Industrywide Issues

  • | | |

    WV Teachers Want Higher Severance Tax – For Themselves

    No wonder the teachers in Philadelphia think that the money in drillers’ pockets actually belongs to them. Because in neighboring West Virginia, it does! At least some of the money. WV held its final public hearing (#21) as part of a statewide “listening tour” about how the state should fix (i.e. pay for) its insurance program for public employees. Most of the speakers at the 21 complain-fests were teachers. Their #1 preferred solution to “fixing” (paying for) better benefits is to boost the severance tax on natural gas higher than the current 5% (already one of the highest rates in the country). Such an increase would, of course, kill new drilling. And sooner or later previously drilled wells on which current severance tax revenues are based wind down, leaving teachers back at square one, with no extra money to pay for better insurance plans. Here’s more on the story of WV teachers looking to take money out of the pockets of a single industry, in order to grab other people’s hard-earn money for themselves…
    Read More “WV Teachers Want Higher Severance Tax – For Themselves”

  • | | | |

    Quebec’s Utica Frack Ban Forces Junex to Merge with Cuda Energy

    Last week the Canadian province of Quebec announced it plans to commit fracking suicide (see Quebec to Ban Utica Shale Drilling, Most Other Drilling Too). Quebec’s announcement is a virtual death sentence for oil and gas companies in the province. How? By saying they will ban shale fracking, and by making drilling standards so tight for everyone that even conventional drillers will have a difficult, almost impossible time. We are already seeing the results of Quebec’s announcement. And the result isn’t pretty. Junex, a driller headquartered in Quebec with 1 million leased acres in the St. Lawrence lowlands (where there is Utica Shale), has just announced it is selling out to/merging with Cuda Energy, headquartered in Calgary, Alberta. It was either sell out/merge, or go out of business. Thanks Quebec! You’re so “business friendly” (NOT). Quebec is quickly becoming a pariah among all the Canadian provinces, like New York State is on the other side of the border…
    Read More “Quebec’s Utica Frack Ban Forces Junex to Merge with Cuda Energy”

  • | | | | | |

    PA Superior Court Rejects Southwestern “Briggs” Trespass Appeal

    An unwelcome and troubling development in the Southwestern Energy “Briggs” court case. MDN brought you important news in April that the Pennsylvania Superior Court had handed down a decision (known as the “Briggs” case) that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed to Superior Court and three judges heard the case. Two of the three overturned the lower court and sided with the landowner. Southwestern, following the decision, petitioned the Superior Court to have all of the sitting justices (called en banc) hear the case (see Southwestern Appeals “Trespass” Case to Entire PA Superior Court). Sadly, on Friday, the Superiors declined to rehear the case. The next step? Southwestern has appealed the case directly to the PA Supreme Court…
    Read More “PA Superior Court Rejects Southwestern “Briggs” Trespass Appeal”

  • | | | | | | | |

    Industry Expert Says 3 More Crackers Coming to M-U

    Last week the second annual Appalachian Storage Hub Conference convened at the Hilton Garden Inn Pittsburgh/Southpointe. As we pointed out in a post last week, the main topic of discussion was the $10 billion NGL/ethane storage hub (see Southpointe Event Focuses on M-U NGL Storage Hub). As big as the storage hub project is (and the news surrounding it), there was even bigger news coming from the event: 3 more ethane cracker projects for the Marcellus/Utica are likely to announce in the coming year! Tom Gellrich, principal of Top Line Analytics, talks to a lot of people. He’s an insider. At last week’s event, Tom shared some of his insights. He said PTT Global will commit to its previously announced cracker in Belmont County, OH, sometime this year. No real revelation there–we’ve been expecting such an announcement for the past two years. That’s one of three. Then Tom said the on again, off again Braskem/Odebrecht plan to build a cracker near Parkersburg, WV is on again and he expects an announcement to that effect in the next year. Wow! That’s two of three. And then Tom teased the crowd by saying there’s a THIRD project bubbling in the background. No details on who is behind it or where it will be located. Tom says to look for an announcement on this third cracker project by this time next year. Bonus: Tom believes Shell will take a hard look at building a new/second cracker right next to the first, after the first is completed (a fourth new cracker?). We have embarrassing riches of ethane crackers! Each one costing multiple billions of dollars to build…
    Read More “Industry Expert Says 3 More Crackers Coming to M-U”

  • | | | | | |

    ME2 Work in Lebanon, PA Halted for Spilling a Single Cup of Mud

    A single cup of drilling mud, bentonite, is nothing. It is beyond nothing. Bentonite is the clay-based compound used to make toothpaste, lipstick and kitty litter. It is completely non-toxic–it goes on and in the human body! And yet when underground drilling work restarted at Snitz Creek in Lebanon County, PA for the Mariner East 2 pipeline project, a single cup of drilling mud (bentonite) came out where it wasn’t supposed to (in the creek), so once again the whole shebang was shut down. Which we find crazy. What’s next–shutting down drilling when a tablespoon of drilling mud comes out? A teaspoon? Look, we get it. There have been other spills at Snitz Creek (see ME2 Construction in Lebanon County Stopped for 50 Gal Mud Spill). If a cup comes out, maybe it will be followed by a gallon coming out. And if a gallon comes out, maybe 10 gallons or even 50 gallons will follow. Immediately halting all underground horizontal directional drilling used to install the pipeline under Snitz Creek is an “abundance of caution” thing. But come on! So what if 10 or even 50 gallons comes out? It’s bentonite and its non-toxic! Spilling 50 gallons of the stuff in the creek is like spilling 10 bags of kitty litter in the creek. A few fish and salamanders might die. So what? That’s the price of progress. Here’s the crazy news that a single cup of drilling mud has once again stopped ME2 work in Lebanon County at Snitz Creek…
    Read More “ME2 Work in Lebanon, PA Halted for Spilling a Single Cup of Mud”

  • | | | | | |

    Looks Like WNY Coal-Fired Plant Will Never Convert to Gas/Reopen

    In 2013, a coal-fired electric generating plant near Buffalo, NY (in Dunkirk) was slated to be converted to burn natural gas–a win/win for everyone (see Dunkirk, NY Electric Plant Saved – Converting from Coal to NatGas). Radical environmentalists like the Sierra Club opposed it, but that’s to be expected. Everything seemed to be fine until a competitor hauled NRG, the plant’s owner, into court to dispute the change from coal to natgas. They objected to ratepayers kicking in $150 million for the project. NRG said fighting the case in court will take years, so they just closed down the plant instead (see Dunkirk, NY Coal-Fired Electric Plant Closing in January 2016). It was an economic nuclear bomb for that community. The Town of Dunkirk gets 40% of its tax revenue from that single plant! New York State “generously” shucked out $5.5 million so Dunkirk wouldn’t collapse economically. But doing that year after year will get old quick. Other communities can rightly demand state help too. But then the competitor who had objected to converting the old coal plant to natgas (with ratepayer assistance) dropped their objection, and NRG restarted the project in December 2016 (see Coal-to-Gas Plant Conversion in Western NY Back from the Dead). Once again, environmental lunatics would rather bankrupt Dunkirk than let the plant restart as a gas-fired plant. They lobbied the state Public Service Commission to block the deal. That didn’t happen, but what has happened is that because of the delays caused by NY and NRG’s competitor, NRG has to “restart” the project and along with that comes connection costs–the cost to reconnect the plant to the electricity grid. Estimated reconnect costs go as high as $115 million! The cost of “transmission upgrades” according to the NY grid operator. The cost to reconnect would be almost as much as the project cost itself, meaning there’s no way in Hades NRG will build it. So although antis couldn’t get NY to regulate the project out of existence, electric grid bureaucratic claptrap will keep it out of existence. Same result…
    Read More “Looks Like WNY Coal-Fired Plant Will Never Convert to Gas/Reopen”

  • |

    Platts: Marcellus/Utica has Too Much Pipeline Capacity

    Luke Jackson – Platts

    The LDC Gas Forum Northeast conference in Boston began yesterday and goes through tomorrow. One of the speakers yesterday was Luke Jackson, a Platts Analytics senior energy analyst. MDN editor Jim Willis heard Luke a couple of years ago at Platts’ Benposium event (see Jim’s Notebook: Benposium East Predicts Future for Oil/NatGas). Smart guy. Last year we posted analysis by Luke which said drillers will have to hurry up and drill more in order to fill up the pipelines that would soon be going online (see Platts: M-U Drillers Need to Double Rigs to Fill Pipelines in ’17). Luke returned to his theme of “not enough gas to flow through all those new pipelines” in his talk yesterday at LDC Gas Forum. Luke said there’s a growing gap between how much is getting produced and the amount of pipeline space to cart it away. He said that gap may grow to be an excess capacity of 10 billion cubic feet per day (Bcf/d) by late 2019. Ouch! Let’s get drillin’! Also talking yesterday was Meera Bagati, manager of market analysis for NextEra Energy Resources, who addressed LNG exports and how exports may affect the Marcellus/Utica region…
    Read More “Platts: Marcellus/Utica has Too Much Pipeline Capacity”

  • | | | |

    Construction Begins for 14-Mile Pipe to Feed Berks Gas-Fired Plant

    Birdsboro pipeline route – click for larger version

    Ladies and gentlemen–start your bulldozers! It’s time to begin building a 14-mile natural gas pipeline from the Texas Eastern Transmission (Tetco) mainline in Rockland Township, to a natural gas-fired power plant under construction in Birdsboro (Berks County, near Philadelphia). EmberClear Corp. is a Canadian-based company that builds and operates natural gas-fired electric generation plants in North America. In 2015, EmberClear filed an application to build a new 488-megawatt natural gas-fired electric plant in Birdsboro, in Berks County, near Philadelphia (see New NatGas-Fired Electric Plant Coming Near Philadelphia). In April 2017, two different Japanese companies, Sojitz Corporation and Tokyo Gas, each purchased a one-third share ownership of the Birdsboro Power project (see Japanese Now Own 2/3 of Marcellus-Powered Electric Plant in SEPA). We call the Birdsboro Power a “Japanese-owned” project, which it is, but in reality EmberClear is still the company building and operating it. The PA Dept. of Environmental Protection (DEP) issued permits for the Birdsboro project in March of this year, and the project is now under construction (see PA DEP Issues Permits for Japanese Gas-Fired Elec Plant in SEPA). In order to operate, the plant will need gas. It will get its gas from the Tetco pipeline 14 miles away, via a dedicated pipeline. Construction has begun on the pipeline. Or rather, preliminary construction–clearing trees, etc. It will only take a few months to complete the pipeline project…
    Read More “Construction Begins for 14-Mile Pipe to Feed Berks Gas-Fired Plant”

  • |

    DRBC, SRBC Castigated for Regulatory Overreach @ PA House Hearing

    The Pennsylvania House State Government Committee held a hearing yesterday on the “regulatory overreach” by the Delaware River Basin Commission (DRBC) and Susquehanna River Basin Commission (SRBC). The big guns came out and blew multiple holes in the DRBC and SRBC. One of the big guns was PA State Rep. Jonathan Fritz, who said the DRBC has become “dangerous, unaccountable, and rogue.” Never truer words were spoken! MDN friend Tom Shepstone was there (his testimony below), as was Betty Sutliff from Upper Delaware River Basin Citizens. Marcellus Shale Coalition president Dave Spigelmyer delivered a powerful condemnation of the DRBC, calling their proposed frack ban “absurd.” Not be left out, DRBC executive director Steve Tambini (a major disappointment in that role) tried to defend the indefensible. To his credit, at least he showed up. Here’s a rundown on what happened yesterday, the castigation of the DRBC and SRBC…
    Read More “DRBC, SRBC Castigated for Regulatory Overreach @ PA House Hearing”

  • | | | | | | |

    Other Pipelines Pick Up Slack for Exploded Leach XPress

    Leach XPress fire

    As we told you last week, Columbia Gas Transmission’s Leach XPress Pipeline, which only came online in January, experienced an explosion and fire in Marshall County, WV last Thursday (see Leach Xpress Pipeline Explodes in Marshall County, WV). It’s early days yet, but so far, no word on what may have caused the explosion and resulting fire. The problem is that most (if not all) of the 1.5 billion cubic feet per day of Marcellus/Utica gas flowing through the pipeline is now stopped. What do shippers do? They find alternatives. And so they have. A Reuters article reports that shippers have cut deals with Energy Transfer’s Rover, Tallgrass’ Rockies Express (REX), EQT’s Equitrans, and Enbridge’s Texas Eastern Transmission (Tetco) pipelines to flow their gas out of the region. Below is the article highlighting the alternate routes shippers are using, along a second article speculating (in the absence of any hard facts) about what may have caused the explosion…
    Read More “Other Pipelines Pick Up Slack for Exploded Leach XPress”

  • | | | | | | | |

    Columbia Sues WV Landowners for Delaying Mountaineer XPress Work

    It’s one thing for a landowner (or Big Green supporter, sometimes one and the same) to oppose a pipeline project by protesting, asking politicians to get involved, writing to regulatory agencies, etc. We have a great American tradition of free speech. Go for it. But it’s quite another thing to “harass, intimidate and interfere” with work crews in an area by screaming at them and shooting your “large caliber gun” near where they’re working. Columbia Gas Transmission is currently building the Mountaineer XPress Pipeline, a $2 billion, 170-mile pipeline that will flow 2.7 billion cubic feet (Bcf) per day of natural gas from existing and future points of receipt along or near the Columbia pipeline system–most of it located in West Virginia (see Details on Columbia Pipeline Mountaineer XPress Pipeline Project). At 2.7 Bcf/d, Mountaineer XPress is the second largest (by volume) new pipeline project for the Marcellus/Utica region–second only to Rover’s 3.25 Bcf/d pipeline. It is a big and important project. And yet, a single couple whose land the pipeline does NOT cross can delay the entire project with threats and intimidation and interference. That’s the charge Columbia has made in court. On April 30, Columbia sued a couple in Doddridge County who live near an active construction site for Mountaineer XPress, claiming their hostile actions toward workers have caused a delay for the entire project–and that’s costing Columbia big bucks. Columbia wants to ask a jury to extract some of that lost revenue from the hostile couple as compensation. Lesson: Your (hostile, threatening) actions have consequences, and may cost you money…
    Read More “Columbia Sues WV Landowners for Delaying Mountaineer XPress Work”

  • | | | | | |

    Antis Fight Plan to Convert 2 Class II Injection Wells in OH to Class I

    In 2013, Buckeye Brine, a relatively young Ohio-based company, added a second shale wastewater injection well in Coshocton County (see Buckeye Brine Adds Second Injection Well, Business Expands Rapidly). Buckeye later added a third injection well. After an oil or gas well is drilled and fracked, wastewater from fracking flows back out for a week or two. After that, over time (years in most cases) naturally occurring water from deep underground continues to flow. That naturally occurring water contains a lot of dissolved minerals in it, making it much “saltier” than even ocean water–hence the term brine. Buckeye Brine has operated their three Class II (as they are known) injection wells “flawlessly” for the past five years. No earthquakes. No spills. No leaks back to the surface. Nothing. Buckeye now wants to re-designate two of the three wells as Class I wells, which would allow them to accept non-shale wastewater–from industrial equipment operators, soap manufacturers, food processors, power plants, and municipal wastewater treatment plants. The new wastewater sources for a Class I well are considered “nonhazardous.” However, so-called environmental groups are opposing the change from Class II to Class I…
    Read More “Antis Fight Plan to Convert 2 Class II Injection Wells in OH to Class I”

  • | | | | | |

    Antis Rally Near Philly to Permanently Shut Down ME1/ME2 Pipes

    PA State Sen. Andy Dinniman

    In May, anti-fossil fuel pipeline opponents finally found a single, liberal administrative judge to shut down the Mariner East 1 (ME1) NGL pipeline–a pipeline that’s been operating without any problems for more than a year (see Antis Get Lib Judge to Shut Down All Mariner East Pipes, Dems Rejoice). Sunoco Logistics Partners, the owner of ME1, and the builder of the Mariner East 2 (ME2) Pipeline project, appealed the judge’s decision to the full Public Utility Commission (PUC). A decision about the shutdown (whether to lift is) is due any time. In an attempt to pressure the PUC and Gov. Tom Wolf to *permanently* shut down ME1 and ME2, a group of 150 or so rallied near Philadelphia on Saturday. Something you should know: A total shutdown of ME1 and ME2 is not going to happen. But that doesn’t stop self-deluding nutters from trying. Inevitably the protesters are disappointed. They talk themselves into the fictional fantasy that a pipeline that has been fully permissioned and 98% done (ME2) will simply stop and not be allowed to finish construction and begin operations. They tell themselves they can get a pipeline with a perfect safety record (running for more than a year) permanently shut down. Ain’t gonna happen. But they tell themselves these things, over and over, convincing themselves. People like PA State Sen. Andy “Tony Soprano” Dinniman, recklessly feeds his kook nutbase these fantasies. Totally irresponsible. So they gather, as they did this past weekend, to protest and “demand” that the PUC shut down these projects. What will happen when the full PUC overturns the liberal judge’s biased decision? How will the protesters handle the defeat?…
    Read More “Antis Rally Near Philly to Permanently Shut Down ME1/ME2 Pipes”

  • | | | |

    2 Bills Affecting Utica Shale Head to Gov Kasich for Signature

    OH Gov. John Kasich

    A pair of bills recently passed the Ohio State legislature and have gone to Gov. John Kasich’s desk for his signature. Both bills affect companies in the oil and gas space, in particular those drilling in the Utica Shale. One bill, House Bill (HB) 430, tightens up the tax code, what is and what is not allowed as deductions for drilling companies. Ohio state auditors have taken advantage of unclear language to aggressively go after oil and gas companies over legitimate tax breaks they receive under Ohio law (to not pay taxes on equipment used directly in producing oil and gas). Lawmakers want to end the tax witch hunts by clearing up language. They did so back in 2016, but Kasich and Democrats successfully spun the issue as a “tax break” under which up to $264 million would have to be refunded to Big Oil. Total lie. But Kasich vetoed that bill and it died (see OH Gov Kasich Vetoed Misnamed ‘Tax Relief’ for Utica Drillers). The bill is back, in a different form, and sent to Kasich for a signature. Will he sign it this time? The second bill, House Bill (HB) 225, addresses the issue of plugging some of the estimated 600 orphan wells in the Buckeye State. HB 225 triples the amount of money set aside to cap orphan wells (money which comes from Ohio’s severance tax, paid for by oil and gas producers). The bill also “creates a more streamlined and efficient process for identifying and plugging” orphan wells. The amazing thing about HB 225 is that both Big Green groups and the drilling industry support it! We predict a quick signature on this one…
    Read More “2 Bills Affecting Utica Shale Head to Gov Kasich for Signature”

  • | | | | | | |

    Leach Xpress Pipeline Explodes in Marshall County, WV

    Click image for larger version

    This is not the kind of news we like to share–but it’s important. A newly installed pipeline–that went online in January–experienced an explosion and huge fireball, in Marshall County, WV. TransCanada’s Leach XPress project–some 160 miles of new natural gas pipeline and compression facilities in southeastern Ohio and West Virginia’s northern panhandle which flows 1.5 billion cubic feet (Bcf) of gas all the way to Leach, Kentucky (hence the name), went online January 1st (see Leach XPress Goes Online; FERC Approves Mountaineer & Gulf XPress). Leach XPress is part of the Columbia Gas Transmission system. From Leach, KY, the gas hitches a ride on TransCanada’s Rayne XPress pipeline to the South and Gulf Coast. A portion of Leach XPress, this brand new, “best-in-class” pipeline (so said TransCanada’s CEO in January), exploded and caught fire at 4:15 am yesterday in Moundsville (Marshall County), WV, sending flames hundreds of feet into the air. Fortunately no one was injured. Some nearby residents fled their homes. Most of the pipeline is now shut down, curtailing 1.3 Bcf/d (out of the 1.5 Bcf/d) of gas volumes “indefinitely.” Here’s what we know (and don’t know) about the accident…
    Read More “Leach Xpress Pipeline Explodes in Marshall County, WV”

  • | | |

    Country’s Biggest NatGas Power Plant Breaking Ground in OH Oct-Nov

    In April 2016 MDN told you about the Guernsey Power Station–a new Utica/Marcellus natural gas-fired electric generating plant proposed for Guernsey County, OH (see New Utica-Powered Electric Plant Proposed for Guernsey County, OH). Apex Power Group at that time said they want to build a large 1,100 megawatt plant in Valley Township–producing enough electricity to power 1 million homes. Apex said construction is targeted to begin in 2018 and the plant will go online in 2020. At the end of December 2017, Apex and joint venture partner Caithness Energy filed a pre-application for the project–and the application showed they no longer want to build an 1,100 megawatt plant, but instead a whopping 1,650 megawatt plant (see Planned OH Utica-Powered Electric Plant Goes from 1,100 to 1,650 MW). That’s the biggest natgas-fired electric plant we’ve heard of so far–anywhere. A record-holder! We spotted an article in the local Daily Jeffersonian (Cambridge, OH) that says Apex is on track to break ground this coming October/November, which is fabulous news, although that time frame is delayed from a previously announced May start…
    Read More “Country’s Biggest NatGas Power Plant Breaking Ground in OH Oct-Nov”