Update on PA Severance Tax Bill – More Progress, House Leaves Town

We have a brief respite, but are still in a dangerous position. The Pennsylvania House continued to debate and vote on amendments to House Bill (HB) 1401 yesterday–the Frankenstein bill introduced by RINOsaur Gene DiGirolamo (“Republican” from the Philadelphia area) that would tack a 3.2% severance tax on top of the existing ~5% impact tax (called a “fee”) already levied on Marcellus drillers, thereby effectively killing any new Marcellus drilling in the state (see PA Frankenstein House Bill Merges Severance Tax & Minimum Royalty). Debate on the bill began Monday, making quick progress (see Disastrous PA Severance Tax Bill Debated in House, Makes Progress). More progress was made yesterday. Some amendments to the bill passed, some failed–and then the House “abruptly adjourned” late last night without voting on the full bill itself. They got outta Dodge. The House returns to Harrisburg for more voting on Dec. 4th, so we have nearly two weeks of a reprieve before the battle begins again. It is vital this bill NOT PASS–for the future of Marcellus drilling in PA. Below is a list of the amendments that have, so far, passed and not passed, and how they tweak and change the overall Marcellus-killing HB 1401 bill…
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DRBC Lawyer Nearly Faints 2nd Time When Questioned by Fed Judges

This is getting pretty old, fast. Two weeks ago MDN told you about a lawsuit that finally got it’s day in court–a case brought by a Wayne County, PA landowner against the Delaware River Basin Commission (DRBC) over its ongoing, 10+ year ban on fracking in the Delaware River Basin (see DRBC Attorney Faints in Federal Court During Questioning). Under “heaving questioning” the attorney for the DRBC fainted in the court room, ending the session that day. Both sides were back in court yesterday to finish what began two weeks ago, and the judges once again turned up the heat on the DRBC attorney–and he almost fainted again, having to sit down (delaying proceedings for a time). Every time this lawyer gets tough questions that he doesn’t like, he pulls this fainting routine. Is it legitimate? Does he have a “condition?” Frankly, we don’t care. His “condition”–if that’s what it is–keeps blocking justice. If he’s not up to the job, remove him. Get someone who can handle the pressure. At least the session yesterday finished. Oral arguments are now done. MDN friend Tom Shepstone listened to a recording of the session and filed a fantastic report, recounting the back and forth–and how the DRBC’s defense collapsed (metaphorically) under the sharp eye of the judges doing the questioning. The DRBC and its shill leader Steve Tambini (a MAJOR disappointment since he was appointed in 2014) were exposed yesterday as the obstructionists they are…
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Belmont County, OH Passes Carroll County for Most Utica Permits

Since Aubrey McClendon and Chesapeake Energy first burst on the scene to announce the Utica Shale is “the best thing to hit the state of Ohio economically since maybe the plow” and Chesapeake leased and drilled in Carroll County, OH, Carroll has been the single most Utica drilled county in the state. Activity in Carroll remains strong, but as the play has matured and drillers have experimented in other counties, the “sweet spot” for Utica drilling moved south, to places like Belmont, Monroe and Guernsey counties. The most productive Utica wells drilled are in those southern counties. So it was not all that big a surprise, but certainly noteworthy, to read that Belmont County has now passed Carroll for total number of permits issued to drill Utica wells. A “changing of the guard.” We hasten to add Carroll still has more drilled and producing Utica wells than Belmont–at this point in time. At some point that dynamic will change. Below we have the latest numbers, and a special sneak preview of MDN’s forthcoming Marcellus & Utica Shale Almanac showing a breakdown of numbers for Carroll County, still (for now) the most drilled Utica Shale county in the Buckeye State…
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Report: Utica Drillers Spend $300M (so far) on Fixing Ohio Roads

The Ohio Oil and Gas Association (OOGA) and Energy In Depth (EID) Ohio recently published a new report that shows Utica drillers have spent more than $300 million in eight Ohio counties from 2011 until earlier this year improving and fixing 630 miles of Ohio’s roadways. The study, titled “Ohio’s Oil & Gas Industry Road Improvement Payments” (full copy below) takes a close look at Road Usage Maintenance Agreements (RUMAs) in eight counties. You read that right. The O&G industry has spent over $300 million in eight counties over the past seven years. That’s $300 million in PRIVATE (not government-confiscated-via-taxes) money to fix up roads. Those living in eastern Ohio are lucky dogs…
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Basin Energy Buys/Merges in Marcellus-Utica Co. Katko

Basin Energy, which acts as a holding company to invest in (and run) other companies located in the Marcellus/Utica, is based in Bridgeport (Harrison County), WV. Basin’s first acquisition was ProActive Services, an operator of natural gas pipeline compressor stations and other related oilfield services. In September 2015, Basin closed a deal on their second subsidiary–the Jane Lew (Lewis County), WV-based Starett’s Well Service, a specialty roustabout services firm, focused on well site and midstream natural gas infrastructure in the Marcellus and Utica Shale regions (see WV Roustabout Company Sells Itself to Another WV Company). Since that time Basin has been busy. In January of this year, Basin closed on acquiring Appalachian Production Services (APS), a company focused on focused on providing services for producers in the Marcellus and Utica Shale. A few weeks ago Basin did it again, closing a deal to acquire Katko, LTD. Katko is focused on providing well hook up services, maintenance of midstream and production assets and specialty welding services in OH, PA and WV. The the owner and founder of Katko, John Bettem, will join Basin’s board of directors. Terms of the private deal were not disclosed. Basin Energy has come out of nowhere in a few short years to become an important oilfield services player in the Marcellus/Utica…
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XNG Virtual Pipeline Defends Itself Against Antis in Otsego Co. NY

Earlier this year Xpress Natural Gas (XNG) spent $18.6 million to build a “virtual pipeline” facility in Susquehanna County, PA that employs ~90 people and loads up to 100 compressed natural gas (CNG) tanker trucks each day with PA Marcellus gas, for deliveries to customers across the Northeast and Mid-Atlantic states (see Major CNG Virtual Pipeline Coming to Susquehanna County, PA). Many of XNG’s trucks (40 per day) head up Interstate 81, catch Interstate 88 in the Binghamton area, and keep on going, eventually arriving in Herkimer County where the trucks unload the gas into the Iroquois Pipeline. Iroquois gets up to 50 million cubic feet per day (MMcf/d) from XNG’s trucks, using it for resale to customers further on down the pipeline in New York and New England (see XNG Virtual Pipe Delivering 50 MMcf/d of PA NatGas to NY Pipeline ). However, some residents in Upstate NY, in Otsego County (we suspect the same anti-fossil fuel nutters who lobbied to ban fracking and ban new pipelines) are up in arms with XNG’s daily truck trips. In order to shave miles and money from having to use Interstate 90 (NY Thruway with big tolls), XNG instead leaves I-88 and uses several state highways, routing the trucks through small towns. An eyewitness who lives along the route emailed MDN back in September said, “these [XNG drivers] are very considerate to the speed limits in the small towns they go through, I think these drivers are well disciplined…(maybe disciplined is not the right word) and the trucks are very quiet.” However, a group of antis turned up at a meeting last Thursday night in Otsego County to gripe and moan about the truck traffic. They don’t want fracking. They don’t want pipelines. And now they don’t want trucks hauling natural gas coming past their front door. Maybe they should just quit using all fossil fuels themselves and begin living like cavemen again?…
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New England Lawsuit Claims Utilities “Constrained” NatGas Pipeline

A class action lawsuit was filed last week by 12 New England power customers who claim that two New England utility companies–Eversource and Avangrid–intentionally manipulated the flow of gas along the Algonquin natural gas pipeline by placing and later withdrawing orders, in order to spike the cost of gas which then spiked the cost of electricity generated by the resulting higher cost gas. It is a convoluted, cockamamie charge first brought by the radical antis at the Environmental Defense Fund (see EDF Accuses New England Gas Utilities of $3.6B Market Manipulation). EDF published a “report” that makes the preposterous claim that New England customers have overpaid utility bills by $3.6 billion due to collusion between the natural gas and electricity industries. EDF spins the outlandish theory that Avangrid and Eversource brilliantly conspired to create Enron-style fake gas shortages involving a whopping 3.5% of the capacity of the Algonquin pipeline–all in order to drive up electric clearing prices for a wind farm Avangrid didn’t yet own, a rarely dispatched Avangrid oil peaker, and three crappy, rarely operated oil and coal plants in New Hampshire (plus nine little hydro dams that Eversource was trying to unload for years, sold recently). EDF’s tall tale is so bizarre (and hard to follow) it’s laughable. Yet now a class action lawsuit has launched based on EDF’s fictional report…
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New England Grid Operator: Region Needs More NatGas, Pipelines

In a companion story today, MDN tells you about a frivolous lawsuit that claims two New England utilities have been manipulating gas flows along the Algonquin Pipeline, by “constraining” those flows (see New England Lawsuit Claims Utilities “Constrained” NatGas Pipeline). It’s bupkis. That is, the utilities are not the ones constraining pipelines in New England. What is constraining New England pipelines is high demand for natural gas–and NOT ENOUGH PIPELINES to flow it–both for end users like residences and business, and major users like electric generating plants. So says the head of the electric grid in New England, Gordon van Welie. Speaking at a recent energy conference in Rhode Island, van Welie said, “regional pipelines were built for gas distribution companies’ heating demands, not for power generation. [van Welie] says they’re at, or near capacity, in winter and generators have to use more expensive fuels, including oil and liquefied natural gas.” van Welie also said, “The gas problem [lack of it] is going to live with us for a long time” because more than 50% of New England’s electric power generation comes from gas-fired plants. What about Big Green favorites, wind and solar? van Welie rained on Big Green’s parade, saying wind and solar can’t replace gas because they’re “intermittent sources of power.” Whoops! Big Green’s bubble just got burst by reality and good old common sense. Here’s more about the meeting, and van Welie’s remarks…
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MDN Off Thanksgiving, Black Friday

Marcellus Drilling News typically takes Thanksgiving and the day after off to rest and relax with family. We will be sure to keep an eye on the news and if there is anything earth-shattering, we will bring you that news. Otherwise, we’ll see you next Monday. Have a great Thanksgiving! – Jim Willis, Editor

Marcellus & Utica Shale Story Links: Wed, Nov 22, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Man accused of stealing from shale biz in OH; Univ. at Buffalo invests in fracking, ticks off green snowflakes; Cornell prof wants NY to go climate berserk with new regs; TransCanada still investigating Keystone leak; growing gas glut threatens W TX oil boom; OPEC-U.S. shale showdown continues; Trump & antis both want court to leave BLM frack ruling intact; natgas inventories down; Poland signs deal to buy US LNG; Norway isn’t turn away from fossil fuels; and more!
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