A week ago MDN brought you the news that Toby and Derek Rice, formerly of Rice Energy, have launched an effort to take over the company they sold Rice Energy to (see Rice Brothers Attempt to Take Over EQT, Install Toby as CEO). In recent months the Rice boys have had private conversations with EQT’s top dogs, Chairman of the Board Jim Rohr and CEO Rob McNally, but according to Toby and Derek, those talks went nowhere. The Rice boys say EQT needs some new energy and a new direction, to leverage the world class assets it now owns. And the Rice boys think they have just the plan to accomplish it. After going public with their plan and their intent to wage a proxy war (get board members elected who will endorse their plan), word has leaked out from “sources” that Rohr and McNally want to have another round of talks with the Rice boys, to hear more about their plan. Which causes us to ask, didn’t all that get discussed the first time around? What’s the real purpose of more “talks” with the Rice brothers?
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Antero Now Sells 30% of NatGas to Higher-Paying Midwest Market
Antero Resources, one of the biggest drillers in the Marcellus/Utica, is also one of the best hedging companies in the business. They routinely lock in prices for their gas up to a year (or more) in advance, to ensure they make a tidy profit. And Antero averages higher prices for their gas sales than just about any other Marcellus/Utica producer. This morning Antero issued an update on their latest hedging moves, which is always interesting. But that’s not what caught our eye. They also issued a fourth quarter update. No, not for the entire fourth quarter as we still have a few weeks left in 4Q and the full, official 4Q update won’t come along until maybe the end of January. But in this interim 4Q update, we spotted the news that because of the addition of the Rover Pipeline, Antero now sells a full 30% (up from 16%) of their natural gas production to Midwest markets–markets that pay, on average, more for gas than elsewhere.
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EIA Dec ’18 Drilling Report: M-U Expands Another 414 Mmcf/d
The “Beast in the East” (Marcellus/Utica) continues to roar, according to our favorite government agency, the U.S. Energy Information Administration. EIA publishes our favorite monthly report, the Drilling Productivity Report (DPR), a forecast of oil and gas production in the country’s seven major shale plays for the coming month. The latest DPR shows that the Marcellus/Utica region (called Appalachia in the report) will expand by another amazing 414 million cubic feet of natural gas production per day (MMcf/d). The increase is a response to new pipelines coming online in the region, carrying our gas to other regions where it fetches a higher price. Not only is M-U production off the charts, so is natural gas production collectively, across all the plays. EIA says that in January, production from all seven plays will go up another 1.1 billion cubic feet per day (Bcf/d), after it went up 1 Bcf/d in November (see EIA Nov ’18 Drilling Report: Shale Gas Output Up 1 Bcf/d – Again!), and 1 Bcf/d in October (see EIA Oct ’18 Drilling Report: Shale Gas Output Up Another 1 Bcf/d). It’s just incredible!
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Columbia Asks FERC to Start Up 2/3rds of Mountaineer XPress Pipe
In December 2017, the Federal Energy Regulatory Commission (FERC) issued a final approval for the Mountaineer XPress pipeline project (see Leach XPress Goes Online; FERC Approves Mountaineer & Gulf XPress). The $2 billion project is ~170 miles of new pipeline meant to flow 2.7 billion cubic feet (Bcf) per day of natural gas from existing and future points of receipt along or near the Columbia pipeline system–most of it located in West Virginia (see Details on Columbia Pipeline Mountaineer XPress Pipeline Project). At 2.7 Bcf/d, Mountaineer XPress is the second largest (by volume) new pipeline project for the Marcellus/Utica region–second only to Rover’s 3.25 Bcf/d pipeline. It is a big and important project. Last week Columbia, the builder, asked FERC for permission to start up 113 miles out of the 170-mile project, by Dec. 31.
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Looks Like Radicals have Scuttled Patriot Water Deal w/Warren, OH
In June 2017, MDN reported that the Fresh Water Accountability Project (FWAP), a radical anti-fracking group based in Michigan, had filed a lawsuit against the Patriot Water Treatment facility and the City of Warren, OH, claiming the two treat frack chemicals at their respective facilities that don’t get processed enough–and consequently get released into the Mahoning River (see Radical Enviro Group Sues Warren Frack Wastewater Plant). Patriot processes frack wastewater at it’s Warren plant and then (used to) dispose of the wastewater by using the local Warren municipal sewage treatment plant. That is, Patriot strips out all of the really nasty stuff, and then the sewage plant would finish off the process releasing clean water into the Mahoning River, near Youngstown. Unfortunately, it appears the FWAP lawsuit has permanently stopped that beneficial practice.
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SE PA Republicans Ask Adelphia Pipe to Move Compressor Station
Two weeks ago the Pennsylvania Dept. of Environmental Protection held a public hearing for the Adelphia Gateway project, a plan to convert an old oil pipeline stretching from Northampton County, PA through Bucks, Montgomery, and Chester counties, terminating in Delaware County at Marcus Hook, to instead pump natural gas (see PA Residents Sound Off Against Adelphia Pipe at DEP Hearing). It was pretty easy to predict that the hearing would elicit negative feedback, based on previous stories of residents unhappy with the location of a planned compressor station in Bucks County. And it did. The public reaction did not escape the attention of local Republican politicians. Congressman Brian Fitzpatrick and state Rep. Craig Staats, both representing Bucks County, wrote a joint letter to the Federal Energy Regulatory Commission asking that the location of a planned compressor station in Bucks be moved.
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VA Water Board Considers Revoking MVP Water Quality Permit
A year ago, in December 2017, Virginia’s Water Control Board issued a water permit/certification for the Mountain Valley Pipeline project–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA (see Virginia Water Board Approves Mountain Valley Pipe – Antis Erupt). At least one anti-fossil fueler at that meeting “screamed profanities at the board members and vowed to visit them where they live.” Violent people. Since that time other required permits have been issued and MVP is now, as of the end of 2018, 70% done being built (see Shocker: Mountain Valley Pipeline Now 70% Built, Online by 4Q19). Even so, there are still some major hurdles to overcome. Virginia’s liberal Democrat Attorney General last week filed a lawsuit against MVP alleging the project has violated Virginia environmental regulations some 300 times (see Virginia AG Sues Mountain Valley Pipeline re “300 Violations”). In light of the AG’s lawsuit, the VA Water Control Board is now threatening to revoke the permit they issued last year.
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Energy Stories of Interest: Tue, Dec 18, 2018
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: The price of ignorance: New York State’s approaching energy disaster; Athens County, OH meeting re injection well permit tonight; New liquefaction trains, pipeline capacity revving up Gulf Coast feedgas demand; Carbon tax scam – exposing the latest attack on fossil fuels; Enbridge Inc. and Spectra Energy Partners, LP complete merger; Technically recoverable natural gas from future US shale wells on rise; New oil, gas projects to accelerate next year; Machine learning takes on oil, gas production forecasting role; OPEC production deal not enough to stabilize oil market; Qatar Petroleum to invest $20 billion in U.S. in major expansion.
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Federal Court in NJ Grants PennEast Pipeline Eminent Domain
Just last week MDN told you the first domino had fallen, when a federal judge in Pennsylvania granted the PennEast Pipeline project the right to survey and construct pipeline on a property in Carbon County, PA, the last landowner holdout in PA (see First Domino Falls: Judge Grants PennEast Pipe Eminent Domain). And now, not even a week later, the second domino has fallen. A federal judge in New Jersey on Friday upheld eminent domain power for PennEast for ALL of NJ, where there are 136 holdout landowners who have refused to allow PennEast surveyors on their property. PennEast still isn’t totally out of the woods. The project goes to court in D.C. on Dec. 21 to try and turn back a challenge by a radical environmental group that says the Federal Energy Regulatory Commission erred when it approved the project. Still, work will now begin, first to complete the surveys, then construction. The pipeline is on track to be built and running in 2019.
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Cabot “Making Offers” to OH Landowners; New Well in Richland Co.
We spotted an article about a landowner meeting held last week in Ashland County, Ohio. In the meeting, lawyers advised landowners to hold off on signing a standard lease agreement with Cabot Oil & Gas for $25 per acre with 12.5% royalties. Those offers, from what we are able to determine, were sent a year ago. Since that time Cabot has drilled at least three (possibly four) wells targeting the Knox Formation in Ashland County (see Cabot O&G Fracks Its First OH Knox Well, Drilling 3rd OH Well). A fourth (possibly fifth) well is about to be drilled in neighboring Richland County. Lawyers are telling landowners who haven’t yet signed it’s prudent to hold off and see how these initial test wells perform. We have details about the recent landowner meeting, along with details about a new Cabot well being drilled in Richland County, below.
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OH Supremes “Clarify” Preservation of Royalty Interest Under OMTA
If a deed refers to a previously reserved royalty interest where the reference identifies the type of interest created and the person to whom the interest was granted (with no other details), is that sufficiently specific enough to preserve the royalty interest under the Ohio Marketable Title Act (OMTA)? According to a decision rendered last week by the Supreme Court of Ohio, the answer is, “Yes.” In a case with its roots dating back to 1915, landowners attempted to sever royalty interests under the Ohio Dormant Mineral Act, attempting to cancel the old interest because a 1969 deed that referred back to the original deal (of one-half royalty interest) was not “specific enough.” The 1969 reference didn’t include the volume and page number of the instrument that originally created the royalty interest. In other words, it wasn’t a “Simon Says” kind of thing–it didn’t follow the exact legal standard. The current landowner tried to cancel the original royalty sharing obligation via a legal loophole.
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Sen. Chuck Schumer Promises New NatGas Pipe in Upstate NY
Wait a minute, we’re confused! Chuck Schumer, the titular head of the wild and radical Democrat Party in the United States, a party devoted to combating so-called climate change by ending the use of all fossil fuels, the guy who supports a total ban on fracking in New York State, the guy who got one of his own buddies appointed to FERC (Dick Glick, wind lobbyist and someone who votes against every new pipeline project)–that Chuck Schumer–has just promised the local yokels in an upstate NY town that he will get them a natural gas pipeline to feed the local town (with a new industrial park and a paper plant). In fact, Schumer said, “I will lean on them,” meaning the feds, to get the money to build the natural gas pipeline. Huh.
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PA DEP’s New Air Regs Would Exempt 80% of Conventional Wells
Last week MDN told you about onerous new regulations being proposed by the Pennsylvania Dept. of Environmental Protection (DEP) to cut down on supposed methane and volatile organic compound (VOC) emissions coming from *existing* oil and gas wells and pipelines (see Pa. DEP Jumps the Gun with Proposed New Emissions Regs). In our initial reporting on the proposed new regulations, one bit of information escaped our attention: Most of PA’s conventional wells (80% or more) will be exempted from these new rules. And PA’s conventional wells reportedly account for more than 50% of supposed methane emissions. There are approximately 80,000 active conventional oil and gas wells in PA, and about 10,600 active shale gas wells in PA.
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Raining on Gov. Wolf’s Parade – No Scientific Basis for Cap & Trade
Last week MDN told you that Pennsylvania Gov. Tom Wolf, liberal Democrat, is seriously considering a bizarre cap-and-trade greenhouse gas emission reduction program to eliminate carbon emissions from major sources by 2052 (see PA Gov. Wolf Seriously Considers Marcellus-Killing Cap & Trade). The program is meant to eliminate fossil fuel production and use, including Marcellus Shale production. A couple of authors, one a 35+ year geologist, the other a senior fellow with the Commonwealth Foundation, took note and co-authored a devastating article appearing on The Daily Caller that punctures cap-and-trade in general, and Wolf’s dalliance with it in particular. Wolf invoked the argument that this year has been far rainier than normal in PA, which must, of course, be due to man-made global warming. The co-authors use actual, real data on rain conditions and amounts to completely obliterate Wolf’s arguments–making him look like the fool he is.
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SC PSC Votes to Approve Dominion Buyout of SCANA
In January Dominion Energy announced a deal to buy out and merge in South Carolina-based SCANA Corporation (see Dominion Buys SCANA, Mulls Atlantic Coast Pipe Expansion into SC). SCANA is an energy-based holding company that through its subsidiaries is essentially the local gas and electric company for much of South Carolina. When Dominion’s Atlantic Coast Pipeline gets built and expanded into South Carolina, it will flow Marcellus/Utica gas to SCANA customers–an important and huge new market for our molecules. In November North Carolina regulators signed off on the merger (see Dominion One Step Away from Closing on SCANA Merger). Last Friday, the Public Service Commission of South Carolina (SCPSC) voted to approve it as well–the last major regulatory hurdle before the merger can happen.
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Energy Stories of Interest: Mon, Dec 17, 2018
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: New York City rated ‘judicial hellhole’ by major legal organization; Dominion Energy completes previously announced asset sales; Gulf petrochemical complex may have rival in Appalachia; Interior Secretary Zinke resigning, cites ‘vicious’ attacks; US shale becomes oil industry’s safe haven; Coming changes in marine fuel sulfur limits will affect global oil markets; Import of U.S. liquefied natural gas to Greece begins.
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