FERC Approves Atlantic Coast, Mountain Valley Pipeline Projects

Great news delivered late Friday afternoon: The Federal Energy Regulatory Commission (FERC) issued final, full approvals for both the Atlantic Coast and Mountain Valley pipeline projects. Atlantic Coast is a $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. Mountain Valley is a $3.5 billion, 303-mile natural gas pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. Both projects still face an uphill battle before they get built. The North Carolina Dept. of Environmental Quality (DEQ) issued a rejection letter for Atlantic Coast last week (see NC DEQ Rejects Plan for Atlantic Coast Pipeline – What’s Next?). The rejection, while a setback, does not mean the project is barred from the Tar Heel State. It simply means Dominion must provide more information to NC DEQ. Similarly, Mountain Valley first received a water permit from the West Virginia Dept. of Environmental Protection (DEP) in March, later to be withdrawn in September (see Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit). Again, not a catastrophic development–it just slows down the process. Although FERC approved both projects, one of the three FERC commissioners, Cheryl LaFleur (Obama appointee holdover) voted against approving both projects. Her stated reason is that she does not think either project is in the public interest. Antis are (predictably) frothing at the mouth over FERC’s approvals, promising to sue, protest, and do whatever it takes to stop both projects. However, with FERC’s blessing, these projects are now assured of getting built. Below we have copies of the FERC approvals, along with select reaction to the news…
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NY DEC Appeals FERC Override of Millennium Pipe Decision

The Andrew Cuomo-corrupted New York Dept. of Environmental Conservation (DEC) on Friday filed an appeal/challenge with the Federal Energy Regulatory Commission (FERC) contesting FERC’s recent ruling that essentially emasculates the DEC regarding their rejection of a tiny pipeline project in Orange County, NY. On Aug. 30, the DEC issued a letter to FERC and Millennium Pipeline denying Millennium’s request for a water permit to build a 7.8 mile pipeline spur from the main Millennium Pipeline to a natural gas power plant under construction in Orange County (see Corrupt NY DEC Denies Water Permit for 7.8 Mile Power Plant Pipeline). In their rejection, the DEC claimed that FERC’s review of the power plant project (that the pipeline will feed) is deficient based on a recently-decided court case about a pipeline project in Florida. Since the project the pipeline would feed is deficient (in DEC’s view), so too is the pipeline that feeds it. A few weeks later, in September, FERC fired back by overruling NY DEC and granting the project permission to proceed without NY approval (see History Made! FERC Overrules NY DEC on Millennium Pipe Permit). The DEC is now contesting that move, filing a petition for rehearing with FERC, which is the first step. If FERC decides to not reopen the case, the DEC will then file a lawsuit with the Court of Appeals. In their rehearing request, the DEC asks (begs, pleads) FERC that while this process is under way, the agency should not issue permission for Millennium to begin construction of the pipeline. Construction is urgently needed because the natural gas-fired electric plant the pipeline is supposed to feed will be done in early 2018. It will be interesting to see if FERC decides to snub the DEC (which we think/hope they will)…
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Constitution Pipeline Asks FERC to Override NY DEC

The Andrew Cuomo-corrupted New York Dept. of Environmental Conservation (DEC) took more than two years to evaluate and eventually reject the Constitution Pipeline–a $683 million, 124-mile pipeline from Susquehanna County, PA to Schoharie County, NY to move Marcellus gas (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). Constitution went to court to overturn that decision, but ultimately failed in August (see Court Rejects Constitution Pipe’s Case Against NY DEC; Now What?). Many analysts and lawyers believed it was lights out for the project (see Energy Attorneys Hint it’s ‘Lights Out’ for Constitution Pipeline). Hold your horses! Constitution, borrowing a strategy that worked for Millennium Pipeline, filed a request last week with the Federal Energy Regulatory Commission (FERC), asking FERC to overrule the DEC’s refusal to grant the water permit needed for the project. There is precedence. FERC recently did the same thing in another case (see History Made! FERC Overrules NY DEC on Millennium Pipe Permit). Constitution is on firm ground. The DEC took over two years to review the project. Statutorily the DEC only has one year to complete a review. It was on that same basis that FERC granted Millennium permission to build their project (review was too long), and Constitution is hoping FERC will now do the same for them…
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PA DEP Tries to Expand Its Power, Republicans Try to Reign It In

A troubling development over the past generation or so has been the rise of executive agencies that formulate and adopt their own laws–without said laws being voted on by a legislature. Those new laws are called “regulations.” Long ago the legislative branch of government ceded some (much!) of its power to these agencies. Can you imagine a legislature debating over every new line in a Dept. of Motor Vehicles manual? Or debating standards for nuclear reactors? It was thought that specialists should oversee such minutiae, so the legislature delegated their authority to various executive branch agencies–like the DMV, Nuclear Regulatory Commission, and Environmental Protection Agency. Not only is this done at the federal level, it’s also done at the state (even local) level. On the state level in Pennsylvania, the Dept. of Environmental Protection (DEP) is charged with developing regulations to protect PA’s environment. The DEP sits in the executive branch–under the oversight of the governor (currently Tom Wolf). However, over the years the legislative branch has lost much of its oversight over the activities and new regulations adopted by these agencies. Coincidentally (or not), the PA DEP has just launched an effort to (our words) expand its power in making new regulations. At the same time, a Republican House member has introduced a bill that restricts regulatory agencies like the DEP, and gives the legislature more of a say in how they operate. Looks like a battle is shaping up in the Keystone State over the (expanding) role of the DEP…
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William Penn Foundation Exposed: Funds Penn East Pipe Propaganda

MDN friend Tom Shepstone (Natural Gas Now) has long pointed out that the William Penn Foundation funds a variety of front groups to push an anti-fossil fuel agenda. William Penn funds groups like the Sierra Club, THE Delaware Riverkeeper, and the New Jersey Conservation Foundation. William Penn also funds “news” outlets, including StateImpact Pennsylvania and NJ Spotlight. So this is how it happens: Riverkeeper, the Sierra Club and others issue wild claims about a project like the PennEast Pipeline, and then StateImpact and NJ Spotlight report it like it’s news. Incestuous. At the center of it all is the William Penn Foundation. MDN friend Kevin Moody does a great job of exposing this web of deceit targeting PennEast Pipeline in an article published on The Daily Signal
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Marcellus Driller Cabot Oil & Gas: Wall Street’s NatGas “Unicorn”

Cabot Oil & Gas has long been one of our favorite Marcellus drillers. We are friends with several members of the Cabot team. We are impressed with their many acts of philanthropy in northeastern Pennsylvania–donating millions of dollars to worthy causes in the local community where they drill. As we’ve pointed out many times, Cabot somehow spins gold out of hay in Susquehanna County–producing something like 2.5% of all the natural gas that’s produced in the U.S. from a single county. They have some of the best rocks in the shale business. Cabot’s assets have not gone unnoticed on Wall Street, where investors and analysts call the company “a unicorn.” While the term unicorn as applied to a company can have several meanings, as applied to Cabot the meaning is clear: the company is rare, and desirable. In an Investor’s Business Daily article, several analysts gush about Cabot in light of the beginning of construction of the Atlantic Sunrise Pipeline project. Cabot will be the main shipper on the new pipeline. Analysts are predicting next year, in 2018, Cabot’s production will increase 23% from this year. And in 2019, one analyst says Cabot production will be up a whopping 47%! You begin to see why Cabot has a reputation as a unicorn on Wall Street…
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Harrisburg NatGas Pipeline Manufacturer Laying Off 180

Dura-Bond Industries operates a pipeline and coating manufacturing plant in Dauphin County, PA–near Harrisburg. The plant, acquired from Bethlehem Steel in 2003, “manufactures and coats steel pipe in diameters from 24 to 42 inches, mostly for the natural gas industry.” You would think with all of these new pipeline projects in the works that business at the plant would be in overdrive. Unfortunately, that’s not the case. Because of a glut of steel imports from places like India and Canada, business at the plant is down. Dura-Bond recently filed a notice that within 60 days they will layoff 180 workers–about 40% of the workforce at the plant. Which is a shame in our book. While the company is mouthing platitudes about trying to rehire them at some point, the local union says don’t count on it. Those jobs are gone gone…
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Further Thoughts on PA’s Severance Tax “Mess”

Dan Markind

Last week MDN published an opposing viewpoint about the current severance tax debate in Pennsylvania (see Guest Post: An Opposing View of PA’s Severance Tax “Mess”). Please take time to read it. MDN editor Jim Willis has high respect for the author, Dan Markind (a partner with law firm Weir & Partners). When we published his post, we introduced it with our own thoughts. Dan had asked for the opportunity to respond to our intro, which we readily agreed to. Below is Dan’s response. We bring it with no further commentary necessary here, other than we like Dan and appreciate his views, even the ones we may not agree with…
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Marcellus & Utica Shale Story Links: Mon, Oct 16, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: PA House committee cancels meeting on severance tax bill; the many benefits of fracking IN the Delaware River Basin; thoughts on Carrizo’s Marcellus asset sale; Ohio the “key anchor” to Appalchia’s bright plastics future; convering WV buses to run natgas; Cheniere starts up 4th LNG export facility; OPEC’s message to shale drillers; drilling mud separator expands into US shale; Clean Power Plan’s counterfeit benefits; and more!
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