Industrywide Issues

Chesapeake Energy | Energy Companies | Energy Services | GASFRAC | Hydraulic Fracturing | Industrywide Issues | Ohio | Tuscarawas County | Utica Shale

Chesapeake Tries Waterless Fracking at OH Utica Shale Well
March 12, 2015March 12, 2015

Something we consider pretty big news: Chesapeake Energy is running an experiment with waterless fracking. They’ve contracted with Canadian waterless fracking company GASFRAC to attempt what is the second (that we’re aware of) waterless frack job on a Utica Shale well–in Tuscarawas County, OH. The first waterless frack job done by GASFRAC was for EV Energy Partners on a Utica well also in Tuscarawas County (see Details on GASFRAC’s Waterless Frack Test in OH Utica). We consider it a good sign that Chessy thinks its worth a few million bucks to try it out for themselves. Chessy stresses this is still very preliminary…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Taxation

PA Gov Wolf: Forget Burning Natgas, Make PVC Pipe Instead
March 12, 2015March 12, 2015

A question and answer session with PA Gov. Tom Wolf at the Harrisburg Patriot-News reveals a lot about his attitude and thinking with regard to the Marcellus Shale industry. Hinting at his previous statement that if the industry doesn’t agree to his tax he’ll ban them (see PA Gov Wolf Turns Bully, Threatens Ban on Drilling Absent New Tax), Wolf, in answering a question about the drilling industry and how it conducts itself said the industry will “do this [Marcellus drilling] right or we can’t do it at all.” He failed to define what he means by doing it right. Wolf also said that while he’s in favor of extracting Marcellus Shale gas, he (fantastically) thinks it’s a waste to burn it! Instead, HE wants to use it to make things, like artificial wood for decks and PVC for pipes. He’s more interested in solar and wind than he is natural gas (must be John Hanger’s influence). What a mess this man’s thinking is on one of PA’s most important natural resources. He’s going to screw it up if he continues on this dangerously naive course…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PIOGA Leads the Charge to Defeat Wolf’s Severance Tax
March 12, 2015March 12, 2015

Louis D. D’Amico, President & Executive Director of the Pennsylvania Independent Oil & Gas Association (PIOGA), is leading the effort to defeat PA Gov. Tom Wolf’s Marcellus-killing, 7.5% severance tax. While virtually everyone else looked away in embarrassment and otherwise ignored Wolf’s threat that you either take this tax like a man or you’ll get banned “like New York,” Lou D’Amico is not looking away and not pretending Wolf never said it. Wolf did say it and he meant it–and he must be stopped. Below is an excellent column Lou recently wrote in which he parses the governor’s comments and offers the industry’s response–setting the record straight. By the way, Lou will be the Guest of Honor at this year’s Oil & Gas Awards event in Pittsburgh on March 25…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Taxation

PA DEP Sec Quigley Fumbles Questions at House Budget Hearing
March 12, 2015March 12, 2015

Yesterday PennFutureDEP Acting Sec. John Quigley appeared before the PA House budget hearing to answer questions about Gov. Tom Wolf’s budget proposals for the Dept. of Environmental Protection (i.e. cheerlead and support the highest tax increase on drillers in the state’s history). Quigley was asked why he had fired the members of the DEP’s Oil & Gas Technical Advisory Board (OGTAB)–something no incoming governor has done in a generation, Republican or Democrat (see Why did PA DEP Acting Sec Quigley Mass Fired Gas Advisory Board?). Quigley apparently fumbled around with the question and answered it later, after the meeting, saying the law required splitting the board in two and, “We needed some new blood on the advisory board.” He was asked, during the hearing, who the new members would be on the newly constituted OGTAB. Quigley said he “couldn’t remember” and he later told reporters the board is appointed by the governor and that he “doesn’t do clerical work.” Apparently nominating and appointing a board with people who ultimately guide and control the very policies his department must enforce isn’t important enough for Quigley to bother with. Arrogant or out of touch, take your pick. Later that same day, after some underling got chewed out for Quigley’s poor performance, a press release was issued with the names of the OGTAB members…
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Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

PA DEP Sec Quigley Wants Pipeliners/Towns to Meet Up
March 12, 2015March 12, 2015

PA’s PennFutureDEP Acting Sec. John Quigley wants to get the big pipeline companies and the townships through which the pipelines will go to meet at the local Starbucks and “start a conversation.” Which latte do you like? Er no, not that kind of conversation. Quigley acknowledges he doesn’t have a thing to do with interstate pipelines–they’re approved by the Federal Energy Regulatory Commission (FERC). Other agencies (federal and state) oversee the pipelines once they are built. But Quigley thinks if he can get both sides–pipeliners and towns–together and try to at least get a dialogue going, perhaps something good will come from it. Not a bad idea as ideas go. One recommendation: don’t tell the nutters which Starbucks you’re meeting at…
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CNG/LNG | Electrical Generation | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Spectra Energy | Tennessee Gas Pipeline

Does New England Really Need a New Natgas Pipeline?
March 12, 2015March 12, 2015

Don’t look now, but we actually read a pretty fair and balanced report on pipelines to New England…published by PBS! We predict a reporter who will soon be out of a job. The article (which we quote from below) frames up the arguments against and for new natural gas pipelines coming to New England this way: Those against say electric generation that requires natgas really only demands an extra supply in the dead of winter–typically 30-45 days. Because of that heightened demand, it drives electric prices through the roof because the plants have to buy the gas on the spot market. The rest of the year that kind of intense demand is not there–meaning you’ll spend billions on pipelines to solve a 30-45 day problem. And the rest of the year? Some of that gas will go to Canada and likely get exported. Better to use the existing LNG terminal in Boston and import (!) liquefied natural gas, instead of using cheap, abundant Marcellus gas from a few hundred miles away, and use more LNG at electric generation plants. Those who favor building the pipelines see it differently…
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Energy Services | Industrywide Issues | Millennium Pipeline | New York | Pipelines | Statewide NY

NY’s Millennium Pipeline Launches Open Season to Expand
March 12, 2015March 12, 2015

The Millennium Pipeline–a natural gas pipeline running through upstate New York’s Southern Tier area from Corning, NY to Rockland County, NY–announced a new open season yesterday. The open season will sign up new customers from now until the end of the month, March 31. The Millennium, which is jointly owned by NiSource, National Grid and DTE Energy, plans to expand facilities along the line, increasing capacity. That usually means they will install some new loops, or additional pipelines right next to the existing pipeline, along with upgrades to compressor plants. The purpose? Deliver more clean-burning natural gas to customers throughout the northeast…
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Energy Companies | Energy Services | EQT Corp | Industrywide Issues | Pipelines | WGL Holdings

Mountain Valley Pipeline Picks Up 2 New Investors/Partners
March 12, 2015March 12, 2015

Yesterday we told you that some landowners in West Virginia are not happy with what they call threatening letters coming from the Mountain Valley Pipeline (see WV Landowners Say They’re Bullied by Mountain Valley Pipeline). MVP is a 330-mile pipeline from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. It’s a joint venture between EQT and NextEra US Gas Assets. At least it was a jv between the two until yesterday when MVP announced two more partners/investors: WGL Midstream and Vega Midstream. Who’s on top? EQT owns 55% (and manages) the jv, NextEra owns 35%, WGL will own 7% and Vega 3%. Here’s the announcement from yesterday…
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Industrywide Issues | Research

Turning Point: EIA Drilling Report Shows Slow Down in Production
March 11, 2015March 11, 2015

It is true that what goes up must come down? As a general rule, yes. That age-old wisdom is manifesting itself in both oil and natural gas production from shale plays. Two days ago our favorite report from our favorite government agency–the Drilling Productivity Report (DPR) from the U.S. Energy Information Administration (EIA)–was issued. It shows something we haven’t seen before: negative numbers in some of the production columns for some of the shale plays–in both oil and natural gas. No, the Marcellus and Utica are not in the negative (they will both produce more oil and gas in April than they did in March). However, the rate of increase in production for the Marcellus and Utica, indeed all of the shale plays, is much less than it has been previously. Scaling back on new drilling will, sooner or later, affect production. We’re now seeing it in the numbers…
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Industrywide Issues | Ohio | Statewide OH | Taxation

OH Gov Kasich the Bully: Accept My 6.5% Tax or Risk a 10%+ Tax
March 11, 2015March 11, 2015

Wow. We’re kind of speechless. Ohio Gov. John Kasich (RINO) sure is a sore loser. And a vicious one too. Get this: Kasich is now saying if the oil and gas industry doesn’t lay down and take the high severance tax he’s proposing, some “citizen group or aspiring politician” will probably (wink wink nod nod) push for a ballot measure in the state to create such a tax. And if that happens, his measly 6.5% severance tax will look darned good compared to the 10% or more those wild citizen groups will no doubt push for (see OH Gov. Kasich Increases Proposed Severance Tax Rate by 236%). That is, Kasich just threatened the oil and gas industry with a 10%+ severance tax if they don’t accept his tax in this year’s budget. Talk about a bully! We’re used to this from Democrats, but not from so-called Republicans…
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Chesapeake Energy | Columbiana County | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio

Columbiana Landowners Win Right to Renegotiate Some Lease Terms
March 11, 2015March 11, 2015

In 2008, before the word “Utica Shale” was on people’s lips and in their consciousness, landmen from Patriot Energy Partners “smiled and dialed” calling up landowners in Columbiana County, offering them a whopping $10 (yes 10 bucks) an acre to sign gas and oil exploration leases. Patriot mailed them the contracts, the landowners signed and sent them back, and then got pennies on the dollar for what those leases were actually worth. Patriot then flipped the leases, selling the deep exploration rights to Chesapeake Energy–for $1,100 an acre. Patriot claimed the practice (of hoodwinking landowners and flipping leases) is legal. The landowners wised up and in 2011, 25 landowner families sued to have their leases dissolved. Four years later the case, after going to arbitration, is resolved…
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Energy Companies | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Washington County | Wastewater

Range Re-Opens 2 of 3 Water Impoundments in Washington County, PA
March 11, 2015March 11, 2015

Last September Range Resources was fined $4.15 million for a series of violations at eight water impoundments they operate in southwestern PA (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). As part of the deal worked out with the PA Dept. of Environmental Protection (DEP) under then-Sec. Chris Abruzzo, Range agreed to shut down five of the eight impoundments. Actually, all eight of the impoundments ceased operation either during or prior to last September. Two of the remaining three impoundments–the “Carter” and “Carol Baker” impoundments–are now back up and running. The Carter impoundment is handling only fresh water these days, while the Carol Baker impoundment has been upgraded and once again handles wastewater. The remaining “Jon Day” impoundment is being upgraded to begin handling wastewater again, when the weather breaks…
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Energy Companies | EQT Corp | Industrywide Issues | Pipelines | Regulation | West Virginia | Wetzel County

WV Landowners Say They’re Bullied by Mountain Valley Pipeline
March 11, 2015March 11, 2015

Last June EQT and NextEra US Gas Assets formed a joint venture to build a 330-mile pipeline from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA to deliver abundant, cheap Marcellus and Utica Shale gas to markets throughout the southeast (see EQT Announces New Marcellus/Utica Pipeline to Southeastern US). The new pipeline was dubbed the Mountain Valley Pipeline (MVP) project. Since that time, MVP has filed paperwork with the Federal Energy Regulatory Commission (FERC), which has jurisdiction on whether or not to build it because the pipeline crosses state lines (see EQT’s WV to VA Pipeline Open Season a Success, FERC Filing in Oct). In February, rumors began to bubble that the pipeline is changing its route (see WV to VA Mountain Valley Pipeline Changing Routes?). There has been some resistance, as there always is, on the part of some landowners who refuse to let surveyors on their property. So MVP sent letters to landowners threatening to sue them if they don’t allow the surveyors access. How can they sue? Using the power of eminent domain–but FERC hasn’t yet approved the project which would trigger the right to use eminent domain…
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Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream | Industrywide Issues | Pipelines | Statewide WV | West Virginia

EQT Sells WV Pipeline Gathering System to Itself for $1B
March 11, 2015March 11, 2015

We’re always somewhat amused by these stories. Sometimes a company will spin off a division into its own company–a subsidiary–and later transfer or “sell” certain assets to the subsidiary. On paper the subsidiary is its own company with its own set of investors, its own board, and its own management. But the primary investor with controlling interest remains the mother company. For all practical purposes, the subsidiary IS the same company as the mother company. Midstream companies tend to do this with some regularity. Back in 2012 we noted that Kinder Morgan did it (see Kinder Morgan Sells Tennessee Pipeline to Itself). This week it’s EQT–selling its Northern West Virginia Marcellus Gathering System, along with a “preferred interest” in another EQT subsidiary, for $1.05 billion to the company’s pipeline subsidiary, EQT Midstream Partners…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Regency Energy Partners

ETP Buyout of Regency Energy Has a Date: April 28
March 11, 2015March 11, 2015

In January MDN brought you the big news that Energy Transfer Partners (ETP) is buying/merging with Regency Energy Partners (see Energy Transfer Partners Buys Regency Energy for $25B). Both companies have meaningful operations in the Marcellus/Utica region. These mergers & acquisitions, as you know, take time. Both companies have been busy and Regency reported earlier this week they have a date to make it all final: April 28. On that date, Regency will hold a special meeting at their company headquarters in Dallas, TX to vote on the deal…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Ohio | Pipelines | Regulation | Statewide OH

NE Wackos on a Rampage: Demand FERC Stop Approving Pipelines
March 11, 2015March 11, 2015

Here’s what passes for thinking in anti-drilling land: Fossil fuels, when burned, release carbon into the atmosphere. Carbon is bad (at least it is for anti-drillers), although you and all other animals breathe carbon out with every breath and plants breathe it in–it’s a requirement for all of life to exist. Still, play along, k? Because natural gas is a fossil fuel, it’s evil. By burning it you pollute Mother Earth and will cause Her to bake with mythical global warming (although we almost froze to death this winter in the northeast). So fracking is the ultimate rape of Mother Earth, as stated by none other than that towering intellect Yoko Ono when singing the song “Don’t Frack My Mother” (see Yoko Ono and Son Sean Lennon Go on Anti-Fracking Tirade). Fracked shale wells require pipelines. If you can stop pipelines, you can stop fracking. Who approves the big pipelines? The Federal Energy Regulatory Commission (FERC). So who’s the latest target of anti-drilling wackos? You got it–FERC…
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