PA DEP Releases New Regs re Methane & Air Pollution at Drill Sites

Yesterday the Pennsylvania Dept. of Environmental Protection (DEP) unveiled new regulations to clamp down on methane emissions and other other air pollution that allegedly comes from shale drilling sites. The onerous new regulations, not in effect yet (to be published “soon”) are prompted by bullying from the federal Environmental Protection Agency, an agency which is about to get gutted (see Master Stroke: Trump Selects OK AG Pruitt to Lead EPA). That doesn’t stop the Gov. Wolf’s DEP from plowing forward with new rules (copies below). As an interesting aside, MDN editor Jim Willis attended a conference yesterday in New York City where Harold Hamm, CEO of Continental Resources, said more methane leaks from the gas lines under New York City each day than from ALL oil and gas drilling activity across the country! Yet the Wolf DEP, with a plank sticking out of its eye (methane leaking like a sieve from major cities), is going after the sawdust in o&g’s eye (tiny bit of methane escapting at well sites). Go figure. To be fair, DEP’s new regs do more than just try to force every last molecule of methane to be “captured” (nasty fugitive molecules causing Mom Earth to toast)–DEP will also go after a reduction in some other types of air pollution, including VOCs (volatile organic compounds). But capturing fugitive methane in a vain attempt to combat mythical man-made global warming is the main thrust of the effort. Once the DEP publishes the new rules in the Pennsylvania Register, the industry (and radical environmentalists) will have 45 days to comment before the new rules magically become unlegislated laws…
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FERC Allows KM to Begin Broad Run Expansion Project in KY

Last week MDN brought you news about Kinder Morgan’s Broad Run Expansion Project will expand transportation capacity of natural gas on the existing Tennessee Gas Pipeline system. Antis tried to stop the project, but FERC rejected their pleas (see FERC Denies Anti Request to Stop KM’s Broad Run Expansion Project). The Broad Run Expansion includes the construction of two new compressor stations in Kanawha County, WV, one new compressor station in Davidson County, TN, and one new compressor station in Madison County, KY. Tennessee Gas also expects to increase compression capacity by modifying two of its existing compressor stations in Powell and Boyd counties in KY by replacing existing capacity with new, higher-rated horsepower compression units. The project will provide an extra 200,000 dekatherms per day (Dth/d) of transportation capacity along the same capacity path as the Broad Run Flexibility project, which was placed in service on Nov. 1, 2015. All of the additional gas will come from Antero Resources and their Marcellus/Utica program. On Wednesday FERC gave Kinder Morgan permission to upgrade the two existing compressor stations in KY, but (for now) that’s all–something called a “partial notice to proceed”…
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PES’ Phil Rinaldi Stepping Down; Will Philly Energy Hub Die?

Phil Rinaldi

“Fossil Phil,” Philip L. Rinaldi, is stepping down as CEO of Philadelphia Energy Solutions. In 2012 Sunoco and the Carlyle Group formed a joint venture to operate the troubled Sunoco refinery in South Philadelphia (see Sunoco & Carlyle Group Ink Joint Venture for Philly Refinery). They put Phil Rinaldi in charge. The deal saved 850 jobs from disappearing and led to adding even more jobs as the refinery, under the leadership of Rinaldi, began processing shale oil. Since then the price of oil has dropped, a lot. But the facility still chugs along. Phil is turning 71 and didn’t offer a reason for why he’s leaving the post (although retirement is the apparent reason). Phil does intend to continue on as Chairman of the Greater Philadelphia Chamber of Commerce’s Energy Action Team–a group dedicated to turning Philadelphia into an “energy hub” by building more pipelines to the city from the Marcellus. Some antis have intimated that Phil leaving his post spells the end of the dream to turn Philly into an energy hub, which is, of course, nonsense…
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80% of PA, OH, VA Voters Support More Pipelines & Power Lines

The National Association of Manufacturers (NAM) recently commissioned a survey of residents in Pennsylvania, Ohio and Virginia–so-called “battleground” states that can swing either Democrat or Republican come election-time. The survey found that an average of 80% of the respondents support energy infrastructure spending, by both government and private companies. Which is remarkable. When was the last time you heard of 80% of the American electorate agreeing on anything? This survey takes the wind out of the sails of the “keep it in the ground” movement of fossil fuel haters, like those opposing pipeline projects like NEXUS, Rover, PennEast, Atlantic Coast, Atlantic Sunrise, Mountain Valley, et cetera et cetera. Here’s the results of the NAM survey…
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Yes Virginia, There IS a Severance Tax in Pennsylvania!

The Commonwealth Foundation for Public Policy Alternatives, commonly known as the Commonwealth Foundation or CF, is Pennsylvania’s free-market think tank. CF’s mission is simple: Transform free-market ideas into public policies so all Pennsylvanians can flourish. In a recent post on the CF blog site, the organization makes the strong case that although PA’s levy on shale drillers in the state is called an impact “fee”–it’s actually a tax. Quoting the Independent Fiscal Office (IFO), the CF post says, “the current impact fee is equivalent to a 6.9% severance tax–higher than severance taxes in Louisiana, Wyoming, and West Virginia.” Here’s what CF has to say about PA’s severance TAX…
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EPA Final Fracking Report (May) Say Fracking Doesn’t Harm Water

In 2015 the federal Environmental Protection Agency, after spending four years to evaluate 950 studies on hydraulic fracturing, conducted nine of their own original studies, and came to the conclusion that there is no “widespread, systemic impacts on drinking water” from fracking (see EPA Draft Report Says Fracking Doesn’t Pollute Groundwater Supplies). That finding caused anti-fossil fuel wackos to become apoplectic. Antis immediately began a campaign of bullying and intimidation against the EPA to get them to change the finding. That is, to cheat. It looked like it was working when the EPA appointed a special, stacked panel to review the original draft report, and (unsurprisingly) they questioned the original finding (see Will EPA Whore Itself to Antis and Change Fracking Water Study?). The final report is due to be released soon–before the Obamadroids leave town in January. Everyone is waiting to see what the EPA will say in the final report. Interestingly to us, the Institute for Policy Innovation (IPI) says the EPA will “likely” stick to the original conclusion–that fracking does not contaminate groundwater…
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Canadian Bear Head LNG’s Long-Shot Plan to Get Gas

For some time we’ve tracked the progress of an LNG export plant planned for the eastern shore of Nova Scotia, the Bear Head LNG project. Of all the Canadian LNG export projects, Bear Head seems to have the most momentum. The project has received most (if not all) of the necessary permits it needs to proceed. But it’s not been without its bumps along the way (see Bear Head LNG Export Plant: Bad News & Good News). It had appeared that Bear Head would export Marcellus Shale gas as LNG–using gas from Spectra Energy’s Access Northeast project that would expand and connect existing Spectra pipelines, connecting them to the Maritimes & Northeast pipeline all the way to Nova Scotia (see Spectra’s Access Northeast Pipe Wins Important Approval in Maine). However, Spectra has hit roadblocks with their project. So Bear Head is now proposing a new 1,000 mile pipeline to bring western Canadian natural gas to the East Coast…
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Antero Floats $600M in New IOUs to Pay Off Older Debt

Antero Resources, one of the biggest drillers in the Marcellus, is going shopping for cash. In September Antero’s midstream (i.e. pipeline) subsidiary went shopping for cash and got $650 million (see Antero Midstream Floats $650M in New IOUs). Antero the mother ship is now shopping, looking to raise $600 million by floating new IOUs, otherwise called “notes.” The company plans to use most of it to pay off older debt…
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Respected Analyst Says Chesapeake Out of the Woods, No Bankruptcy

Richard Zeits is an oil and gas, commodities, and long/short equity research analyst. He writes on the Seeking Alpha website and is, without a doubt, the best writer we read on o&g matters on the SA website. So when we spotted an article he’s written about Chesapeake Energy, that its “distress risk” (i.e. bankruptcy) is now “remote”–we took notice. It wasn’t long ago that many were betting the company would declare bankruptcy (see Chesapeake Energy: We’re Not Filing for Bankruptcy…Yet). Here’s what Mr. Zeits had to say…
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Marcellus & Utica Shale Story Links: Fri, Dec 9, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Rockefellers paid for #ExxonKnew AND pulled in NY AG Schneiderman; Chesapeake still #1 driller in the Ohio Utica; Duke study ignores improvements in Marcellus road report; US shale will kill oil price rally; majority of biz execs happier since Trump elected; Asian LNG price goes above $8/Mcf; and more!
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