Ohio EPA Slaps Rover Pipe with $431K Fine for Spills, Other Issues

Rover mud spill in April

The Ohio Environmental Protection Agency (OEPA) is frustrated with Energy Transfer and its management of constructing the ~$4 billion Rover Pipeline through the state. As MDN reported in April, Rover spilled some 2 million gallons of non-toxic drilling mud (i.e. bentonite) in three separate incidents (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp and Rover Update: Half of 15K Workers Now Hired, 2% Pipeline Laid). We know that the biggest spill happened in Stark County, and another sizable spill in Richland County. It appears spilling some mud wasn’t the only environmental violation. The OEPA has just assessed a $431,000 fine against Energy Transfer for “18 incidents involving mud spills from drilling, stormwater pollution and open burning at Rover pipeline construction sites have been reported between late March and Monday.” The latest mud spill happened on Monday–200 gallons in Harrison County. OEPA Director Craig Butler said, “All told, our frustration is really high. We don’t think they’re taking Ohio seriously…Normally when we have…a series of events like this, companies respond with a whole lot of contrition and whole lot of commitment. We haven’t seen that. It’s pretty shocking.” Not good news for Rover, when one of the main state regulators (that can stop the project) is leveling criticisms like that…Continue reading

Trump Nominates 2 New FERC Commissioners – Powelson & Chatterjee

Finally! President Trump has proffered two candidates to fill the (soon to be) four empty slots as commissioners for the Federal Energy Regulatory Commission (FERC). The FERC board is supposed to have five commissioners. It currently has two, and soon to be one. Three commissioners are needed to fulfill a quorum, allowing votes to be taken on important infrastructure (i.e. pipeline) projects. A number of vital Marcellus/Utica projects are on hold due to lack of quorum. The not-so-secret rumor running around Washington since March was that Trump would nominate Kevin McIntyre, Neil Chatterjee and Robert Powelson (see Breaking: Kevin McIntyre, Neil Chatterjee are Trump Picks for FERC and Names Mentioned for 3rd FERC Post, Incl. PA’s Powelson). Kevin McIntyre is an attorney with the Jones Day law firm. Neil Chatterjee is a senior energy adviser to Senate Majority Leader Mitch McConnell. And Rob Powelson is a member of the Pennsylvania Public Utilities Commission, and currently the president of the National Association of Regulatory Utility Commissioners (NARUC). The rumor was that McIntyre would be put forward as chairman of FERC. Yet, when Trump finally nominated, McIntyre was not in the mix. Will he come along later? Is he now off the list? At least with Chatterjee and Powelson, FERC will once again have a quorum. When? Both candidates have to be vetted by the Senate. If everything goes smoothly, a final vote could happen by early June. Unless the Democrats try to slam the breaks on…Continue reading

IOGAWV Opposed to Tiered Severance Tax – Proposal Now Dead?

The West Virginia legislature only meets for 60 calendar days each year and move quickly when the do meet. Unless the governor calls for a special session. Which has happened–to consider and pass a budget for the state. During the regular session earlier this year, newly-minted Gov. Jim Justice wanted and got a bill, Senate Bill (SB) 415 (full copy below) that tiers the severance tax on natural gas and oil. Justice would keep the existing 5% severance tax on oil and gas as the bottom tier–to be assessed if the “annualized gross value of natural gas per MCF” is $3 or lower. When the annualized value goes to $3.01, the tax goes to 5.5%. At $3.51, it goes to 6%. And so on to $9/Mcf when the tax would be 10%. It’s a crazy idea and frankly, we’re surprised a Republican governor that supports the shale industry wants it. Other o&g states are looking at lowering their severance taxes, not raising them. At any rate, the Independent Oil & Gas Association of West Virginia (IOGAWV) is strongly opposed to the plan. From what we can tell, as of a few days ago, the tiered severance tax for natural gas/oil plan has been withdrawn. Which is good news for both drillers and landowners…
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Carrizo O&G Puts Up ‘For Sale’ Sign on Marcellus/Utica Assets

Carrizo Oil & Gas, a Houston-based driller, actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15. During the company’s fourth quarter/full year 2016 earnings call, it seemed to us that Carrizo signaled a potential sale of their Marcellus/Utica assets (see Carrizo Actively Considering Sale of Marcellus/Utica Assets). Looks like we were right. Yesterday on an earnings call for 1Q17, Carrizo CEO S.P. “Chip” Johnson said, “[W]e have elected to test the market for our Appalachian assets, as they do not currently compete for capital with our three core oily plays. Monetization of these assets would leave Carrizo with a core position in three high-return, oil-weighted plays and should enhance our long-term production growth profile.” Translation: We’ve now put the “for sale” sign out on our Marcellus/Utica assets. What are those assets? We outline them below…
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Antero Resources: Production Hits New High of 2.1 Bcf/d, $268M Profit

Antero Resources, one of the biggest and best drillers in the Marcellus/Utica concentrating on just those two plays, turned in their first quarter 2017 numbers on Monday, and held an earnings call to discuss it yesterday. The first thing that caught our eye was that Antero hit a new production high in 1Q17. The company produced 2.1 billion cubic feet equivalent per day. Impressive. Perhaps even more impressive is that although the company lost $5 million in 1Q16, they swung to making a $268 million profit in 1Q17. Wow! Antero has one of the best hedging programs in the business. That is, they pre-sell their production at higher prices than other drillers, which is no doubt why they turned in such a great first quarter. The Marcellus was their main focus during 1Q17. Antero drilled and brought online 25 Marcellus wells. Although they fiddled with drilling and casing 13 Utica wells in the first quarter, they didn’t complete (i.e. frack) and bring any of their Utica wells online. Why? They’re waiting for the Rover Pipeline to get built first. Antero currently runs three rigs in the Utica. They plan to move one of the three to the Marcellus during 2Q17. Here’s a load of good information from Antero for 1Q17…
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MAX Environmental Walks Away from Marcellus/Utica

In 2014 MDN reported that MAX Environmental, operator of the Bulger hazardous waste landfill in Smith Township (Washington County), PA since 1958, planned to expand the landfill by 21 acres in order to handle an increase of drill cuttings and even liquid waste (which they will turn to solid waste) coming from Marcellus Shale drilling (see New Landfill Expansion in SWPA Aimed at Marcellus Drillers). That happened and the landfill currently accepts Marcellus/Utica waste. Earlier this year, MAX sold itself to Altus Capital Partners–a private equity investment firm–for an undisclosed amount (see Pittsburgh-based MAX Environmental Purchased by Investment Firm). With the closing of the deal, MAX’s CEO/owner, William Spencer, rode off into the sunset and Bob Shawver was brought in as the new CEO. Shawver, while acknowledging it would have been “nuts” not to pursue business from the shale industry when it was going gangbusters, is “retooling” MAX–away from depending on the Marcellus industry. If the industry continues to pick up, Shawver won’t turn down business–but MAX will no longer be known and branded as a company in the oil and gas space. Shawver is rebranding the company, and going after customers that are the region’s “traditional bread and butter”–manufacturing, industrial facilities and construction…Continue reading

6 Middletown Antis Sue Sunoco LP to Stop Mariner East 2 Pipe

As we reported last week, six anti-pipeline residents living near where the Mariner East 2 pipeline will pass asked the Middletown (Delaware County, PA) town council to reject the path of the pipeline near their property because it would, supposedly, pass closer than town code allows. At a meeting earlier in the week, town council told the residents they’re out of luck–the town will not pursue any action to block Mariner East 2. Period. The residents, amped up and agitated by Big Green groups, was rumored to be considering a lawsuit against the pipeline to force it to conform with Middletown’s ordinance. It’s no longer a rumor. The amped up antis, spurred on and using lawyers from said Big Green groups, filed a lawsuit in the Delaware Court of Common Pleas on Friday…Continue reading

PA DEP Acting Secretary McDonnell Will Soon Drop “Acting” from Title

Patrick McDonnell Acting Secretary, DEP

It won’t be long now and Acting Secretary of the Pennsylvania Dept. of Environmental Protection won’t have to “act” any more. In May 2016, DEP Secretary John Quigley was fired for using a PRIVATE email account to collude with his Big Green friends to try and bully PA’s legislators into supporting his onerous proposed regulations (see Smoking Gun: Copy of the Email that Got John Quigley Fired). Richly deserved. The man who took his place as Acting Secretary is Patrick McDonnell, a 19-year veteran of the DEP. Pat made it clear from the beginning he’d like to move from “acting” to full Secretary. It took Wolf long enough, but finally in September he put Pat’s name forward as permanent DEP Secretary (see Gov. Wolf Nominates Pat McDonnell to Head PA DEP, Finally). We’re not sure what the holdup has been, but the PA Senate Environmental Resources and Energy Committee finally held a hearing and grilled McDonnell yesterday, after which the panel voted to recommend he be confirmed. The full Senate has until May 23rd to cast that vote, which we expect they will do…Continue reading

Study Finds Fugitive Methane from O&G 97% Less than EPA Estimates

The federal Environmental Protection Agency (EPA), under the Obama/McCarthy reign of terror, far overstepped its charter by seizing power that doesn’t belong to it. Last May the EPA issued new methane rules in a back-door way to try and regulate the oil and gas industry (see EPA Does it Again: Tries to Destroy O&G with New Methane Rule). In pretty short order several states sued to stop the order, which eventually turned into 15 states (see 15 States File Lawsuits to Block EPA O&G Methane Rule). The EPA claimed, at that time, that methane is leaking out of bore holes, pipelines, valves–just about everywhere on a well pad. And methane (as the fairy tale goes) is a gajillion times more “potent” than carbon dioxide when it comes to causing man-made global warming. The problem is, the EPA used estimates, calculations, algorithms, spreadsheets as their “evidence.” They never went into the field and actually measured anything. Such a field study has now been done–by the EPA–in the Uinta Shale Basin in Colorado (full copy below). And guess what the researchers have found? While there is some methane leakage here and there, the EPA previously OVERESTIMATED the leakage–by 97%! Yes, “EPA researchers found methane emissions from intermittent bleed devices were 97 percent lower than the standard emission factor for intermittent pneumatic control devices EPA uses for estimates in its Greenhouse Gas Inventory(GHGI).” In other words, the entire methane rule the EPA forced on the industry was based on lies…a foundation of sand…a house of cards. Why does that not surprise us?…
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Marcellus & Utica Shale Story Links: Wed, May 10, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Cove Point and the Atlantic Seaboard – in search of gas; Rice Energy considers selling part of midstream unit; legal battles continue in OH over oil & gas rights; five pipe projects in the mix in southeast OH; three reasons to invest in OH gas-fired power; CONSOL sees potential in the Utica where others don’t; officials should put added focus on WV cracker project; 18 protesters arrested for blocking pipeline project in Mass.; shale drillers are outspending the world by $84B; idiotic cities voting to cut their nose off by adopting resolutions to use 100% renewable energy; EOG uses science to boost production; and more!Continue reading