Marcellus Drilling News

Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA PUC Releases Impact Fee Numbers: Revenue Down $36M in 2015
June 16, 2016June 16, 2016

Yesterday the Pennsylvania Public Utility Commission (PUC), the agency charged with keeping tabs on impact fee revenue from shale drillers, announced that impact fee revenue (PA’s version of a severance tax) is going down by $36 million from fees levied in the previous year–to $188 million. That’s the lowest yearly impact fee revenue in the past five years–since the beginning of impact fees in PA. As an aside, we find it interesting that last year when impact revenue was the highest it’s been in five years, the PUC had to be forced to release the numbers, with Republicans leaking the numbers first to force the PUC to give it up (see PA 2014 Impact Fee Payments: List of Drillers & What They Paid). This year, when impact fee revenues are at their (current) lowest levels, the PUC is only too happy to trumpet the news. Tell us again how politics, and lib Dem appointments, don’t play a role at the PUC. Anywho, below we have the johnny-on-the-spot-let’s-get-the-news-out-quickly press release from the PUC, followed by some pretty, colored charts detailing who paid, and where the money will go, for PA’s 2015 impact fees…
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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Gov Wolf “Eager” to Sign Drilling Law Forced Down His Throat
June 16, 2016July 29, 2016

PA Gov. Tom Wolf

7/29/16 Update: Please see the note on this article for clarification on when/if new shale drilling regulations (known as Article 78a) will take effect.

We can’t stop laughing. PA’s very liberal Governor, Tom Wolf, has been obstinate in demanding onerous new drilling rules for the conventional, as well as unconventional (shale) drilling industry since he took office. Reworked drilling rules were done and ready to go under previous Governor, Tom Corbett. Then Corbett lost to Wolf, and Wolf demanded to change common sense rules everyone had already agreed to (see New Draft Drilling Regulations in PA: Wastewater Impoundments Out). It became obvious that Democrats were trying to run PA’s traditional, small conventional drillers out of business by applying the same regulations to them that will apply to shale drillers. The Pennsylvania Independent Oil & Gas Association (PIOGA) represents many of those small conventional drillers and vigorously fought back (see PIOGA Turns Up the Heat on Wolf/Quigley Over TAB/Article 78 and PA Board Adopts New Drilling Regs, PIOGA Blasts DEP “Deceptive”). In the end, Wolf’s own Democrat Party legislators in the House and Senate abandoned him and the writing was on the wall: The entire package of drilling rules, for both conventional (Article 78) and shale (Article 78a) was headed for defeat. The legislature was about to repeal both sets of newly-minted DEP rules–so Wolf pivoted and decided to accept half a loaf–passage of the shale rules, Article 78a (see Wolf Really Didn’t Wise Up, He Just Took Half a Loaf re Drilling Regs). Yesterday the the PA House voted 141-46 to require the Department of Environmental Protection (DEP) to start from scratch with proposed rules for the state’s conventional drilling industry. The Senate later agreed, voting 37-12 in favor of Senate Bill (SB) 279. The bill will now be signed by Wolf. Why are we laughing? Because Wolf’s office issued a press release yesterday essentially taking credit for getting SB 279 passed–like it was somehow his idea all along, when in fact he was forced into it…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Radical Enviros Mad at PA Gov Wolf over Compromises with Repubs
June 16, 2016June 16, 2016

Pennsylvania State Rep. Greg Vitali, a far-left Democrat from the Philadelphia area, is a good soldier who knows how to take orders. When Big Green says “Salute!” Greg snaps his arm around faster than you can say “global warming.” A few weeks ago PA’s radical Secretary of the Dept. of Environmental Protection (DEP), John Quigley, got fired over an email he unethically sent from a private email account to his close buddies in the Big Green movement, asking them to out so-called “apostate” Democrats who refuse to support his (Quigley’s) radical, anti-drilling agenda (see Smoking Gun: Copy of the Email that Got John Quigley Fired). Apparently one of the apostates is none other than Gov. Wolf himself–according to soldier Vitali who is the designated verbal grenade thrower–tossing some pretty mean-spirited jabs in Wolf’s direction for Wolf’s willingness to accept half a loaf and adopt new drilling regulations for shale/unconventional, while letting rules for conventional drilling slide (see PA Gov Wolf “Eager” to Sign Drilling Law Forced Down His Throat). Vitali and his media enablers (StateImpact Pennsylvania, funded by taxpayer dollars) are savaging Wolf, throwing him under the bus. Not only for exempting conventional drillers from new rules, but also for Wolf’s willingness to bend and compromise with Republicans on other environmental issues. Apostate! (As Quigley calls it in his profane email.) As we previously commented, we enjoy watching the Dems eat their own…
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Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Washington County

Homeowner Claims Range Doctored Well Test Results, Suing for Fraud
June 16, 2016June 16, 2016

In 2014, the Pennsylvania Dept. of Environmental Protection (DEP) fined Range Resources a whopping $4.15 million for violations related to several of Range’s wastewater impoundments in Washington County, PA (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). Some of the nearby neighbors claimed that Range’s impoundments had leaked, contaminating their water wells. One of those landowners was Loren Kiskadden, who sued Range in civil court. The problem is, the DEP found that the nearby Yeager impoundment had not contaminated Kiskadden’s well, which led to allegations that the DEP had bungled the investigation (see Did DEP Mishandle Range Wastewater Impoundment Investigation?). Kiskadden had to press on, because if the DEP didn’t reverse its finding, he would have no civil case against Range. Press on he did (see Hearing on Range Yeager Impoundment/Water Contamination Continues). The matter was heard by the DEP’s Environmental Hearing Board (EHB). The EHB found that Kiskadden didn’t have a case–his well was not contaminated by Range’s impoundment. So Kiskadden and his lawyers asked for a re-hearing. Kiskadden’s re-hearing request got turned down (see DEP Final Determination: Range Didn’t Pollute Kiskadden Water Well). End of story. Except, we now have a new wrinkle. Another homeowner–we’re not sure if this is for the Yeager or a different impoundment–is suing both Range and a lab Range used to test their water well claiming fraud–that Range changed the test results that the DEP based its “faulty” investigation on…
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Economic Impact | Energy Services | Industrywide Issues | Jobs | NEXUS Pipeline | Ohio | Pipelines | Spectra Energy | Statewide OH

NEXUS Awards Contracts to Build Pipeline – Union & Non-Union Labor
June 16, 2016June 16, 2016

NEXUS map – click for larger version

Spectra Energy has awarded four contracts to three companies to build the NEXUS Pipeline–a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. Two of the three companies will use union labor, the third will not–and that’s causing some pushback from labor groups in Ohio. A NEXUS rep said that 79% of the pipeline will be built by union labor. Labor unions would prefer that percentage be 100. Spectra/NEXUS guaranteed at least 50% of the labor would be union–so the contracts far exceed their promise. A dollar figure was not released for the work. Here’s who got the work to build NEXUS…
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Columbia Pipeline Group | Energy Services | Industrywide Issues | Marshall County | Pipelines | Regulation | West Virginia

Federal EPA Throws Cold Water on Leach XPress, Rayne Xpress Pipes
June 16, 2016June 16, 2016

Columbia Leach Express map – click for larger version

In August 2014, MDN told you that Columbia Pipeline Group, a division of NiSource, had decided to move forward with investing $1.75 billion dollars for two new projects: the Leach XPress and Rayne XPress pipeline projects (see Columbia Gas: $1.75B for 2 Projects to Send Marcellus Gas to Gulf). Leach Xpress will begin in Marshall County, West Virginia, cross Ohio and end up in Leach, Kentucky. Rayne Xpress will beef up an existing pipeline from Leach, Kentucky that goes all the way to Rayne, Louisiana with new compressor stations and looping. The two projects together mean up to 2.7 billion cubic feet per day (Bcf/d) of natural gas can move through the entire system–from West Virginia to the Gulf Coast and all point in between. In April of this year, the Federal Energy Regulatory Commission (FERC) issued their draft Environmental Impact Statement (EIS), which was positive. Earlier this week the federal Environmental Protection Agency (EPA) came along with their comments and decided to throw cold water on both projects. Why are we not surprised?…
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Beck Energy | Energy Companies | Industrywide Issues | Litigation | Ohio | Regulation | Summit County

Beck Energy Lawyer Responds to Frivilous Munroe Falls Zoning Case
June 16, 2016June 16, 2016

Earlier this month MDN shared with you the news that Munroe Falls (Summit County), OH had filed yet another frivolous lawsuit against Beck Energy to prevent drilling–after already losing a similar case before the Ohio Supreme Court (see Munroe Falls Won’t Let it Go: Files New Lawsuit Against Beck Energy). MDN received a statement from Beck Energy’s lawyer which says, among other things: “the complaint the City of Munroe Falls recently filed lacks any good faith basis under existing law, and it is clear Munroe Falls’ intention in filing this complaint is to harass and maliciously injure Beck Energy.” Fighting words! Sounds like the taxpayers of Munroe Falls should get ready to open their pocketbooks to pay into a settlement with Beck after Beck wins again. Our question: When will Munroe Falls voters get rid of the obstinate jerks running the place? Here’s the statement from Beck’s lawyer…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Williams Tries, One Last Time, to Garner Support for ETE Merger
June 16, 2016June 16, 2016

Yesterday Williams published a letter from Institutional Shareholder Services (ISS)–a “leading proxy advisory firm”–recommending that shareholders in Williams should vote “yes” on the merger with Energy Transfer Equity (ETE). Williams will hold a special shareholder’s meeting on Monday, June 27, to vote on the proposed merger. Even if a majority votes in favor of the merger–far from a foregone conclusion–it’s still not a done deal. ETE continues to assert that expert opinions on the taxability of the merger may scuttle the deal. Just a few weeks ago ETE sued Williams to abort the deal (see Midstream Soap: ETE Sues to Walk Away from Williams Takeover Deal). We view all of this–voting for the merger, etc.–as posturing. Fodder for the lawyers to use after the deal fails to consummate. Here’s the latest in our ongoing soap opera that we call, As the (Midstream) World Turns…
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Industrywide Issues | Regulation | Wastewater

EPA Bans Disposal of Frack Wastewater at Public Sewer Plants
June 16, 2016June 16, 2016

Not long after Michael Krancer was appointed Secretary of the Pennsylvania Dept. of Environmental Protection in 2011, he “requested” (which was more order than request) that municipal sewage treatment plants still accepting and processing Marcellus drilling wastewater stop the practice. At the time there were 15 plants accepting Marcellus wastewater. Under pressure from Krancer, they ended the practice in May 2011 (see PA DEP, Marcellus Shale Coalition Admit Drilling Wastewater Likely Contaminating Drinking Water). His prescience was rewarded. A year later there were far lower bromide levels in PA rivers (see Marcellus Wastewater Ban Leads to Lower Bromide in PA Rivers). That’s how things should work: the state looks after its own environment. But that means less power for the power-mad bureaucrats in Washington, DC. Right on cue, before Obama is ejected from office next January (thank God!), his out-of-control EPA has issued rules that do what Krancer did without a new law back in 2011. The EPA has issued a new regulation (i.e. unlegislated law) that declares no municipal sewage treatment plant in any state (not just PA) can accept and process shale wastewater…
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CNG/LNG | Exporting | Industrywide Issues | Regulation

Canada Grants Final Approval for Bear Head LNG Facility
June 16, 2016June 16, 2016

For some time now we’ve had our eye on Bear Head LNG, a $2.2 billion LNG export project proposed by Australian company Liquefied Natural Gas Limited (LNGL), to be built in Nova Scotia, Canada. In August 2015 the Canadian National Energy Board (NEB) approved LNG exports for the project. In February of this year the U.S. Dept. of Energy also gave its blessing, because the gas it will export will largely come from the Marcellus/Utica region (see Bear Head LNG Exports Get Final DOE Approval – Good for Marcellus). Although the NEB approved the project last summer, that approval was subject to a further approval by the “Governor in Council”–some sort of final bureaucratic signature required. LNGL announced earlier today that they have received the Governor in Council signoff. The Bear Head LNG project is now fully, officially, approved by the Canadian government. The question remains, will it get built?…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Jun 16, 2016
June 16, 2016June 16, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Ohio has 12 rigs running, 1 new Utica permit; Kinder Morgan donates $15K to Wooster YMCA; hope that Wolf will back off on severance tax; Rogersville Shale drilling at stand-still; Maine needs more natgas; large stockpiles of natgas choking price rally; Speaker Ryan unveils plan to roll back Obama enviro regs; and more!

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