Victory for NY Landowners in Chesapeake Force Majeure Case

victoryIn a major victory for New York landowners, Attorney General Eric Schniederman’s office reached a settlement with Chesapeake Energy to allow 4,400+ landowners with a collective 264,000 acres to renegotiate old gas drilling leases that Chesapeake was attempting to extend using the “force majeure” clause. MDN has followed this story for more than a year (see this MDN story from May 2011 for history and background).

As a brief background, a number of New York landowners—many of them in the Southern Tier area of New York—signed gas drilling leases in 2000 with small drilling companies. The leases had a 10-year term. Most of the landowners got $3 per acre as a signing bonus. Those leases, along with leases signed prior to 2000, were bought by Chesapeake in the mid-2000s. In 2009, Chesapeake sent letters to New York landowners invoking the force majeure clause, which is legalese for “we’re extending the contract term due to extenuating circumstances, which we believe is our right to do.” The extenuating circumstance? The moratorium on high volume hydraulic fracturing that was implemented by then-Gov. David Paterson in 2008.

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Dueling Rallies in Albany Over Cuomo’s Fracking Plan

Both anti- and pro-drillers staged rallies in Albany, NY yesterday in response to the leaked plan by the Cuomo administration to allow limited hydraulic fracturing of gas wells in five Southern Tier counties.

Perhaps two dozen anti-drilling protestors showed up outside of Gov. Cuomo’s office for their PR appearance before the cameras. An hour later, they went to stand outside of a much a larger crowd of pro-drillers who staged a press conference featuring five town supervisors who were there to say they want drilling in their townships.

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Update on NETL Faults & Fracking Study

Earlier this week MDN covered news of a study about to be released by the U.S. Department of Energy’s National Energy Technology Laboratory (NETL) which looks at whether or not fracking fluids can find their way to the surface through faults or cracks (see this MDN story).

Based on the article MDN read, we floated the question, “Are we being set up?” Any time MDN reads about “this is science and incontrovertible and this will settle it once and for all” it sets off red flags—like we’re about to be railroaded.

Fortunately Pam Casey, a reporter with the West Virginia State Journal, read the MDN article and dug deeper. What she found is reassuring:

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Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break

Pennsylvania Gov. Tom Corbett officially launched his public relations effort yesterday to get the PA legislature to pass a package of tax credits for Shell to build an ethane cracker plant in the state. The package of tax credits will amount to $1.7 billion over a 25-year period (up to $66 million per year) and will not begin until 2017 at the earliest.

Three of Corbett’s cabinet secretaries held a forum at the Beaver County community college yesterday, near the location of the proposed plant (in Beaver County), to push for the tax credits. When the new plant is built, it will result in 20,000 new jobs throughout the region.

Corbett is making a push to get the legislature to adopt the package by the end of June, before legislators adjourn for summer recess. But many legislators complain they don’t know enough about the plan (yet) to cast a vote either way. This effort by Corbett and his administration is an attempt to bridge that gap.

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Norse Says NY Force Majeure Settlement Doesn’t Apply to Them

MDN reported today that New York Attorney General Eric Schneiderman’s office struck a deal with Chesapeake Energy over the issue of extending landowner leases in New York using the “force majeure” clause in the contract (see this MDN story). Norse Energy issued a press release saying essentially that the deal does not apply to them, and their force majeure claims are still in place until overturned by a court.

Here’s the Norse press release:

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WV Oil & Gas Employment Numbers: Underreported by 14K?

MDN reported two days ago that WorkForce West Virginia reported that direct jobs held by West Virginians in the oil and gas industry in the state had actually decreased from 2010 to 2011 (see this MDN story). We observed the total number of jobs cited, 2,179 in 2011, seemed really low, and perhaps inaccurate. WorkForce WV says that’s the total number of “direct” jobs held by West Virginians so we took them at their word.

But what’s a “direct” as opposed to an “indirect” (but created because of the drilling industry) job? Seems we’ve hit some semantic issues here. According to the Independent Oil and Gas Association of West Virginia, the actual number is something over 16,000 jobs:

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OH State Land – About to be Leased for Drilling?

Ohio Department of Natural Resources (ODNR) officials report their research into how much of the mineral rights the state owns beneath state land in 16 eastern Ohio counties is almost complete. What does that mean? In 2011 the state passed a law allowing the state to lease state-owned land for oil and gas drilling—at least for the portions where they own the rights. It appears that’s now about to happen.

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Trout Run Pipeline Goes Operational, Seneca Wells Connect

National Fuel Gas Midstream’s new Trout Run Gathering System (Lycoming County, PA) came online May 30 and is now delivering natural gas to the Transcontinental Gas Pipe Line (Transco). Because the new pipeline is now operational, Seneca Resources has brought online four new wells. As of a few days ago, the wells were producing a combined 45 million cubic feet of gas per day.

National Fuel Gas’ press release:

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