Federal Judge Blocks BLM Rules for Fracking on Federal Lands

judge says noFinally a spot of good news in the never-ending battle to keep the federal government out of the business of regulating oil and gas drilling. Going all the way back to 2012, the federal Bureau of Land Management (BLM), an agency that sits under the umbrella of the U.S. Dept. of Interior (DOI), proposed draft rules for fracking on federally-controlled land (see BLM Issues Proposed New Rule for Fracking Federal Lands). There are some federal lands in the Marcellus/Utica–but not much. However, it’s the larger principle at stake: Will we allow the federal government under the Obama Administration to continue violating the U.S. Constitution, which specifically leaves oil and gas regulation to the individual states? Since 2012 several drafts of BLM’s fracking regulations have been released, the final version in March of this year (see BLM Introduces “Final” Fracking Rules for Fed Lands – 3 Yrs Late). The BLM adopted the new rules in March with the intent of enforcing them, but they were quickly sued in federal court by the Independent Petroleum Association of America, the Western Energy Alliance, the Ute Indian tribe and the states of Wyoming, North Dakota, Colorado and Utah. A federal judge ruled yesterday that the BLM cannot enforce their new fracking rules pending the outcome of the larger case. The judge believes the states (and IPAA and WEA) will prevail in their case–saying that Congress has not specifically granted the BLM the power to regulate fracking. Perhaps this will also put the breaks on the out-of-control EPA in its quest to regulate fracking…
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Kinder Morgan Signs Up New Customers for Portion of NED Pipeline

new customersKinder Morgan continues to fight an uphill battle to get its Northeast Energy Direct (NED) pipeline project accepted and approved. In March MDN noticed that Kinder had failed to sign up any new customers in the previous eight month period, with commitments remaining at 500,000 dekatherms per day, equivalent to 1/2 Bcf/d (see Kinder Morgan Fails to Sign Up New NED Customers in Last 8 Mos). In July the Kinder Morgan board committed to building the project–but in a scaled back form (see KM Board Approves Scaled-Back New England Pipeline for $3.3B). Most of the attention has been on the portion of the pipeline project that runs from Wright, NY to Dracut, MA–the section of the project Kinder calls “the Market Path.” Anti-fossil fuel nutters in Massachusetts and New Hampshire, where the new pipeline would run, have staged various protests and publicity campaigns. Not much has been said about the portion of the project that will run from northeastern Pennsylvania (Susquehanna County) to Wright, NY (in Schoharie County)–the section Kinder calls “the Supply Path.” That is, not much has been said until now. Kinder announced on Tuesday they’ve landed new/unnamed customers to ship natural gas along the Supply Path portion of NED. Indeed, they’ve signed up 627,000 dekatherms per day (roughly 2/3 of a Bcf/d) for the Supply Path portion of NED…
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MarkWest Exec Says Ethane Storage Key Issue for NE Cracker Plants

ethane tank
Ethane tank in Grangemouth, Scotland – click for larger version

At yesterday’s sessions of the West Virginia Oil and Natural Gas Association (WVONGA) conference at Oglebay Park (Wheeling), WV, MarkWest Energy’s executive vice president and chief commercial officer Greg Floerke talked about natural gas liquids (NGLs)–specially ethane–and the need for a regional ethane cracker plant. Floerke said MarkWest currently processes around 75% of all NGLs in the Marcellus/Utica region and that his company alone could provide enough ethane for several cracker plants. However, for those considering the prospect of spending billions of dollars to build a cracker plant, Floerke says there is a key issue–storage. Cracker plants want to be assured there will be a steady supply and one way you get steady supplies is with storage…
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OH & Other States Release Report on Injection Wells & Earthquakes

StatesFirst Seismicity PrimerCountless times MDN has told you that in rare cases, injecting fracking wastewater into a deep, underground Class II injection well (for disposal) can cause earthquakes–if the injection well is located over a fault. When you inject fluids under high pressure into rock formations with a fault it can act like a lubricant, allowing the rocks to slip and slide–causing a low-level earthquake. It’s happened in Ohio. It’s happened (a lot) in Oklahoma. It’s happened in Texas. And in other states too. Thirteen oil and gas states joined together with the Interstate Oil and Gas Compact Commission (IOGCC) and Ground Water Protection Council (GWPC) to form the StatesFirst Initiative, a working group to pool their knowledge and try and figure out how, and under what conditions, injection wells cause earthquakes. Co-heading the initiative is Ohio’s Chief for the Division of Oil & Gas Resources Management (Ohio Dept. of Natural Resources), Rick Simmers. Rick and the working group have just released a 150-page Primer (copy below) to help regulatory agencies evaluate and develop good policies to mitigate and prevent earthquakes from injection wells…
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PennEast Pipeline’s Main Sponsor Recognized as Enviro Champion

we are the championsPerhaps we now know the real reason why a group of anti-fossil fuel protesters decided to abandon their protest at the headquarters of PennEast Pipeline’s main sponsor, UGI. MDN told you yesterday how mainstream media in the New Jersey market covered a “massive” protest (of 35 people) who showed up at the Statehouse in Trenton during the day–with obviously nothing better to do–to protest against the PennEast Pipeline (see Tiny Protest in Trenton, NJ Against PennEast Pipeline is “News”?). The protesters had planned to also show up at UGI headquarters on Tuesday for a similar “massive” protest–but those plans got canceled. We assumed it was because it was food stamp distribution day and the paid-for protesters had better things to do–but maybe we were wrong. Could it be that protest organizers were tipped off that UGI, the lead sponsor of the PennEast Pipeline, was about to be named to a national list of utility companies that are “Environmental Champions”? It wouldn’t look good for THE Delaware Riverkeeper and her acolytes to show up and protest a company that is recognized nationwide as one of the leading environmentally sensitive companies, would it?…
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Wolf Asks “Good Republican Legislators” to Support Severance Tax

Make Him an Offer He Can't RefusePA Gov. Tom Wolf has dropped all pretense of being a nice guy and has turned into a mafioso bully because he can’t get his own way. We understand. He made a back-room deal with teachers’ unions and they delivered him an election victory. He owes them and the only way he can pay them off is by taxing the Marcellus Shale industry into oblivion. Wolf’s latest tactic is to call the Republicans who won’t go along with his Marcellus-killing severance tax “the bad guys” and appeal to RINOs in the House and Senate–those like Rep. Gene DiGirolamo (from the Philly area)–those he calls “good Republican legislators”. Wolf plans to make the RINOs an offer they can’t refuse in order to support a severance tax. Will they bow to pressure from the don?…
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Warren Resources Says Bye-Bye to NYC Headquarters, Hello Denver

Goodbye New YorkWarren Resources, a small, independent exploration and production company has been headquartered in New York City–until now. Warren has ongoing drilling programs in California, Wyoming, and in the Pennsylvania Marcellus Shale. Warren’s Marcellus program is very small–they previously announced they would drill and complete two Marcellus wells in 2015. In July the company began a search for a new CEO, a process that continues (see Help Wanted: Warren Resources Launches Search for New CEO). Warren announced yesterday that effectively immediately their formerly branch office in Denver, Colorado will become the company’s new headquarters–and that they will close down the New York City and Roswell, New Mexico offices in the coming months. Apparently it will save quite a bit of money on rent…
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Rural OH County Opposes ET Rover Pipeline in Letter to FERC

Wayne County OHIn an unusual move, the Wayne County (OH) Board of Commissioners has written to the Federal Energy Regulatory Commission (FERC) to oppose having Energy Transfer’s ET Rover pipeline come through the southern portion of their county, as currently planned. ET Rover is a 711-mile Marcellus/Utica natural gas pipeline that will serve mostly U.S. customers that will cost $3.7 billion to build and run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. The bulk of the pipeline would run through Ohio, including southern Wayne County. The Board of Commissioners’ objection is unusual because Wayne is a mostly rural county with farms. Farmers, while not always welcoming of pipelines running through prized hay fields and crops, can sure use the money that would come from such a project. Farmers typically do support pipelines–and drilling. The commissioners cite safety concerns and damage to farmland in their letter to FERC…
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Dominion Closes on Deal to Buy 26% of Iroquois Pipeline

iroquois
Click for larger version of map

In August MDN told you that Dominion had cut a deal to purchase 26% of Iroquois Gas Transmission System, which is a 416-mile, FERC-regulated natural gas pipeline running from the Canada-U.S. border near Waddington, NY, through New York and Connecticut to South Commack, NY on Long Island, and to Hunts Point, NY in the Bronx (see Dominion Buys 26% of Iroquois Gas Transmission Pipeline). The $286.5 million deal gives Dominion a bigger seat at the Marcellus/Utica table. Dominion announced that as of Tuesday, the deal closed…
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Crestwood Equity/Crestwood Midstream Complete Merger

mergerExactly one month ago MDN told you that Crestwood Equity Partners LP and Crestwood Midstream Partners (with operations in the northeast)–two different companies on paper–would merge (see Crestwood Equity/Midstream Announce Date to Merge Two Companies). Crestwood Equity Partners is a master limited partnership (MLP) that operates an NGL supply and logistics business and previously owned, on paper, 4% of Crestwood Midstream Partners, a pipeline business operating in multiple U.S. shale plays. Crestwood Midstream also had an NGL business. The two said they would complete a merger of the separate companies by yesterday, Sept. 30–and by golly, they did…
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Marcellus & Utica Shale Story Links: Thu, Oct 1, 2015

best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH frack tax on time after all; EQT’s Andrew Place confirmed to join PA Public Utility Commission; listen to some of Jeb’s high-energy energy speech; WVU gets $100K to study pipeline safety; NH residents opposed to NED pipeline; gas in New England is in short supply; how shale has changed the world; China lowers shale drilling costs 23%; shale drilling on both sides of the pond; and more!
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