EQT Pulls a Chesapeake, New Deductions from PA Leases

Last Friday MDN editor Jim Willis had the pleasure of speaking at the National Association of Royalty Owners (NARO) Pennsylvania Chapter annual convention in State College, PA. Jim was humbled to present alongside a cast of terrific speakers, including Scott Perry, Deputy Secretary of the Office of Oil and Gas Management at the PA Dept. of Environmental Protection, Tom Murphy, Director of Penn State’s Marcellus Center of Outreach and Research (MCOR), and Scott Kurkoski, a top lawyer and head of the energy practice for Levene, Gouldin & Thompson (thanks for the ride home Scott!). One of the first attendees at the event to stop by the MDN table for a chat asked if we had heard about a letter recently sent by EQT to PA landowners. We had not. He gave us a copy (below). In the letter, EQT claims they have been “subsidizing a portion of the cost to gather the gas” produced by their PA wells, and they intend to begin claiming new deductions from royalty checks beginning this year. The way they position it in the letter is that landowners will begin “sharing” in these post-production costs. Who doesn’t like to share, right? We can tell you, not a single attendee at the event was impressed with EQT’s “sharing” letter. It smacks of the road Chesapeake Energy has gone down in robbing landowners of their royalties…
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EQT Spends $1.6M to Lease More Land Under Monongahela River

The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) has just amended an existing lease with EQT that allows EQT to extract natural gas (and other hydrocarbons) from underneath the Monongahela River in Allegheny, Greene, Fayette, Washington and Westmoreland counties. EQT is paying $4,000 per acre for 392 acres ($1.568 million total) in a signing bonus, along with a big 20% royalty on anything produced. However, the announcement raises an important question we’ve asked for more than four years: Is the land under rivers and streams actually owned by the state? PA says yes. We suspect landowners who own land along those rivers and streams would say otherwise. The state grabbing money for land under bodies of water has been going on for years (see PA DCNR Program Leases Under Rivers/Creeks for Marcellus Drilling and PA DCNR Publishes Lease Agreements for Deals Under Rivers/Creeks). Below is the latest lease deal by DCNR to lease more land under the Monongahela River…
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IFO Report: Proposed Wolf Severance Tax Hits PA Landowners Hard

One of the lies told by Pennsylvania Gov. Tom Wolf in attempting to sell a Marcellus-killing severance tax to the general population is that most of the tax would fall on businesses and corporations outside of PA. The rallying cry has always been that PA landowners would not bear any of the severance tax–as in deductions from royalties paid. That lie was exposed by none other than the PA Independent Fiscal Office last week when the IFO released a report that calculates of the estimated $210 million in severance taxes that would be raised, per year, by the latest Wolf proposal–some $28 million of it (over 13%) would come out of the pockets of landowners–IN THE FIRST YEAR. By the third year, that number rockets to $51 million (or 24%). That is, a meaningfully large portion of the proposed severance tax WILL get passed on to landowners as deductions from their royalties. Lesson for landowners: Don’t fall for the siren song from Wolf and RINOs who say “If you support the severance tax (it won’t affect you), we’ll get you your minimum royalty bill.” It’s a farce…
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PA DEP Approves Wastewater Injection Well in Clearfield County

It takes a loooooong time to get a wastewater injection well approved and then up and running in Pennsylvania. Maybe that’s way there are less than a dozen of them in the entire state. In February 2014, the federal Environmental Protection Agency (EPA) gave a “final” approval to Windfall Oil and Gas to drill a wastewater injection well near Dubois (Clearfield County), PA (see New Wastewater Injection Well Approved in Clearfield County, PA). But then antis threw a fit and the EPA decided to withdraw their approval in May 2014 (see EPA Issues “Final” Permit for PA Injection Well, Then Rescinds It). Somewhere along the way the EPA got its head straight and approved the permit again, and now, so too has the PA State Dept. of Environmental Protection (DEP). Last week the DEP gave its approval for the Winfall Zelman #1 injection well, located in Brady Township…
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NG Advantage Looks Beyond Fenton, NY to Build Virtual Pipeline

In a sad postscript, it appears that NG Advantage, which had once hoped to establish a virtual pipeline operation (compressing natural gas from the Millennium Pipeline) in the Town of Fenton (suburb of Binghamton), has finally given up on building the project in Fenton and is instead looking elsewhere. At least that’s our impression based on a couple of sources. We have no confirmation nor comment from NG–so this is purely our own speculation. However, a local television station in Binghamton recently noticed that NG is loading pipes onto a trailer, moving them out of the former construction site. The Town of Fenton Zoning Board of Appeals (ZBA) ruled in February that the facility does not qualify as an allowed use under existing zoning regulations (see NG Advantage Loses Zoning Vote for Virtual Pipe Near Binghamton). The Fenton Town Board is in no mood to overrule the ZBA decision, according to Suervisor Dave Hamlin. Case closed–unless NG plans to sue the town to recover costs, or try to force the issue of building the plant–which we don’t see happening. At any rate, MDN has heard scuttlebutt around the virtual water cooler that NG is looking at several other locations–in and out of Broome County. It would be a tremendous loss for Broome if NG locates outside the Greater Binghamton area. Meanwhile, MDN continues to spot XNG trucks (from a virtual pipeline in Susquehanna County, PA) passing through the Vestal, NY area–through densely populated centers–each and every day. They are the very same kind of trucks NG had proposed to use in Fenton. Yet not a peep about the XNG trucks that pass through our community…
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Lancaster Nuns Continue to Agitate Against Already-Installed Pipeline

The Adorers of the Blood of Christ, a group of nuns in Lancaster County, PA, simply can’t stay away from sacrificing Christ on the alter of politics. The Sisters didn’t want the Atlantic Sunrise Pipeline project passing through their property. They own several buildings (one of them an old folks home heated with natural gas) on the very same property. The pipeline was due to run through a nearby field owned by the Sisters that they lease to a local farmer who grows corn on it. The Sisters took up with radical anti-fossil fuelers from Lancaster Against Pipelines to protest the project, putting a few wooden park benches and a flower tressle in the middle of the corn field, calling it a “chapel” (see Catholic Nuns Use Radicals to Build Chapel in Path of PA Pipeline), which is why we refer to them as Sisters of the Corn. They’ve tried a couple of different lawsuits, trying to spin the pipeline crossing their property as a religious freedom issue (see Lancaster Nuns Demand “Religious Freedom” Trial re Pipeline). Fast forward to Palm Sunday. The pipeline is now in the ground and covered up, and the farmer can plant his corn over top of it this spring. Yet the Sisters held a political protest service on Palm Sunday at the site of the pipeline. How enormously sad to sully the name of Christ in that way…
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Other Energy Stories of Interest: Mon, Mar 26, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: DEP wants comments on proposed Greene County, PA electric plant; Shale Crescent USA reports good showing at Houston conference; OH landowner groups take on left-wing Center for Biological Diversity; PA gov works with OH & WV to promote fracking, while he also promotes ban in DRB; source of Rover pipe contamination still unclear a year later; natgas enters “injection season” on a low note; TransCanada settles rate issue with NGTL shippers; and more!
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