WV “Landowner” Wins $4.8M in Lawsuit for Failure to Drill

By Andy Leahy

court gavelOn March 3, a federal judge awarded a Tyler County, WV mineral owner $4.8 million in present and future royalties (plus interest) as damages in a dispute involving the operator’s failure to follow through on some unusually generous lease terms. The operator, Cunningham Energy LLC of Charleston, WV, had promised to horizontally drill eight wells to and through the Marcellus Shale formation within three years, but was unable to do so–largely because the leaseholds were far too small to develop as stand-alone units, and the surrounding lands turned out to be already under lease to other drillers…
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Intl Rig Counts in Free Fall, What About Marcellus/Utica Counts?

Rig counts are a closely watched measure as an indicator of future drilling and therefore future production. Over the past several years, rig counts have become a much less accurate method for predicting future production simply because so many wells have been drilled–in the Marcellus and now Utica–that connecting those wells to production will take years to complete. So if the number of rigs actively drilling goes down, it doesn’t correlate to a drop in production–not anymore. But rig counts are still important–the number of rigs actively drilling–because it’s an indicator of economic impact. When rigs are drilling, all sorts of goods and services and jobs are needed–which makes everybody happy. Baker Hughes, in the process of being gobbled up by Halliburton, has been for years the go-to source for rig counts. They issue counts on a weekly basis. MDN keeps track of rig counts in our 3x/year Marcellus and Utica Shale Databook. We decided it’s time to revisit rig counts–both globally and in the Marcellus/Utica–to see what the latest hullabaloo is all about. Are the counts going down in the northeast–and if so, where? The answer may surprise you…
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Sunoco Reconciles Differences with Municipalities re Mariner East

Hats off to Sunoco Logistics. In order to complete the conversion of a decades-old pipeline already in the ground, the Mariner East 1 pipeline, into flowing natural gas liquids (propane and ethane) across the state to the Marcus Hook refinery near Philadelphia, the company needs to build or upgrade 31 pump and valve stations along the existing pipeline. A legal battle ensued with resistance from many of the local municipalities, largely ginned up by scare stories from the usual sources like the Clean Air Council, THE Delaware Riverkeeper, Mountain Watershed Association and their sycophantic buddies in mainstream media outlets like PBS’ StateImpact Pennsylvania. Sunoco felt it had no option but to try and get the pipeline declared a public utility and by extension, use eminent domain to avoid local zoning ordinances. There have been plenty of legal twists and turns along the way (see our list of stories here). Sunoco has worked out their differences with 22 of the 31 townships and they are now hammering out deals with the rest. So they’ve withdrawn their application with the state Public Utility Commission (PUC) to be exempted from local zoning ordinances–no eminent domain. Anti-drillers are feverishly trying to spin this as a loss for Sunoco Logistics–that the company has “backed down” and is beaten. What it is, is a major victory for Sunoco–the pipeline will be completed (very soon) and NGLs will flow all the way to Marcus Hook…
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FERC Chair to Pipeline Protesters: It’s About Climate Change (Stupid)

By Andy Leahy

A new narrative is freshening for environmental reporters in mainstream and regional media: After suffering recent losses in extensively waged fights against new natural gas pipelines, notably in the blue-shifted northeastern U.S., opponents of fossil fuels are growing increasingly frustrated with the usually obscure decision-making process overseen by the Federal Energy Regulatory Commission, or FERC. Previously lost in the scrum: Comments by FERC Chair Cheryl LaFleur from Jan. 27, 2015–appearing before the National Press Club, no less–in which she essentially challenged activists concerned about climate change on the value of natural gas within the bigger equation. And she explained why “unprecedented” protest from activists is failing to deter FERC from approving necessary construction…
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OH EPA Issues Draft Lake Erie Discharge Permit for Ashtabula GTL Plant

The Ashtabula (OH) gas-to-liquids, or GTL, plant is ever-so-gradually making progress. In Sept. 2013 MDN first told you about this innovative plant coming to Ashtabula County (see Utica Shale Gas-to-Liquids Plant Planned for Ashtabula, OH). The plant will convert Marcellus and Utica Shale gas into diesel fuel, lubricants, solvents and waxes. The technology used for the plant is provided by a UK company called Velocys. In June 2014, Velocys bought out the Astabula operation and took up the reigns of the project (see UK-based Velocys Buys Ashtabula, OH GTL Plant). We didn’t hear anything about it until January of this year when Ashtabula Energy, a division of Velocys, has filed for a permit with the Ohio Environmental Protection Agency (OEPA) that would allow the plant to discharge wastewater into Lake Erie (see New Life for Ashtabula Gas-to-Liquids Plant, Files for Permit). The new news is that the OEPA has issued a draft discharge permit for the plant and has scheduled a public hearing on it…
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ET Rover Pipeline Hires Land Stewards to Protect the Land in OH

As we’ve been reporting for some time, Energy Transfer Partners (ETP) plans to build an 830-mile, $4.4 billion pipeline, called the ET Rover Pipeline, from PA and WV and eastern OH through OH into Michigan and eventually into Canada (see ET Rover Pipeline’s 800-Mile Journey Begins with FERC Filing). The pipeline will flow Marcellus and Utica Shale gas to Midwestern US markets and to Canadian markets. The longest stretch of pipeline will cross OH. In an effort to ensure Ohioans have an advocate to ensure their land is impacted as minimally as is possible, ETP is paying for the services of an ombudsman, a representative who will look out for the landowner’s best interest. It is Ohio-based firm Land Stewards–“a team of certified soil scientists, agricultural engineers, agronomists and conservation planners.” Does ETP get thanked taking this extraordinary over-and-above step? No. Instead, they get criticized…
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Jenga! PA Gov Wolf’s Budget Built on Severance Tax Will Crash

JengaHave you ever played Jenga? You know, the game where you stack blocks of wood in mini-skyscraper style and then each player must remove a block from a lower level and stack it on the top until somebody pulls a block out and the whole thing comes crashing down. That’s the comparison used to describe the state budget recently proposed by PA Gov. Tom Wolf in none other than the reliably liberal, Democrat-supporting, anti-drilling Allentown Morning Call. As the Morning Call points out, Wolf has built his Jenga (house of cards) budget on soaking drillers with a new severance tax. When that doesn’t happen, the whole budget comes tumbling down and no one will be to blame except Tom Wolf himself…
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Shale Gas News Radio – Mar 7, 2015 [Audio]

Every Saturday the one-hour Shale Gas News show airs on Scranton, PA’s 94.3 FM “The Talker” radio station. The show is co-hosted by Kevin Lynn of Linde Corporation and Bill desRosiers from Cabot Oil & Gas. MDN brings you the latest program show notes and recordings for Shale Gas News each week (well worth your time to listen). Here’s the latest program, recorded on Saturday, Mar 7…
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