PIOGA Makes Legal Play to Stop Chapter 78a Regs from Taking Effect

appealLast Friday the Pennsylvania Independent Oil and Gas Association (PIOGA) filed a letter with the PA Joint House Senate Committee on Documents asking them to NOT publish the Dept. of Environmental Protection’s (DEP) final Chapter 78a Marcellus Drilling regulations, citing last week’s PA Supreme Court ruling on Act 13 as the basis. As MDN previously reported, the DEP plans to publish the final regulations in this week’s Oct. 8 Pennsylvania Bulletin (see PA’s New Article 78a Drilling Regs Go into Effect Oct 8). PIOGA previously sued asking the Commonwealth Court to block the new regulations based on the legal fact that key parts of Act 13, which Chapter 78a is based on, have been “enjoined” that prevent certain Chapter 78a provisions from being adopted in their current form. It kind of gets into the weeds with legal speak, but essentially PIOGA is (a) warning these agencies they should not publish the new regulations, which prevents the regs from going into effect, until the invalid provisions are removed, and (b) further litigating to keep the regulations stopped. Below is an overview of what’s happening, along with the letter sent by PIOGA to the Joint Committee, and a copy of the appeal filed to the Supreme Court…
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DTE’s Reason for Buying M-U Pipes: NatGas-Fired Electric Plants

gasfiredpowerplantillustration1x1-largeLast week MDN brought you the news that DTE Energy, a BIG utility and midstream company based in Detroit, MI, is buying 100% of M3 Midstream’s Appalachia Gathering System (AGS), located in Pennsylvania and West Virginia, and 40% of M3’s Stonewall Gas Gathering (SGG), located in West Virginia (see DTE Energy Buys Marcellus/Utica Pipelines for $1.3B). MDN speculated that DTE wants the pipelines because DTE wants a reliable source cheap, abundant, clean-burning Marcellus/Utica natural gas for its utility customers in the Midwest. While that’s true, there’s a bigger reason why DTE is making a play for the pipelines–because they intend to build $1.5 billion of new natural gas-fired electric plants in Michigan. Since that price tag will build one, maybe two plants, and because DTE is shutting down three of its five coal-fired plants in the state, we think there’s a good chance DTE will build more new gas-fired plants–powered by Marcellus/Utica gas…
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FERC Tells Columbia to Open Valves on Utica Access Pipeline in WV

Proposed_Utica_Access_Pipeline-20150212
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In January 2016 the Federal Energy Regulatory Commission (FERC) approved a plan by Columbia Pipeline to build five miles of new pipeline and an upgrade to a compressor station in Kanawha County, WV (see Columbia Pipeline Gets FERC Approval for WV Utica Access Project). The $45 million “Utica Access” project will transport 205 million cubic feet per day (MMcf/d) of Utica Shale gas for Eclipse Resources Corporation to trading points on the Columbia Gas Transmission interstate pipeline system. Last Thursday FERC gave Columbia (now owned by TransCanada) the green light to open the valves on the new pipeline…
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Cabot Hits Major Milestones in the Marcellus, New Records to Come

10th-anniversaryLast week Cabot Oil & Gas CEO Dan Dinges issued a company-wide memo to observe a very important milestone in the life of the company–the 10th anniversary of the start of drilling at the company’s very first Marcellus Shale well in Susquehanna County, PA. With a quick stroll down memory lane to recount other major milestones reached over the past 18 months, Dinges then makes this powerhouse prediction: In the “next couple of years” when new pipelines (like the Constitution) finally go online, Cabot plans to hit 4 billion cubic feet (Bcf) of Marcellus Shale production–per day! Going from memory, that would vault Cabot to the position of #1 Marcellus gas producer, ahead of the current #1, Chesapeake Energy. Put into context, the U.S. produces around 71-72 Bcf/d right now. If Cabot begins producing 4 Bcf/d, that represents 5.5% of the entire production of natural gas in our country–from a single driller in a single county in northeastern PA. Behold the miracle of the Marcellus! MDN adds our own hearty congratulations to our friends at Cabot (Buddy, George, Bill and Brittany)…
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130 Tanker Trucks/Day in Ohio End as Cornerstone Pipe Begins

Cornerstone Pipeline Route Map
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Last week MDN shared the good news that Utica Shale condensate (very light oil) had begun flowing through the new Marathon Petroleum Cornerstone Pipeline (see Utica Condensate Begins Flowing Through Cornerstone Pipeline). The Cleveland Plain Dealer published an interesting story about the pipeline on Saturday, explaining in depth what condensate is and how/why Marathon upgraded its refinery in Canton to handle it. However, it was another point made in the story that caught our attention. The MarkWest Energy (now a part of Marathon) processing plant in Cadiz, Ohio cleans and separates out condensate from other natural gas liquids (like ethane and propane) before sending the condensate to the Canton refinery. Until the Cornerstone went online, it took 130 tanker trunk trips PER DAY, operating around the clock, to cart the condensate from Cadiz some 60 miles to Canton (and then back for another pickup). While the trucks are still operating, for now, once the pipeline is fully operational and pumping at full capacity, it will end those truck trips…
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Post Carbon Institute’s Peak Marcellus Gas Theories Obliterated

post-carbon-instituteIn 2014 David Hughes from the so-called Post Carbon Institute made one of the stupidest remarks he’s ever made when he said, “I think the Marcellus is getting pretty close to the peak in [total] production…I wouldn’t be surprised to see a peak in the Marcellus this year, maybe next year at the latest.” Dumb. Marcellus (and Utica) production has done nothing but go up since that time. Oh, the last few months the EIA has reported that Marcellus production is declining–a little bit. But that’s because of a lack of new drilling due to low low prices, a situation that is right now turning around. You can expect Marcellus production to pick up again very soon. The fact is, there is decades (perhaps centuries) of Marcellus/Utica Shale gas supplies waiting to be tapped–with no let-up in sight. Forbes contributor Jude Clemente, one of our favorite Forbes writers, goes on a riff to talk about the huge amount of gas available in the northeast, and its key role in U.S. production…
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“Endangered” Bumble Bee May Slow/Stop O&G Projects in Northeast

rusty-patched-bumble-beeOver the years MDN has watched various threatened and endangered species get listed, which impacts drillers and midstreamers. Most notably in the northeast has been the northern long-eared bat (see US Fish & Wildlife Fixes Wrong Problem for Northern Long-Eared Bat). The U.S. Fish and Wildlife Service (USFWS) is responsible for recommending and listing varies species, empowered to do so under the Endangered Species Act (ESA). USFWS admitted the long-eared bat is threatened because of something called white nose syndrome–which has nothing to do with habitat destruction. Yet drillers and midstreamers are hamstrung with regulations to “save the bats”–even though they are not the ones causing harm to the bats. It’s a typical Washington solution: “fix” the wrong problem. The USFWS is about to do it all over again, this time with the lowly bumble bee. On September 22, 2016 the USFWS published a proposed rule to list the rusty patched bumble bee (Bombus affinis) as “endangered” under the ESA. The rusty patched bumble bee is found in the Midwest and eastern parts of the country. If it gets listed, it will have SIGNIFICANT impacts on drillers and midstreamers, according to the lawyers at top international law firm Locke Lord…
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AccuWeather Winter Forecast: “Frequent Snow” Will Blast Northeast

accuweatherWeather is a major driver in the natural gas markets and primary cause for ups and downs in the price of natural gas. The hotter or colder it is, the more natgas is used for cooling (in the summer) or heating (in the winter). Some of the best weather forecasters in the business can be found making predictions for the energy markets–specifically in the natgas market. One of the country’s top weather outfits is AccuWeather. The forecasters at AccuWeather have just released their long-range forecast for the winter months in the U.S. Their forecast shows much colder and snowier conditions in the northeast than we experienced last year. If their prediction comes true, it means gas prices in our region may move higher (watch out pipeline deficient New England, your gas AND electric rates will skyrocket again), and it means drillers will face challenges with drilling through the winter months. Here’s what AccuWeather says (and shows, via maps) about the coming 3-4 months across the country…
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Marcellus & Utica Shale Story Links: Mon, Oct 3, 2016

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: Downstream expansion will boost ethane prices; northeast pipeline plans will affect more than just the northeast; Bob Howarth goes all-in on fractivist shilling; Ohio Valley running gasoline made from Utica oil in cars; PA DEP won’t change water notifications even though Supreme Court struck down law; counties near cracker plant will benefit; OPEC decision good news for shale in US; and more!
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