Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit

In March, the West Virginia Dept. of Environmental Protection (WVDEP) issued a federal water crossing permit for the Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA (see WV DEP Grants Mountain Valley Pipeline Water Crossing Permit). In June, a group of profoundly radical “environmental” organizations (Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network) filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit against the WVDEP for doing their job issuing the permit (see Radicals File Lawsuit Against WV DEP for Approving MV Pipeline). Because of the pressure of that lawsuit, last week the WVDEP caved and reversed their decision, rescinding (called “vacating”) the permit for MVP. The WVDEP says they will now “re-evaluate the complete application to determine whether the state’s certification is in compliance with Section 401 of the federal Clean Water Act.” Another victory for the forces of evil…
Continue reading

Ridgetop Capital Raises $200M to Invest in Marcellus/Utica Leases

Ridgetop Capital Partners, founded in 2007 and headquartered in the Pittsburgh area, is a private institutional investment firm focused mainly on the oil and gas space. That is, they raise money from rich people (and businesses) and invest that money in projects which they closely watch and influence, hoping to make their money back with a generous interest rate. A LOT of private money funds oil and gas development–there is nothing new or novel about Ridgetop. However, what is new and novel is that the company has just closed on another round of fundraising–chasing $200 million through the door–which they will now use to buy natural gas mineral rights (i.e. leases) in the Marcellus/Utica. The company previously invested ~$130 million in our region’s shale, snapping up ownership in over 30,000 acres (most, perhaps all of it, in joint ventures with major M-U drillers). Where will Ridgetop likely invest to buy new acreage? They’ve given us a big clue…
Continue reading

WV Surface Owners Win Important Case Against EQT re Drill Pad

A West Virginia Circuit Court case decided last week (by jury) found in favor of surface owners against a well pad constructed by EQT. The decision has far-reaching implications for not only surface owners and drillers, but mineral rights owners too. From the first time we read about so-called “joint development” legislation being promoted by the drilling industry in WV (back in February), we’ve not been fans (see More on WV’s Push for “Joint Development” Instead of Forced Pooling). In brief, there are a number of existing old leases in WV, signed before shale drilling began, that prevents drillers from drilling a horizontal well across an individual property boundary line–until a new lease is signed. Joint development says if the driller already owns the leases on all adjoining properties they want to combine into a drilling unit, they can do so without signing a new lease. The proposed joint development law seemed to us to be a way for drillers to avoid negotiating and paying more for new leases–which they should be willing to do! However, the case of Crowder and Wentz v EQT puts joint development in a new light for us. The case appears (to us) to be an abuse of power by surface owners against both drillers and mineral rights owners–by using the current prohibition against joint development. We certainly understand why surface rights owners would resist having a drill pad on their property, however, that’s life. They bought land (or inherited it, etc.) that doesn’t have mineral rights attached. Under existing WV law, a well pad can be drilled, taking 10-15 acres of the surface land (against the surface landowner’s wishes, but with compensation), in order to access the minerals under that specific piece of property. However, the court ruled last week in Crowder and Wentz v EQT that a driller cannot then use that same already-constructed well pad to further drill wells that access minerals under other, adjacent properties. Which in our book makes a strong case for a joint development law, to avoid this kind of misuse by surface landowners…
Continue reading

NY DEC Grants Permit for Millennium Pipe Eastern System Upgrade

The New York Dept. of Environmental Conservation (DEC) is tap dancing to explain why they refused to grant a water crossing permit for a 7.8-mile pipeline in Orange County to Millennium Pipeline Valley Lateral Project, yet a few days before that refusal they granted a water crossing permit to Millennium for the Eastern System Upgrade, which includes 7.8 miles of looping pipeline in yes, Orange County! The Millennium Pipeline stretches ~244 miles from Independence in Steuben County, NY to Buena Vista in Rockland County, NY. The Millennium, which is supplied by local production (much of it Marcellus Shale gas) and storage fields and interconnecting upstream pipelines, serves customers along its route in New York’s Southern Tier region and helps meet the energy needs of northeast markets. In August 2016, Millennium filed an application for what it calls its Eastern System Upgrade (see Millennium Pipe Asks FERC to Approve Eastern System Upgrade in NY). The ESU would add 7.8 miles of extra looped pipeline in Orange County, upgrade a compressor station in Delaware County, build a new compressor in Sullivan County and make some minor tweaks to metering stations in Rockland County. Just days before the DEC denied a water permit for the Valley Lateral Project (see Corrupt NY DEC Denies Water Permit for 7.8 Mile Power Plant Pipeline), the DEC issued the same permit for the much larger ESU project. The DEC denied Valley Lateral on the premise that the Federal Energy Regulatory Commission (FERC) had not done a proper job in evaluating the global warming potential of the new power plant that pipeline will feed. Yet the DEC saw no problem with bumping up capacity by 223 million cubic feet of natural gas flowing per day along the mainline Millennium, which the ESU project will do. Lucy! You have some ‘splainin to do! Aside from the flaming DEC contradiction, Millennium has just asked FERC to please hurry up a final OK of the ESU project, before the DEC changes it mind…
Continue reading

NY’s Critical Error in Denying Millennium Pipe for Power Plant

On August 30th the New York Dept. of Environmental Conservation (DEC) issued a refusal to grant a water permit to Millennium Pipeline to build a tiny, 7.8 mile pipeline spur from the main Millennium Pipeline to an under-construction natural gas-fired electric generating plant in Orange County (see Corrupt NY DEC Denies Water Permit for 7.8 Mile Power Plant Pipeline). The electric plant will get finished either way, whether it’s fed by natural gas or, alternatively, by dirtier fuel oil. The DEC has blocked many (not all, but many) recently filed pipeline projects in the state–because of undue and corrupt influence from our governor, Andrew Cuomo. Cuomo seeks to appease his radical/left base. The DEC previously denied a water permit for the Constitution Pipeline, stating Constitution had not provided all of the required information the DEC needs to properly evaluate the project (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). The DEC later refused a water permit for NFG’s Northern Access Pipeline project (see Cuomo’s Corrupt NY DEC Blocks NFG Northern Access Pipeline Permit). In the case of Northern Access, the DEC claimed they did have enough information, but in their opinion the project would do too much damage to Mom Earth. Both the Constitution and Northern Access projects are in court to try and overturn the DEC’s decision to block. However, in refusing Millennium’s tiny 7.8 mile pipeline to the Valley Energy Power plant, the DEC claimed the Federal Energy Regulatory Commission (FERC) didn’t do a proper job in evaluating the project’s impact on mythical man-made global warming. The pipeline will feed gas to an electric plant, and the DEC says the electric plant will produce air emissions that will help toast Mom Earth. A couple of top energy attorneys from the law firm Blank Rome explain how the DEC has made a critical error in judgment with their refusal of the Millennium project, a decision they say stands a “very high” chance of being overturned on appeal…
Continue reading

EXCO Resources Taps Out Remaining Line of Credit, Borrows $88M

EXCO Resources was once a sizable player in the Marcellus. They still have 184,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However the company, as we pointed out a year ago, has abandoned the Marcellus/Utica at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). The company flirted with bankruptcy for some time. In the end, they effectively turned over control of the company to its creditors (see EXCO Issues 2.7M Shares of New Stock in Lieu of Paying $23M). However, the company continues to struggle. Just last month they were threatened, for a third time, with having the company’s stock delisted from the New York Stock Exchange (see EXCO Resources Receives 3rd NYSE Notice of Delisting). EXCO has a line of credit (i.e. a “Revolving Credit Facility”) of $150 million. They’ve just borrowed the last $88 million of that total, to keep the company going…
Continue reading

Southwestern Energy Floats $1.15B in New IOUs to Pay Off Old IOUs

In a pair of announcements made this morning, major Marcellus/Utica driller Southwestern Energy said they are floating $1.15 billion of new IOUs (i.e. “notes”) that are unsecured and due to be repaid in 2026 and 2027. Part of the money will be used to pay off a 2015 loan for $327 million. It appears another part will be used to pay off up to $800 million of notes (a buyback or repurchase of the notes) due in 2020, 2022, and 2025. That is, Southwestern is swapping one form of debt for another. We’ve often observed this behavior in the energy industry–issuing new debt to pay off old debt. Bit of a shell game in our book, but then we’re not high finance people. Apparently this is not an unusual circumstance with large corporations, and nothing to be alarmed about…
Continue reading

No DRBC Frack Ban…Yet; A Look at DRBC Corruption & Incompetence

Last week the rumor mill was hot with speculation that on Friday the Delaware River Basin Commission would release a draft document outlining their proposal to ban hydraulic fracturing in the Delaware River Basin permanently (see DRBC Secretly Working on Permanent Delaware Basin Frack Ban). Fortunately, that didn’t happen. But don’t start celebrating just yet. The rumors are still swirling. Apart from a single Associated Press article (run in dozens of newspapers), there has been no other coverage of this big news. Why is that? Why is mainstream media so uncurious about a potential DRBC frack ban? The person doing the real work on this story is MDN friend Tom Shepstone. Writing on his blog site Natural Gas Now on Saturday, Tom did a masterful job of chronicling the foibles of the DRBC–and he laid out how we got to where we are now, with a potential permanent ban. In a nutshell, landowners in Wayne County, PA sued to reverse a grievous error, challenging the DRBC’s authority to regulate fracking in the basin. That lawsuit, and the very real possibility that a decision will go against the DRBC, prompted radical environmental groups like THE Delaware Riverkeeper to push for a DRBC permanent ban. The effort for a permanent ban, which (for now) would only affect Wayne and Pike counties in PA, went into overdrive a few months ago. Here’s Tom’s excellent article, which will bring you up to speed and prepare you for when the news of a permanent ban eventually does break–possibly this week at the DRBC regularly scheduled meeting…
Continue reading

Marcellus & Utica Shale Story Links: Mon, Sep 11, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH Utica natgas helps lead the shale revolution; what are Cabot’s key strategies for 2017/2018; NY natgas producers sent pack in shift to ‘clean energy’; weekend rally against Mariner East 2 doesn’t amount to much; ethane storage hub location could come down to politics; Yale’s fracking investments; US shale producers a great place to invest; recent court ruling may impede new gas pipelines; Senate picks up the pace on confirming more Trump energy nominees; the connection between Sierra Club and Russian money; and more!
Continue reading