Constitution Pipe Files for FERC Rehearing, Then Back to Court

Contrary to stories begin spun by anti-fossil fuel groups, Williams has not given up the fight to build the Constitution Pipeline–a $683 million, 124-mile pipeline from Susquehanna County, PA to Schoharie County, NY to move Marcellus gas into New York State and from there, into New England. The pipeline faces stiff odds. In 2016, the Andrew Cuomo-corrupted NY Dept. of Environmental Conservation (DEC) abrogated their fiduciary duty by denying the project a federal stream crossing permit (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). Williams sued the state in federal court–and lost (see Court Rejects Constitution Pipe’s Case Against NY DEC; Now What?). Williams then asked the Federal Energy Regulatory Commission (FERC) to overrule DEC’s rejection. Sadly, last month FERC denied that request (see Death of the Constitution Pipeline? FERC Refuses to Overrule NY DEC). Williams has since launched a multi-pronged legal attack with three potential paths to victory. First, Williams appealed the case directly to the U.S. Supreme Court (see Constitution Pipeline Appeals NY Fight Directly to U.S. Supreme Court). The case to the Supremes takes up the issue of whether or not one state, like New York, can deny a federal project that benefits other states, like the New England states. We await word from the Supremes on whether or not they will hear the case. Yesterday Williams launched another legal attack by asking FERC to reconsider their denial from last month. If FERC says yes and overrules the DEC, we have victory. If FERC says no, Williams will then (we are assuming) use the denial as the basis to take the case back to federal court–this time to the D.C. Court of Appeals. The first federal court to consider the matter (ruling against Williams) was the Second Court of Appeals (in NY). Moving the case to the D.C. court stands a better chance. So, three potential paths to victory: U.S. Supreme Court, FERC changes its mind, or the D.C. Court of Appeals. This fight is far from over…
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EIA Feb ’18 Drilling Report: M-U Production Up Another 1/3 Bcf

Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. The numbers continue to be AMAZING. Natgas production continues to explode (poor metaphor!)–especially here in the Marcellus/Utica region, which is labeled “Appalachia” in the report. EIA predicts production in the Marcellus/Utica will soar another 321 million cubic feet per day (MMcf/d), roughly one-third of a billion cubic feet (!), between February and March. That’s after M-U production went up a stupendously massive 428 MMcf/d last month, even more than the 377 MMcf/d originally forecast (see EIA Jan ’18 Drilling Report: M-U on Fire, Up 1/3 Billion Cubic Ft). Incredible! Our region isn’t the only prodigious producer. The Permian is primarily an oil play. But because each oil well also produces at least some natural gas along with the oil (called associated gas), and because so many wells are getting drilled in the Permian, it’s natgas production is forecast to jump 216 MMcf/d in the coming month. In a string going back more than a year, the seven major plays in the U.S. will once again hit new record natgas production in March–estimated to be 64.9 billion cubic feet per day. Of that, the M-U region will produce 27.1 Bcf/d–or 42%…
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MarkWest Building New Fractionation Plant in Harrison County, OH

Hopedale Fractionation Facility (click for larger version)

MarkWest Energy, now a subsidiary of Marathon Petroleum (MPLX unit) is THE premier shale gas processor in the Marcellus/Utica region. When natural gas comes out of the ground, a bunch of other hydrocarbons come out of the ground with it–namely NGLs (natural gas liquids). NGLs include compounds like ethane (C2H6), propane (C3H8), butane (C4H10), isobutane (also C4H10), and pentane (C5H12). MarkWest’s cryogenic processing plants separate out the methane from NGLs. A different process, called fractionation, further separates the NGLs into their component parts. MarkWest handles an estimated 60% of all fractionation in the M-U. MarkWest has standalone plants set up to separate out ethane–called C2 fractionation because ethane has two carbon atoms. Ethane fractionation plants are their own separate beast–removing ethane from the NGL stream. Finally, there are C3 fractionation plants, which tackle separating the other NGLs–propane, butane, isobutane and pentane (referred to as C3+ fractionation because each of those compounds has three or more carbon atoms). In the Hopedale fractionation operation (Jewett, Ohio), MarkWest already has three C3+ fractionation plants up and running–Hopedale I, II, and III. Each one processes 60,000 barrels of NGLs a day, for a cumulative 180,000 bbl/d capacity. Honeywell issued a press release yesterday to say they have been tapped to build a fourth Hopedale C3+ fractionation plant, expanding MarkWest’s capacity by another 60,000 bbl/d. Honeywell says it takes just 40 weeks from start to finish and they will have the Hopedale IV plant up and running, by the end of this year…
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WV Votes on Co-Tenancy Bill Today; Anti Gets Mouthy, “Dragged” Away

Today a co-tenancy bill is due for a vote by the full House of Delegates and from there will get sent on to the WV Senate. Co-tenancy is NOT forced pooling. It is legislation that will give a majority of rights owners in a property the authority to sign a lease on behalf of all the rights owners. In WV there are often multiple rights owners listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them all to sign on the dotted line. Co-tenancy corrects that situation. In the current bill, House Bill (HB) 4268, if 75% of the rights owners agree to lease the property for oil and gas drilling, that’s “good enough.” The bill will open up more Marcellus and Utica acreage to be drilled. As we previously reported, almost everyone is in favor it, including landowner groups (see WV Co-Tenancy Bill Picks Up Support from Landowner Group). Last Friday, the House of Delegates’ Judiciary Committee held a public hearing to gather more input from the public, and then voted to approve the bill, sending it to the full House for a vote. The public hearing was not without some drama. An anti-fossil fueler who is running for a House seat this fall, Democrat Lissa Lucas, got up to the mic during the public hearing and instead of addressing the merits (or lack thereof) for HB 4268, she proceeded to read the names of House members and contributions to their campaigns from the oil and gas industry. When asked to refrain from her stunt, she didn’t, so two men gently took her by the arms and escorted her out of the hearing. She now (hilariously) claims she was “dragged” out of the hearing. Here’s the latest on co-tenancy in WV–and the nutjobs who oppose it…
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Columbia Gas Customers in OH Start Using M-U Gas in April

We often write about pipeline projects in the Marcellus/Utica and their mission to move our prodigious natgas production to new markets where the gas will fetch a higher price. Last fall MDN provided a list of 15 active pipeline projects in our region, aimed at moving our gas to new markets (see List of 15 Active Marcellus/Utica Pipeline Projects Worth $23B). However, sometimes the “new” markets these pipelines serve are located–right here, in the M-U region! That’s right. Not all gas needs to go to the South, the Southwest, Midwest or get exported to Canada and beyond. Sometimes new market demand is hidden in plain sight. Such is the case for Columbia Gas (owned by NiSource) in Ohio. The company said it has “changed our portfolio around” to source locally extracted Marcellus/Utica gas for “at least 40%” and “likely much more” of the gas it sells to its customers. The change to using Marcellus/Utica gas will begin in April. Among the pipelines that will flow the M-U gas Columbia will buy is the recently completed Leach XPress (see Leach XPress Goes Online; FERC Approves Mountaineer & Gulf XPress). Here’s the good news that our own gas will serve those in our own region…
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Indeck to Start Building $1B Gas-Powered Electric Plant in Michigan

In October 2016, Indeck Energy announced a plan to build a $1 billion electric generating plant (powered by natural gas) in Niles, Michigan, not far from Chicago (see $1B Electric Plant Planned Near Chicago, M-U Connection?). Although there has been no mention of Marcellus/Utica gas feeding the plant (so far), we have little doubt that our gas will be used to power the plant. A number of pipelines already do, or soon will, serve that region with our gas. The State of Michigan gave its blessing and approval for the project over a year ago (see Indeck Gets Michigan Approval for $1B Gas-Powered Electric Plant). Indeck, at the time, said they planned to begin construction by the end of 2017. Didn’t happen. What’s the holdup? A couple of easements are required from Amtrak (Come on Amtrak! Get with the program!). Indeck now says construction is slated to begin in August of this year, and the plant is due to be up and running in early 2021…
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Local Officials Praise Atlantic Sunrise Construction in Lancaster

Here’s something you don’t read every day with respect to pipeline construction: “Some township officials have praised the care of contractors in minimizing and reacting to disturbances and nuisance issues such as muddy roads and traffic backups.” Those comments come from officials in (yes), Lancaster County, PA, referring to the stellar job Williams is doing in building the Atlantic Sunrise Pipeline–a $3 billion, 198-mile natural gas pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. What happened to the “over 1,000 protesters” willing to get themselves arrested as they stand in front of heavy equipment to block construction in Lancaster County? Where are the Clattberbucks and their Lancaster Against Pipelines gang? Nowhere to be found, apparently. The opposition to Atlantic Sunrise appears to have run out of steam. Meanwhile, Williams is full of steam–going full steam ahead with the project–and local officials could not be happier as Williams drills under 70 roads, 67 streams and 17 wetlands in Lancaster County…
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Monroeville, PA Antis Want 100% Ban on Fracking, Pipelines

Limiting fracking to an impossibly small 150 acres (out of 12,620 acres) that make up Monroeville–a mere 1% of the acreage–is not enough of a ban for radical antis in the municipality of Monroeville (suburb of Pittsburgh). They want it all banned–every single centimeter. The only problem with that is the Act 13 law, passed in 2012, requires each municipality to allow drilling in at least one zoned area. But hey, disobeying the law isn’t a problem for antis–they do it all the time. They are anarchists by nature. Last October, Monroeville Council passed a temporary ban on oil and gas well drilling everywhere except for those areas marked M-2 industrial zoning–a big change (see Monroeville, PA Hostile to Shale, Bans Drilling in Most Places). Previously, drilling permits were “conditional use” in Monroeville, meaning each permit was evaluated on its own merits, regardless of which zoning district it was located in. By limiting drilling to M-2, Council effectively banned drilling in the municipality. They passed the temporary ban until they could pass a new zoning ordinance that would set the frack ban policy in concrete. In January, Monroeville Council advertised their new zoning ordinance to FURTHER RESTRICT any kind of oil and gas activity–not just drilling, but pipelines, compressor plants, etc.–to a 150-acre parcel located next to the city dump (see Monroeville Pushes Ban on NatGas Activity, Incl. Drilling & Plants). Fantastically, unbelievably, antis in Monroeville aren’t happy with that 150-acre parcel exception–an old dump! They want drilling at the dump banned too…
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Harrison County, WV Commissioners Vote to Help Delayed Elec Plant

Last June, the West Virginia Public Service Commission held a public hearing in Clarksburg, WV on the proposed ESC Harrison County Power Plant project (see Public Hearing Held for Harrison County, WV NatGas Electric Plant). ESC (Energy Solutions Consortium) was founded by father and son team Andrew and Matthew Dorn, based in Buffalo, NY. The Dorns are behind a series of WV natgas-fired electric plants, the first of which will get built in Marshall County (see Progress for 3 WV NatGas Electric Plants; 1 Breaks Ground in 2016). At the public hearing last June, the only person to speak against the project was from the Sierra Club–opposed because the Clubbers claim the plant will contribute to man-made global warming. Whatever. The PSC reported receiving 540 positive comments, and one negative comment. What does that tell you? Last July we reported the project still needs a few more permits (air and water) and was jumping through multiple government hoops to get them (see Harrison County, WV NatGas Electric Plant Close to Final Approval). Here we are, seven months later, and the project is STILL not fully permitted! What in the world is going on in WV? Why is it taking so long? Harrison County commissioners, hoping they can further goose the process and get it dragged across the finish line, will vote tomorrow to issue a resolution giving their full-throated support for the project. Let’s hope their vote of confidence finally does the trick…
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Other Energy Stories of Interest: Tue, Feb 13, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Cheniere ordered to close 2 Sabine Pass LNG tanks following leaks; US shale oil output in Permian almost 3 million barrels/day; Chesapeake Energy sells remaining Mississippian Lime assets for $500M; Trump admin proposes repealing Obama methane leak rule; Trump budget slashes EPA budget 23%; Big Green lawyers hope latest tactic will sink fossil fuel companies; and more!
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