Industrywide Issues

Energy Services | Harrison County | Industrywide Issues | MarkWest Energy | Monroe County | Ohio | Pipelines | Processing Plants | Statewide OH

Cash Runs Low – MarkWest Floats $150M Loan in Utica Midstream JV
February 6, 2013February 6, 2013

At the end of 2011, MarkWest Energy and The Energy & Minerals Group (EMG) announced that MarkWest was buying out EMG’s share in a 3-year-old joint venture deal in the wet gas portion of the Marcellus Shale called MarkWest Liberty Midstream. EMG owned a 49% stake in that JV (see MarkWest Pays $1.8B to Buy Out JV Partner in Liberty Midstream). At the time of the buyout, the two companies announced they would form a new JV to build midstream infrastructure in the Utica Shale starting in 2012.

The new Utica JV (called MarkWest Utica EMG) ramped up in early 2012 as the pair set out to duplicate their success in building out the Marcellus in the fledgling Utica. The strategy? “Creating a large network of processing complexes connected through an extensive NGL gathering system,” which they immediately began to do by beginning construction on two new processing complexes in Harrison and Monroe counties in Ohio (see MarkWest to Expand/Build NGL Plants on New Agreements). Just one tiny problem: the Utica JV is now running short on cash…

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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

NY Drillers: “Optimistic” DEC will Meet Feb 13 Fracking Deadline
February 6, 2013February 6, 2013

Landowners in New York State wait with bated breath for next Wednesday, Feb. 13 (one week from today), to see if the Dept. of Environmental Conservation publishes a final version of new fracking regulations. If the DEC misses the deadline next Wednesday, the new rules will almost certainly not be released on Feb. 27, which is the final deadline to release those rules or… or the process restarts. More public comments. More posturing by environmental extremists. More everything. If the deadline next Wednesday is missed, all bets are off on whether New York will ever see fracking in our opinion.

What does “the industry” think? Perhaps the best barometer of what drillers are thinking comes from Brad Gill, the executive director of the Independent Oil & Gas Association of New York (IOGA of NY). He was in Albany yesterday to meet with lawmakers. Here’s what he said:

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Columbia Pipeline Group | Energy Services | Industrywide Issues | Pennsylvania | Pike County | Pipelines | Regulation | Tennessee Gas Pipeline | Wayne County

DRBC – Fishing for Money from 2 Pipeline Companies?
February 6, 2013February 6, 2013

The regional quasi-governmental organization in charge of “protecting” the Delaware River Basin—the Delaware River Basin Commission—has just reversed a decision about whether or not they have the right or power to review (i.e. regulate) two newly completed natural gas pipelines that run through DRBC’s territory. Yes, both pipelines are now completed (barn door…horse?).

It appears the DRBC is kowtowing to anti-drilling environmental organizations like Delaware Riverkeeper Network by going after these two pipeline companies…

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Anti-Drilling/Fossil Fuel | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | New York | Regulation | Statewide NY

NY Comptroller Bullies Cabot O&G over Frack Fluid Disclosure
February 6, 2013February 6, 2013

Being the sole person in charge of a pot of investments worth $150 billion is an awesome responsibility—and invests that person with an enormous amount of power. Power which can (and is) abused. New York State Comptroller Thomas P. DiNapoli is the sole person in charge of the New York State Common Retirement Fund and he regularly throws his weight around with the companies the fund invests in to strong-arm them into doing things they typically don’t want to do. Call it bullying (because that’s what it is).

The latest example: DiNapoli, himself an anti-driller, is crowing that he forced Cabot Oil & Gas, one of the companies the Fund invests in ($35.8 million), to “publicly disclose its policy and procedures for eliminating or minimizing the use of toxic substances in its hydraulic fracturing fluids.” Never mind that Cabot already lists the components of its fracking fluids in the FracFocus.org Chemical Disclosure Registry. Let’s not let facts get in the way of a good PR campaign.

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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Martens Prepares to Blame Shah if Fracking Doesn’t Happen in NY
February 5, 2013February 5, 2013

Pennsylvania is doubling their natural gas output every year by using fracking. So is West Virginia. Ohio has now joined the fracking club and is ramping up their natural gas production. All of the states in the northeast “neighborhood” are fracking—without water contamination, without pollution problems, without a negative impact on “public health,” et cetera et cetera. All except New York, which continues to dither over its decision to frack. Why? Politics. Not science, not health concerns. Politics.

In testimony before the NY legislature yesterday, Dept. of Environmental Conservation (DEC) Commissioner Joe Martens acknowledged if the DEC doesn’t meet a Feb. 13 deadline to publish final drilling rules the review process will need to restart—yet he also told legislators there is no projected date for finishing shale gas drilling rules and it will depend on recommendations from a health review the DEC will receive “in a few weeks.” MDN finds Martens’ comments from yesterday troubling…

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Albany County | Broome County | Hydraulic Fracturing | Industrywide Issues | New York

Phelim McAleer & FrackNation Documentary Come to Upstate NY
February 5, 2013February 5, 2013

If you live anywhere in the vicinity of either Binghamton, NY or Albany, NY, the Joint Landowners Coalition of New York (JLCNY) is hosting a free screening of Phelim McAleer’s new documentary FrackNation this weekend. Phelim himself will be there!

The dates are Sunday, Feb. 10 at 2 pm in Binghamton, and Monday, Feb. 11 at 7 pm in Albany. MDN editor Jim Willis will attend the Binghamton screening and would love to meet MDN readers (drop me a line to let me know you’re going: jim@marcellusdrilling.com).

Here’s the press announcement:

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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | New York | Pipelines | Spectra Energy | Statewide NY

Judge Tosses Out Lawsuit Against Spectra NYC Pipeline Project
February 5, 2013February 5, 2013

Spectra Energy continues to battle environmental extremists who want nothing to do with more natural gas (especially “filthy” shale gas) coming into New York City, even though NYC Mayor Michael Bloomberg calls more natural gas “vital” to the city. Spectra has had to battle nutty protesters that strip down (see NYC Pipeline Protesters Get Naked, Paint Themselves Green), and even protesters who don’t tell themselves they’re about to break the law (see Nutjob Protester Stops NYC Pipeline Construction for 2 Hours).

The protesters and their more adult-acting supporters took Spectra to court in New York State to stop the 16-mile pipeline from New Jersey to New York City from being built. A judge has just tossed the lawsuit telling the protesters, “wrong court”…

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Industrywide Issues | Ohio | Statewide OH | Taxation

OH Gov. Kasich Budget Soaks Drillers & Farmer Landowners
February 5, 2013February 5, 2013

Ohio Gov. John Kasich (supposedly a Republican) just released his biennial budget and as promised, it’s a socialistic masterpiece that raises taxes on shale drillers and farmers in order to fund a massive expansion in Medicaid and provide a state income tax cut.

When liberals like what you’re doing and you’re a Republican, that’s not a good sign…

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Accidents | Energy Services | Industrywide Issues | Litigation | MarkWest Energy | Pennsylvania | Washington County

MarkWest Sues Enerflex Over Compressor Station Fire in Western PA
February 5, 2013February 5, 2013

Midstream powerhouse MarkWest filed a lawsuit on Monday in Washington County, PA seeking $1.1 million from Enerflex Energy Systems, manufacturer of equipment for compressor plants. MarkWest says Enerflex sold them defective equipment that led to a fire, and a lot of damage, in their compressor facility in Avella, PA last year:

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Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Regulation | Washington County

Robinson Twp, PA Drags Feet on Approving New Permits to Drill
February 4, 2013February 4, 2013

Why are drilling permits from Range Resources not being approved in Robinson Township (Washington County), PA? You may recall that Robinson is one of seven towns in PA that sued the State of Pennsylvania over Act 13, a new shale drilling law passed in February 2012. Robinson and the other towns object to a provision in Act 13 that replaces the right of local towns to enact zoning restrictions on oil and gas drilling and instead replace local rules with a uniform set of zoning rules from the state (see Lawsuit Filed: PA Towns Sue State over Marcellus Act 13 Law).

Robinson and the other towns went to court over the provision and won their case in the lower courts. The decision was appealed by the state all the way to the PA Supreme Court where a everyone eagerly awaits a decision (see PA Supreme Court Hears Testimony on Act 13 Zoning).

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Hydraulic Fracturing | Industrywide Issues | Regulation

Obama Energy Sec. Steven Chu Resigns
February 4, 2013February 4, 2013

The third shoe has finally dropped (if that’s even a legitimate metaphor!). Obama’s Secretary of Energy, Steven Chu, has resigned. You may recall MDN reported early on that the three Obama cabinet members who most directly affect shale drilling—Chu, EPA chief Lisa Jackson and Dept. of Interior Sec. Ken Salazar were all rumored to be departing a second Obama term (see 3 Top Officials Rumored to be Leaving Obama Administration).

Of the three, Chu was the one rumormongers were most sure about. Yet Jackson was the first to go, and Salazar the second. On Friday, Chu announced he too would depart. His tenure at Energy has been marked by crony capitalism with the government handing out big big money to politically-connected Obama donors—Solyndra being the most famous example. It’s “so long and don’t let the door hit you on the way out” to Sec. Chu…

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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Home Stretch for NY Fracking Generates New Ad Campaign
February 4, 2013February 4, 2013

In what may be the final stretch of four and a half long years to win approval for New York State to begin using the miracle of hydraulic fracturing as has Pennsylvania, Ohio, West Virginia, Texas, Louisiana, Wyoming, Oklahoma, Colorado and so many other states, the New York State Petroleum Council (NYSPC) has launched a new ad campaign aimed at one person: Gov. Andrew Cuomo. Listen and watch the new commercials below.

Last Friday the NYSPC issued this press announcement about the new ad campaign:

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Air Quality | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Research | Statewide PA

2 New Studies of Marcellus Drilling’s Impact on PA Air Quality
February 4, 2013February 4, 2013

Marcellus Shale drilling in Pennsylvania was responsible for just a small fraction of PA’s air pollution in 2011 according to newly released data (the first full year of data we have) from the Dept. of Environmental Protection, and from a private study by Rand Corporation (see below). How much did it contribute? PA’s shale gas industry was responsible for about 4% of total air pollution emitted by all industrial facilities in 2011.

Although the overall numbers are low, that’s not to say there aren’t concerns or things to improve…

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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

PA Wants Drillers to Use Acid Mine Water in Fracking – Will They?
February 4, 2013February 4, 2013

Pennsylvania has a big problem with water seeping from abandoned coal mines—the water mixes with minerals from the mine and is highly acidic. Some 300 million gallons of it flow—every day—into Pennsylvania’s waterways, killing off fish and plant life in 4,000 miles of rivers and streams. The PA Dept. of Environmental Protection (DEP) recently launched a plan to encourage shale drillers in the state to use “mine influenced water” (MIW) for drilling and fracking operations. It kills two birds with one stone: it helps to get rid of MIW and it gives drillers a steady source of water for fracking (see PA DEP Finalizes Procedure for Using Acid Mine Water in Fracking).

Just one problem: Drillers are scared to death of “if you touch it, you own it for evermore.” That is, drillers are rightly concerned about liability in this day and age of litigate everything. Who wants to get sued for doing the right thing? What can PA do to reassure drillers to give MIW a shot?

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Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Legislation Would Release Untapped Acreage for New Lease
February 4, 2013February 4, 2013

Help may be on the way for Pennsylvania landowners who have leased their land, but not all of their land is part of a “production unit.” PA State Sen. Gene Yaw has introduced legislation what would release the land not in production so it could, theoretically, be leased again, or leased to someone else.

This update from one of our favorite blogs, ShaleEnergyLawBlog:

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Economic Impact | Industrywide Issues

80,000 Locations Left to Go for Marcellus Drilling
February 4, 2013February 4, 2013

Speaking at the Marcellus-Utica Midstream conference last week in Pittsburgh, ITG Investment Research analyst Manuj Nikhanj said their research shows there are an astounding 80,000 locations still drillable in the Marcellus Shale, and that the Marcellus is “absolutely massive” and dwarfs the next biggest shale play. How long will it take to full drill the Marcellus? “Decades.”

He also had some interesting analysis on the question of what natural gas price is breakeven for drillers to make a profit:

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