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Exclusive: MDN Interviews PA DEP Sec. Chris Abruzzo

Christopher AbruzzoMDN became aware that newly nominated (and currently Acting) Secretary of the PA Dept. of Environmental Protection, Chris Abruzzo, would be attending Shale Insight 2013. So we requested an interview with the Secretary, and he obliged! To our knowledge, we were the only media interview he granted during a brief walking around the show visit on Wednesday.

MDN editor Jim Willis asked Sec. Abruzzo some tough questions, including his take on the PA Attorney General’s criminal lawsuit against XTO (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO); his biggest challenge since holding the office in April; how he responds to the charge that the DEP is sometimes too cozy with the drilling industry; an update on the DEP’s study of air quality near drilling sites and compressor stations (see DEP Marcellus Air Study in SW PA Extended Extra Half Year); and his response to John Hanger (former Secretary of the DEP) about his remarks that Abruzzo’s appointment was “bizarre and irresponsible”…
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XTO Will Pay $20M+ to Settle PA Frack Wastewater Spill Case

XTO Energy (owned by Exxon) continues to fight against an egregious–perhaps illegal–abuse of power by Pennsylvania Attorney General Kathleen Kane, an anti-driller who is attempting to criminalize an accidental spill of frack wastewater hoping to make “an example” of XTO (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO).

Meanwhile, XTO has just settled the civil side of that accident by agreeing to pay more than $20 million–$100,000 in fines and $20 million to implement new procedures and technologies to ensure such a spill does not happen again…
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Hanger Joins Kane in Piling on XTO for 3-Yr Old Accidental Spill

MDN told you yesterday about the unprecedented and egregious abuse of power by the Pennsylvania Attorney General Kathleen Kane in bringing criminal charges against XTO for a more than three-year-old accidental wastewater spill in Lycoming County, PA (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO). Now, Kane’s fellow Democrat John Hanger, who was Sec. of the PA Dept. of Environmental Protection at the time of the accidental spill (and someone seeking the Democrat nomination to run for governor in PA) is piling on too. He’s happy that Kane has the long knives out for XTO and says so. Hanger, you may recall, still has not disavowed his party’s call for a statewide, ongoing moratorium on shale drilling (see Rendell Paints Hanger into Corner on PA Democrat Moratorium Vote).

Kane’s actions shouldn’t surprise anyone. She telegraphed her intentions before she was elected last year. Anti-drillers have confirmed Kane was eagerly looking for an opportunity to persecute prosecute a Marcellus Shale driller–to make an example of them. Brings to mind another anti-drilling zealot we know about who shares the same philosophy (see EPA Administrator Al Armendariz Resigns over Crucify Comment)…

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PA AG Abuses Her Authority, Files Criminal Charges Against XTO

abuse of powerIn November 2012, the day after the general election, MDN asked the question if Pennsylvania’s newly elected anti-drilling attorney general, Kathleen Kane, would target the Marcellus Shale drilling industry (see Will New PA AG Go After the Marcellus Drilling Industry?). We now know the answer. Yesterday Kane’s office announced it had filed criminal charges against XTO Energy related to the spill of fracking wastewater at a site in Lycoming County, PA that happened more than three years ago–before she took office.

XTO has already responded that the area where the spill occurred suffered no long-term adverse environmental effects and that Kane has far exceeded the bounds of her authority (in fact is abusing her authority) in seeking criminal charges. We agree with XTO…
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XTO Pays Dearly for 2010 Wastewater Spill in Lycoming County, PA

Yesterday, the federal Environmental Protection Agency (EPA) and U.S. Department of Justice announced a deal with XTO Energy to resolve what they say was a violation of the Clean Water Act in 2010 when XTO experienced a spill of fracking wastewater from a storage tank in Lycoming County, PA.

That spill is going to cost XTO dearly: a $100,000 fine, and another $20 million to craft a “comprehensive plan to improve wastewater management”…
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NiSource Big Pine Gathering Pipeline Goes Online in SW PA

NiSource and Columbia Pipeline Group announced yesterday their new Big Pine Gathering System is now online and running in PA’s Marcellus Shale. Big Pine is a 57-mile pipeline gathering system serving southwestern PA: Allegheny, Butler, Armstrong, Indiana and Westmoreland counties. NiSource has a long-term contract with XTO Energy to deliver XTO’s natural gas to three different pipeline transmission systems. In addition to XTO, NiSource recently signed PennEnergy Resources as another customer for the new pipeline.

Details from the NiSource press release:
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XTO’s New NGL Recovery Plant in Butler County, PA Now Online

under the radarFlying under the radar for more than year, XTO Energy (the Marcellus/Utica Shale subsidiary of Exxon Mobil) announced yesterday their natural gas liquids (NGL) recovery plant in Butler County, PA is now up and running. The plant will process wet gas coming from the the southwestern portion of PA, separating NGLs from methane. Although not referenced in the XTO announcement (see below), the recovered NGLs will be fractionated (further separated) and marketed by MarkWest (see MarkWest Signs Deal with XTO to Process NGLs in PA).

The announcement from XTO that their new NGL recovery plant is now up and running:
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Judge Rescinds Request for WV Supremes to Rule on Surface Rights

In early April, MDN told you about a case referred to the West Virginia Supreme Court by a federal district court judge. Judge Irene Keeley requested the WV Supreme Court rule in a case over whether or not a driller can build a drill pad on a surface owner’s land for the purpose of getting the gas underneath a neighbor’s property (for background, see District Court Judge Asks WV Supremes to Rule in Surface Rights Case).

We have a new development in the case. Judge Keeley has changed her mind and told the supremes to forget about it–at least for now. She wants the lawyers for both sides in the case to submit more “facts” before she decides on whether she’ll rule or resubmit it to the high court…
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District Court Judge Asks WV Supremes to Rule in Surface Rights Case

Waaaay back in July 2011 MDN told you about an interesting legal case in West Virginia in which a surface rights landowner was suing XTO because XTO is (in the opinion of the landowner) abusing the right to set up a well pad on his surface in order to get gas not only under the surface of his property, but also from his neighbors’ property (see WV Marcellus Legal Battle over Well Pads: Surface Rights Owners v. Mineral Rights Owners). The surface landowner, Richard Cain, acknowledges law and precedent allows XTO to set up a well on his land in order to get the gas under his land—but Cain maintains XTO isn’t really all that interested in getting it from under his land, but simply wants to use his convenient location to reach other nearby properties. Cain gets all of the headaches and none of the royalty money. Kind of a raw deal, from his perspective. Can’t blame him.

There is a new development in the case. The judge presiding over the case, U.S. District Judge Irene Keeley, has formally asked the WV Supreme Court to rule on the key question in the case since it will set a precedent (and has far-reaching consequences) for the entire state…

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XTO, Beck Energy Appeal OH Case Allowing Lease Termination

Earlier this week MDN told you about 600-700 landowners in Ohio who won a lawsuit allowing them to terminate leases held with Beck Energy and XTO Energy (see OH Lawsuit Victory: 600-700 Landowners Can Terminate Beck, XTO Leases).

Beck and XTO are none too happy with the decision and have appealed it to the Ohio Court of Appeals:

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OH Lawsuit Victory: 600-700 Landowners Can Terminate Beck, XTO Leases

A court case recently-decided could have big implications for landowners in Ohio. The case means that some 600-700 landowners with signed leases with Beck Energy Corp. and XTO Energy in Monroe and Belmont counties may be able to join a class action to have their leases terminated, allowing them to re-sign with a different company.

The details, as provided by law firm Jackson Kelly:

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Will Exxon’s Lack of Marcellus Drilling Lead to Expired Leases?

slipping awayAn energy industry consultant and investment analyst writes an interesting article on Seeking Alpha about Exxon Mobil’s commitment to dry shale shale (“methane only”). Richard Zeits characterizes Exxon’s shift away from dry to wet gas (oil and natural gas liquids) as “radical,” citing Exxon’s onshore rig count decline from 71 to 50 rigs (a 30% drop) since the beginning of this year as evidence of the change. He estimates they use less than 10 of the remaining 50 rigs for drilling in dry gas areas.

Zeits says that Exxon may not be able to hold a sizable amount of leased acreage they hold in dry gas areas of the Marcellus and Fayetteville Shale basins because of the reduced rig count. That is, they won’t be able to drill on the leased acreage by the time the leases expire—especially in the Marcellus where they’re only operating four rigs on 660,000 acres of holdings.

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MarkWest Signs Deal with XTO to Process NGLs in PA

MarkWest has just signed a deal with XTO Energy (XTO is a wholly-owned subsidiary of Exxon Mobil) to extend MarkWest’s natural gas liquids (NGLs) gathering pipeline in Butler County, PA to XTO’s processing plant. Previously MarkWest announced plans to extend the same pipeline from its Houston, PA complex to the Bluestone complex in Butler County. With this announcement, MarkWest will further extend the pipeline from Bluestone to XTO’s plant.

This deal will grant MarkWest the right to fractionate and market NGLs from XTO. Adding this new pipeline to other recently announced pipelines by MarkWest, when everything is built and running, MarkWest will have 3 billion cubic feet of gas processing capacity and 270,000 barrels per day of fractionation capacity throughout the Marcellus and Utica Shale.

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Correction: Exxon Buys 25K Acres of Utica Shale Leases in OH

Two days ago MDN reported, based on copies of paperwork filed with Monroe County, Ohio, that Exxon Mobil via its subsidiary XTO Energy had acquired 13,200 acres of Utica Shale gas leases from Beck Energy (see this MDN story). It turns out there’s more to the story.

MDN received a copy of an additional purchase agreement between Beck and Exxon for another 7,627 acres, for a total deal between the two companies of 20,827 acres of leases in Monroe County. The new/second agreement appears to be property held by Beck with delayed rental payments—that is, property where there is currently no active drilling.

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