Industrywide Issues

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    WV Co-Tenancy Bill Survives Challenge, Amended, Final Vote Today

    Two days ago we reported that the West Virginia House of Delegates was due to vote on House Bill (HB) 4268, the “Co-tenancy Modernization and Majority Protection Act” (see WV Votes on Co-Tenancy Bill Today; Anti Gets Mouthy, “Dragged” Away). In WV there are often multiple rights owners listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them all to sign on the dotted line. Co-tenancy corrects that situation. A vote by the full House didn’t end up happening on Tuesday, as originally predicted. Amendments to the bill were offered. One of the amendments would have changed the ratio of rights owners who must sign on the dotted line to allow leasing from 75% all the way up to 90%–which isn’t feasible. Fortunately that amendment was voted down 57-40. However, another amendment–to reallocate half of the unclaimed royalties to fund health insurance for public employees including teachers–did pass (50-47). In the original bill 100% of unclaimed royalty revenue was to be used to cap orphan wells. Now the orphans only get half the funding. Perhaps most importantly, an amendment to limit co-tenancy to properties with seven or more rights owners passed 90-6. That amendment is intended to keep WV out of family squabbles, where just a few people own the mineral rights. The now fully-amended, fully-discussed bill is ready for a final final House vote, which is scheduled for today. After the House votes, it’s on to the Senate. Below are reports about the amendment process in the House…
    Read More “WV Co-Tenancy Bill Survives Challenge, Amended, Final Vote Today”

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    PA DEP Wants to Boost Shale Fees 250% to Help Fund Non-Shale Work

    Pennsylvania Gov. Tom Wolf’s Dept. of Environmental Protection (DEP), the agency charged with overseeing oil and gas drilling in the state, “blindsided” the shale industry last week with a proposal to hike the fee required when submitting an application to drill a new shale well (see PA DEP Plans to Raise Marcellus Well Permit Fee by 250%). The current fee is $5,000. The proposed new fee is $12,500–or 2.5 times (250%) higher. The DEP Oil and Gas Technical Advisory Board (TAB) met yesterday to discuss the permit fee increase. It was DEP Deputy Sec. Scott Perry’s job to be the point guy, the spear catcher to stick up for this insane hike in fees. We understand…The DEP has fewer people working there than it once did and needs to hire more. (Although the DEP somehow found half a million bucks lying around to hire 92 interns to help out. See PA DEP’s Short-Term Solution to Get More Help – Hire 92 Interns). PA Gov. Tom Wolf wants to slap a new severance tax on shale drillers to give their money away to Philadelphia teacher’s unions. The DEP (an executive agency, part of the Wolf administration) is taking a page from Wolf’s playbook. The DEP wants to slap this insanely high fee on shale drillers to (in part) cover the expenses associated with non-shale activities. According to the Pittsburgh Post-Gazette: “Mr. Perry said they [shale permit fees] fund the broad scope of the [DEP] office’s operations, including its oversight of traditional [i.e. conventional] oil and gas wells, gas storage wells, abandoned wells and earthmoving activities.” How is it, in any sense, fair to hike the fees of shale drillers so DEP agents can better keep an eye on non-shale wells? Kind of like robbing Peter to pay Paul…
    Read More “PA DEP Wants to Boost Shale Fees 250% to Help Fund Non-Shale Work”

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    Antis Pressure Maryland Gov. Hogan to Reject Pipeline Under Potomac

    Maryland Gov. Larry Hogan

    In April 2017, MDN brought you the news that Columbia Pipeline (now owned by TransCanada) had filed an application with the Federal Energy Regulatory Commission (FERC) to build a 3.5 mile, 8-inch pipeline that will carry natural gas from Pennsylvania to connect the Mountaineer Gas system in the Eastern Panhandle of West Virginia with the Columbia Gas Pipeline in Pennsylvania (see New 3.5 Mile Pipeline Project to Drill Under the Potomac River). That tiny section of pipeline is part of the larger Eastern Panhandle Expansion project–a project to deliver natural gas via local distribution channels (local utility Mountaineer Gas) to a new industrial facility in Berkeley County, WV, and to provide gas to other local businesses and residents in the Tri-State area. Anti fossil fuel nutters have been on a rampage to stop the pipeline from going under the Potomac since last summer (see Mountaineer Pipeline Under Potomac Latest Focus of Anti Movement). To hear them talk, you’d think this is the first time a pipeline has been drilled under the Potomac River. However, TransCanada, via its Columbia Pipeline subsidiary, has already built and operates 12 other pipelines that go under the Potomac River–just in the State of Maryland! Have you ever heard a peep about those pipelines and an environmental holocaust they’ve created? No. Why? Because putting a pipeline under a river is no big deal. It doesn’t harm the environment. Yet that’s what antis are claiming and will claim in a protest march today, aimed at pressuring the weak-willed Republican Governor of Maryland, Larry Hogan, into blocking this tiny, 3.5 mile project…
    Read More “Antis Pressure Maryland Gov. Hogan to Reject Pipeline Under Potomac”

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    Whatever Happened to Illegally Dumped Frack Waste in KY Landfill?

    Click image for larger version

    In March 2016, MDN reported that 47 dumpsters full of concentrated frack waste from OH, PA and WV was illegally dumped in a Kentucky landfill in Estill County, KY (see Marcellus/Utica Frack Waste Illegally Dumped in Kentucky Landfill). The cuttings were buried between July and November in 2015, near as anyone can tell. The landfill sits across the road from a school. Normal frack waste has extremely low (usually no) radioactivity. But when drill cuttings are further processed and concentrated, as was the case with this series of loads, the naturally occurring radiation present can become more concentrated. Fortunately there’s no indication of a problem at the landfill: no indication that it’s leaking radioactivity into the water table, etc. But parents and residents were rightly up in arms (see Local Residents Demand KY Landfill Accepting Frack Waste Close). We last provided an update on this situation in July 2017 (see Update on Illegally Dumped Frack Waste in Kentucky Landfills). What’s happened since then? Not much. The radioactive waste is still there, buried. Still no signs of any leakage or problems. The landfill owners were fined and are required to create a mitigation plan. State officials want to keep the waste right where it is–best not to disturb it. But some locals want it dug up and moved–to somewhere/anywhere else. Here’s the latest on the “hot mess” in Estill County’s landfill…
    Read More “Whatever Happened to Illegally Dumped Frack Waste in KY Landfill?”

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    Kentucky Antis File Lawsuit to Stop TGP NGL Pipe Reversal

    Kentucky antis have gone to court to try and block a plan by Kinder Morgan to convert a portion of the Tennessee Gas Pipeline that flows natural gas from the Gulf Coast to the northeast, to reverse the pipeline and flow natural gas liquids from the Marcellus/Utica region to the Gulf. Part of the 964-mile project runs through Kentucky (see KM Plans to Convert Tennessee Gas Pipeline to Flow M-U NGLs South). The first step in the reversal process was approved by the Federal Energy Regulatory Commission last October (see FERC Advances Plan to Reverse Part of TGP to Haul M-U NGLs to Gulf). Antis in Kentucky got their bluegrass knickers in a twist over FERC’s action. They filed a request for “rehearing” of FERC’s decision, which is the first step in a process that typically ends up in court. First the “aggrieved party” (antis are in a perpetual state of being aggrieved) must request a rehearing. If FERC denies the rehearing request, antis (Big Green groups with deep pockets representing them) then file a lawsuit in federal Appeals Court to try and stop FERC from continuing to approve the project. Normally FERC has 30 days to decide on a rehearing, however, they have a little tactic they call a “tolling order” which allows them to extend the amount of time to make a rehearing decision–indefinitely. FERC pulled out the tolling order card and played it with the TGP project last November (see FERC Frustrates Kentucky Radicals Seeking to Stop TGP Pipe Reversal). The antis aren’t waiting. They’ve just filed a lawsuit challenging the FERC tolling order. Here’s the latest from the enviro nuts in the Bluegrass State…
    Read More “Kentucky Antis File Lawsuit to Stop TGP NGL Pipe Reversal”

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    More on Unintended Consequences for Pipelines from Trump Tax Cut

    As we reported last week, President Trump’s marvelous tax cut has had some unintended (negative) consequences for pipeline companies (see Trump Tax Cut has Unintended Consequences for Pipeline Projects). Trade groups and some states are pressuring the Federal Energy Regulatory Commission (FERC) to force pipeline companies to cut the rates they charge customers in light of the Trump tax cut. The corporate tax rate is going from 35% down to 21%. When pipelines file rate cases for how much they will charge customers to flow gas (or oil or whatever else) through the pipeline, part of the calculation for what FERC allows them to charge is based on profitability. Since pipeline companies will now be a whole lot more profitable (tax payments going down), the customers using those pipelines want the rates recalculated to reflect the savings. In other words, they want part of the tax savings too. But the pipeline companies say they have duly signed contracts in place. You can’t just rework a single portion of those contracts with the sweep of a pen. What about other components in the contract that are used in calculating prices? In some (many?) cases pipeline companies have borne *increased* costs that are not passed along to customers. If the customers (mainly utility companies) want FERC to adjust rates now, based on the Trump tax cut, they may not like how those rates get adjusted considering all the other factors that could/should be changed. Maybe they’ll go up instead of down! As we said last week, a trouble is brewing between utilities and the pipelines that feed them. Here’s more background and insight into the brewing trouble…
    Read More “More on Unintended Consequences for Pipelines from Trump Tax Cut”

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    FERC Grants MVP OK to Begin Pipeline Construction in Virginia & W.V.

    In January, MDN reported that Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA–had received permission from the Federal Energy Regulatory Commission (FERC) to begin tree clearing and construction of access roads and construction yards in five West Virginia counties: Wetzel, Harrison, Doddridge, Lewis and Braxton counties (see Mountain Valley Pipe Gets FERC Approval to Begin WV Construction). That was MVP’s very first permission to begin construction-related activities. It was the trickle. The flood gates burst open late last week when FERC began issuing what is (so far) four new orders. The new orders grant MVP permission to continue not only tree clearing and building roads, but also to begin construction of the actual pipeline itself. That is, digging trenches and laying steel in the ground–not only in WV, but also in Virginia. Construction is now under way in multiple counties in both states. We lay out where MVP is getting built, and what activities are now green lighted by FERC, below…
    Read More “FERC Grants MVP OK to Begin Pipeline Construction in Virginia & W.V.”

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    ME2 Pipeline’s $12.6M Shakedown Money Won’t Pay for Cleanup

    Last week MDN brought you the news that Sunoco Logistics Partners had agreed to pay a massive (historically high) $12.6 million fine to the PA Dept. of Environmental Protection (DEP) for “permit violations related to the construction of the Mariner East 2 pipeline project” (see Sunoco LP Pays PA DEP $12.6M to Resume ME2 Pipeline Construction). Supposedly Sunoco’s ME2 construction activities have caused a few erosion issues here and some drilling mud leaks there–so-called “harms” to the environment. Surely some of the massive, historically high $12.6 million fine Sunoco is paying will be used to “fix” those problems, right? Wrong. Every single penny is going to other pockets (black holes) within the DEP, proving our contention that this was nothing more than a shakedown by a government agency. Essentially Sunoco had to pay DEP mobsters a “bribe” in order to restart work on the ME2 project. The DEP had Sunoco by the short hairs, blocking any new work until the money was paid. So what about “cleaning up” the problems created by ME2 construction? “[I]t’s highly likely that Sunoco will be required to clean up the damage caused by its botched construction, in addition to paying the penalty,” according to a former DEP Secretary. If that doesn’t beat all. Fine them AND make them pay even more for the cleanup. Welcome to doing business in Pennsylvania…
    Read More “ME2 Pipeline’s $12.6M Shakedown Money Won’t Pay for Cleanup”

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    Tallgrass has “Outstanding Quarter” Thx to REX Pipeline in the M-U

    We still, to this day, marvel at how Tallgrass Energy Partners turned around what looked like a financial disaster, into a financial bonanza. Tallgrass built the Rockies Express (REX) pipeline that stretches from Colorado and Wyoming all the way to Ohio just in time for the shale revolution to hit. Whoops! Talk about bad timing! A significant portion of REX, it’s Zone 3 pipeline from Missouri to Ohio, was in danger of drying up in 2012 because of the increase in Marcellus/Utica gas being produced (see REX NatGas Pipeline Faces Stiff Competition from Marcellus). Tallgrass did an about face, reversing the flow of REX to run from Ohio to Missouri a year later, in 2013 (see REX Reverses Pipeline Flow from OH for Mystery Utica Customer). Since that time volumes along the Zone 3 portion of REX have done nothing but increase. A lot of Marcellus/Utica gas now flows from our region to the Midwest by hitching a ride on REX. The strategy of reversing the pipeline’s flow turned what was shaping up to be a disaster, into a bonanza. Yesterday Tallgrass issued its fourth quarter and full year 2017 update. While Tallgrass (as other pipeline companies) did well in 2017 in general, much of the company’s success came “as a result of incremental capacity sales in Zone 3” of the REX pipeline…
    Read More “Tallgrass has “Outstanding Quarter” Thx to REX Pipeline in the M-U”

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    Big Green Targets PA Marcellus via DEP Water Quality Review

    The efforts by radical environmental groups like THE Delaware Riverkeeper and PennFuture to try and shut down the Marcellus industry in Pennsylvania never stop. Like ocean waves that continue to crash into the shoreline, Riverkeeper and PennFuture constantly, regularly, launch new initiatives aimed at hassling, slowing, stopping and reversing the Marcellus industry. Sometimes (often) their efforts are focused on filing frivolous lawsuits. Sometimes it’s a publicity stunt/protest. And sometimes they take aim at regulatory bodies, like the PA Dept. of Environmental Protection (DEP). It is that last one that is the focus of a new campaign to stifle the Marcellus industry. Every three years the DEP conducts a review of water quality standards. Riverkeeper and PennFuture have put the call out to their radical faithful to inundate the DEP with public comments (due by Feb. 16) to create new regulations that will “protect” PA streams “from impacts like brine gas drilling wastewater” and “road salt applications in the winter”–perfectly safe salt that comes from processed wastewater. In other words, this is yet another attempt to shut down the drilling industry by neutering its ability to properly dispose of brine wastewater…
    Read More “Big Green Targets PA Marcellus via DEP Water Quality Review”

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    PA Auditor General Goes After SRBC, DRBC with “First-Ever” Audits

    2/14/18 Update: Shortly after this post went live, MDN received a tip from a reliable source that sheds more light on the audit and why DePasquale is moving forward with it. (Hint: He’s being forced to.) See our note below.

    This should be interesting to watch. Democrat partisan hack PA Auditor General Eugene DePasquale is about to conduct an in-depth (very invasive and painful) “audit” of the finances for both the Susquehanna River Basin Commission (SRBC) AND the out-of-control Delaware River Basin Commission (DRBC). That is, we have a Democrat turning on some of his own. DePasquale previously audited the PA Dept. of Environmental Protection during the administration of Republican Gov. Tom Corbett. DePasquale’s “audit” highlighted problems that had already been fixed, for years (see DEP to DePasquale: Problems Fixed Years Ago, Where Have You Been?). It was a political stunt, meant to embarrass Tom Corbett and shame the Marcellus industry. When that didn’t work, DePasquale ran a sham audit two years later looking at the impact tax–the money raised by shale drilling–that looks and acts and walks and quacks like a severance tax in PA (see PA Anti-Drilling Auditor General Bashes Impact Fee Spending). His audit found the system needs better paperwork. Yeah, that’ll fix things. More paperwork. DePasquale’s targets have been Republicans and the things they like, as in drilling. So it surprised us to learn that DePasquale will now go after (at least in the case of the DRBC) some of his own. Perhaps DePasquale will “discover” all sorts of nasty problems with the SRBC, but the DRBC will be clean and pure as the wind-driven snow. That’s what we expect from a partisan hack like DePasquale…
    Read More “PA Auditor General Goes After SRBC, DRBC with “First-Ever” Audits”

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    Boston Globe Takes Aim at Mass. Politicians Blocking Gas Pipelines

    It’s fun to watch the left eat its own. That’s exactly what’s happening in Boston. We’ve provided a fair bit of coverage on the issue of lack of pipelines in New England and the fallout from it. Because of lack of natural gas pipelines, both natural gas AND electricity prices in New England are sky high. Natgas is used to generate most of New England’s electricity. When it gets cold out, residents and businesses use more natgas for heat, causing a shortage of natgas, further causing insane price hikes. At some point, there just won’t be any more gas at any price–and that’s when rolling blackouts begin. It will happen sooner than you think. Important politicians in New England, like U.S. Senator Elizabeth “Pocahontas” Warren and Attorney General Maura Healey (both from Massachusetts) have actively worked to block new natgas pipelines. The result? LNG tankers with illegal Russian gas are supplying a good share of the region’s natgas supplies during cold snaps. It’s disgusting. It’s so disgusting, even the far-left libs who write and edit the Boston Globe can’t stand it anymore. The Globe published an editorial yesterday titled “Our Russian ‘pipeline,’ and its ugly toll,” taking Healey and the enviro left to task. Yeah, it’s fun to watch the left eat its own!…
    Read More “Boston Globe Takes Aim at Mass. Politicians Blocking Gas Pipelines”

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    Trump Infra. Plan Will Spur New Pipe Projects; Overrule States?

    On Monday, President Trump released a $200 billion infrastructure plan that he hopes will generate $1.5 trillion in funding with states, local governments and the private sector. The ambitious plan aims to improve roads, bridges, airports, drinking water and wastewater systems, waterways, water resources, brownfields and Superfund sites, energy, rural infrastructure, public lands, and veterans’ hospitals. Compare Trump’s brass tacks get-it-done plan to Obama’s long-forgotten “shovel ready” B.S. plan. Trump knows how to get things done. Part of the infrastructure plan would speed up the permitting process for pipelines by removing Congress from the approval process for pipelines to cross national parks. Which, of course, has enviro lefties in a panic. Predictably, Democrats panned the plan. After all, they couldn’t get the job done, so they couldn’t possibly support someone from the other party who CAN get the job done. Below are the details of Trump’s “get it done” infrastructure plan, along with a Reuters story about how the plan (if adopted) may spur new pipeline projects. Reuters theorizes this plan may, among other things, remove recalcitrant states like New York from having a role in approving pipeline projects. Perhaps Trump’s plan can revive the Constitution Pipeline project!…
    Read More “Trump Infra. Plan Will Spur New Pipe Projects; Overrule States?”

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    Exxon Fights Back, Countersues AGs & Big Green Attorneys

    It’s about time! The gloves need to come off and our side (pro-fossil fuel) needs to aggressively launch lawsuits against the lawyers and groups who continue to launch a barrage of frivolous lawsuits against us, trying to shut down all fossil fuel companies (but not before they empty fossil fuel company coffers). Exxon is fighting back. The gloves are off. It’s time to talk about Fight Club–out in the open. We have, from time to time, chronicled the lawsuits launched by New York State’s out-of-control Attorney General, Eric Schneiderman. Schneiderman, Massachusetts AG Maura Healey and other lefty Dems formed an unethical secrecy pact in their campaign to shake down Exxon Mobil by claiming the company “knew” man-made global warming exists and that burning the nasty fossil fuels the company produces contributes to it (see Smoking Gun: AGs Signed Pact to Keep Exxon Documents Secret). It doesn’t matter that man-made global warming is an unproven theory–not even real science. Schneiderman and his cabal of legal jackals tried to gang up on the Exxon Mobil water buffalo–except this time the water buffalo prey is healthy and is fighting back, by launching lawsuits against Schneiderman and others whom he is colluding with. It’s time to take down the jackals…
    Read More “Exxon Fights Back, Countersues AGs & Big Green Attorneys”

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    Constitution Pipe Files for FERC Rehearing, Then Back to Court

    Contrary to stories begin spun by anti-fossil fuel groups, Williams has not given up the fight to build the Constitution Pipeline–a $683 million, 124-mile pipeline from Susquehanna County, PA to Schoharie County, NY to move Marcellus gas into New York State and from there, into New England. The pipeline faces stiff odds. In 2016, the Andrew Cuomo-corrupted NY Dept. of Environmental Conservation (DEC) abrogated their fiduciary duty by denying the project a federal stream crossing permit (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). Williams sued the state in federal court–and lost (see Court Rejects Constitution Pipe’s Case Against NY DEC; Now What?). Williams then asked the Federal Energy Regulatory Commission (FERC) to overrule DEC’s rejection. Sadly, last month FERC denied that request (see Death of the Constitution Pipeline? FERC Refuses to Overrule NY DEC). Williams has since launched a multi-pronged legal attack with three potential paths to victory. First, Williams appealed the case directly to the U.S. Supreme Court (see Constitution Pipeline Appeals NY Fight Directly to U.S. Supreme Court). The case to the Supremes takes up the issue of whether or not one state, like New York, can deny a federal project that benefits other states, like the New England states. We await word from the Supremes on whether or not they will hear the case. Yesterday Williams launched another legal attack by asking FERC to reconsider their denial from last month. If FERC says yes and overrules the DEC, we have victory. If FERC says no, Williams will then (we are assuming) use the denial as the basis to take the case back to federal court–this time to the D.C. Court of Appeals. The first federal court to consider the matter (ruling against Williams) was the Second Court of Appeals (in NY). Moving the case to the D.C. court stands a better chance. So, three potential paths to victory: U.S. Supreme Court, FERC changes its mind, or the D.C. Court of Appeals. This fight is far from over…
    Read More “Constitution Pipe Files for FERC Rehearing, Then Back to Court”

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    EIA Feb ’18 Drilling Report: M-U Production Up Another 1/3 Bcf

    Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. The numbers continue to be AMAZING. Natgas production continues to explode (poor metaphor!)–especially here in the Marcellus/Utica region, which is labeled “Appalachia” in the report. EIA predicts production in the Marcellus/Utica will soar another 321 million cubic feet per day (MMcf/d), roughly one-third of a billion cubic feet (!), between February and March. That’s after M-U production went up a stupendously massive 428 MMcf/d last month, even more than the 377 MMcf/d originally forecast (see EIA Jan ’18 Drilling Report: M-U on Fire, Up 1/3 Billion Cubic Ft). Incredible! Our region isn’t the only prodigious producer. The Permian is primarily an oil play. But because each oil well also produces at least some natural gas along with the oil (called associated gas), and because so many wells are getting drilled in the Permian, it’s natgas production is forecast to jump 216 MMcf/d in the coming month. In a string going back more than a year, the seven major plays in the U.S. will once again hit new record natgas production in March–estimated to be 64.9 billion cubic feet per day. Of that, the M-U region will produce 27.1 Bcf/d–or 42%…
    Read More “EIA Feb ’18 Drilling Report: M-U Production Up Another 1/3 Bcf”