More on WV’s Push for “Joint Development” Instead of Forced Pooling

On Friday MDN ran a story of keen interest to both mineral rights owners and drillers in West Virginia–about an effort pushing new legislation this year in lieu of forced pooling, something called “co-tenancy” and “joint development” (see WV Won’t Push Forced Pooling, Will Push Joint Dev. & Co-Tenancy). Co-tenancy is pretty easy to understand: if there are multiple owners for the mineral rights under a property (something that happens fairly regularly in WV), you would only need a simple majority of those owners to approve a drilling lease. Currently, if one person with a teeny tiny share objects, it stops the process. But joint development was something of a mystery for us. We thought it meant if adjoining properties were signed with different drillers, they could more easily be combined for horizontal drilling. Although that may be the case, we were wrong about the the main intent of the new bill. A sharp MDN subscriber (someone from the industry) emailed to explain what’s really going on with this new bill. We also heard from a rights owner who would be affected. And from the West Virginia Oil & Natural Gas Association (WVONGA). We now have a better handle on joint development…
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PA Landowner Wins Case Against Chesapeake re Royalty Deductions

Paul Sidorek, an accountant representing some 60 northeastern Pennsylvania landowners who receive royalty income from drilling, is also a landowner himself. In 2009 Sidorek leased 145 acres, a lease that was eventually sold to Chesapeake Energy. Because of the troubles encountered by others, Sidorek wrote into his lease a 20% royalty and made sure the lease explicitly stated that no expenses could be deducted from the sale of the gas produced on his property. That is, NO post-production expenses could be deducted. And yet, Chesapeake disregarded the lease and deducted as much as 30 percent from his royalties, attributing it to “gathering” and “third party” expenses, an amount that adds up to some $40,000 a year (see Chesapeake Short-Changes PA Landowner on Royalty Checks). Sidorek fought Chesapeake in court, and ended up in arbitration. The arbitrator has just ruled–in Sidorek’s favor. The good news is that a PA landowner has gotten some justice against Chesapeake’s sleazy practice. The bad news is that it’s not a precedent and can’t be used in other court cases…
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WVDEP Loosens Permits for Compressors re Noise & Bright Lights

The colorful new Governor of West Virginia, Jim Justice, is wasting no time in showing his support and appreciation to the natural gas industry. During Justice’s State of the State address last week, he ordered his new head of the WV Dept. of Environmental Protection, Austin Caperton, to stop saying “no” to businesses that show up with requests (including the drilling industry). During a rambling address, Justice had this to say: “Now, I underline — underline, underline, underline — nobody loves the outdoors as much as me. Nobody loves water as much as me. We’re not going to break the law. We’re got going to do anything to damage the environment to the very best of our abilities. Or our waters. But we are not going to just say no.” And we have perhaps the first instance of that philosophy in action. The previous Gov. Earl Ray Tomblin Administration had enacted certain restrictions in WV permits for compressor stations–establishing noise and light restrictions to protect nearby residents. At the request of the West Virginia Oil and Natural Gas Association (WVONGA), Caperton removed those restrictions…
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Good Sign: Large Number of Abstractors Return to Wheeling, WV

If you’re in business, you’ve no doubt heard of “leading indicators” and “lagging indicators.” Example: When it comes to employment, a leading indicator would be an increase in work at temporary agencies (a rapid ramp-up in new employees), which means the economy is about to heat up and do better. A lagging indicator would be the official unemployment numbers–higher unemployment means an economy doing worse, lower unemployment means an economy doing better. When it comes to drilling activity, MDN has long used two metrics as leading indicators–that drilling activity is about to pick up. One is new permits issued. Drillers don’t spend big bucks to apply for permits they don’t intend to use–and use soon. However, there’s another, even earlier leading indicator, a predictor that more drilling is on the way in the next 6-12 months. That indicator is packed record halls at the local county clerk’s office. Before lease deals are signed, sealed and delivered, drillers must first ensure there is a clear title–that the person who says he/she owns the mineral rights for a given property, actually does. That’s where abstractors come in. Abstractors research deed records at the county clerk’s office. In the past we’ve noted there are some counties where there is a waiting line to get in to access records (see Tyler WV Courthouse Overrun with Abstractors – Drilling Signal?). When the price of natural gas crashed and drilling slowed, the large number of abstractors disappeared. Guess what? They baaaaack! At least in Wheeling, WV…
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PennEast Pipeline Calls THE Dela. Riverkeeper & Sierra Club Liars

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It’s about time the gloves came off and we started hitting back–hard. Kudos to PennEast for calling a spade a spade. In an announcement released Friday, PennEast Pipeline did everything but use the word “liar” in reference to the lies and propaganda being spread by Maya van Rossum (THE Delaware Riverkeeper) and her compatriots at the New Jersey Sierra Club. But we can tell you, the sentiment is there, loud and clear. PennEast is taking the gloves off and fighting back against outright lies coming from anti-drilling zealots, calling their screeds “false information” and “misinformation” and “flat-out false” with respect to a lie being spread about an alternate route for PennEast route through central Bucks County…
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Antis Ask FERC to Block Dalton Expansion Project, Using Greek Pipe

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In March 2015, Williams announced that its Transco pipeline subsidiary had filed an application with the Federal Energy Regulatory Commission (FERC) for its Dalton Expansion Project, which will expand the Transco and flow more Marcellus Shale gas from New Jersey all the way to Mississippi, primarily for electric generation plants, but also for local natural gas distribution by utilities (see Williams Files with FERC to Expand Transco Pipeline from NJ to MS). Most of the Dalton project will be built in, and benefit, the State of Georgia, by delivering natural gas to an existing electric generating facility in northern Georgia operated by Oglethorpe Power Corp., delivering gas for local distribution company Atlanta Gas Light, and delivering gas for the City of Cartersville. Transco has customers signed up under binding contracts for 100% of the Dalton Expansion Project, which will increase Transco’s capacity by 448,000 dekatherms per day of natural gas. FERC approved the Dalton Project last summer (see Marcellus/Utica Gas Heading to Georgia via FERC-Approved Pipeline). Antis are now attempting to use a creative new way to stop construction. They noticed that some of the pipe being used came from Greece, so they’re asking FERC to stop the project because it doesn’t use American-made pipeline…
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Antis Go Batty in Effort to Stop Ohio’s NEXUS Pipeline

Last week we pointed out that of all the major pipeline projects we had hoped the Federal Energy Regulatory Commission (FERC) would approve before Norman Bay quit the Commission in a huff, that NEXUS (runs through Ohio) did not get a go-ahead (see In FERC’s Game of Musical Chairs, NEXUS Pipeline Left Standing). We don’t expect it will take too long before FERC is back up to three or more Commissioners–a quorum–and can then authorize NEXUS. Antis are concerned about that too. So they’re looking for other ways to block the pipeline, hoping if they block it long enough, they can kill it. The latest tactic is nothing new–antis are saying since NEXUS is now delayed, the pipeline won’t be able to clear trees in time to beat a deadline of March 31. After that date you then must wait until October 1st. Why? To avoid killing any northern long-earned bats–which happen to be on the threatened and endangered species list. Antis make no bones about it–they earnestly hope the final NEXUS OK to begin construction comes too late in the season to finish tree clearing. NEXUS maintains the pipeline will be built and in-service by the end of this year…
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Josh Fox & Antis Plan to Disrupt DRBC Meeting This Wednesday

There may, finally, be movement by the recalcitrant Delaware River Basin Commission (DRBC) to finally, after eight years, begin to move in the direction of guidelines to allow shale drilling in two northeastern PA counties: Wayne and Pike. Why is there movement now? Because last year landowners launched a lawsuit against the DRBC, a lawsuit the DRBC now senses they may lose (see Wayne County, PA Landowner Sues DRBC Over Fracking Ban). So one of the chief antis, charlatan Josh Fox (of Gasland infamy) has put out the call to rally the radical troops to show up at this week’s DRBC meeting, with plans to disrupt the meeting. Bullying with fear and intimidation is the weapon of choice for this group…
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NJ Electric Rates Going Down – Thx to Marcellus Shale Gas

New Jerseyans, who don’t seem to want new natural gas pipelines, will see lower electricity rates this year–thanks to Marcellus Shale gas that flows through pipelines to electric generating plants–in New Jersey. Last Friday the NJ Board of Public Utilities approved the results of the state’s annual electricity auction. The annual auction sets wholesale electricity prices that the state’s electric utilities will pay and pass through to all NJ residential customers who have not chosen a third-party electric supplier. It is the eighth consecutive year that electric prices are either stable, or have gone down. The reason for the lower rates: “cheaper prices for wholesale natural gas.” And guess where NJ’s cheap natgas comes from? Yep–the Pennsylvania Marcellus…
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Marcellus & Utica Shale Story Links: Mon, Feb 13, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Cash blowing in the wind with NY’s wind-power giveaway; natgas is great for Mahoning Valley; uptick in downstream energy jobs; fake report from anti groups says New England pipe not needed; the world’s hottest oil play (hint, it’s not Saudi Arabia); Williams doubles down on the Marcellus; investor honeymoon with OPEC falters; and more!
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