Dynamite Stolen from Atlantic Sunrise Pipe Site in Lancaster County, PA

Approximately 640 pounds of dynamite and 400 blasting caps were stolen from a locked trailer at a construction site for the Atlantic Sunrise Pipeline in Marietta (Lancaster County), PA this past weekend. Because the theft involved explosives, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has been called in to investigate. The ATF is offering a $10,000 reward for information that leads to an arrest and conviction. We sincerely hope the perp(s) are caught and go to jail–for a long time. If you know anything, call the ATF hotline at 888-ATF-BOMB (888-283-2662). Not sure who thought up that phone number for the ATF, but it’s certainly memorable! Here’s the details…
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EQT Sues WV for Passing Minimum Royalty Law re Flat Rate Leases

Earlier this year the West Virginia legislature passed Senate Bill (SB) 360, which Gov. Jim Justice subsequently signed into law (see WV Gov Justice Signs Bill to Guarantee 12.5% Minimum Royalty). SB 360 overturns a ruling by the WV Supreme Court in Leggett v. EQT Production, a case in which the Supremes (in a very unusual move) reversed their own previous decision and allowed EQT to deduct post-production expenses in an old flat rate lease. In essence, SB 360 guarantees rights owners/landowners a 12.5% minimum royalty, regardless of post-production deductions–but only in flat rate leases. A flat rate lease is a lease in which a company pays a regular (in EQT’s case, annual) payment, regardless of how much oil/gas is produced. Traditionally drillers don’t deduct post-production expenses because the payments they make aren’t all that much anyway. But then EQT began to claim deductions, prompting a lawsuit that went all the way to the Supreme Court. The legislature aimed to “fix” what they considered an error in the court’s ruling. EQT claims the new law is unconstitutional and last week filed a lawsuit (copy below) asking a judge to block implementation of the law, set to take effect on May 31…
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PA DEP Hunger Games Competition to Distribute $12.6M in ME2 Money

In February Sunoco Logistics Partners agreed to pay a massive (historically high) $12.6 million fine to the PA Dept. of Environmental Protection (DEP) for “permit violations related to the construction of the Mariner East 2 pipeline project” (see Sunoco LP Pays PA DEP $12.6M to Resume ME2 Pipeline Construction). Sunoco’s ME2 construction activities caused a few erosion issues here and some drilling mud leaks there–so-called “harms” to the environment. Surely some of the massive, historically high $12.6 million fine Sunoco is paying will be used to “fix” those problems, right? Wrong. Sunoco has to pay twice–pay to clean up the problems AND pay the fine. The fine was essentially a shakedown–Sunoco had to pay it or they would not be allowed to resume construction work on ME2. Yesterday the DEP announced a new program to distribute the $12.6 million of fine money. In Hunger Games tradition, the DEP is launching a lottery for the 85 municipalities along ME2’s path, allowing those “districts” to submit begging proposals to request some of the money for programs in their district. What kind of programs? “[P]rojects that reduce or minimize pollution and protect clean water.” In other words, just about anything contestants can dream up. They have 45 days, from May 7 to June 21, to make a grab for the cash (i.e. submit a grant application)…
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Rex Energy Gets 1 Extra Wk to Pay Defaulted IOU, Files Annual Report

Two weeks ago Rex Energy filed a notice with the Securities and Exchange Commission to alert shareholders that the company has defaulted on an interest payment due on senior notes (see Rex Energy Defaults on IOUs, Can’t File Annual Report on Time). Rex said in the filing that the noteholders to whom payment is due (Angelo, Gordon & Co.) signed a temporary “forbearance” agreement that gives Rex a little breathing room–until April 16 to pay up. Angelo, Gordon & Co. promised not to take any action until that date. In a second filing two weeks ago, Rex said they would not be able to file their annual 2017 report on time. We have updates on both filings. First, Rex has still not made the interest payment and still has not negotiated a new agreement with Angelo, Gordon & Co. However, yesterday Angelo signed a new, second forebearance agreement giving Rex one more week–until April 23–to either pay or agree to a new deal. The clock is ticking. Meanwhile, last Friday Rex filed it’s annual report for 2017. Among the revelations in the report: Rex plans to spend $78-$83 million on drilling this year, down from spending $133 million last year…
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WV’s Thrasher “Hopeful” First Chinese Project Announcement Soon

Yesterday the seventh Marcellus and Manufacturing Development Conference was held in Morgantown, WV. The event keynote speaker was Steve Winberg, the U.S. Dept. of Energy’s Assistant Secretary for Fossil Energy. He talked about the relationship between manufacturing and shale production. Fortunately for us, Winberg (part of the Trump Administration) said the DOE’s attitude is to not interfere with the shale miracle. Other speakers included Brian Anderson, director of the WVU Energy Institute. However, it was a brief comment made by WV Secretary of Commerce, Woody Thrasher, that really caught our attention. Last November Thrasher signed a memorandum of understanding with the Chinese government, an agreement in which the Chinese pledged to spend $83.7 billion over the next 20 years in WV’s shale and petrochemical sectors (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). So far, five months later, not one red yuan has been invested. What’s the holdup? For one thing, there’s a developing trade war (see Will Trade War with China Affect $83.7B Investment in WV Shale?). Thrasher said yesterday he doesn’t think the trade war will interfere with China’s WV investment (if wishes were horses…). Thrasher also said he’s “very hopeful in the near future that we’ll be able to announce the first project” using Chinese money. Now that is definitely good news–perhaps the biggest news coming from yesterday’s event…
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Duke Energy Refiles 13-Mile Cincinnati NatGas Pipeline Plan

Duke Energy needs to replace an aging pipeline, built in the 1950s, near Cincinnati, OH–or some people in Cincy will have to go without natural gas. Duke has proposed a 13-mile, 20-inch pipeline along two potential routes. The project is called the Duke Central Corridor Extension Gas Pipeline. Both of the proposed routes are opposed by antis, including a group calling themselves NOPE–Neighbors Opposing Pipeline Extension. We call them DOPEs–Dummies Opposing Pipeline Extensions. Will the DOPEs volunteer to shut off the natural gas to their homes and businesses if the pipeline doesn’t get built? Not on your life! With just weeks before a final approval by the Ohio Power Siting Board (OPSB), Duke asked the state to push the pause button last August (see Duke Energy’s 13-Mile Cincinnati NatGas Pipeline Put on Hold). At the time, Duke said they had “potential concerns” about building the pipeline on a property close to a Superfund site in Reading, should they build it along the alternate route. Those concerns have now been addressed and the project is unpaused and moving forward once again. Duke recently refiled their application to build the new pipeline along the alternate route, with a few tweaks. The usual suspects are turning up to oppose it all over again…
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US NatGas Production Will Grow 59% by 2050 Thx to M-U

In February our favorite government agency, the U.S. Energy Information Administration, issued its Annual Energy Outlook 2018 report (full copy below). This week the eager beavers at EIA culled through that report to highlight important information about U.S. natural gas production. In a Today in Energy post on Monday, the EIA made some startling observations. EIA predicts that U.S. natural gas production will grow 59% from 2017 to 2050, starting at 73.6 billion cubic feet per day (Bcf/d) in 2017 and reaching 118 Bcf/d in 2050. Massive! They also say that most of the projected production growth comes from the Marcellus/Utica region. However, as MDN has pointed out repeatedly in recent months, “associated natural gas” from the Permian region in Texas and New Mexico will also be a significant contributor to overall natgas production growth in the coming 30 years. Here are some intriguing insights into predictions made by some of the best number crunchers in the business…
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Other Energy Stories of Interest: Wed, Apr 18, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Penn Twp showdown in Westmoreland County begins; green insanity in Rhode Island; impact of pipeline constraints on Permian producers; fracking transparency bill moves forward in Illinois legislature; LNG exports could produce $3.3 TRILLION in econ benefits by 2050; a natgas giant like no other; U.S. offers $25M in cybersecurity grants following pipe attacks; just who is buying U.S. LNG; Australian territory lifts frack ban; and more!
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