OH Landowners File Royalty Class Action Lawsuit Against Chesapeake

lawsuitA group of Ohio landowners is doing what others have previously done in Pennsylvania, Texas and elsewhere–they’ve filed a proposed class action lawsuit against Chesapeake Energy claiming Chessy has screwed them and about 1,000 other Ohio landowners out of a collective $30 million in royalty payments. The lawsuit was filed last Monday in Columbiana County Common Pleas Court (copy embedded below) by an Akron, OH woman and the owners of two Columbiana County farms. In addition to Chesapeake, French company Total E&P USA, Pelican Energy LLC and Jamestown Resources LLC were also named in the lawsuit. The plaintiffs claim the only allowed deduction from royalties, according to signed leases, is for taxes–not for drilling expenses, not for post-production costs, etc. The lawyers filing the lawsuit figure there are at least 1,000 landowners with 40,000 acres who have been negatively affected by Chesapeake’s royalty shenanigans…
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Philly Enviro-Nazis Attack Dem Councilman for Visiting Drill Site

geenaziA story in Philadelphia Magazine perfectly illustrates the Nazi-like control freaks that inhabit anti-fossil fuel organizations like Food and Water Watch and the fringe group Action United. Philadelphia City Councilman Curtis Jones Jr. is a bone fide, card-carrying liberal Democrat. In 2011 Jones called for a fracking moratorium in the Delaware River Basin. Since that time Jones has actively advocated for no fracking/drilling in the Philadelphia region. Four years ago the Marcellus Shale Coalition invited Jones (and others) to tour a drilling rig, to see how it’s done. At the time, he declined. It’s always so much easier when you stick your head in…the sand. But Jones is a member of the Philadelphia Gas Commission, the group that oversees the city-owned Philadelphia Gas Works (PGW). A recent audit recommends PGW buy more Marcellus Shale gas (see Expensive Audit Tells PGW to Buy More PA Shale Gas to Save Money). So Jones, being on the Gas Commission responsible for overseeing PGW, felt it would be worthwhile to go ahead and take that rig tour and learn the facts for himself first-hand rather than relying on second-hand opinions. So Jones agreed to attend a tour last Friday. He even allowed his name to be put on the invite to encourage others to “go see for yourselves” just what happens at a drilling rig. And that, dear reader, is anathema to the wackos at groups like Food and Water Watch, the Sierra Club, THE Delaware Riverkeeper, Action United, on and on and on. Actually touring a rig and learning that this activity is safe, and advantageous, and not the environmental holocaust it’s made out to be? That blows their lies right out of the water and they can’t have that. And so Food and Water Watch, along with Action United, attacked one of their own–Curtis Jones–for the simple act of visiting a drill site to see it for himself…
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Dominion Files Pipeline Route Change to Avoid Salamanders, Swamp

Cow Knob Salamander
Cow Knob Salamander

Contrary to what anti-fossil fuelers would have you believe, midstream companies building big pipeline projects DO listen to concerns and they DO change the route of a pipeline to address those concerns–like changing the route to minimize environmental impacts or to address the concerns of landowners. For example, Dominion has just announced it filed route changes for the Atlantic Coast Pipeline, a $5 billion natural gas pipeline running from West Virginia through Virginia and into North Carolina. The changes are made to minimize impacts on salamanders in two locations, to minimize impacts on a historic district, and to avoid crossing a swamp (yes, a swamp). Somewhere along the way in the past 30 years swamps became precious ecological assets instead of pools of stagnant, smelly, mosquito-infested water that need to be drained (go figure). Dominion is willing to play along. “Hey, if that smelly swamp is important to you, we’ll spend an extra $XX million and go a different route.” Dominion is not alone. Theirs is just the latest example that totally refutes the yarns spun by ninny nanny antis who blat about evil Big Pipelines and how they destroy everything. Here’s the latest “we’ll make some adjustments to the route to keep everyone happy” notice from Dominion…
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DEC Official Says NY in Danger of FERC Taking Over Pipeline Permits

takeoverIt was just two weeks ago that MDN posted an article saying the New York Dept. of Environmental Conservation (DEC) has had enough time to approve stream-crossing permits for the much-needed Constitution Pipeline. It’s now time to force their hand (see Time to Force NY DEC to Issue Permit for Constitution Pipeline). As we wrote in that piece, the DEC risks the very real threat that the Federal Energy Regulatory Commission (FERC) may step in and force the DEC to issue the permits. Now a high-ranking official with the DEC has essentially said the same thing we did–on the record…
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PA Marcellus Gas Claims a Nuclear Scalp in Central NY

FitzPatrick Nuclear Plant
FitzPatrick Nuclear Plant

Low-cost Marcellus Shale gas has just taken out a nuclear plant in New York State. Entergy, owner of the James A. FitzPatrick Nuclear Power Plant in Scriba, NY, says they will shut down the plant in 2016 or 2017 because of the “continued deteriorating economics of the facility” and because of “significantly reduced plant revenues due to low natural gas prices, a poor market design that fails to properly compensate nuclear generators like FitzPatrick for their benefits, as well as high operational costs.” The FitzPatrick Nuclear Power Plant generates 838 megawatts of electricity, enough to power more than 800,000 homes, and employs 600 people in Oswego County, NY. Essentially over-regulation that drives up costs have shut it down. The question now is, where will those 800,000 homes get their electricity? Oh, they won’t go dark. But they will begin to pay much higher prices for their electricity than they do now. Unless a new natgas-fired electric plant opens up…
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OH Pipeline Projects in 2016: $8B of Investment, $360M in Taxes!

tax revenueIn a somewhat related story posted today, MDN tackles the thorny issue of taxing pipelines in Pennsylvania. As serendipity would have it, last week Energy in Depth posted an excellent article on the financial impact pipelines are having in Ohio. Would you believe it if we told you that not only will an astounding $8 billion be spent to build new pipelines in the Buckeye State in 2016, but also an estimated $360 million in ad valorem property taxes (taxes on pipelines) will roll in to local municipal coffers. Next year. And every year thereafter! Here’s the numbers broken down by who is doing the spending and paying the taxes, and which pipelines will generate the most economic activity in Ohio next year…
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Is it Time to Tax Big Pipelines in PA?

is it time yetAn Associated Press (AP) story appearing in multiple newspapers and in online outlets has returned to the meme of how unfair it is that pipelines in Pennsylvania are not taxed, as they are in other states like New York, Ohio and West Virginia. Perhaps they have a point? No, MDN isn’t going “soft”! We’ve long made the argument that a permanent structure in the ground should benefit landowners beyond a one-time, up-front payment (see the suggestion by Bryant LaTourette made at the Constitution Pipeline scoping hearing in April 2014: Vicariously Attend FERC Scoping Hearing on Constitution Pipeline). The counter to landowners receiving ongoing royalties for pipelines is the argument of electric power lines. They run everywhere over people’s property. You can’t build a structure under or near such lines once they are in place. Yes, they can be taken down/removed (i.e. not “permanent”), but when was the last time that happened? Landowners are not given an ongoing royalty for the electricity flowing through power lines that criss cross their land. Why would you grant an ongoing payment/royalty for a pipeline in the ground if you don’t for a power line above the ground? You see this is a thorny, complex issue. Although individual landowners in states like New York don’t receive an ongoing royalty for pipelines, the pipelines themselves are considered property and pipeline companies are taxed for having them in the ground, giving a community-wide benefit to all residents in a town or village. We’ve remarked before that the property taxes where we live (in NY) have gone DOWN because of a local pipeline. When’s the last time you heard about taxes going down in New York State?! In Pennsylvania, pipelines are NOT taxed, and therefore taxpayers in those communities don’t benefit. That’s the bone of contention…
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Dartmouth Research: Fracking’s Benefits Extend Hundreds of Miles

crickets chripingIt’s always fascinating for us to see which universities tout the research papers published by their professors and students, and which don’t. And which papers they decide to promote, and which they don’t. Publish a study that knocks fracking as somehow damaging the environment? That’s worth a full-blown press release and calls to the New York Times to see if you can get some juicy PR. Publish a paper that concludes, oh, the economic benefits of fracking actually extend out for hundreds of miles? Not a peep. In fact such a study was released by Dartmouth researchers called “Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution” (full copy below). The report concludes: “Every million dollars of oil and gas extracted produces $66,000 in wage income, $61,000 in royalty payments, and 0.78 jobs within the county. Outside the immediate county but within the region, the economic impacts are over three times larger. Within 100 miles of the new production, one million dollars generates $243,000 in wages, $117,000 in royalties, and 2.49 jobs.” You might think such good news would be emblazoned on major newspapers across the country. Nope. Nothing. Nada. Zippo. That kind of objective research, that finds fracking benefits society, doesn’t fit the liberal bias of mainstream media. So they ignore it. If they don’t cover it, it essentially doesn’t exist. What a shame…
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26 States Ask Federal Court to Shut Down Clean Power Plan Now

shut it downMDN has highlighted in several posts the draconian and dictatorial Clean Power Plan (CPP) issued by B.H. Obama’s Environmental Protection Agency (EPA). Not only will Obama’s CPP outright assassinate the coal industry in this country, it will deliver a mortal wound to the natural gas industry, a wound it may not survive (see Obama Stabs Natural Gas Electric Plants in Clean Power Plan). The EPA intentionally delayed publishing a final copy of the plan (by 87 days) in order to run out the clock. They knew the sooner they published, the quicker lawsuits would be filed that may defeat the plan. By delaying, they force states to begin implementing the plan because they dare not be caught in violation in case they lose the court battle. Sleazy in the extreme. Once the plan was published in final form, states immediately filed a lawsuit against it (see States Gear Up to Fight Obama’s Illegal Clean Power Plan in Court). The number of states suing the EPA to stop the CPP now numbers 26–over half of these United States of America. The lawsuit also includes dozens of business groups. They are all asking the federal courts to immediately stop any implementation of the CPP while the lawsuit has a chance to work its way through the court system–which will likely take years. This time, as a Wall Street Journal editorial points out, the courts may just grant the stay and shut down the CPP…
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MarkWest Tells Unitholders Time to Sign Proxy for Marathon Sale

vote early vote oftenIf you hold MarkWest Energy “units” (similar to shares of stock), it’s time to vote on the merger/takeover of MarkWest by Marathon Petroleum. In July, MarkWest (arguably the premier midstream company in the Marcellus/Utica), and Marathon (the fourth largest refiner in the U.S., headquartered in Ohio) announced a $20 billion deal for Marathon to buy out MarkWest (see Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum). In August, the federal government gave its blessing on the deal (see Federal Govt Approves Marathon Petroleum Buyout of MarkWest). And just last week Marathon said they expect to close on the deal “later this year”–and the end of this year ain’t all that far away (see Marathon 3Q15: Closing on MarkWest Merger “Later this Year”). Last Friday MarkWest released a statement that it’s now time for existing unitholders to sign proxy statements that approve (or not) of the merger. A big meeting will be held on December 1st at MarkWest HQ in Denver for big unitholders, including those representing smaller unitholders via proxy, to cast their vote and plant a big ole rubber stamp of approval on this deal. What? You thought the outcome was ever in doubt? Hate to burst your bubble, but it’s not. This is a done deal folks…
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Marcellus & Utica Shale Story Links: Mon, Nov 2, 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: gas drillers eye Utica promise; Appalachian dilemma, too much gas, nowhere to go; Marcellus gas stealing markets away from Canada; Cuomo cronyism; LNG for NYC; Ohio’s oil boom; Act 13 lands back in PA Supreme Court; Chevron cutting 7,000 jobs; big oil gears up for $60 price; and more!
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