PA DEP Fines Chesapeake $1.4M for 4-Year Old Landslide

Make Him an Offer He Can't RefuseWe’ll let you decide whether the recent action by the Pennsylvania Dept. of Environmental Protection (DEP) is in line with being a good regulatory watchdog, or with being a mafia Don, using the power of the government to shake down a drilling company. On Sept. 15, 2011 as Chesapeake Energy was drilling the Stinger 8H well in Aleppo Township (Greene County), PA, in an area known for its landslides–they experienced (yes) a landslide. The landslide created sediment that plugged about one-fourth of a mile of seven “streams” so tiny they don’t have names–essentially drainage ditches. The seven drainage ditches, when they have water in them, flow into a very small creek called Harts Run. In return Harts Run, which crosses the border into West Virginia, eventually empties into a slightly bigger creek called Pennsylvania Fork Fish Creek, which eventually empties into Fish Creek (slightly bigger again), which eventually empties into the Ohio River–on the other side of WV where it borders with Ohio. There is zero chance any of the sediment made it beyond Harts Run, let alone all the way to the Ohio. But still, it’s not a good thing if you’re not “careful” to prevent what the Guvment believes you should be able to prevent. Chesapeake, since that time (over four years ago), has essentially fixed the problem–spending millions to do so. Apparently there’s a little bit of work left to do. The PA DEP comes along and yesterday announced that Chesapeake has agreed to pay the DEP a whopping $1.4 million fine for this four year-old accident, as well as do a bit of tidying up of the drainage ditches. Here’s the kicker–Chessy doesn’t even own that well any more…
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PA County Judge Rules Rex Can Begin Drilling First Martian Well

My Favorite MartianAs we have long chronicled, a few anti-drilling parents from the Mars School District (Butler County, far western part of the state), backed by a couple of Big Green groups from the other side of the state (in the Philadelphia area), sued Middlesex Township to stop shale drilling in rural portions of the county. Rex Energy had applied for, was legally permitted for, but still hasn’t been allowed to drill a series of wells some three-fourths of a mile from the Mars School (for background, see our long list of “Martian” stories here). This is the outrage: These very same anti-drillers fought hard to overturn a portion of the 2012 Act 13 law that took zoning of oil and gas out of the hands of local towns and put it in state hands. The zoning portion of Act 13 was overturned by the PA Supreme Court. The antis got what they wanted–except, it seems, they got a little too much of what they wanted. They didn’t factor that in some towns there would be a majority who favor fracking and shale drilling–like in Middlesex. Middlesex ran an extensive series of nine hearings over seven months and eventually adopted zoning ordinances that allow Rex to drill. So the antis sued to stop what they previously sued to achieve. Eventually a group of landowners counter-sued the antis (rightfully so) for denying them access to allow drilling on their own land. That lawsuit is still playing out in the courts. Last Thursday a Butler County judge ruled, once again, that the zoning ordinances adopted by Middlesex are legal and therefore drilling can commence. The antis will appeal the decision and continue to try and block local landowners from legally using their own property as they see fit…
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ScottMadden Report: Getting Marcellus/Utica Gas to Market

ScottMadden, Inc., a top energy consulting firm, recently released the latest edition of their twice-per-year report called The Energy Industry Update. The current report, titled “Strange Brew: Adapting to Changing Fundamentals” (full copy below), offers insights into major events and emerging trends in the energy industry. This particular edition takes a close look at the natural gas industry–in particular how ever-increasing gas resources can find adequate infrastructure to make their way to market. We really like this report, for a couple of reasons. First, it gives you the wider context. Natural gas (and oil) doesn’t exist on its own. It is part of a complex tapestry of energy options and needs to be viewed that way. This report helps contextualize natural gas–helps you see the natgas puzzle piece in the larger energy puzzle. Second, we like the deep dive they do on natural gas. Not so long ago the estimates were that with shale gas in the U.S.–particularly in the Marcellus/Utica–we have a “100 year supply” of natural gas. Now? That number has risen to 140 years of supply. And it keeps growing. The report looks at rig counts and well productivity, pipelines that are (or will) move gas from the northeast to other markets, regulations and more. Take time to read it!…
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Value of OH’s Oil & Gas Production a Straight Line Up in 2014

Last Friday the Ohio Dept. of Natural Resources (ODNR) released their annual report on Ohio’s extraction/mineral industries, including the oil and gas industry. The report, titled “2014 Report on Ohio Mineral Industries: An Annual Summary of the State’s Economic Geology” (full copy below) contains precisely five pages of interest to MDN readers. But those five pages, which detail what happened (and where) in Ohio oil and gas during 2014, are loaded with good information. For example, natural gas production in Ohio in 2014 was 512,964,465 thousand cubic feet (Mcf), a 207% increase from 2013. The dollar value of natural gas produced in Ohio in 2014 was $1,939,005,678, an increase of 229% from 2013. The report has one page detailing how many wells were drilled by rock layer/resource play. Unsurprisingly the Utica/Point Pleasant shale layer was the most-drilled layer, with (as of the end of 2014) 521 wells drilled. The second most-drilled layer was the Clinton-Medina sandstone layer, with 92 wells drilled…
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PTT Taps Swiss Company INEOS for OH Cracker Plant Technology

Yet another piece of the Belmont County, OH ethane cracker falls into place–further indicating the project is likely to get built. It was only April of this year that MDN brought you the announcement that partners PTT Global Chemical (based in Thailand) and Marubeni Corporation (financial company based in Japan) were teaming up to potentially build a new $5.7 billion ethane cracker/petrochemical complex in Belmont County (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Since that time, PTT hasn’t let any grass grow under its feet. Already PTT (and Marubeni) are spending $100 million with Bechtel Enterprises and Fluor Corporation to design the plant (see PTT Announces 2 Contractors Working on Belmont Cracker Plant). PTT has also signed an option to buy the property where they plan to build the plant (see 300 Acres Next to FirstEnergy Site Part of Belmont Cracker Plan). All very good signs that this is indeed a serious project moving forward. And now, another piece of the puzzle falls into place. INEOS Technologies, a Swiss-based petrochemical technology company, announced they have been selected to provide a key piece of the technology for the new Belmont cracker plant…
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EIA: Shale Rockets U.S. Proved O&G Reserves to New Records

Our favorite government agency, the U.S. Energy Information Administration (EIA), yesterday released their annual report of proved oil and natural gas reserves in the United States for 2014. The report, titled “U.S. Crude Oil and Natural Gas Proved Reserves, 2014” (full copy embedded below) shows proved reserves for natural gas rose by 34.8 trillion cubic feet (Tcf), or 10%, to a record high of 388.8 Tcf in 2014. Oil reserves rose 3.4 billion barrels, or 9%, to 39.9 billion barrels. That’s the highest oil reserves have been since 1972! This is the second year in a row for a new natural gas proved reserves record high, and the sixth year in a row for oil proved reserves (see last year’s report, EIA: Proved Reserves for Natgas Up 10% Last Year, Marcellus Leads). As a quick reminder, proved reserves are, according to the EIA, “those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.” That is, proved reserves are what’s in the ground now, can be gotten out, and we can prove it. This is a great report, full of excellent data and interesting charts and graphs…
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Wolf Can’t Get Current Budget Done, Vows Severance Tax Next Year

Will Pennsylvania’s governor, Tom Wolf–the most liberal governor in America according to the nonpartisan website InsideGov–finally agree to a budget framework and budget to end a nearly six month delay he has caused? He promised to try and get the budget done by Thanksgiving–but you know all about politicians and promises. That promise is now out the door. The latest news we’ve been able to locate says Wolf’s plan to hike the sales tax in order to give a break on property taxes is now dead. The one thing that every news account we read says is this: Wolf is promising to resurrect the issue of a Marcellus Shale severance next year and every year thereafter of what we predict will be a very short tenure as PA’s governor. Wolf is fixated on raiding drillers and landowners in order to transfer their hard-earned money to those who don’t earn money–teachers unions…
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CONSOL’s Bankers Say Company has $2B Worth of Gas in the Ground

CONSOL Energy, one of the larger drillers in the Marcellus/Utica (based in Pittsburgh, a coal company transitioning to a gas company) issued an announcement yesterday that they’ve passed their twice-per-year test by their bankers and that once again their “borrowing base” is reaffirmed as being worth $2 billion. So what’s a borrowing base and why is it important?…
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Will Pilgrim Pipeline be Allowed to Settle in the NY World?

Pilgrim Pipeline Holdings is developing an East Coast pipeline to carry refined petroleum products such as gasoline, diesel, heating oil, and jet and aviation fuel northbound from Linden, New Jersey to Albany, New York (178 miles). In addition, a second pipeline will carry crude oil from Albany south to NJ and other locations. Two pipelines, side by side, liquids flowing through them in different directions. Pilgrim (how apropos this announcement comes at Thanksgiving) has just filed an official application with the Thruway Authority. Their plan is to lay 79% of the pipeline within the Thruway right of way. No, technically this is not a Marcellus/Utica story–although some of the crude they plan to flow from Albany to NJ refineries may indeed come from the Marcellus/Utica. It’s a pipeline for fossil fuels and that will surely bring the crazies right out of the woodwork, which is why we bring you this story…
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Both MarkWest Co-Founders Strongly Against Sale to Marathon

There is a fevered battle going on to prevent Marathon Petroleum from consummating a deal to buy MarkWest Energy. Yesterday we told you that MarkWest was touting two more proxy advisory firms, in addition to a previously named advisory firm, have endorsed the deal (see War of Words Continues: 2 More Proxy Cos Endorse MarkWest Sale). We also told you that one of MarkWest’s two co-founders and a former CEO of the company, John Fox, is dead set against the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). The other MarkWest co-founder, Brian O’Neill, has now come out against the sale as well…
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Marcellus & Utica Shale Story Links: Tue, Nov 24, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Maryland targeted by fractivists, again; Guernsey County opposes waste treatment facility; Lebanon West II pipeline approved by FERC; uncompleted wells will stunt production growth in 2016; Steins’s law and oil prices; the billionaires behind attacks on Exxon; and more!
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