Industrywide Issues

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    OH Supreme Court Rules Independent Landmen Need Real Estate License

    Sometimes the law, and justice, is mysterious to us. Last November we told you about an Ohio Supreme Court case with profound implications for both landmen and for the drillers who employ and use them (see OH Supreme Crt Considers Whether Landmen Need Real Estate License). The case, Dundics v. Eric Petroleum Corp., was appealed to the Ohio Supreme Court by Dundics who was not happy with the outcome in lower courts that ruled landmen must have a real estate license in order to get paid for their valuable services. Even more to the point, if you don’t have a real estate licence, the company hiring you (like Eric Petroleum) can decide to not pay you–and it’s OK! The Supremes ruled at the end of August to uphold that principle. That is, if a landman is compensated via a commission and/or royalties for the deals he or she brokers, that person needs to have a real estate license. And if they don’t have such a license, they are considered (under the law) to be committing fraud. (It is our understanding that if the landman is paid a “day rate,” that is, paid a flat rate by the day, or if the landman is an employee of the drilling company, someone whose compensation is not directly tied to the number and value of deals, that landman does not need a real estate license. Please verify that!) The Ohio Supremes decided, in essence, that when you accept a commission or are paid a percentage of each deal, you must have a real estate license. In the case of Dundics v. Eric Petroleum, Mr. Dundics was repeatedly assured (according to the court documents we read) by Eric Petroleum that he (Dundics) would be compensated according to an agreed-on formula. But Dundics didn’t have a real estate license, so Eric Petroleum abrogated the agreement–with the court’s blessing…
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    Out with the Old (Coal), in with the New (Natgas) @ Shamokin Dam

    The former coal-fired power generation plant at left along the Susquehanna River in Shamokin Dam. At right is the new Panda gas-fired Hummel Station. (Credit: Sunbury Generation)

    In July, MDN told you that Panda Power’s Marcellus gas-fired Hummel Station Power Plant, located at the Shamokin Dam along the Susquehanna River, is now “complete” and online (see Marcellus-Fired Panda Hummel PA Power Plant Now “Complete”). Hummel Station is a whopping 1,124-megawatt gas-fired electric plant built on the site of a retired coal-fired plant. The old coal plant is still there, sitting next door to the new gas-fired plant, closed down in 2014. The coal plant is set to be demolished–a process that will take up to two years due to asbestos throughout the plant. In a story about the old coal plant’s demolition, we were struck by the comparison between the coal plant and the gas plant. The old coal plant produced 400 megawatts of electricity, the new gas plant 1,124 MW. The new gas plant produces more than twice the power, but uses 97% less water than the coal plant. The new gas plant produces 90% less sulfur dioxide and nitrogen oxide emissions than the old coal plant. On and on. The differences are striking! No wonder gas is replacing coal…
    Read More “Out with the Old (Coal), in with the New (Natgas) @ Shamokin Dam”

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    Hubbard Twp, OH Still Trying to Block Injection Well

    Two weeks ago MDN told you that liberal Democrat State Rep. Glenn Holmes (from Girard, Trumbull County, OH) is attempting to use a hammer to kill a fly (see Ohio Democrats Float Bill to Cap Injection Wells at 23 per County). Holmes is sponsoring House Bill 723 to cap the number of injection wells at 23 per county, in an attempt to block a single new injection well from getting built in Hubbard Township. Currently Trumbull County has 17 live and functioning wastewater injection wells. Five more are currently under construction. If the bill passes, it would prevent a newly-proposed well in Hubbard from getting built. Holmes has some company in his opposition. Hubbard township officials are “bitterly opposed” to the injection well and raising their own fuss to try and stop it. The preferred solution for Hubbard officials is for the state to allow local towns to write their own oil and gas zoning laws–a prescription for NIMBY disaster. No town would allow it, which is why the review and authorization of injection wells is a joint process between the federal EPA and the state. But that well-thought-out solution of federal/state review doesn’t stop the locals from kicking up a fuss…
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    Proposed Rhode Island Gas-Fired Plant on Life Support

    MDN previously told you about a new natural gas-fired plant planned for the socialist paradise of Rhode Island, home to old money and people who oppose change of any kind (see New NatGas Powered Electric Plant Coming to…Rhode Island?!). The plant would lower RI residents’ electric bills by a collective $280 million and replace aging coal and oil power plants–cleaning the air in the process. With the jobs created, the investment in the facility, and lower electric rates, it’s calculated this single plant will have a $1.3 billion impact on the economy of RI. And yet so-called environmentalists still oppose it. The plan was to begin construction in summer 2016 and have the plant up and running by 2019. What’s happened since the initial announcement? A lot of bureaucratic bull. The project has been under review and a final decision by the Rhode Island Public Utilities Commission was slated for January 2019. But that’s all now in doubt. Because of delays in building the plant, the Independent System Operator (ISO) New England filed an application last week with the Federal Energy Regulatory Commission (FERC) to cancel the plant’s capacity supply obligation, or CSO. CSO’s are contracts awarded years in advance to supply electricity. ISO says there’s no way this plant will be producing electricity on time, and so they want out of the contract, to find someone else to produce the electricity. Yesterday RI state regulators put their review of the project on hold until FERC makes a decision about canceling the CSO contract. At this point we’d have to say the project is on life support, and RI is reaching their withered, old hand over to the outlet to pull the plug…
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    New Pipeline Designed to Connect M-U Gas to Gulf Coast LNG Exports

    Gulf Run Pipeline – click map for larger version

    An exciting new pipeline project to tell you about. Two days ago Enable Midstream Partners announced a plan to build an interstate natural gas transportation project called the Gulf Run Pipeline. The pipeline itself is 165 miles of large-diameter pipeline to be constructed from northern Louisiana to Gulf Coast markets. The pipeline will connect to other pipelines, and that’s how Marcellus/Utica gas will reach it and go on to the Gulf Coast. In fact, the plan is to connect to multiple pipelines that in turn connect to not only the Marcellus/Utica, but also to the Haynesville, Barnett, and the Mid-Continent shale region too. The Gulf Run Pipeline project is backed by an agreement with an undisclosed “cornerstone shipper” that has signed up for 20 years, committing to use 1.1 billion cubic feet per day of capacity along the pipeline–to deliver the gas to an LNG export plant. If the LNG plant doesn’t get built the deal is off and the pipeline won’t get built. Still, Enable is confident enough in the project that they are running a non-binding open season from now until Oct. 26…
    Read More “New Pipeline Designed to Connect M-U Gas to Gulf Coast LNG Exports”

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    4th Circuit Again Blocks NPS Permit for Atlantic Coast Pipeline

    Last week we told you that the forces of good had overcome the forces of evil–evil being the Sierra Club and the Southern Environmental Law Center (SELC) and their mission to stop the Atlantic Coast Pipeline (ACP) from getting built (see Victory! FERC Lifts Stop Work Order for Atlantic Coast Pipeline). The Federal Energy Regulatory Commission stop-work order for ACP in early August came after the Fourth Circuit Court of Appeals pulled permits for approximately 100 miles of ACP, in response to a lawsuit filed by the Clubbers and SELC (see Federal Court Stops Works on Some (All?) of Atlantic Coast Pipe). The Fourth Circuit overturned 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. FWS and NPS reworked and reissued their permits, which is why FERC lifted the stop-work order. Predictably, SELC, on behalf of the Clubbers and a few other far-out leftist groups, filed an appeal with the Fourth Circuit to overturn the newly-reworked permits. The Fourth Circuit has just issued an order temporarily blocking the NPS permit (not the FWS permit), while they consider the new lawsuit. The NPS permit stops 21 miles of pipeline work. The radicals are demanding a new stop-work order from FERC for the entire project (we despise these loathsome people). Dominion isn’t budging–they will keep working everywhere else on the 600+ mile project. Hopefully FERC will not issue a new stop-work order for the entire project…
    Read More “4th Circuit Again Blocks NPS Permit for Atlantic Coast Pipeline”

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    Mountain Valley Pipeline Cost Goes Up $1.1B, Online by Late 2019

    The price tag to build the 303-mile Mountain Valley Pipeline is going up. When first announced, the project, which will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA, was originally estimated to cost $3.5 billion. That number was tweaked this summer to $3.7 billion. Now MVP (i.e. EQT Midstream) says it will cost a whopping $4.6 billion–more than a billion dollars higher than the original estimate. Why the big hike? Two things, says MVP: (1) A work stoppage imposed by the courts and by FERC (thank you Sierra Club), and (2) heavy rain. The rise in cost is due more the former rather than the later. It was only yesterday we ran a story about how much it costs, per mile, to build a major pipeline in the northeast (see How Much Does it Cost to Build a Pipeline in the Northeast?). The costs to build all northeast pipelines continue to rise because of frivolous lawsuits by groups like the Sierra Club (nasty organization). We told you yesterday that it’s costing MVP’s chief competitor, Dominion’s Atlantic Coast Pipeline, $8.5 million per mile to build. Doing the math with the new/higher cost, the 303-mile MVP project will cost $15.2 million per mile to build! Ouch. The one bit of good news coming from MVP is that they say the project is still on track to be built and flowing gas by the end of 2019…
    Read More “Mountain Valley Pipeline Cost Goes Up $1.1B, Online by Late 2019”

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    Senate Committee Hears Testimony on Foreign Meddling in PA Shale

    The Pennsylvania Senate Environmental Resources and Energy Committee yesterday heard testimony from several witnesses on the topic of foreign meddling meant to suppress or stop Marcellus Shale production in the Keystone State (and beyond). There were three witnesses, all of them stars (and all MDN friends). One of the three was MDN buddy Tom Shepstone, writer of the always-excellent Natural Gas Now website. As he so deftly does, Tom connected the dots between foreign money and (in this case) the Heinz Endowments, further connecting Heinz to non-profits like THE Delaware Riverkeeper and PBS’ StateImpact Pennsylvania. Here’s how it works: Chris Heinz (one of the directors of the Heinz Endowments) is heavily invested in a Ukrainian gas company. That company is competing with, and wants to suppress, American (including Marcellus) gas from being sold to Europe. Heinz Endowments pumps big money into Riverkeeper, StateImpact and other anti-fracking shill groups, enabling them to file lawsuits, launch negative PR, and make all manor of mischief to slow and stop Marcellus drilling. Which benefits Chris Heinz’s back pocket. The solution, according to Tom, is “sunlight.” Force these non-profits to disclose who is funding them. And get the Auditor General to investigate the “unholy alliance” between these nonprofits and foreign entities. We’d add a third item: Get the IRS to investigate funders like Heinz, organizations that engage in overtly political activities via proxy, in violation of their tax-exempt status…
    Read More “Senate Committee Hears Testimony on Foreign Meddling in PA Shale”

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    PA Republicans Support Bill to Make Pipeline Trespass a Felony

    Perhaps this is an overstatement and a tad too generalistic, but once again Republican lawmakers have shown they are the party of law and order, while Democrats have shown they are the party of lawlessness and disorder–at least in Pennsylvania. Yesterday the PA House Environmental Resources and Energy Committee tweaked and then passed (on a party line vote) Senate Bill (SB) 652 which makes trespassing on rights-of-way of “critical infrastructure” (pipelines, power lines, refineries, etc.) a felony instead of a misdemeanor. Democrats don’t like it, because their party’s members are typically the ones who engage in illegal trespass in order to slow down and block work on things like don’t like–like pipelines. Dems maintain they have a right to “free speech” to illegally block pipeline work, just because they don’t like it and can’t stop it using lawful means. The difference between the two sides could not be more clear…
    Read More “PA Republicans Support Bill to Make Pipeline Trespass a Felony”

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    Proposed Meadowlands Marcellus-Fired Electric Plant in Trouble

    Manneken Pis – famous statue in Brussels, Belgium

    MDN reported in April that a subsidiary of Japanese conglomerate Mitsubishi wants to build a huge, new $1.5 billion natural gas-fired electric generating plant in the Meadowlands (New Jersey), just outside of New York City (see Marcellus Electric Plant Proposed for Meadowlands to Power NYC). The North Bergen Liberty Generating Project, at 1,200 megawatts, will help replace some of the electricity lost when the Indian Point Nuclear plant located in New York along the Hudson River closes down in 2021. We suspect that since the mighty Transco pipeline, which flows mostly Marcellus molecules in the northeast, will feed the Meadowlands project, this plant will become an important new market for PA Marcellus production. The town where the plant will be located, North Bergen, is jazzed about the plant (see NJ Town Ready to Approve Meadowlands Marcellus-Fired Power Plant). And wonder of wonders, liberal Democrat NJ Gov. Phil Murphy approved the first in a series of required permits in July (see Surprise! NJ Issues Permits for Meadowlands Marcellus-Fired Plant). Yes, it did seem like things were going too well. The Sierra Club has been lobbying nonstop to defeat the project, and their efforts at spreading doom and gloom are, unfortunately, bearing fruit. Somehow the Clubbers have convinced the New York ISO (the electricity authority for NY, where the electricity from this plant will be sold) to claim it doesn’t really need the electricity after all. Even though 25% of its electricity will soon disappear from the grid when Indian Point closes. NY’s claim now means the project will be delayed and that the builders will need to produce a report proving NY really does need the electricity. An electric peeing match. The Clubbers have also spread rumors to neighboring towns, telling them the plant will poison their air, so some neighboring towns are now opposed to the project…
    Read More “Proposed Meadowlands Marcellus-Fired Electric Plant in Trouble”

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    Lobbyists Tell PA Lawmakers Nukes Safer than Gas-Fired Plants

    Sometimes you can’t convey it all in a headline that should be 65 characters or less (in order to make the Google gods happy). In this case, the longer headline we would have used is this: “Lobbyists tell Pennsylvania lawmakers that nuclear powered electric plants are safer from cyber and physical attack than natural gas-fired plants (and therefore should be preferred to gas-fired plants).” That was the upshot of a hearing held yesterday by the PA House-Senate Nuclear Caucus, a hearing in which nuclear energy lobbyists claimed “no mandatory physical or cyber security standards exist for natural gas systems” in contrast to the nuclear energy industry that has to meet “demanding security requirements.” We should hope so! We hope that nuke facilities are more strictly regulated than natural gas facilities. If a nuke goes offline/has an accident/is overtaken in a physical attack, thousands of people die and it’s an environmental disaster. If a natgas-fired plant goes offline, the lights go out for a while. Big difference, we would say…
    Read More “Lobbyists Tell PA Lawmakers Nukes Safer than Gas-Fired Plants”

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    Dominion Sells 2 Gas-Fired Plants; Blue Racer Midstream For Sale

    Dominion Energy has found a buyer for two of its natural gas-fired electric generating plants, one located in Pennsylvania, the other in Rhode Island. In July MDN told you that Dominion was shopping the two plants, hoping to raise $1+ billion (see Dominion Looking to Sell Gas-Fired Power Plants in PA, RI). One plant, the Fairless Power Station, is located in Bucks County, PA near Philadelphia. The other, Manchester Street Power Station, is located in the People’s Republic of Rhode Island. So why would Dominion, a company that really digs natgas, want to dump two of its natgas power generating plants situated in large, urban areas? In a word, regulation, or rather lack of it. Both of the plants Dominion wants to dump are “merchant plants”–meaning they sell electricity on the open market, at market rates. Regulated plants, on the other hand, have their prices determined by quasi-governmental agencies. Selling electric that’s regulated means the potential upside is limited, but it also means you are guaranteed a certain price and can count on receiving that price year in and year out. In the lingo of high finance, being regulated “derisks” a company–makes revenue streams predictable, which investors like. So Dominion is on a mission to (a) pay down debt by selling assets like these two merchant power plants, and (b) provide more revenue certainty for investors. And it looks like they achieved their goal, selling the two plants for $1.23 billion to Starwood Energy. In the same Dominion announcement about the Starwood sale, the company said they will continue to shop their 50% ownership stake in Blue Racer Midstream, which is the first we’ve heard that Dominion is looking to unload their share. Dominion says there is “strong interest” in buying it…
    Read More “Dominion Sells 2 Gas-Fired Plants; Blue Racer Midstream For Sale”

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    How Much Does it Cost to Build a Pipeline in the Northeast?

    The short answer to the question posed in our headline is, “Too much.” The reason it’s costing too much is because of a blizzard of frivolous lawsuits launched by anti-fossil fuel groups, funded with money from big foundations (see Big Green Exposed: List of Liberal Foundations Donating $3.7B and New Study, Video Exposes 19 Foundations Funding Climate Hoax), and because of the heavy hand of government regulation. Those two things together–lawsuits and punitive regulations–drive the cost of pipeline construction in the Marcellus/Utica region to heights where it may not make sense, economically, to build new projects. How much per mile does it cost to build a major pipeline that flows 1 billion cubic feet per day (Bcf/d) or more of low-carbon, clean-burning Marcellus/Utica shale gas? These days, it costs anywhere between $2.9 million to a whopping $13 million *per mile* to build a new pipeline in the northeast. Yeah, way too much. How much did Atlantic Sunrise cost Williams to build per mile? And how much is Atlantic Coast Pipeline costing Dominion Energy to build? We’ve got the numbers below…
    Read More “How Much Does it Cost to Build a Pipeline in the Northeast?”

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    Diversified’s Schedule to Plug Abandoned PA Wells in Dispute

    Diversified Gas & Oil has been on a mission to buy as many non-shale (conventional) oil and gas wells as it can in the Appalachian Basin. In June, MDN brought you the exclusive news that Diversified had purchased EQT’s Huron Shale assets in Kentucky, Virginia and West Virginia for $575 million (see Diversified Gas & Oil Adds to Conventional Assets in KY, VA, WV). The sale included nearly 12,000 conventional wells with 200 million cubic feet per day of natural gas production, 2.5 million acres of leases, and some 6,400 miles of gathering pipelines. Along with all those wells comes a number of wells that don’t produce any more and need to be plugged (see PA DEP Orders CNX, XTO & Diversified to Plug 1,058 Abandoned Wells). Plugging wells is not cheap, although Diversified seems to have found a way to do it cheaper than other companies like EQT can do it. Still, Diversified is faced with plugging thousands of wells. You don’t do it all at once–you have tackle it well by well, year by year. The Pennsylvania Dept. of Environmental Protection told Diversified it wants 1,000 of its nonproducing wells plugged in the next five years. Diversified countered it would like to plug 2,000 wells over the next 20 years. Diversified’s strategy, according to a Pittsburgh Post-Gazette article, is to push off plugging as long as possible…
    Read More “Diversified’s Schedule to Plug Abandoned PA Wells in Dispute”

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    Allegheny LibDem Wants to Throttle Fracking with Lease Database

    Why can’t liberal Democrats, for once, just be honest about their intentions and motivations? A liberal Democrat who sits on the Allegheny County (PA) Council, Anita Prizio, is floating a plan that requires drillers to provide information on their oil and gas leases (shale AND conventional) in digital format to the county recorder of deeds. The supposed aim is to create an easy-to-access database/registry showing which land has been leased and which has not. We won’t lie (unlike lib Dems)–such a registry would be worth its weight in gold to many people, including landowners, other drillers/competitors, but most of all to antis who want to make trouble. Why do we say Ms. Prizio has ill-intent, even though she claims she has no ulterior, anti-drilling motive? Because she’s floating this plan for a lease registry at the prompting of radical leftist and anti-driller Doug Shields, from the odious group Food & Water Watch. Before joining FWW, Shields was himself a Pittsburgh Councilman for 20 years–lobbying for a total frack ban on more than one occasion (see Pittsburgh Councilman Doug Shields Lobbies to Get Drilling Ban Added to City’s Charter). Prizio’s connection to Shields is the tip-off that this is not some innocent proposal, but instead yet another case of collusion between lib Dems and Big Green. Follow the money…
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    Lawyers Make Out Like Bandits in PA O&G Overtime Case

    We have a lot of lawyer friends, and lot of loyal MDN readers are lawyers. With all due respect to our lawyer friends and readers, we are outraged at the amount of money awarded to the attorneys in a recent oil and gas case in PA. Let’s back up. This post is primarily a warning to drillers and their contractors to play it straight when it comes to classifying who is exempt from overtime and who is not. You know who’s really “hourly” and who isn’t, and if you screw that up, it will come back to bite you–in a major way. A group of oilfield service workers in western PA were, according to the workers, misclassified as exempt from overtime when working over 40 hours per week. They sued. The details are below, but the short version is that the eight employees who stuck it out until the bitter end won their case. Collectively they got just over $1 million in back wages and “damages.” However (and here’s our outrage), the lawyers got a “reasonable fee” of $2.3 million! Really? It’s “reasonable” that the lawyers got more than twice what the employees got?…
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