Dominion Sells 2 Gas-Fired Plants; Blue Racer Midstream For Sale

Dominion Energy has found a buyer for two of its natural gas-fired electric generating plants, one located in Pennsylvania, the other in Rhode Island. In July MDN told you that Dominion was shopping the two plants, hoping to raise $1+ billion (see Dominion Looking to Sell Gas-Fired Power Plants in PA, RI). One plant, the Fairless Power Station, is located in Bucks County, PA near Philadelphia. The other, Manchester Street Power Station, is located in the People’s Republic of Rhode Island. So why would Dominion, a company that really digs natgas, want to dump two of its natgas power generating plants situated in large, urban areas? In a word, regulation, or rather lack of it. Both of the plants Dominion wants to dump are “merchant plants”–meaning they sell electricity on the open market, at market rates. Regulated plants, on the other hand, have their prices determined by quasi-governmental agencies. Selling electric that’s regulated means the potential upside is limited, but it also means you are guaranteed a certain price and can count on receiving that price year in and year out. In the lingo of high finance, being regulated “derisks” a company–makes revenue streams predictable, which investors like. So Dominion is on a mission to (a) pay down debt by selling assets like these two merchant power plants, and (b) provide more revenue certainty for investors. And it looks like they achieved their goal, selling the two plants for $1.23 billion to Starwood Energy. In the same Dominion announcement about the Starwood sale, the company said they will continue to shop their 50% ownership stake in Blue Racer Midstream, which is the first we’ve heard that Dominion is looking to unload their share. Dominion says there is “strong interest” in buying it…
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How Much Does it Cost to Build a Pipeline in the Northeast?

The short answer to the question posed in our headline is, “Too much.” The reason it’s costing too much is because of a blizzard of frivolous lawsuits launched by anti-fossil fuel groups, funded with money from big foundations (see Big Green Exposed: List of Liberal Foundations Donating $3.7B and New Study, Video Exposes 19 Foundations Funding Climate Hoax), and because of the heavy hand of government regulation. Those two things together–lawsuits and punitive regulations–drive the cost of pipeline construction in the Marcellus/Utica region to heights where it may not make sense, economically, to build new projects. How much per mile does it cost to build a major pipeline that flows 1 billion cubic feet per day (Bcf/d) or more of low-carbon, clean-burning Marcellus/Utica shale gas? These days, it costs anywhere between $2.9 million to a whopping $13 million *per mile* to build a new pipeline in the northeast. Yeah, way too much. How much did Atlantic Sunrise cost Williams to build per mile? And how much is Atlantic Coast Pipeline costing Dominion Energy to build? We’ve got the numbers below…
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Diversified’s Schedule to Plug Abandoned PA Wells in Dispute

Diversified Gas & Oil has been on a mission to buy as many non-shale (conventional) oil and gas wells as it can in the Appalachian Basin. In June, MDN brought you the exclusive news that Diversified had purchased EQT’s Huron Shale assets in Kentucky, Virginia and West Virginia for $575 million (see Diversified Gas & Oil Adds to Conventional Assets in KY, VA, WV). The sale included nearly 12,000 conventional wells with 200 million cubic feet per day of natural gas production, 2.5 million acres of leases, and some 6,400 miles of gathering pipelines. Along with all those wells comes a number of wells that don’t produce any more and need to be plugged (see PA DEP Orders CNX, XTO & Diversified to Plug 1,058 Abandoned Wells). Plugging wells is not cheap, although Diversified seems to have found a way to do it cheaper than other companies like EQT can do it. Still, Diversified is faced with plugging thousands of wells. You don’t do it all at once–you have tackle it well by well, year by year. The Pennsylvania Dept. of Environmental Protection told Diversified it wants 1,000 of its nonproducing wells plugged in the next five years. Diversified countered it would like to plug 2,000 wells over the next 20 years. Diversified’s strategy, according to a Pittsburgh Post-Gazette article, is to push off plugging as long as possible…
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Allegheny LibDem Wants to Throttle Fracking with Lease Database

Why can’t liberal Democrats, for once, just be honest about their intentions and motivations? A liberal Democrat who sits on the Allegheny County (PA) Council, Anita Prizio, is floating a plan that requires drillers to provide information on their oil and gas leases (shale AND conventional) in digital format to the county recorder of deeds. The supposed aim is to create an easy-to-access database/registry showing which land has been leased and which has not. We won’t lie (unlike lib Dems)–such a registry would be worth its weight in gold to many people, including landowners, other drillers/competitors, but most of all to antis who want to make trouble. Why do we say Ms. Prizio has ill-intent, even though she claims she has no ulterior, anti-drilling motive? Because she’s floating this plan for a lease registry at the prompting of radical leftist and anti-driller Doug Shields, from the odious group Food & Water Watch. Before joining FWW, Shields was himself a Pittsburgh Councilman for 20 years–lobbying for a total frack ban on more than one occasion (see Pittsburgh Councilman Doug Shields Lobbies to Get Drilling Ban Added to City’s Charter). Prizio’s connection to Shields is the tip-off that this is not some innocent proposal, but instead yet another case of collusion between lib Dems and Big Green. Follow the money…
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Lawyers Make Out Like Bandits in PA O&G Overtime Case

We have a lot of lawyer friends, and lot of loyal MDN readers are lawyers. With all due respect to our lawyer friends and readers, we are outraged at the amount of money awarded to the attorneys in a recent oil and gas case in PA. Let’s back up. This post is primarily a warning to drillers and their contractors to play it straight when it comes to classifying who is exempt from overtime and who is not. You know who’s really “hourly” and who isn’t, and if you screw that up, it will come back to bite you–in a major way. A group of oilfield service workers in western PA were, according to the workers, misclassified as exempt from overtime when working over 40 hours per week. They sued. The details are below, but the short version is that the eight employees who stuck it out until the bitter end won their case. Collectively they got just over $1 million in back wages and “damages.” However (and here’s our outrage), the lawyers got a “reasonable fee” of $2.3 million! Really? It’s “reasonable” that the lawyers got more than twice what the employees got?…
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New Williams Board Appointment Raises Ethics Question

On July 31 midstream giant Williams announced it had added a new member to its board of directors, Vicki Fuller. We didn’t think much of it at the time. We included a mention in our “best of the rest” section the following day (see Energy Stories of Interest: Wed, Aug 1, 2018). Fuller is an accomplished woman–very smart. Prior to assuming her part-time role at Williams (for a cool $275,000 per year), she was the chief investment officer of the New York State Common Retirement Fund. That is, she decided how and where to invest the $207 billion worth of investments in the pension fund, put there by New York State workers (teachers and others), used to cover their retirement pensions. That’s a lot of responsibility riding on one person’s shoulders. And therein is the rub. Anti fossil fuel radicals have been pushing New York State Comptroller Thomas DiNapoli (a wildly left liberal himself) and Fuller (appointed by DiNapoli) to divest the Common Retirement Fund from fossil fuel companies–companies like Williams. To his credit, DiNapoli has resisted the political pressure to divest, realizing that millions of pensioners’ investments would fall by billions of dollars if that happens. And to her credit, Fuller did not cave to the pressure either. Liberal media (PBS) is now going after Fuller and her appointment to the Williams board, implying it’s some sort of quid pro quo–that Fuller got the job and a big salary for doing part-time work, in return for not divesting the pension fund from Williams stocks and bonds. Which is a stretch. A big stretch. However, the timing of her departure as CIO of the pension fund and her appointment to the Williams board (both in the same week) doesn’t look good…
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Energy Stories of Interest: Tue, Sep 25, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Infinity and beyond! Activist denies high costs of Youngstown anti-fracking measure; Upshur County pipeline site providing jobs, boost to local economy; Group from Colombia tours sites in Beaver County; No link between Barnett Shale natural gas production and methane in groundwater, studies conclude; Republicans push back against states seen as too pro-regulation; Oil CEO and Trump donor Dan Eberhart says the shale boom gives Trump an edge; Crude oil was the largest U.S. petroleum export in the first half of 2018; E&Ps grind out production growth through incremental capex increases; Predictions of early ‘peak oil’ demand don’t pass the Goldilocks test; McIntyre absent from FERC meeting as chief of staff controversy swirls; Russian gas and the case for sanctions; Shell CEO considers new natural-gas bet; Big Oil pledges to slash potent greenhouse gas emission.
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