Revisiting the EQT “Forced Pooling” Lawsuit

second lookYesterday MDN wrote a summary and interpretation of an article appearing in the Harrisburg Patriot-News about the recent court decision known as EQT Production v. Opatkiewicz, et al (see EQT’s (Mis)Use of 2013 Royalty Law Creates Forced Pooling). MDN friend and one of our legal idols–Dr. Michael Joy (with top law firm Reed Smith, holder of advanced degrees in both geology and the law) wrote to tell us–you’re wrong about your opinion of that case! When someone of Michael’s stature tells you you’re wrong, you step back and do some reflecting to see where you came off the tracks…
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Revisiting the Bakken Crude Shipment Through NY Debate

Let’s revisit the issue of Bakken Shale oil traveling on down the train tracks. MDN has written to criticize New York anti-drillers who fought to get train movement information released–not so people could be safer but so they could use the information in their PR offensive against shale drilling. In the process they’ve made New Yorkers less safe (see New York Caves to Anti-Drillers Again: Discloses Oil Train Movements). Is there, however, another side to this story? A North Dakota resident sent out an op-ed to a number of media outlets, including MDN. In it he calls out his own state government for their unwillingness to force Bakken drillers to first separate out natural gas liquids from the light sweet crude produced in the Bakken–chemicals that make train shipments much more volatile and explosive. He says he supports drilling and simply wants the output from Bakken drilling cleaned up before shipping–to make it safer. Is it really that simple?…
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CONSOL Energy 2Q14: Production Up, Margins Up, Costs Down

CONSOL Energy issued their second quarter update yesterday. Although the company lost $25 million for the quarter due to accounting this and write-down that, the shale drilling division of the company performed like a star. Production was 51.9 billion cubic feet equivalent, up 34% over the same period a year ago. That converts to an average of 576 million cubic feet per day. Although the update contains a lot of information about the Marcellus/Utica, most of it relates to the financial aspects and not to operations. Here’s the brief couple of paragraphs of most interest to MDN:
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Odebrecht Cracker Plant Will be Magnet for Downstream Development

David Peebles, VP of business development for Odebrecht, presented a plan for downstream development related to his company’s proposed ethane cracker plant in Parkersburg, WV at the Department of Energy Quadrennial Energy Review Public Meeting held at Carnegie Mellon University in Pittsburgh on July 21st. The presentation shows how the proposed Odebrecht $2B+ ethane cracker plant is just the beginning of “clusters” of downstream manufacturing facilities that will be built. The cracker plant will act as a magnet for other businesses. Peebles presented the plan to DOE Sec. Ernest Moniz. And, we happen to have a copy!…
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Chevron Puts Moon Twp, PA Office Building Project on Hold

In February 2011 Chevron completed the purchase/buyout of Atlas Energy and with it, some 622,000 acres of Marcellus Shale leases. Atlas was located in Moon Township, PA (Allegheny County, near Pittsburgh). In September 2011, Chevron picked up another 228,000 acres–this time from Chief Oil & Gas (see Chevron Continues Aggressive Expansion into Marcellus Shale in PA – Buys Leases for Additional 228K Acres from Chief Oil & Gas). In May 2013 it was rumored that Chevron would build a new, massive 350,000 square foot headquarters in Moon Twp, a rumor that was confirmed when Chevron gained initial approval for the new facility in September 2013 (see Chevron Wins 1st Approval for New Regional HQ Near Pittsburgh). Chevron has just put those plans on hold…
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DOE Releases “New Initiatives” to Cut Fugitive Methane

Ernest MonizThe Department of Energy (DOE) under the guidance of Secretary Ernest “Hair” Moniz, at the direction of the White House, has been on a fools errand to cut down on methane emissions, claiming such emissions are a “potent greenhouse gas” (although the earth isn’t actually warming). Still, when the boss says jump, you say, “How high?” So the DOE has been conducting methane round tables with various environmental and industry participants to try and figure out how they can regulate methane emissions to cut them down to size. The fifth and final round table was held and yesterday Sec. Moniz and the DOE issued several new initiatives to help cut down on methane emissions, part of the larger Obama Administration “Strategy to Reduce Methane Emissions”…
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Martians Still Trying to Invade Neighbors to Prevent Drilling

Nasty, and frankly loony, anti-drillers in Mars, PA want to exceed their constitutional authority. They want a 2 mile exclusion zone around the school to deny landowners the right to allow Marcellus Shale drilling on or under their land. State law already prohibits drilling within 500 feet of a school. As we frequently point out, the Elk Lake School District in Susquehanna County, PA has a couple of wells right on school property (see Rural NE PA School Nets $1.7M in Royalties from 2 Marcellus Wells). The Elk Lake wells totally debunk any arguments from Mars parents that their little Martian crumb-crunchers would be damaged by drilling…
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Marcellus & Utica Shale Story Links: Wed, Jul 30, 2014

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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JLCNY Appeals Article 78 Case to Higher NY Court

appeal signYesterday the 70,000-member Joint Landowners Coalition of New York (JLCNY) along with several individual landowners filed an appeal in their Article 78 lawsuit that was dismissed by a lower court in Albany County, NY earlier this month. You may recall that the JLCNY sued NY Gov. Andrew Cuomo, Dept. of Environmental Conservation Commissioner Joe Martens, and state Health Dept. Commissioner Nirav Shah over their refusal to deliver fracking regulations (see D-Day: JLCNY Files Lawsuit Today Against Cuomo, Martens, Shah). Albany County Supreme Court, a lower level court in New York, said the JLCNY and others who filed the lawsuit had no “standing” to bring the suit (see (see NY Pro-Drillers Lose 2nd Important Shale Drilling Court Case). Not true, according to JLCNY president Dan Fitzsimmons…
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Seneca Resources 3Q14: Drilling Moves Away from Lycoming County

Seneca Resources, the Marcellus Shale drilling division of midstream and utility company National Fuel Gas headquartered in Buffalo, NY, issued their fiscal third quarter (everyone else’s calendar second quarter) update yesterday. Among the interesting items: Seneca has shifted its focus on new drilling away from Lycoming County, PA (Williamsport area) westward to Elk, McKean and Cameron counties. The shift in focus will remain until Williams completes its recently announced Atlantic Sunrise Expansion pipeline project. Also of note was the increase in Seneca’s production and where it came from…
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Range CEO Says Path to Producing 3 Bcf/d in Company Sights

By all accounts, Range Resources had a busy second quarter 2014. The company increased production by 21% over the same period last year–to 1.1 billion cubic feet per day of natural gas–most of it coming from the Marcellus. And that was despite the problems with a MarkWest processing plant going offline from late May to mid-July following a lightening strike (see MarkWest Re-Opens Chartiers, PA Plant, New Plant in OH) and despite unplanned downtime for the Mariner West pipeline which carts Range’s ethane to Canada. Even so, production (and profits) were at record highs for Range in 2Q14…
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EQT’s (Mis)Use of 2013 Royalty Law Creates Forced Pooling

A Pittsburgh-based attorney who, it appears (from his byline) sues shale drillers for a living, nevertheless offers up an excellent article in the Harrisburg Patriot-News that helps us understand the ill-advised royalty bill signed into law one year ago this month (see PA Gov Corbett Signs Back-Door Forced Pooling Bill into Law). The bill was meant to help landowners receive better, more transparent information in their royalty statements, but at the last minute a provision was added that allows leased properties to be pooled for horizontal drilling. Immediately after the royalty bill passed, EQT used the eleventh hour provision, called Secton 2.1 of the law, to sue 70 landowners (see Bad News: EQT Sues 70 Landowners Using New PA Forced Pooling Law). As with all things legal, this is complicated, but thanks to the lawyer’s article, we now have a better understanding of it…
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Atlantic Sunrise Pipeline Will Get Environmental Impact Statement

Last week regulators at the Federal Energy Regulatory Commission (FERC) announced they will perform a full blown environmental impact statement (EIS) on Williams’ proposed $3 billion Atlantic Sunrise Expansion pipeline project that will expand the Transco pipeline in Pennsylvania in order to feed cheap, abundant Marcellus Shale gas into a pipeline running to southern states. MDN has a copy of the FERC “Notice of Intent” to conduct an EIS. As part of the review process, FERC will hold four public hearings throughout PA next week to get feedback on the project…
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MSC Releases Annual Workforce Survey: Marcellus Continues to Hum

Another 2,000 new Marcellus jobs are being added this yes–in 2014–by Marcellus Shale Coalition (MSC) members according to the latest annual Marcellus Workforce Survey conducted by the MSC. The latest survey (full copy of results below) is increasingly hiring skilled workers in engineering and construction. High-paying skilled jobs accounted for 26.5% of all new hires last year in the Marcellus Shale. And there’s lots more where that came from…
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Partisan GAO Report Says EPA Falling Down with Injection Wells

The partisan and biased so-called Government Accountability Office (GAO), populated with liberal activists, issued a 103-page report yesterday telling the federal Environmental Protection Agency (EPA) to get off it’s rear and get more aggressive about regulating shale wastewater injection wells. The GAO was asked by Congressional Democrats to “review” EPA’s stewardship and oversight of injection wells related to shale drilling and this “report” is the result…
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PA Lt Gov Candidate Supports Raiding Drillers for Big Education

Democrat Mike Stack, a PA State Senator from Philadelphia, is his party’s nominee for Lt. Governor this fall. Stack has close ties to big education and is a tool of teacher unions who want to raid another industry–shale gas drilling–to feed their addiction to ever-higher salaries while turning in ever-lower education standards for their students. So it’s no surprise that Stack is one of the toadies that introduced legislation to enact a sky-high severance tax on Marcellus Shale drilling…
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