Industrywide Issues

Energy Services | Industrywide Issues | M&A | PVR Midstream | PVR Partners | Regency Energy Partners

Marcellus/Utica Midstreamer PVR Bought by Regency Energy for $5.6B
October 11, 2013October 11, 2013

PVR Partners, formerly known as Penn Virginia Resource Partners, will now just be formerly. Period. PVR is a major midstream company (pipelines and processing plants) with big operations in the PA Marcellus Shale after buying Chief Gathering last year (see PVR Buys Chief Gathering/Marcellus Pipelines for $1B). They also announced last year that they would spend $380 million to expand pipelines in NE PA (see PVR Announces $380 Million Investment in NE PA Marcellus), and very recently PVR announced a deal with Hess to build a pipeline system in eastern OH (see PVR Partners to Build $150M Utica Shale Pipeline System for Hess).

Yesterday Texas-based Regency Energy Partners and PVR announced that Regency will buy out PVR for $5.6 billion. Regency, also a midstream company, owns some assets in the Marcellus/Utica, but most of their operations are in the Southwest and West, so this purchase gives them a major presence in the rapidly-expanding midstream sector of the Marcellus/Utica. After the buyout is completed, the PVR name will be no more…
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Health Impacts | Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Cuomo Says NY Doing a Good Job on Frack Health Review (LOL)
October 11, 2013October 11, 2013

Ha ha ha ha ha ha ha ha ha ha. Oh, sorry, but we just could not stop laughing when we saw a quote made by Gov. Andy “he without a spine” Cuomo yesterday. With respect to the now year-long health review of proposed fracking regulations in New York–a review that was supposed to be done “within the next few weeks” back in February–Cuomo actually, incredulously said (please, try not to roll on the ground laughing like we just did): “I think we’re doing a good job on it.”

Andy must have a REALLY low opinion about the intelligence of the average NY voter…

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Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Taxation

MSC to PA Dem Gubernatorial Candidates: Nix the Big Tax Idea
October 11, 2013October 11, 2013

Most (all?) of the candidates who have announced they are running for the Democrat nomination for governor in Pennsylvania have said they will (a) increase regulation on the Marcellus Shale industry, and (b) dramatically increase taxes on the industry. Democrats either don’t know or don’t care that such taxes suffocate businesses and cause those businesses to go elsewhere. It’s a fact, not a threat.

The Marcellus Shale Coalition (MSC)–a group of some of the biggest drillers and midstream companies in the Marcellus–have weighed in and are giving PA’s Democrat gubernatorial candidates a verbal slap about their plans to tax and regulate…
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Industrywide Issues | Pennsylvania | Research | Statewide PA

PA DEP Files Required Report on So-Called Climate Change Affects
October 11, 2013October 11, 2013

Let’s assume, just for the sake of argument, that there really is a Santa Claus. Let’s further assume brilliant politicians in Pennsylvania want a state government agency to do a “scientific study” of the physics of how Santa can visit all of the homes in PA in a single night–Dec. 24–and still make it home to the North Pole in time to eat cookies by sunrise. The purpose of the report is to reassure the little kiddies that Santie is real and yes, he can and does get it all done in a single night.

Now assume that those same PA politicians believe in another fairy story–something called man-made global warming (now renamed to “climate change” because the earth’s so-called average temperature hasn’t risen in the last 15 years)–and that said politicians directed a state agency–the Dept. of Environmental Protection–to draft up a document detailing how the big, bad bogeyman of global warming will affect all the little boys and girls in PA, and oh, by the way, don’t forget to sprinkle the report with lots of talk about “renewables” because we hate nasty fossil fuels, ya know. And snap snap, get that report written PDQ!

Unfortunately, the second scenario above is true. And when the DEP was late in filing this exercise in fantasyland, PA eco-nuts and anti-drillers got their knickers in a twist. They can untwist them now–the fairy story report is finally here…
Read More “PA DEP Files Required Report on So-Called Climate Change Affects”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Regulation | Taxation | Washington County

PA Anti-Fracking Gatecrashers Outside, Real Work Gets Done Inside
October 11, 2013October 11, 2013

We know everyone likes a good story, so… Once upon a time there were four anti-drillers: Craig Stevens (from Dimock, PA, he of the little brown jug that supposedly contains contaminated drinking water from his well but he won’t let anyone test it); Ray Kemble (also from Dimock, PA); Robert Lee McCaslin (from Bath, NY); and Randy Moyer (from Portage, PA). None of these anti-drillers apparently have day jobs because they travel around the northeast like groupies following their favorite rock band–except in reverse. This band of merry anti-frackers travel about the countryside trying to gatecrash pro-drilling meetings. (Every now and again they do attend a meeting of the anti-drilling faithful–just to get some good juju to keep going.)

Anywho…our merry band of four anti-frackers descended on a peaceful meeting of elected PA officials in far western PA yesterday, and the Washington Observer-Reporter was there to report on the four anti-frackers outside instead of the 100 elected officials inside…
Read More “PA Anti-Fracking Gatecrashers Outside, Real Work Gets Done Inside”
Health Impacts | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Research | Statewide PA

New Study: No Increase in Childhood Cancer Rates Near PA Fracking
October 10, 2013October 10, 2013

More bad news for anti-drillers. A recently published study in the peer-reviewed Journal of Occupational and Environmental Medicine (July 2013 issue) looks at incidences of childhood cancers in Pennsylvania–in areas with hydraulic fracturing. The study, titled “Childhood Cancer Incidence in Pennsylvania Counties in Relation to Living in Counties With Hydraulic Fracturing Sites” (full copy embedded below) looks at the rates of cancer both before fracking begins, and then again after fracking has been going on.

And what did this scientific study find? Statistically, there are no increases in childhood cancers in areas where there is fracking. Bad news for anti-drillers–good news for everyone else, including “the children”…
Read More “New Study: No Increase in Childhood Cancer Rates Near PA Fracking”
Air Quality | Broome County | Health Impacts | Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

NY Assemblywoman Donna Lupardo’s Anti-Drilling Snit Fit
October 10, 2013October 10, 2013

New York Assemblywoman Donna Lupardo is a Democrat from the Binghamton, NY area, a member of the Assembly Committee on Environmental Conservation and a member of the governor’s High-Volume Hydraulic Fracturing Advisory Panel–appointed to the panel by Dept. of Environmental Conservation (DEC) Commissioner Joe Martens. Her opinion on fracking matters—she carries influence in Albany. She’s also anti-drilling, as MDN pointed out in March (see NY Assemblywoman Donna Lupardo: Fracking Friend or Foe?). She coyly attempts to straddle the fence with her language, but her actions speak so loudly we no longer hear her political double-speak.

Once again Lupardo proves her anti-drilling creds. She has just sent (yet another) letter to DEC Commissioner Martens (full copy embedded below). This time Lupardo wants to let Martens know she’s miffed that he won’t assemble the fracking advisory panel per her previous request earlier this year, and to let him know she thinks the never-ending health review of fracking regulations by State Health Dept. Commissioner Nirav Shah should be put on immediate hold. To which we say, really? The health review is already on hold! More on Lupardo’s anti-drilling snit fit to Martens…
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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

How Do You Talk to (Educate) Friends & Neighbors About Shale?
October 10, 2013October 10, 2013

It’s a common problem for those of us who are immersed in the shale energy industry. We are so saturated all the time with the arguments and counter-arguments and details about shale drilling, that when faced with a family member, friend or neighbor who isn’t well-versed in the industry, we grope for the words and terms to use to describe this incredible industry and its successes. Most of the time our friends and family have a built-in reticence and caution about shale drilling because they know nothing more than what mainstream media feeds them, most of it untrue.

So how do we quickly, accurately and effectively communicate the positive shale drilling message? Michael Krancer, former Secretary of the PA Dept. of Environmental Protection, has a solution, which he shared recently at the Energy Inc. conference in Pittsburgh…

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Air Quality | Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Susquehanna County

More on “Pro-Drilling” Conversion of Gasland II Star from Dimock
October 10, 2013October 10, 2013

A few days ago we told you that one of Josh Fox’s stars in Gasland II, Victoria Switzer, has changed sides and now wants to work with the drilling industry to ensure the air is clean in Susquehanna County, PA (see Gasland II Starlet Leaves Anti-Drilling Behind, Adopts “Realism”). This is a huge problem for the anti-drilling movement, a movement that is typically shrill and frankly, unthinking. We now have at least a few people who, while they don’t like natural gas drilling going on around them, are willing to have a cogent, what they call “respectful” dialog about it. They also recognize shall drilling is here to stay–they are realists. Finally, some people on the other side of the issue we can talk to!

A bit more about the new tone and the new group which Switzer and other former anti-drillers have formed–a group called Breathe Easy Susquehanna County…
Read More “More on “Pro-Drilling” Conversion of Gasland II Star from Dimock”
Air Quality | Industrywide Issues | Pennsylvania | Pipelines | Processing Plants | Regulation | Statewide PA

Should PA Compressor Plants Miles Away be Considered “Adjacent”?
October 9, 2013October 9, 2013

A few weeks ago at the Shale Insight 2013 event in Philadelphia, MDN heard a panel discussion that tackled a thorny, and on-going, issue in Pennsylvania. The issue is complex, but if we can condense it to a brief statement, it would be this: Should processing and compressor plants that are connected by pipelines but not directly next to each other be considered a “single source” when it comes to the pollution they emit? The argument comes down to the concept of adjacency–what does the word “adjacent” mean in the federal Clean Air Act? Does it mean “directly next to each other,” or “in the same general vicinity” (up to X miles away)?

If the plants scattered in a general area–say 20-30 miles around–are considered a single source or “adjacent”, it means collectively they would be considered a “major source” of pollution and therefore subject to very strict federal guidelines under the Clean Air Act. If they are not adjacent and not a single source, they are regulated by the state and the state has less onerous rules when it comes to air pollution emissions. It may sound like a small difference, but being regulated by the EPA or the state of Pennsylvania is a huge (and expensive) difference. The real question is, are residents who live in areas with an abundance of compressor stations and processing plants being exposed to dangerously high levels of air pollution?…
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Hydraulic Fracturing | Industrywide Issues | Ohio | Pennsylvania | Regulation | Statewide OH | Statewide PA | Statewide WV | West Virginia

17 State Chambers of Commerce to EPA: States Regulate Fracking
October 9, 2013October 9, 2013

On Sept. 20, 17 state Chambers of Commerce sent a joint letter to President Obama’s new EPA Administrator, Gina McCarthy. They opened the letter (full copy below) with a nice greeting and a congratulations on her recent confirmation as administrator, and then immediately launched into a statement (not really a request) that tells her to, in so many words, keep her mitts off fracking. That is, leave the regulation of fracking where it properly and Constitutionally belongs–with the individual states.

The federal government does not have a Constitutional role in regulating fracking and the Chambers of Commerce, representing 34% of all states and from the biggest oil and gas producing states in the Union–want to keep it that way. Not surprisingly, among the signatories are the Pennsylvania, Ohio and West Virginia Chambers of Commerce…
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Accidents | Energy Services | Enterprise Products Partners | Harrison County | Industrywide Issues | Ohio | Pipelines

Drilling Mud Spill in Harrison County, OH – ATEX Express Pipeline
October 9, 2013October 9, 2013

An Arizona company, Southeast Directional Drilling, was hired by Enterprise Products Partners to drill a trenchless hole underneath Conotton Creek in Harrison County, OH for Enterprise’s ATEX Express ethane pipeline–a pipeline that will stretch from Pennsylvania through Ohio and eventually all the way to the Gulf. However, Southeast hit a snag. Last week an “unknown quantity” of drilling mud used to lubricate the drill was spilled into Conotton Creek and onto the properties of two area homeowners.

Fortunately drilling mud is non-toxic–but in sufficient quantities it can suffocate both plants and fish. The Ohio Environmental Protection Agency is on the case investigating…
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Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

PA Republicans Introduce 4 Royalty Bills, Mea Culpa?
October 9, 2013October 9, 2013

A new PA law was supposed to give leased landowners whose property has had drilling more protections with respect to royalties, but instead ended up harming some landowners who are not leased by allowing forced pooling of their land–weakening their bargaining position (see PA Gov Corbett Signs Back-Door Forced Pooling Bill into Law). PA landowners in general and the National Association of Royalty Owners (NARO), PA chapter in particular were not pleased with the new law. Perhaps in an attempt to get back into the good graces of PA landowners, several Republican state lawmakers whose districts are in the Marcellus Shale have introduced a plethora of new bills to protect royalty interests of landowners.

A group of four House Republicans, led by Rep. Garth Everett (R-Lycoming County), recently introduced House Bill 1684, which seeks to clarify state law regarding the minimum royalty payment for landowners so that the deduction of post-production costs from unconventional wells may not result in royalty payments less than the guaranteed minimum. On the Senate side, Sen. Gene Yaw, whose district covers many of the northeastern PA drilling counties, introduced a series of three companion bills to HB 1684. It seems the Republicans can’t do enough now to help out leased landowners…
Read More “PA Republicans Introduce 4 Royalty Bills, Mea Culpa?”
Ethane | Industrywide Issues | NGLs

NGLs in OH & PA: Roughly 30/70 Propane/Ethane
October 9, 2013October 9, 2013

How much of what compound makes up what are called natural gas liquids? We read about NGLs constantly. The “wet gas” area of southwestern PA and eastern OH is said to have a lot of wet gas, or NGLs, which makes those areas more profitable for drillers. What’s in NGLs? In January 2012 we wrote a post to help readers understand the compounds found in NGLs–which ones are there, and what they are used for (see Just What are Natural Gas Liquids Anyway?).

However, MDN friend and intrepid reporter Bob Downing, from the Akron Beacon Journal, recently picked up on another piece of the puzzle. Bob found a reference as to how much of what makes up the typical barrel of NGLs–at least in the Marcellus/Utica region…
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Energy Companies | Forced Pooling | Hilcorp Energy | Industrywide Issues | Lawrence County | Litigation | Pennsylvania

Hilcorp Uses PA Forced Pooling Law Against Lawrence Cty Landowner
October 8, 2013October 8, 2013

This is not the kind of story we enjoy sharing with you. Hilcorp, a major driller in the Utica and Marcellus Shale, has decided to take what we consider “the low road” and is using a 1961 Pennsylvania law to sue a landowner to allow them to drill under their property. It’s called “forced pooling,” “compulsory integration,” and a variety of other terms. MDN does not support it. Our argument is simple: My neighbor should not have the right to tell me I can’t drill on and under my land, and I should not have the right to force it on my neighbor if they don’t want it. We believe it’s the only defensible position in the drilling debate.

Regardless, Hilcorp has moved forward with a legal action against a landowner in Lawrence County, PA who owns just 14.6 acres in a drilling unit leased by Hilcorp–and that 14.6 acres apparently prevents Hilcorp from drilling. So off to court they go…
Read More “Hilcorp Uses PA Forced Pooling Law Against Lawrence Cty Landowner”
Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Dow Disingenously Tells Shell to Forget About a PA Cracker Plant
October 8, 2013October 8, 2013

Manufacturing and labor leaders held a confab yesterday in Pittsburgh to discuss jobs, the economy, and how the Marcellus is lifting both in southwestern Pennsylvania (see our companion story today). One of the speakers at yesterday’s meeting was Peter Molinaro, vice president and senior advisor on government affairs for The Dow Chemical Co. One of Dow Chemical’s chief rivals and competitors is Shell Chemical. Shell, as MDN readers are well aware, is currently conducting a multi-year evaluation of whether or not to build a regional ethane cracker plant in Beaver County, PA, outside Pittsburgh about 30 miles.

It probably won’t surprise you that Dow’s Molinaro said at yesterday’s meeting that PA probably doesn’t need a cracker plant after all. Are Molinaro’s comments about a PA cracker wise and measured counsel from an industry participant who has a feel for the economics of U.S. manufacturing and what it truly needs? Or are his comments trash-talking a competitor in hopes of scuttling a deal and eliminating competition so more ethane will be pipelined to the Gulf–where Dow’s cracker plants are located? You decide…
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