Towns Compete in PA DEP Hunger Games to Grab $12.6M of ME2 Cash

Que the music with dramatic drums, cymbals and trumpets. Camera A, zoom in on Secretary McDonnell. The whole state is watching. It’s time for the Pennsylvania Dept. of Environmental Protection (DEP) Hunger Games to begin! 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 will be used to “fix” those problems, right? Wrong. Sunoco had 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. In April the DEP announced a new program to distribute the $12.6 million of fine money (see PA DEP Hunger Games Competition to Distribute $12.6M in ME2 Money). In Hunger Games tradition, the DEP is conducting 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. The contestants have 45 days, from May 7 to June 20, to make a grab for the cash (i.e. submit a grant application). Here’s how one town in Lebanon County is preparing what they hope is a winning entry–their chance to grab some of ME2’s money…
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WV DEP Holds Hearing on Proposed Injection Well in Upshur Co.

Mountain V Oil and Gas owns a Marcellus Shale well drilled in 2014 in Upshur County, WV that was a bust. You don’t often hear about Marcellus wells that don’t produce. Because their Marcellus well is a non-producer, Mountain V wants to convert it into a wastewater injection well. The neighbors are not happy about it. The WV Dept. of Environmental Protection held a public hearing last week about the proposal. Twelve local residents spoke at the hearing–every one of them against the project. No one spoke in favor. Is that really a surprise? The comments made at the hearing referred to the potential for earthquakes and pollution of the water table. Here’s what the good (but misinformed) residents of Upshur don’t understand about injection wells: (1) There are hundreds of thousands of them across the country, and have been for decades. (2) The wastewater (brine) going down the proposed injection well first came up from the same deep sources–we’re just putting it back where it came from. (3) If the well is properly cased, and rest assured these wells are heavily regulated and regularly checked, there is no way for the wastewater to seep back up to the surface. The water was down there for millennia and didn’t make its way to the surface, so why would it now? (4) Earthquakes can happen, but only when massive amounts of fluids are injected into an existing fault, or crack, in the rock layers. Earthquakes from injection wells, at least in the northeast, are as rare as hen’s teeth. Look, in all honesty, we wouldn’t be overly thrilled with an injection well locating near us either. However, if you’re going to object, as a first step you need to get your facts straight. Here’s more about last week’s hearing and the lack of facts (and wild statements) that circulated at that meeting…
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EQT’s Rise from Second-rate Utility to #1 U.S. NatGas Producer

Last year when EQT bought out and merged in Rice Energy, it became the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). In the late 1980s EQT was known as Equitable Gas, a local gas utility company in Pittsburgh. It was a company with “poor customer satisfaction” (hence our provocative title of “second-rate” utility). So how on earth did a company that did no drilling rise to become the country’s biggest shale gas driller in under a decade? It started with the foresight of a previous CEO who saw the Marcellus as “the next big thing.” The company changed its name and branding to EQT in 2009, and they haven’t looked back since. Here’s the quick (and fascinating) history of how EQT transformed itself from a lowly gas utility into the powerhouse drilling company it is today…
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Faux “Conservative” PA Energy Group Launches Promoting Solar/Wind

Last week at a press conference an organization calling itself the Pennsylvania Conservative Energy Forum (PennCEF) officially launched. The group says it, “seeks to provide a conservative voice in the state energy policy debate, supporting common-sense, all-of-the-above energy solutions that are good for the economy, grid and national security, and the conservation of our state’s natural resources.” PBS’ StateImpact Pennsylvania, a mouthpiece for Big Green groups, opens its glowing article of the new “conservative” organization this way: “A group of political conservatives wants a voice in the state’s energy future.” Big red flag when StateImpact writes positively about a “conservative” group. We read the StateImpact article, located the PennCEF press release from last week, and looked over their website in detail. It appears PennCEF promotes an “all of the above” energy philosophy–EXCEPT fossil fuels, which are THE major source of energy today and for the next several generations. The use of the phrase “all of the above” used by PennCEF sounds eerily like what Lord Obama used to say. He said “all of the above” but meant he would pick the winners and losers. Solar and wind are the winners, fossil fuels the losers. Which is not truly an “all of the above” philosophy. We scoured the PennCEF website and a single reference (on an infographic) to natural gas. Nothing else about shale gas and its role in a clean energy future. We reviewed the Executive Leadership Council bios, the people who run the organization, and found Big Green, Big Solar, Big Wind, and Big Libs among those steering the organization. Our conclusion? There’s nothing “conservative” about PennCEF–other than a misappropriation of the word conservative…
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PA House Bill to Neuter SRBC, DRBC Makes It to First Base

As we reported in April, a Pennsylvania House of Representatives member, Dan Moul (Republican from Gettysburg), introduced a bill, House Bill (HB) 2222, that would replace the Delaware River Basin Commission (DRBC) and Susquehanna River Basin Commission (SRBC) authority to regulate groundwater by vesting that authority solely in the hands of the state Dept. of Environmental Protection (see PA House Bill Would Neuter SRBC, DRBC Regulation of Ground Water). Moul’s ire is particularly focused on the SRBC and how the organization has interfered with (and charged a lot of money to) big water users, like farmers, in Moul’s district. It is about perceived abuses by the SRBC. That appears to be the bee in Moul’s bonnet. So he’s taking aim at removing the guts of both SRBC and DRBC and placing their power in the hands of the PA DEP, which presumably Moul thinks would be more amenable to the legislature with regard to water policies. While the DRBC is without question a rogue organization that needs reigning in, our impression of the SRBC has been, on balance, positive. SRBC doesn’t try to regulate fracking the way DRBC is attempting to do. At any rate, the point of this post is that we noticed Moul’s bill actually has some traction and has been assigned out to the House State Government Committee for consideration. A bill must first go to a committee and be reported out before it can go to the floor for a full vote by all members. This is step #1, or using a baseball metaphor, the bill made it to first base…
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Is Private Equity About to Return to Oil/Gas Drilling in Big Way?

In our headline we pose a question asking if private equity (PE) money is about to be lavished on the oil and gas sector once again. The short answer, according to an analyst who writes about these things, is YES! Anthony Mirhaydari, a senior financial writer at PitchBook, says because of the current high price of oil, “After a drought of investment as management teams aggressively trimmed expenses to stay afloat, an aggressive ramp-up in spending is needed.” According to Deloitte, the oil and gas industry will need to spend on the order of $3 trillion in capital expenditures from now until 2020 (two short years away). Some of that money comes from profits or is already in hand from other sources. But, according to Deloitte, “there is a funding gap of $750 billion to $2 trillion that will need to be met with outside capital.” That trillion dollar delta is where private equity comes in–private investors once again opening up their wallets so more oil and gas drilling can happen. And that’s good news for the entire industry, including the Marcellus/Utica region. More money = more drilling…
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Kinder Morgan Says No Thx to Canadian Civil War, Selling Pipeline

An interesting development in the pipeline wars. Kinder Morgan has just agreed to sell its Trans Mountain Pipeline system to the Canadian government for C$4.5 billion ($3.5 billion U.S.). Why? Kinder is tired of the ongoing civil war in Canada over extending Trans Mountain from the oil sands of Alberta through British Columbia to the coast for exporting to Asia. As we reported last week, British Columbia is blocking the project and Alberta is now fighting back–and it’s nasty, a civil war in every way except armed conflict (see Canadian Civil War Previews What’s Coming in NY re Pipelines). The federal Canadian government wants this pipeline project to happen. Kinder lost its appetite to make it happen, so Canada is buying the entire project from Kinder, to ensure it gets built. What does an oil pipeline in western Canada have to do with the Marcellus/Utica? It’s a preview of things to come in U.S., where NY Gov. Andrew Cuomo is blocking pipeline projects that PA and other states critically need. We’re watching what happens with the Trans Mountain project as a proxy for what may happen here at home…
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Other Energy Stories of Interest: Wed, May 30, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Pittsburgh trucking firm testing natgas Mack trucks; PA DEP to name new Enviro Justice director in June; Dominion sets new natgas storage withdrawal record; latest Baker Hughes rig count shows WV up 1; Total makes big investment in U.S. natgas trucks; Trump wants climate lawsuits dismissed; Saudis still large and in charge of oil prices; Halliburton aids and abets Saudis with frack tech; Poland wants sanctions to block Russian pipeline; and more!
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