Industrywide Issues

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    FERC Shuts Down ALL Work on Atlantic Coast Pipeline

    As MDN predicted last week (see Federal Court Stops Works on Some (All?) of Atlantic Coast Pipe), the Federal Energy Regulatory Commission, following a ruling by a federal court that vacated (withdrew) permits for work being done on Dominion Energy’s Atlantic Coast Pipeline (ACP), has told Dominion to quit working on all of the pipeline everywhere. At least until this current legal mess, created by the Sierra Club, can be sorted out. It was an easy prediction to make. FERC did the same thing with Mountain Valley Pipeline when the same court pulled permits for a piddly 3.5 miles of pipeline as it crosses the Jefferson National Forest (see FERC Shuts Down ALL Work on Mountain Valley Pipeline in WV, VA) . In ACP’s case, the court pulled permits for work on 100 miles of pipeline (out of 600 miles). Dominion said in a statement that they’re already working with the two agencies that had issued various permissions overturned by the court, and Dominion expects the matter will be resolved quickly so that the final in-service date is not moved. As a reminder, the Sierra Club convinced the Fourth Circuit Court of Appeals to overturn permits granted by the U.S. Fish and Wildlife Service (FWS) and the U.S. National Park Service (NPS) granted to ACP to cross the Blue Ridge Parkway. However, the rolled-back permits affect some 100 miles of work. The court, in rolling back ACP’s permits, told FERC they should shut down work on the entire project until this matter is resolved. On Friday FERC did just that…
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    Chesapeake Settles NEPA Royalty Lawsuit for Pennies on the Dollar

    Chesapeake Energy has, according to the Pittsburgh Post-Gazette, “reached a $7.75 million settlement agreement with about two-thirds of its Pennsylvania natural gas royalty owners.” At the end of last year Chesapeake Energy offered a $30 million deal to Pennsylvania landowners to settle claims the company had screwed them out of royalty money by artificially inflating post-production costs in an elaborate scheme to pocket more money at landowners’ expense (see Chesapeake Agrees to $30M Royalty Settlement for PA Landowners). Chesapeake’s proposed deal last year would have given the average PA leaseholder (some 14,000 of them) a one-time $2,140 payment–adjusted up or down for the size of their acreage. This new deal, for 10,000 of the same leaseholders, offers $7.75 million–an average of $775 per landowner. Which is piddly. It’s nothing. An insult. Last year Chesapeake’s deal with leaseholders required the state Attorney General’s office, which has an ongoing, separate lawsuit filed against Chesapeake over the same issue, to settle as well. The AG’s office refused (see PA AG Not Backing Down re Chesapeake Energy Royalty Lawsuit). In fact, the AG’s office is still refusing to settle, with this new deal. Yet now Chesapeake is willing to move forward without the AG as part of the settlement. Heck yeah! Convince these desperate folks to take, literally, pennies on the dollar. What company wouldn’t go for that deal? Any way you slice this, northeast PA landowners are getting screwed if they agree to Chesapeake’s deal. They get a maximum of 8% back of the inflated “costs” Chesapeake originally deducted from royalty checks. We suppose some will say 8% now is better than maybe nothing or very little years from now. We don’t see it. We see these good landowners getting shafted in this deal…
    Read More “Chesapeake Settles NEPA Royalty Lawsuit for Pennies on the Dollar”

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    Granite Bridge Shows How to Build a New Pipeline in New England

    Pssst. Don’t tell anyone, but somebody has figured out how to get a pipeline built in New England. Keep it quiet–just between us, K? Time after time we’ve seen worthy, sensible natural gas pipeline projects proposed for New England. And time after time they’ve been shot down by radical Big Green groups and sleazy politicians (like MA Sen. Elizabeth Warren and MA AG Maura Healey) who are in the pockets of Big Green. Instead of building a pipeline from the Marcellus to New England–a few hundred miles–those same sleazy politicians would rather have Russian LNG imported to avert annual energy crises (see Confirmed: LNG Coming to Boston on Jan 22 is Illegal Russian Gas). Kinder Morgan is one of the casualties, pulling the plug on its Northeast Energy Direct project (see NED is Dead – Kinder Morgan Suspends $3.3B New England Pipeline). Spectra Energy’s Access Northeast is another casualty, although as we reported in May, Access Northeast may once again have a weak pulse (see NH Supreme Court Decision Puts New England Pipe Back in Play). MDN recently told you that a New Hampshire utility company, Liberty Utilities, had floated a new plan to build a teeny tiny new pipeline, called Granite Bridge, that will run underground along Route 101 from Stratham to Manchester (see Liberty Utilities Floats Plan for 27-Mile Pipeline in Southern NH). In addition, Liberty proposes building a natgas storage facility in an empty quarry in Epping. We’re not exactly sure where the extra gas will come from that will get stored and then pumped along this new pipeline (Liberty says it’s coming from the “Seacoast”). At the time of that post we asked whether/if ANY pipeline can built in New England ever again? It appears the answer to our question is yes, a pipeline CAN get built! Granite Bridge has quietly, behind the scenes, built up a full head of support for their project. Some 22 of 24 NH state senators support the project, along with Republican Gov. Chris Sununu. What lessons we can learn from Granite Bridge for how to get a pipeline project built in New England?…
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    Extra 2.8 Bcf/d of M-U Gas Heading to Gulf Coast This Year

    Last week our favorite government agency, the U.S. Energy Information Administration, posted an article on their Today in Energy website chronicling an astonishing fact: By the end of this year, nearly 19 billion cubic feet of natural gas pipeline capacity will be moving natgas *into* the South Central region–in other words, gas moving into the Gulf Coast of Texas and Louisiana. That is truly astonishing, because a few short years ago the Gulf Coast (largely from offshore supplies) shipped gas *out of* the region. But now, gas will flow into that region, even amidst record natgas production happening in the Permian Basin. What caught our eye about the article is that 2.8 Bcf/d of gas that will flow into the region will come from the Marcellus/Utica, from three pipelines: Rayne XPress, Gulf XPress, and Atlantic Sunrise. Rayne XPress went online late last year (see FERC Clears 1 Bcf/d Rayne Xpress Pipe to Begin Service). Gulf XPress, which is seven new compressor stations being built along the Columbia Pipeline system, is due to go online in November of this year (see Leach XPress Goes Online; FERC Approves Mountaineer & Gulf XPress). Atlantic Sunrise is supposed to go online this month (see Genscape Confirms Atlantic Sunrise Pipe Ready to Flow in August). Other M-U gas already (and more soon will) goes to the Gulf Coast as well. Here’s the great news that more of our gas is heading to the Gulf…
    Read More “Extra 2.8 Bcf/d of M-U Gas Heading to Gulf Coast This Year”

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    WV DEP Proposes Changes in Pipeline Stream Crossing Permit

    West Virginia has just published a draft revision for terms and conditions under which the state will issue a “Section 401” water permit for federally approved pipeline projects. Under the federal Clean Water Act (CWA), the federal government delegates some of the responsibility in approving a pipeline project to the individual states. It’s a small but important part of the regulatory pie. Under Section 401 of the CWA, states get one year to review a pipeline project–to evaluate where that project will cross streams and rivers. If the state doesn’t like something about the plan, they tell the pipeline company and the plan gets revised. That’s how it’s supposed to work. Instead, some states (like New York) are abusing Section 401 and simply refusing to issue the permit, effectively killing entire pipeline projects. That’s not the intent of the regulation, something Congress is now looking to fix. We can’t have tinhorn dictators like Andrew Cuomo telling other states (like Pennsylvania) that you can no longer build pipelines into or through a neighboring state. That’s why approval of interstate pipeline projects resides at the federal level and not the state level–to prevent one state holding another hostage. WV has had some issues of their own with respect to Section 401 approvals (see WVDEP Reverses, Waives Water Permit for Mountain Valley Pipeline). Perhaps because of previous problems, like the issue with MVP, the WV Dept. of Environmental Protection has just floated proposed changes to the criteria they use in awarding a Section 401 permit…
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    Williams Finally, After Years, Buys Out Williams Partners Subsidiary

    Williams, after years of saying it would so, finally bought out and merged in its Williams Partners MLP subsidiary. The on-paper $10.5 billion merger happened last Friday. Williams originally planned to do this in May 2015 in a deal worth $13.8 billion (see Williams is Buying Out Williams Partners Subsidiary for $13.8B). Shortly after Williams’ announcement, Kelsy Warren and his Energy Transfer Equity company pursued Williams, wanting to merge Williams into its own operation. The ETE distraction caused Williams to put a merger with Williams Partners on hold. Williams initially fought ETE, but in the end cut a deal (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Without recounting the all the sordid details, ETE got cold feet and left Williams at the alter, and Williams sued (see Merger Turns Sour: Williams Sues ETE/CEO Kelcy Warren). The merger never happened, and near as we can tell, the lawsuits over the aborted attempt to merge still are not fully resolved. In the end, Williams remained a standalone company. Williams CEO Alan Armstrong not only survived the botched ETE attempt to take it over, he also survived an attempted board of directors coup against him not long after the merger went bust (see Half of Williams Board, Including 2 Corporate Raiders, Quit). Armstrong is a survivor and Williams is now doing great. Last Friday’s merger of the MLP Williams Partners into the Williams C Corporation is proof of that. In the end, the deal cost Williams (C Corp) stockholders $10. 5 billion (see FERC Tax Decision Forces Williams to Restructure – No More MLP). Here’s the news that Williams is now, finally, all under one umbrella…
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    Cuomo Plan to Divest Pension Fund from Fossil Fuels Cost NY $1T

    Andrew Cuomo – tinhorn dictator of NY

    Sorry to harp yet again on the tinhorn dictator Andrew Cuomo, so-called governor of New York, but his actions are so egregious, so outside the mainstream, we can’t keep silent. Cuomo is bragging that he’s not only shut down fracking in the state, he’s also blocking natural gas pipelines and blocking new gas-fired electric generating plants. He’s clinically off his rocker. And now Cuomo is pushing NY’s public employee pension fund to completely divest any stock holdings in fossil fuel companies. University of Chicago Law School Prof. Daniel Fischel and Compass Lexecon economists Christopher Fiore and Todd Kendall have analyzed the risks associated with fossil fuel divestment by both New York and Colorado’s retirement funds. They found that over the next 50 years, divesting NY’s retirement fund will cost NY pensioners $1 TRILLION of value they otherwise would have had in their pockets. Will anyone have the guts to stop the Cuomo train wreck before it’s too late?…
    Read More “Cuomo Plan to Divest Pension Fund from Fossil Fuels Cost NY $1T”

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    Anti Fossil Fuel Zealots in Oneonta, NY Oppose CNG Terminal

    A boatload of anti fossil fuel zealots from Cooperstown put down their wine glasses long enough to pack an auditorium in nearby Oneonta to bloviate against a sensible plan to build a CNG “decompressor” facility to accept trucks loaded with CNG during wintertime and summertime when area supplies of natgas get dangerously low. We wrote about the proposed facility, described as “a decompression station for compressed natural gas deliveries by truck to supplement resources” two weeks ago (see Oneonta, NY Wants to Build NatGas Decompressor for Short Supplies). In brief, here’s the issue: On really cold and really hot days there’s not enough natural gas in the region, and some large users of gas, like the local hospital and state university, actually have to stop using gas and switch to burning oil as a backup. It’s nuts. To overcome lack of clean-burning gas supplies, the local econ development people are trying to chase down grants to build a decompression station which would be used for maybe two weeks out of the entire year. Wednesday night the Oneonta Town Board held a hearing to get more details about the project. The loons from Cooperstown (i.e., Otsego 2000) turned out in force, some 100 of them, to protest the plan. Why? Because it’s a “fossil fuel.” What did the loons offer as an alternative to this sensible plan to truck in CNG only on days when it’s needed? They recommend “retrofitting old buildings to save energy” (i.e. throw on extra sweaters and turn the thermostat down), or switch to renewables. You know, solar and wind nirvana. What about when the sun doesn’t shine and the wind doesn’t blow? Just do without. It’d only be for a few days at a time…
    Read More “Anti Fossil Fuel Zealots in Oneonta, NY Oppose CNG Terminal”

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    EmberClear to Pay $31M in Lieu of Taxes for Cadiz, OH Power Plant

    Ever hear of a PILOT? No, not the airplane kind. A PILOT is a “payment in lieu of taxes”–a common arrangement for electric generating plants. If such plants paid property taxes at full market value, the taxes would be so insanely high the plants would be uneconomical and therefore wouldn’t get built. So PILOTs are used instead. Such an agreement was recently reached between EmberClear and Harrison County, OH. In September 2016, MDN reported that EmberClear planned to fund and build a new $900 million electric generating plant in Harrison County (see $900M Utica Gas-Fired Electric Plant Coming to Harrison County, OH). The Harrison Hills Power Plant will be fed by Utica Shale gas. EmberClear received approval for the project in June from the Ohio Power Siting Board (see Ohio Approves $900M Harrison County Power Plant in Cadiz, OH). Although construction has not yet begun, another piece of the puzzle has fallen into place. EmberClear agreed to pay $31 million in PILOT payments (i.e. taxes) over 15 years, which will help fund the Harrison Hills City School District as well as Harrison County and its municipalities. With a PILOT now in place, the plant will get built, beaucoup payments will get made, and everybody will be happy…
    Read More “EmberClear to Pay $31M in Lieu of Taxes for Cadiz, OH Power Plant”

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    CPV Floats Plan for New Marcellus-Fired Power Plant in NJ

    For some reason, Competitive Power Venture (CPV) picks states that are adamantly opposed to new gas-fired electric plants as the location for new projects. We wrote yesterday about CPV’s project in Orange County, NY. With four days left before CPV was due to throw the switch and start the plant, the very corrupt Gov. Andrew Cuomo pulled the rug out from under them (see 3 Options for Blocked NY Marcellus-Fired Electric Plant). CPV already owns a gas-fired plant in Woodbridge Township (Middlesex County), NJ. CPV has just floated a plan to build a second gas-fired plant next to the existing plant in Woodbridge. Yeah, gluttons for punishment. NY and NJ are two peas in a Big Green pod. Radicalized environmentalists are already sounding the alarm about the new Woodbridge project. Here we go again…
    Read More “CPV Floats Plan for New Marcellus-Fired Power Plant in NJ”

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    Franklin County, VA Landowners Lose Round #1 to Stop MV Pipe

    A federal judge turned down a request by six Franklin County, VA landowners to shut down construction of the Mountain Valley Pipeline (MVP) in their area. The six claim that work being done by MVP is leading to soil erosion–that storm water runoff has resulted in mountains of mud ending up on their property. The legal argument is “trespass” for failing to do the work correctly, thereby leading to an intrusion on their property. The judge denied the request. However, the judge did not toss out the entire lawsuit–only a request for a preliminary injunction. The lawsuit itself will continue. Not that it makes much of a difference. All work on MVP is currently stopped anyway (see FERC Shuts Down ALL Work on Mountain Valley Pipeline in WV, VA). There’s no need for a preliminary injunction if there’s no work happening. Here’s the story of six ticked-off landowners not happy with how MVP is doing work in their area…
    Read More “Franklin County, VA Landowners Lose Round #1 to Stop MV Pipe”

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    Other Shoe Drops: PA Methane Emissions Regs for Existing Sources

    Pennsylvania Gov. Tom Wolf’s Administration has been fiddling with proposed regulations to cut down on so-called fugitive methane emissions from drilling and pipelines for years. The regulations are known as General Permit 5 (GP-5) and General Permit 5A (GP-5A). GP-5 applies to pipelines and compressor stations, while GP-5A applies to well pads and drilling. In June, the PA Dept. of Environmental Protection (DEP), author of the revised regs, published its final final final final version of the regs (see PA DEP Releasing Onerous New GP-5 & 5A Methane Regs June 8). The new regs will go into effect this month. But here’s the thing. These onerous regulations apply only to *new* and not *existing* sources of methane emissions. With the revised regs about to go into effect for new sources, right on cue Big Green groups began pressuring Wolf to apply them to existing sources too (see Big Green Pressures Gov. Wolf to Expand Onerous Methane Regs). That was, of course, the intention all along–to hamstring (and shut down) the Marcellus industry by saddling it with insanely high costs to comply with regulations that won’t do a thing to “save the planet” from methane poisoning (a non-existent threat). Unfortunately the Wolf DEP is signaling it will propose insanely onerous new methane emissions regulations for *existing* sources in early 2019. So this is fair warning to the industry to begin a counter-offensive now. It’s also fair warning to conventional drillers–the DEP is going to float new regs for you in 1Q19 as well…
    Read More “Other Shoe Drops: PA Methane Emissions Regs for Existing Sources”

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    Disappointing: Trump to Nominate Nuke/Coal Proponent to FERC

    Just yesterday we posted an article observing that today, Friday, is Federal Energy Regulatory Commission (FERC) member Rob Powelson’s last day on the job (see FERC Commissioner Rob Powelson Leaving Friday – Deadlock Looms). We won’t lie (when do we ever lie?): We’re pretty sore at Powelson, and grumpy that for the foreseeable future no new pipeline projects will get approved due to the two partisan Democrats on the Commission who now vote against every pipeline project. The rumor mill is in overdrive that Trump has already picked a replacement for Powelson–Bernard McNamee, head of the Department of Energy’s Office of Policy. McNamee helped roll out a plan favored by Trump and DOE Secretary Rick Perry to artificially favor and boost nuclear and coal energy sources, at the expense of other sources like natural gas. Boneheaded plan. This is the guy Trump now wants at FERC. Recall that FERC rejected DOE’s boneheaded “save coal and nuke plants” plan. No doubt Trump is looking to stack the deck in his favor by naming McNamee. On the plus side, we suspect McNamee would be a reliable vote in favor of pipeline projects, so it’s not all bad news. But the issue remains that Senate Democrats can and most certainly will delay any confirmation votes on McNamee–likely until after the November election. This is how dirty politicians play the game. We’re not thrilled with McNamee, but we’d rather have him at FERC than an ongoing 2-2 deadlock…
    Read More “Disappointing: Trump to Nominate Nuke/Coal Proponent to FERC”

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    FERC Approves New Connection to Rover Lateral, but Not the Lateral

    Yesterday the Federal Energy Regulatory Commission (FERC) granted a “certificate of public convenience and necessity” (i.e. official approval) for Rover Pipeline to spend $4.7 million to build a new meter station along Rover’s Burgettstown Lateral. The new meter station, to be located in Jefferson County, OH, will connect a pipeline gathering system built and maintained by Utica Gas Services LLC, connecting the gathering system to Rover. The new connection will flow 350 million cubic feet per day of Utica Shale gas into the Rover pipeline system. But here’s the thing: FERC has not yet given Rover permission to begin flowing gas along the Burgettstown Lateral. FERC is playing hardball, withholding permission for Burgettstown and three other laterals until Rover (i.e. Energy Transfer) gets restoration work done along certain portions of the project (see FERC Continues to Block Rover Laterals Until Restoration Work Done). Obviously FERC is planning to let Burgettstown and the other laterals go online, it’s just a matter of time. But FERC is using the laterals (withholding startup) as leverage to make Rover do what it said it would do. Below is more information about UGS-Crawford Meter Station, as it’s called, and FERC’s approval of it…
    Read More “FERC Approves New Connection to Rover Lateral, but Not the Lateral”

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    Utica Shale’s Impact on Ohio Past 10 Years: $100 Billion!

    Aubrey McClendon, co-founder of Chesapeake Energy and founder of American Energy Partners (renamed to Ascent Resources) was the first to recognize the importance of the Ohio Utica Shale and once famously said the Utica is “the biggest thing to hit Ohio since maybe the plow.” Turns out he was right, God rest his soul. The Consumer Energy Alliance (CEA), a national group of families, farmers, small businesses, distributors, producers and manufacturers joined together to support America’s energy future, has just released a report that shows from 2006 to 2016, Ohioans saved more than $40 billion (!) on energy costs (natural gas and electricity) because of the Ohio Utica Shale. The report, titled “The Benefits of Ohio’s Natural Gas Production to Energy Consumers and Job Creators” (full copy below), breaks down the savings this way: Ohio residential customers saved close to $15 billion during the 10-year period, while commercial and industrial consumers saved more than $25 billion. But that’s not all. The report also quotes JobsOhio in saying that shale-related investment in the Buckeye State from 2011-2017 was a staggering $63.9 billion. If you add those two numbers together, the amount of money saved on energy (and therefore spent on other things), and the amount of money invested, it totals more than $100 billion of economic impact from shale in Ohio–in ten short years. Put another way, one-tenth of trillion dollars has been spent in Ohio because of shale. Mind-blowing…
    Read More “Utica Shale’s Impact on Ohio Past 10 Years: $100 Billion!”

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    3 Options for Blocked NY Marcellus-Fired Electric Plant

    Two days ago MDN told you that New York’s tinhorn dictator, Andrew Cuomo, pulled the rug out from under a fully-permitted and permissioned Marcellus-fired electric plant by directing his corrupt Dept. of Environmental Conservation (DEC) to withhold renewing an air permit previously granted (see Cuomo Strikes Again: Blocks Completed Gas-Fired Plant from Starting). We’ve since learned that the Competitive Power Ventures (CPV) Valley Energy Center, a $900 million, 680-megawatt natural gas-fired electric generating plant in Orange County, NY, was just four days away from throwing the switch and beginning operations. The DEC’s previous delays of the project have already cost the CPV $40 million in missed revenue. How much more pain will Cuomo and his corrupt DEC inflict on the plant? And, what can CPV do now, to overcome Cuomo’s blockage of the project? It appears there are three options: (1) contest the decision via an administrative appeals process; (2) seek a court injunction against the DEC; (3) apply for an EPA permit, which is what the DEC is telling them to do. All three options will take time. Seems to us that option #2 will take the least amount of time. CPV is right now mulling their next steps…
    Read More “3 Options for Blocked NY Marcellus-Fired Electric Plant”