and perspectives on these and related business developments are highlighted in this Report, including those summarized below:
- Long-term, U.S. energy production appears poised to continue to outstrip domestic consumption due in some measure to increased consumption efficiency, along with the obvious ramifications from the natural gas revolution.
- The regulatory environment is focused on climate change, reducing emissions, water quality developments, and enforcement. Increased volumes of written agency guidance, enforcement, and penalties continue to challenge the industry.
- Citizens groups continue to actively challenge federal and state initiatives designed to expand natural gas and oil development, creating delays and uncertainties.
- Land use and zoning challenges continue at the local level. Increasing industry headwinds have resulted in a slowdown of new permitting activity amid ongoing challenges and ordinance restrictions.
- Public interest in pipeline safety has grown amid opposition and new rules from the Pipeline and Hazardous Materials Safety Administration in response to increased public and congressional pressure to initiate and finalize new or revised pipeline safety regulations. Operators seek to install new or replace existing pipelines throughout the U.S. while advocacy groups aggressively oppose many pipeline projects.
- Title legislation and court decisions vary by state and basin. In Pennsylvania, for example, Act 85 took effect in January 2020 and defines the conditions in which oil and gas producers may drill a lateral wellbore that crosses between two or more pooled units.
- Although 2019 saw renewed claims of adverse health effects allegedly related to oil and gas development, support for such claims continues to be limited, as now noted by numerous publications.
- Unmanned aircraft systems take hold in the energy sector. Despite the pandemic and its impacts, unmanned aircraft systems (UAS) have emerged as essential tools for the energy industry for conducting complex inspection and monitoring of difficult to access infrastructure and locations.
- From a workforce standpoint, COVID-19 conditions and other wage and hour regulations, amendments to the Family Medical Leave Act, and expanded unemployment benefits under the CARES Act have had an impact on companies across the country.
The natural gas and oil industry continues to expand its reach and impact on U.S. energy supply and independence. Each company has its own set of opportunities and challenges to navigate based on its financing, debt, shareholder goals, and operations and infrastructure footprint. Nonetheless, the United States' plentiful supply of natural gas and oil is expected to continue to fuel the country's economic future and support national security.
Request a copy of the Report
Babst Calland's Energy and Natural Resources attorneys support clients operating in multiple locations throughout the nation's shale plays. To request a copy of the Report, contact [email protected].
About Babst Calland
Babst Calland was founded in 1986 and has represented environmental, energy and corporate clients since its inception. Our attorneys concentrate on current and emerging needs of clients in a variety of service industry sectors, with focused legal practices in construction, corporate and commercial, creditors' rights and insolvency, emerging technologies, employment and labor, energy and natural resources, environmental, litigation, public sector, real estate and transportation safety. Babst Calland has been ranked in the 2020 U.S. News – Best Lawyers*Best Law Firms list nationally in seven practice areas and regionally in 31 practice areas.
Headquartered in Pittsburgh, Pa., Babst Calland also has offices in Charleston, W. Va., Houston, Texas, Sewell, N.J., State College, Pa., and Washington, D.C. Babst Calland and its attorneys have been acknowledged by Best Lawyers© and Chambers USA's America's Leading Lawyers for Business. For more information, including attorney profiles, visit babstcalland.com.
Note to Media: Attorney Joseph Reinhart, Co-Chair of Babst Calland's Energy and Natural Resources Group, and other attorneys in the Firm are available to comment on this Report. Attorney Reinhart provides perspective on the evolution of natural gas development during the past decade with an outlook on business, legal and regulatory challenges.
To stay on top of these developments, periodic update articles, news and regulatory information can be found at babstcalland.com or at the Firm's Shale Energy Law Blog shaleenergylawblog.com. Subscribe to receive regular updates.
The Babst Calland Report is provided for informational purposes to our clients and friends and is not intended to constitute legal advice.
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