PA Official Admits Wolf Severance Tax Highest in Nation @ 17.3%

I admit itThe head of Pennsylvania’s so-called Independent Fiscal Office (a partisan organization) testified before a joint hearing of the state Senate’s energy and finance committees yesterday and said (fantastically) non-Pennsylvanians will “eventually” pick up most of the tab for a nosebleed high severance tax proposed by PA Gov. Tom Wolf (Democrat). Matthew Knittel, head of the Independent Fiscal Office, also testified under oath that Wolf’s severance tax will have an initial effective rate of 17.3% in 2016–instantly skyrocketing to become the nation’s highest severance tax…
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Chevron Fined $939K for PA Well Fire/Death in Greene County, PA

Last week MDN brought you word that Chevron had settled a wrongful death lawsuit stemming from an explosion at a Greene County, PA well in 2014 (see Chevron Settles PA Marcellus Wrongful Death Lawsuit for $5M). The other shoe has now dropped. In addition to that $5 million, add another $939,000 in fines from the Pennsylvania Dept. of Environmental Protection (DEP). The DEP yesterday announced Chevron has entered into a Consent Assessment of Civil Penalty (CACP) and has agreed to pay the fines levied by the DEP as a result of the explosion and fire at the Lanco well pad. The details from the DEP…
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How Much $ Should Landowners Get for a Pipeline Right-of-Way?

How much money should landowners get for the pipelines that cross their property? Should pipeline companies pay for the width of the right-of-way, in addition to the length? Should landowners be compensated more if it’s a bigger pipeline that has to be buried deeper? And, will landowners truly be able to use the land (farmers plowing and planting) if a pipeline is buried under it? These are all really important questions. In West Virginia, a former inspector for the state Dept. of Environmental Protection says landowners should be getting $50 per foot for a pipeline right-of-way. The industry, as represented by the West Virginia Oil and Natural Gas Association, thinks $5 per foot is more like an acceptable number. Excuse us for laughing, but $5 per foot for a pipeline that will be in the ground for the next 30-50 years (or more)? We wouldn’t sign it–and we hope WV landowners don’t either…
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1Q15 Ohio Production Numbers Released: Natgas Production Up 11%

The Ohio Dept. of Natural Resources (ODNR) released their first quarter 2015 production report yesterday. It shows natural gas production in the Buckeye State was up 11% from the previous quarter. That rate of increase has slowed (but is still good, all things considered). In 4Q14 production numbers were up 25% from the previous quarter. The production number increase for 1Q15 slowing to only 11% is a reflection of less new drilling in the state. There’s plenty of Utica wells already drilled awaiting completion and connection to pipelines–so production will almost certainly continue to increase in Ohio for the foreseeable future–albeit at a slower pace. According to yesterday’s report, Ohio produced 183.6 billion cubic feet (Bcf) of natural gas, and 4.4 million barels of oil in 1Q15. Note that NGLs are part of the natural gas figures–Ohio doesn’t break out NGLs in a separate number, unfortunately. Below are a few of the highlights from the ODNR, with a link to download the full production report…
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Top 6 Utica Natgas & Top 6 Utica Oil Wells by Production in 1Q15

Top 6Yesterday the Ohio Dept. of Natural Resources (ODNR) released their first quarter production numbers for both oil and natural gas (see our companion story today). Below are details for the top 6 natural gas producing wells, and the top 6 oil producing wells in the state. Rice Energy and Antero Resources split the top 6 natural gas wells with three apiece. Of note, Rice’s wells took the top 3 slots. Aubrey McClendon’s American Energy drilled the most top oil wells (4 of the top 6), followed by one apiece for Antero Resources and PDC Energy…
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PA Gov Wolf Tax Package (Incl Severance Tax) Voted Down 193-0

Pennsylvania Gov. Tom Wolf has proposed a slew of new taxes as part of his proposed budget. Yes, there’s a 15% (or according to his own government advisers, 17.3%) severance tax in the package of tax increases Wolf wants. But there are a number of other taxes the PA Democrat governor, who took office in January, wants as well. When you add it all up, its over $12 billion in new economy-crushing taxes. So the Republicans running the PA House held a vote yesterday on the entire package of Wolf’s tax proposals. In other words, do you really want this? Is this the way to go? The vote was taken, and every single House member, all 193 of them–Republicans and Democrats–voted against Wolf’s tax proposals. Wolf called the vote a “stunt” and said, “This is the kind of gamesmanship that we were not sent here to play.” Er, did we miss something? YOU wanted all of these new taxes Gov. Wolf. So when YOUR taxes were voted on–all together in one package–you didn’t want it after all? Did you have a change of heart? Why did you propose those taxes if you didn’t want them voted on? This is the kind of gamesmanship we’ve come to expect from the Democrats in the Keystone State. The kind of political “stunts” they play. When the Democrats’ enormous appetite for taxing and spending is exposed and brought out into the open, they run away…
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Norfolk Southern Responds to PA Gov Wolf’s Letter re Oil Trains

A few weeks ago Pennsylvania Gov. Tom Wolf sent an open and public letter to CSX Transportation and Norfolk Southern Railway, two major railroads operating in the state, trying to pressure them into accepting the idea that PA may try and slip its own regulations on top of federal regulations with regard to crude oil trains traveling through the state, most of them coming from the North Dakota Bakken Shale region (see PA Gov Wolf Takes Aim at Bakken Oil Trains Traveling Thru PA). Wolf, in his letter, urged both companies “to join Burlington Northern and Santa Fe (BNSF) in adopting improved safety initiatives for all trains with crude-by-rail (CBR) cars operating in Pennsylvania and to fully and expeditiously comply with the U.S. Department of Transportation’s announced Final Rule.” Norfolk Southern has responded with their own open letter back to Wolf (copy embedded below). It’s message? We’re already in compliance with most of the DOT’s Final Rule, and we go over and above the standards in the Final Rule and standards followed by others like BNSF. So put that in your pipe and smoke it Mr. Wolf…
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Anti-Drillers Ask Fed EPA (Again) to Regulate OH Injection Wells

In December we wrote about anti-drillers in Ohio asking the federal Environmental Protection Agency (EPA) to step in an usurp the legal authority of Ohio’s Dept. of Natural Resources in their role of overseeing wastewater injection wells (see OH Anti Group Wants EPA to Suspend ODNR Injection Well Oversight). As we wrote at the time, “Whenever anti-drillers in a given state don’t like how the state environmental authority is doing its job, they run to the federal government like a petulant child clinging to its mother’s skirt.” The petulant children are back, asking yet again for the EPA to take over injection well regulation in the Buckeye State…
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Getting Marcellus NatGas to Customers without Pipelines

NOTE: This post was updated on 7/30/15 per the request of Compass Natural Gas Partners. The updates reflect that Compass does not market to rural communities/end users, but rather to manufacturers, fleets and businesses that are not located near natural gas pipelines. We thank Compass for setting the record straight. – Jim Willis, Editor, MDN

Wouldn’t it be great if you could sell Pennsylvania’s abundant, clean-burning and cheap Marcellus Shale gas to areas without access to a pipeline or natural gas? Just wave the magic wand and presto-magico gas is delivered to manufacturers, fleets and businesses where no infrastructure now exists. That’s the premise behind a very real company that aims to accomplish that lofty objective. Compass Natural Gas Partners, based in Camp Hill, PA, is building a first of its kind compressed natural gas (CNG) terminal in Lycoming County, PA that will accept Marcellus Shale gas in, clean it up (get rid of the water in it), compress it to 3600 psi, and load it into specially designed trailers that haul it to customers. If this project catches on, it has the power to change how natgas is distributed to locations with no pipelines…
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USGS Spotlight on What Makes Good Frac Sand & Where to Find It

According to the latest research by the U.S. Geological Survey (USGS), there’s a reason that 70% of frac sand, used in fracking, comes from Wisconsin and Minnesota. The silica (or sand) mined in those Great Plains states has the best characteristics to be used in fracking. But there are other places–even places in the Marcellus/Utica–that are being mined for silica used for fracking. In an article titled “Frac Sand Sources in the United States” published in the May 2015 issue of Rock Products magazine, USGS researchers describe what makes good frac sand and where, in the Lower 48 U.S. state, it’s being mined commercially. We’ve extracted out a section (below) on where silica is mined in the Marcellus/Utica region…
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