WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties

A significant court case was decided last week in West Virginia. The WV Supreme Court ruled in a gas royalty case that not only has significant implications for WV landowners (and drillers), but also may reverberate across the border into neighboring Pennsylvania where the same issue has been a long and contentious fight–what we call a civil war between landowners and drillers. Like all such cases, this one is complicated and not easy to summarize, but we’ll do our best. The WV Supremes have just handed down a decision that says, in essence, that EQT (and by extension other drillers) cannot deduct post-production expenses when calculating royalty payments to landowners. Specifically, the justices in their ruling said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” Yikes! That is fantastic news for landowners who now have a case to recoup money deducted from their checks–and really bad news for drillers who will owe that money. The big winners are, of course, the lawyers who will litigate this for years to come. However, hold on to those briefs–EQT has just appealed the decision, asking the WV Supreme Court to reconsider their decision, gently chiding the court for erring in their interpretation of state law on royalties…

Continue reading

OH Gov Kasich May Veto Misnamed ‘Tax Relief’ for Utica Drillers

“The Nerve”

Ohio Gov. John “foreigner hunter” Kasich has been hellbent for leather to tax Utica drillers more, over the past, what? Four years now? He’s wanted to hike the existing severance tax in a bid to give away driller’s money to other people–like a good Democrats and RINOs do (see OH Gov Kasich the Bully: Accept My 6.5% Tax or Risk a 10%+ Tax). So image how it must have galled Kasich to learn that a bill he’s about to sign, or veto, has provisions “slipped in” that clear up language regarding tax exemptions for the oil and gas industry (the nerve of those lawmakers!). Ohio state auditors have taken advantage of unclear language to “aggressively” go after oil and gas companies over legitimate tax breaks they receive under Ohio law (to not pay taxes on equipment used directly in producing oil and gas). Lawmakers want to end the tax witch hunts by clearing up language, and Democrats and RINO Kasich are trying to position the issue as a “tax break” under which up to $264 million would have to be refunded to Big Oil. It’s nothing of the sort…
Continue reading

UGI Ready to Begin Flowing Gas via $150M Sunbury Pipeline in PA

Sunbury Pipeline map – click for larger version

In December 2014 Pennsylvania utility company UGI pre-filed an application to build a new 35-mile, 20-inch pipeline to feed a natgas-powered electric generating plant being built in Snyder County, PA (see UGI Pre-Files with FERC for New Marcellus Pipeline in Central PA and UGI Building 35-Mile Pipeline for Panda Power Electric Plant). The project, called the Sunbury Pipeline, was estimated to cost $150 million–money that goes into the local economy. It took long enough, but in May 2016 the Federal Energy Regulatory Commission (FERC) finally approved the project (see UGI Sunbury Pipeline Gets FERC Approval, Built by November?). UGI broke ground on the project in August (see UGI Breaks Ground on Sunbury Pipeline for NEPA Electric Plant). Here it is December, and the Sunbury Pipeline is done and expected to go live in January…
Continue reading

FERC Issues Certificates for 3 Spectra Energy Pipe Projects in M-U

In August, the Federal Energy Regulatory Commission (FERC) issued a favorable environmental assessment (EA) for three Spectra Energy projects: Access South, Adair Southwest and Lebanon Express (see FERC Approves 3 Spectra Energy Pipe Projects in Marcellus/Utica). The three are part of an expansion of the Texas Eastern Transmission (Tetco) pipeline, owned by Spectra Energy. The combined projects will transport an additional 662,000 dekatherms per day (or 662 million cubic feet) of Marcellus and Utica Shale gas from Pennsylvania to Ohio, Kentucky and Mississippi. Once a favorable EA is issued, the final step is for the fat lady to sign–that is, for FERC to issue the final, actual certificate that says a company can begin building. That just happened. FERC has just issued the final certificate for the three projects, meaning compressor station upgrades will now begin, and new pipeline will get built through eastern Ohio…
Continue reading

Updated List of Proposed Laws in PA-OH-WV Affecting Marcellus/Utica

The legal beagles at global law firm Norton Rose Fulbright continue to do us all a huge favor. Researchers at the law firm issue a quarterly legislative action update looking at bills and laws previously voted on, and new bills/laws introduced, affecting the oil and gas industry in Pennsylvania, Ohio and West Virginia. The “Quarterly legislative action update: Marcellus and Utica shale region” for 4Q16 (full copy below) begins with a quick listing by state for existing or new laws introduced, with descriptions for each bill/law. This is, in one place, pretty much everything you need to know about what new laws (i.e. regulations) are coming down the pike that will affect the Marcellus and Utica Shale drilling industry…
Continue reading

Canadian Bear Paw Pipeline for LNG Exports Gets Favorable EA

In March of this year, MDN told you that LNG Limited (from Australia) registered with the Canadian government for an environmental assessment for a pipeline they want to build in Nova Scotia–the Bear Paw Pipeline (see LNGL Applies to Build Pipeline to Bear Head LNG Export Facility). It is the first (and perhaps most important) step in getting a new 39-mile pipeline built that will run from the Maritimes & Northeast Pipeline to LNGL’s proposed Bear Head LNG export facility. LNGL envisions plentiful shale gas coming into the Maritimes & Northeast Pipeline either from the Marcellus region (via Spectra Energy’s Access Northeast Pipeline connecting to M&N) or from a long-shot plan to bring in gas to M&N from western Canada (see Canadian Bear Head LNG’s Long-Shot Plan to Get Gas). The “what gas will it be?” question still lingers. In the meantime, back at the Bear Paw Pipeline ranch–the Canadian government has just received a favorable environmental assessment (EA) for the pipeline project–which means the project has cleared all the major hurdles it needs to clear. The question now is, will LNGL actually build it?…
Continue reading

WV Social Worker Claims Marcellus Drilling Causes Homelessness

Lisa Badia, executive director of the Greater Wheeling Coalition for the Homeless “can’t be certain how many homeless people dwell in Hancock, Brooke, Ohio, Marshall and Wetzel counties,” but she is certain that part (much?) of the homeless problem is caused by Marcellus/Utica Shale drilling. Yep, sinking a hole in the ground causes homelessness. How? According to Badia, when drilling came to town 4-5 years ago, a bunch of out-of-staters showed up to work on drilling rigs (and for pipeline companies, etc.). Those out-of-staters began paying sky-high rental rates for apartments and trailers, driving up the price of rental housing throughout the region. And when that happened, folks on welfare could no longer afford to pay the rent (with our taxpayer money). If it’s a decision between booze and cigs or rent, you know what goes! So those po’ folk ended up sleeping on heating grates–because of that nasty, awful fossil fuel drilling…
Continue reading

Tragically Flawed Iowa Study Says Marcellus Dirt is Radioactive

Earlier this week so-called researchers at the University of Iowa released a tragically flawed study that purports to say Marcellus Shale drill cuttings (rock and dirt from drilling) are radioactive and if you put them in your landfill, you’ll start to glow in the dark. That’s the upshot from “research” that used just three samples FROM A SINGLE WELL as the basis of the “study.” This is anti-fossil fuel hogwash by a group of grad students who want to launch their careers by making a name for themselves. What they’ve actually done is ended their short careers with shoddy research. The paper is titled “Disequilibrium of Naturally Occurring Radioactive Materials (NORM) in Drill Cuttings from a Horizontal Drilling Operation” and appears in the journal Environmental Science & Technology Letters. Below is a summary of the “research” followed by an analysis by MDN friend and intrepid writer Nicole Jacobs, writing for Energy in Depth. Nicole rips apart this new study and exposes its tragic flaws…
Continue reading

Stone Energy Says Prepackaged Bankruptcy Plan on Way to Adoption

Yesterday MDN updated you on the situation with Stone Energy and their filing for bankruptcy (see Stone Energy’s Largest Shareholder Caves, Agrees to Bankruptcy). As we reported, Stone’s largest shareholder, who stands to take the biggest screwing under a bankruptcy plan, decided to negotiate a truce and allow the bankruptcy to proceed. Immediately Stone filed and then issued an update. The first court date is always critical, and according to Stone, it went well with the bankruptcy court ruling that Stone can pretty much do what it filed to do…
Continue reading

Gov. Wolf’s $300 Million Philadelphia Boondoggle Begins

Pennsylvania Gov. Tom Wolf is stealing $300 million from PA taxpayers and giving it to union bosses in Philadelphia–and everyone is celebrating like it’s some great thing. As we previously reported, over the past two years Philadelphia Energy Solutions (PES) has been on a mission to expand their operation at the Southport Marine site in Philadelphia by leasing an additional 200 acres to build a terminal for shale oil imports and exports (see Marcellus Caught in Crossfire of Philly Port Leasing Controversy). PES was willing to invest its own money in the project. But last month Gov. Tom Wolf canceled PES’ plans by giving a $300 million bribe, er a, “investment” of taxpayer’s money to turn that 200 acres into a big parking lot to park incoming cars arriving by container ships from Japan (see PA Gov Wolf Kills Plan for PES Refinery Expansion in Philadelphia). A bunch of (sleazy) politicians and union officials had a big Christmas party on Wednesday to celebrate the theft of taxpayer money for the project, and to pay Wolf on the back for being the thief…
Continue reading

Trump Taps Corp Raider Ichan as Adviser on Regulatory Matters

Carl Ichan – corporate raider and living fossil

You know we find corporate raider Carl Icahn detestable. Corporate raiders buy just enough stock in a company to throw their weight around. Raiders pressure management to offload important assets, and fire scads of people, all in an attempt to make the company “meaner and leaner” which is a euphemism for boosting the price of the stock so they can turn around and sell that stock and line their own raider pockets–as Ichan did with Chesapeake Energy, Cheniere Energy and others. We find it disgusting. You also know we have, from the beginning, supported Donald Trump for the presidency. We’ve made no secret about it. So we found it somewhat distressing that yesterday the Trump team announced that Icahn will be an unofficial adviser to Trump “on matters of regulatory reform.” Trump and Icahn have been friends for years, which explains the pick. Look, no one is perfect. We’re not ready to dump Trump. We’re sure this won’t be the last time we disagree with The Donald. We’re just expressing our displeasure in Trump’s pick of the odious fossil Icahn to advise him. The problem is, Ichan will advise Trump on reducing regulations that have the potential to personally benefit Ichan’s own investments. We secretly hope this is the one time biased mainstream fake media pressures Trump enough to change his mind…
Continue reading

Merry Christmas & Happy New Year – from MDN

MDN editor Jim Willis wishes you a very Merry Christmas and a Happy New Year! We expect most folks will take off next Monday as a holiday. In a rarity, MDN will not publish next week and will resume on Tuesday, Jan. 3. Don’t worry! If any earth-shattering news hits, we’ll return to cover it. Just taking a few days of R&R and thinking about a few changes coming to MDN for 2017. Stay tuned, you won’t be disappointed!

Jim Willis

Marcellus & Utica Shale Story Links: Fri, Dec 23, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Largest ethane carrier ever loads first cargo; four NRG Energy plants switch from coal to gas; fewer jobs in the oil patch as automation takes over; US natgas needs Mexico market; the art of the Arctic deal, Obama screws o&g one last time; Baker Hughes – a GE company; Trump supports Keystone XL pipeline; and more!
Continue reading