Industrywide Issues

  • | | | | | | |

    New Life for Constitution Pipe – Williams Asks White House for Help

    In April 2016 the New York Dept. of Environmental Conservation (DEC) caved to corrupt political pressure from Andrew Cuomo and denied the Williams Constitution Pipeline a necessary federal 401 stream crossing permit, blocking the project (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). At that moment, the DEC stepped off a cliff. It’s been a long, slow process, but we’ve watched them fall ever since. And now, they will soon hit the bottom. They were dead (metaphorically) the moment they issued their denial. It was a foregone conclusion that their illegal action would not stand–that the DEC would eventually be overruled and their role in permitting such projects would be stripped away. But you have to remember those were heady days for the left, when Cuomo was full of himself and the future seemed certain that the hapless Hillary would win the White House and further corrupt federal agencies like the Federal Energy Regulatory Commission (FERC), the agency that oversees projects like the Constitution. But the unthinkable happened. Hillary lost (thank God!). And now Cuomo and his corrupted DEC have no backstop at the federal level. Last week on a conference call to discuss second quarter earnings, Williams CEO Alan Armstrong responded to a question about the long-stalled Constitution Pipeline. He said Williams is working with The White House to get the Constitution project back on track. Reading between the lines, Williams is asking The White House to ask FERC to overrule the NY DEC and grant the stream crossing permits for the project. Armstrong now says he believes it will get built, and will be up and running, sometime in the second quarter of 2019…
    Read More “New Life for Constitution Pipe – Williams Asks White House for Help”

  • | | |

    Antero 2Q17: Record High 2.2 Bcfe/d Production, Gets $3.41/Mcf

    Antero Resources, one of the biggest and best drillers in the Marcellus/Utica concentrating on just those two plays, turned in their second quarter 2017 numbers last week, and held an earnings call to discuss the results. The company has a lot to crow about. Antero’s gas (and liquids) production hit a new record high of 2.2 billion cubic feet equivalent per day (Bcfe/d) in 2Q17. They continue to be the best hedging company in the Marcellus/Utica, getting an average of $3.15 per thousand cubic feet (Mcf) for the gas they sold BEFORE hedging. After hedging Antero got $3.41/Mcf for gas and equivalents (oil, NGLS). Antero’s hedging program is one of the greatest untold success stories of the Marcellus/Utica. The company lost $5 million in 2Q17, a vast improvement over losing $596 million in 2Q16. Antero completed and placed online 29 horizontal Marcellus wells during 2Q17 with an average lateral length of 9,380 feet. They drilled an average of 5,200 lateral feet per day, a 50% increase compared to 2016. In the Utica, Antero completed and placed online 5 horizontal wells with an average lateral length of 11,222 feet. During 2Q17, Antero set a record for drilling its longest lateral to date at 17,380 feet. The company also announced a big bump up in proved reserves…
    Read More “Antero 2Q17: Record High 2.2 Bcfe/d Production, Gets $3.41/Mcf”

  • | | | | | | | | |

    NFG 2Q17: NY Pipeline Holdup Causes Shift to More Utica Drilling

    Last week National Fuel Gas Company, headquartered in Western New York State with drilling subsidiary Seneca Resources and pipeline subsidiary Empire Pipeline, issued its third quarter (everyone else’s second quarter) 2017 update. NFG produced 567 million cubic feet per day (MMcf/d) of natural gas last quarter, a 6% increase over the same quarter a year ago. NFG realized an average price of $2.94 per thousand cubic feet (Mcf), up $0.08 per Mcf from the prior year. Compare that with Antero’s hedged average of $3.41/Mcf (see today’s story about Antero 2Q17). NFG CEO Ronald Tanski had some interesting remarks with respect to the company’s stalled Northern Access Pipeline project. As you may recall, the Andrew Cuomo New York Dept. of Environmental Conservation (DEC) is blocking Northern Access, like they blocked the Constitution Pipeline and a tiny spur project for the Millennium. Because NFG’s Northern Access project is stalled, they are shifting their budget and drilling further west, to do Utica drilling in locations where there is already pipeline infrastructure. So this is yet another case of the NY screwing up Marcellus drilling PA that would otherwise be happening. Landowners in PA can thank NY Gov. Cuomo for screwing them over. Tanski also mentioned the court case for Northern Access, and that FERC (Federal Energy Regulatory Commission) may step in and overrule the NY DEC, as is now being considered in the Constitution Pipeline case (see today’s lead story). Here’s the update from NFG…
    Read More “NFG 2Q17: NY Pipeline Holdup Causes Shift to More Utica Drilling”

  • | | | | | | | |

    PA DEP to Hold Final Atlantic Sunrise Hearing, Antis Plan Walkout

    For those of us who have long supported the Williams Atlantic Sunrise Pipeline project, it seems like it has taken FOREVER for the Pennsylvania Dept. of Environmental Protection (DEP) to issue final water and air permits for the pipeline. Atlantic Sunrise is a $3 billion, 198-mile natural gas pipeline project, most of which will get built in northeast Pennsylvania. In an attempt to get the DEP moving, Williams co-hosted an event a few weeks ago in Wyoming County to pressure the DEP into granting final permits (see Atlantic Sunrise Pipe Rally: ‘Time to Kick Politicians in the Ass’). Perhaps the event helped. On the very same day as the event, the DEP announced a supplemental 30-day public comment period to begin on July 22. During this time, the DEP will hold one final public hearing–for feedback on an Air Quality Plan Approval for construction activities related to Atlantic Sunrise. That final public hearing will be held on Monday, August 14, in Lancaster. The anti-pipeline group Lancaster Against Pipelines (organized by some of the same people who illegally protested against the Dakota Access Pipeline in North Dakota), are planning a mass temper tantrum at the hearing. They will stage a “walkout” at the meeting. Adults behaving like spoiled rotten children. We’ve come to expect it from them. MDN encourages pro-pipeliners (i.e. adults) to show up in large numbers so that when the 10-15 antis walk out, nobody will even notice…
    Read More “PA DEP to Hold Final Atlantic Sunrise Hearing, Antis Plan Walkout”

  • | | | | | |

    NEXUS Pipeline to FERC: Please Approve Project – NOW

    In late January, Federal Energy Regulatory Commission member Norman Bay announced he was quitting, in a huff, because President Trump has elevating another commission member to be chairperson (see FERC Commissioner Resigns Threatening Major M-U Pipeline Projects). That announcement set off a flurry of activity. After Bay left, there would no longer be a quorum of voting members to approve projects. On his way out the door, Bay and the other two commission members approved a list of major Marcellus/Utica projects. But time was limited and there was one project left standing in the FERC game of musical chairs (see In FERC’s Game of Musical Chairs, NEXUS Pipeline Left Standing). NEXUS is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. Originally the project was due to be up and running this year, but in July NEXUS officials admitted that ain’t gonna happen (see NEXUS Pipeline Startup Slips to 2018 Due to Quorumless FERC). In addition to lack of a voting quorum at FERC, NEXUS faces legal action by a small group of antis (see CORNballs Accuse FERC of Illegally Approving NEXUS Pipeline in OH). However, now that FERC does have a quorum, NEXUS is wasting no time. They want to be first in line for an approval. Last Friday NEXUS sent FERC a letter “respectfully” requesting “immediate issuance” of the certificate so they can begin construction NOW…
    Read More “NEXUS Pipeline to FERC: Please Approve Project – NOW”

  • | | | | |

    OH Landowner Vents Frustration with Rover Work on His Land

    Below is a story of an Ohio landowner who “worked to get good easements and good language” in the contract he signed with Rover Pipeline. But, according to the landowner, once construction began, “everyone seemed to forget” what they promised in the contract. And so landowner Roger Meggyesy has been vigilant to point out violations to third-party pipeline inspectors who report on Rover’s activities to the Federal Energy Regulatory Commission (FERC). As Meggyesy rhetorically asks, “Why do we have to come and fight after the fact?” It is disheartening to read these kinds of accounts. This guy did everything right, got it all in writing–and yet it’s still an uphill fight. We bring you this story because it’s important to air the problems along with highlighting the good stuff when it comes to these big pipeline projects…
    Read More “OH Landowner Vents Frustration with Rover Work on His Land”

  • | | | | |

    3 PA Senate Bills Would Fundamentally Change Pipeline Economics

    Senator Andy Dinniman

    Pennsylvania State Senator Andy Dinniman (Democrat from Chester County, PA, near Philadelphia) is an anti-driller and anti-pipeliner. Dinniman recently introduced three bills that would, if passed, fundamentally change the economics and likelihood of whether or not pipelines are built in the Keystone State. The first bill Dinniman sponsored would create an “impact fee” on pipelines: 50% of the fee raised would go to the counties where the pipeline crosses, 40% would go to the local municipality where the pipeline is located, and 10% would go to the PA Public Utility Commission. The next bill would allow local municipalities and school districts to slap a big tax on pipelines–on top of the impact fee previously referenced. The final bill requires pipeline land agents to be registered with the Pennsylvania Real Estate Commission. There are elements in each of the bills that, under other circumstances, are interesting and we might even be able to support. SOME elements–not all. But coming from Dinniman the purpose is clear–he aims to shut down natural gas pipelines in PA…
    Read More “3 PA Senate Bills Would Fundamentally Change Pipeline Economics”

  • | | | | | | | |

    ET Says Accident or Anti Sabotage Caused Diesel in Rover Mud Leaks

    Rover Pipeline is Energy Transfer’s $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. On April 13, Rover workers experienced an “inadvertent return” of “horizontal directional drilling fluid”. That is, they sprung a leak and spilled nearly 2 million gallons of drilling mud (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). The leak did not spill into the Tuscarawas River (thankfully), but into a wetland next to the river. As we pointed out at the time, “Fortunately the primary component of said drilling fluid is nontoxic bentonite–the same ingredient used to make shampoo, deodorant, toothpaste and kitty litter.” The Ohio Environmental Protection Agency (OEPA) investigated the spill, following an “anonymous tip” and found the presence of diesel fuel in the spilled mud. Diesel fuel IS toxic–and its presence is not a good thing. OEPA’s testing found “very very low levels” of diesel fuel, whatever that means. Even very very low amounts are not good–and in fact are illegal. Since that time Energy Transfer has tried to figure out why there is diesel in the drilling mud–because they sure didn’t order it, and they firmly believe their drilling contractor did not add it to the mud. So how did it get there? On Friday Energy Transfer offered two theories–either an accident spilled diesel into the mud, or it was intentionally placed there by antis, as an act of sabotage. We do find it interesting that OEPA Director Craig Butler, who has been combative against Energy Transfer and the Rover project, claims an anonymous source tipped him to the presence of the mud. Was the anonymous source a whistle blower who worked for the contractor and claimed this is a routine practice? Did OEPA find diesel in unused drilling mud? Have they found the presence of diesel at ANY other locations where HDD is being used? We certainly had the thought fly through our brains, for only a moment, “What if an anti deliberately put diesel in the mud?” when this story first broke several months ago. But we immediately dismissed the idea. Not even antis would stoop so low as to poison Mother Earth to advance their cause. Or would they?…
    Read More “ET Says Accident or Anti Sabotage Caused Diesel in Rover Mud Leaks”

  • | | | | |

    Rice Energy Paid $180M for LOLA Energy; CEO Didn’t Want to Sell

    In July MDN brought you the news that Rice Energy had bought out the assets of LOLA Energy (see LOLA Energy Sells Out to Rice Energy, Deal Kept Hush-Hush). NGI’s ace reporter Jamison Cocklin was the first to break the news. Since that time, neither Rice nor the company buying Rice, EQT, have talked about it. In fact, they have refused to comment on it. Last week other news sources observed that Rice Energy’s quarterly update contains information about purchasing LOLA Energy (although even the quarterly update doesn’t use the name LOLA). The interesting thing is that the quarterly update pegs the amount. Rice Energy paid $180 million for the assets of LOLA Energy. LOLA was birthed near the end of 2015, by former EQT executives using $250 million of private equity money from Denham Capital (see New Marcellus/Utica Drilling Company is Born – LOLA Energy). Hmmm. Investors put up $250 million, but two years later the company sells for $180 million. We don’t pretend to be high finance experts, but it sure looks to us like a negative ROI on the transaction. Yet we read claims that “everybody who put in money made money.” How does that work?…

    Update: see a note in the comments. It appears that although $250M was promised by investors, not all of it is paid up front. Thx to MDN reader Venture Energy for enlightening us!
    Read More “Rice Energy Paid $180M for LOLA Energy; CEO Didn’t Want to Sell”

  • | | | | | |

    PA Enviro Judge Lets Sunoco Restart ME2 Drilling 16 of 55 Locations

    On July 25th, a Pennsylvania state environmental judge issued an order blocking all underground horizontal directional drilling (HDD) work being done across the state to install the Mariner East 2 (ME2) pipeline (see PA Enviro Judge Puts 2-Week Pause on ME2 Pipeline Drilling). The order stopped drilling at some 55 different locations where ME2 must drill underground–say under a stream or roadway. The order was in response to an appeal by radical Big Green groups, including the anti-fossil fuel Clean Air Council (of Philly), THE Delaware Riverkeeper (Maya van Rossum), and Mountain Watershed Association (see Antis’ Fake Outrage at ME2 Construction “Spills,” Demand Stop Work). As we said at the time, although temporary, the two-week pause is troublesome and problematic because Big Green groups have convinced a DEP judge to hear a case that ultimately aims to stop the ME2 project. The somewhat good news is that last Thursday the same judge lifted the HDD drilling ban for 16 of 55 locations. Bear in mind digging trenches for the pipeline (over 90% of the work being done) continues and is not subject to the judge’s order. The odoriferous Clean Air Council (CAC) is the primary group doing the suing. In an interesting development, mainstream news is reporting Sunoco Logistics Partners (building the pipeline) is in “settlement negotiations” with CAC. Settling what, we don’t know. We’re not even sure why the CAC has standing to bring a lawsuit against the project in the first place…
    Read More “PA Enviro Judge Lets Sunoco Restart ME2 Drilling 16 of 55 Locations”

  • | | | | |

    Why the PA House Must Reject 1-Sided Budget/Tax Deal from Senate

    We’ve noticed a meme, largely started by an Associated Press article endlessly repeated and published in dozens of news outlets across Pennsylvania, that the recent budget deal (with a severance tax) passed by the traitorous Republican-controlled PA Senate “jams a shale tax and industry permits into unhappy package” that now sits before a House that essentially has no choice but to adopt it. Here’s the establishment “received wisdom” in a nutshell: Drillers don’t get what they want (a severance tax), but they do get what environmentalist wackos don’t want (streamlined approvals for permits). And guess what? “That’s politics.” And if you don’t like it, on either side of the equation, you’re an unrealistic dope who doesn’t know anything about politics. We manifestly reject that assertion. Here’s why this deal is one sided–a severance tax only deal. Big Green groups with endless pockets to fund litigation factories are already talking about how if this budget is passed with what they want (a high severance tax) but also with what they don’t want (streamlined approvals for permits), no problem. They’ll just sue to remove the streamlined permits part, leaving drillers with the high severance tax. That’s how “fairness” works for Democrats and antis. Get part of what you want, then litigate the rest–force it on people who don’t want it. That’s the strategy laid out in the AP article claiming both sides are unhappy, implying it’s a good deal because both sides are getting something they want and something they don’t want. The clear signal being sent by environmentalists is that they’ll litigate their way to happiness. Meanwhile the Marcellus industry will get the shaft, which is why the House MUST reject this budget as written…
    Read More “Why the PA House Must Reject 1-Sided Budget/Tax Deal from Senate”

  • | |

    FERC Quorum Finally Restored – Full Speed Ahead on Pipe Projects

    Yesterday the U.S. Senate finally approved Neil Chatterjee and Robert Powelson as the newest commissioners for the Federal Energy Regulatory Commission (FERC). Which means FERC now has a quorum of three voting members and can, once again, begin issuing final approvals for important pipeline projects that are currently stalled waiting for an approval. Among those important projects (in the Marcellus/Utica region) are Dominion’s Atlantic Coast Pipeline, PennEast Pipeline, NEXUS Pipeline and Mountain Valley Pipeline. FERC has not had a quorum of three (or more) voting members since February, when Norman “cry baby” Bay left the commission in a huff in early February over being demoted as chairman of FERC to just regular member (see FERC Commissioner Resigns Threatening Major M-U Pipeline Projects). President Trump was tardy in appointing two new members. But then New York Sen. Chuck “the schmuck” Schumer decided he would delay it longer, just because he hates Donald Trump. Yesterday the Senate finally took was is called a “unanimous consent” vote, a rubber stamp approving the new members. And now they go to work. Immediately, the sole commissioner left at the agency, Democrat Cheryl LaFleur, tweeted this message: “Happy day! Very excited to work with new Commissioners Chatterjee and Powelson!” We share her enthusiasm!…
    Read More “FERC Quorum Finally Restored – Full Speed Ahead on Pipe Projects”

  • | | | | |

    Groundhog Day: Feds Back in Dimock, PA for More Water Testing

    Just when you thought we’d heard the last of “Dimock” and “fracking poisons water” nonsense, the storyline as pushed by mainstream fake news has come roaring back to life–thanks to the Trump Administration. Dimock, Pennsylvania was made famous in Josh Fox’s faux documentary Gasland, which aired on HBO a bizillion times. It was Fox’s 15 minutes of fame. He lied about fracking, painting it as an evil practice that polluted water wells around Dimock. His lies were later exposed by a real documentary called FrackNation (by Phelim McAleer). Over the past 7+ years the Pennsylvania Dept. of Environmental Protection (DEP) as well as the federal Environmental Protection Agency (EPA) and private researchers have tested water wells around Dimock. Repeatedly. For years. The conclusion? Fracking by Cabot Oil & Gas may have (not 100% assured) caused methane to migrate into some of the wells (a charge Cabot strongly refutes). However, at no time did any of government or private agencies testing find any fracking chemicals in any of the wells. Methane migration can be mitigated. It can be fixed. You don’t die from drinking water with methane in it. Most people in Susquehanna County (where Dimock is located) drink water with methane in it every day and have been for over 200 years! Why do you think Cabot’s wells are so productive? They’re in some of the most methane-rich rock in the U.S. The wells of 14 families along the Carter Road area in Dimock have been repeatedly tested–with no fracking chemicals found. Yet the federal Agency for Toxic Substances and Disease Registry (ATSDR), which is a federal public health agency part of the U.S. Department of Health and Human Services (executive branch, which is now under Trump leadership), says they are coming to Dimock to test both water AND air at 25 homes around Dimock. The poster boy for their testing is Ray Kemble, who keeps junk cars on his property and carries a little brown jug around with him to anti-fracking rallies. Kemble has been trying to shake down Cabot for big money for years, with no success, claiming after they began drilling his water well became polluted…
    Read More “Groundhog Day: Feds Back in Dimock, PA for More Water Testing”

  • | | | | |

    Rice Energy Investor Sues in Fed Court to Block Sale to EQT

    In June EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). You may see headlines from time to time that say EQT is paying $6.7 billion for Rice. However, EQT is also assuming $1.5 billion worth of Rice Energy debt as part of the deal–so in our book, the total price paid is $8.2 billion, not $6.7 billion. A few weeks after the announced merger, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Instead of buying Rice, Jana is demanding that EQT split itself into two companies–upstream (drilling) and midstream (pipelines). Experts don’t give Jana much of a chance. However, we now have opposition on the other side of the isle–from a disgruntled investor in Rice Energy. On Wednesday, Rice Energy investor Patrick Gordon filed a lawsuit in Delaware federal court alleging that Rice, as part of the agreed merger, submitted incomplete paperwork (called an S-4) that “failed to include necessary financial information that would allow shareholders to make an informed decision when voting on the proposed sale to EQT.” Gordon says Rice’s sale price isn’t high enough. Gordon wants the court to stop a shareholder vote on the deal until an amended S-4 is filed, giving what Gordon says is the full financial picture…
    Read More “Rice Energy Investor Sues in Fed Court to Block Sale to EQT”

  • | | | |

    PA Senate Sneaks in Provision Hurting Landowners w/Old Leases

    What’s this? The Pennsylvania State Senate, which is controlled by the Republican Party, has added insult to injury. We’ve already told you about Republican traitors in the Senate who sold out their House counterparts by voting for a disastrous severance tax to raise money to give away to teachers’ unions (see Traitorous PA Senate Republicans Pass Severance Tax Bill). Little did we know they also sneaked in, in the dead of night, a provision in the budget bill that will make it harder for PA landowners with old oil and gas leases to renegotiate those leases. Sometimes landowners have old oil and gas wells on their property, drilled decades ago before horizontal drilling and fracking were combined. And those leases were signed for pennies on the dollar. These days when shale drillers come calling, landowners can often command thousands of dollars per acre in signing bonuses. But a provision in the fiscal code, passed as part of the budget the traitorous Senate passed, would limit the ability of landowners to renegotiate those old leases, allowing drillers to revive expired leases and not pay new lease bonuses…
    Read More “PA Senate Sneaks in Provision Hurting Landowners w/Old Leases”

  • | | | | | | |

    Court Clears Path for Atlantic Sunrise Pipe to Begin Work in PA

    Atlantic Sunrise route – click for larger version

    Williams and their Atlantic Sunrise Pipeline project are just a few properties away from having easements for all of the properties they need in Pennsylvania, thanks to a judge in the U.S. Middle District of PA and his decision yesterday. Judge Matthew Brann gave Transco Pipeline (the pipeline getting extended with the Atlantic Sunrise project) access to seven hold-out properties in Lebanon, Northumberland, Columbia and Luzerne counties. There are still a couple of holdouts left in Lancaster and Columbia counties, cases which are in a different court. Staking of workspace boundaries will begin in 10 days, on August 14th. Construction, things like clearing and grading the right-of-way, will begin in mid-September. Obviously Williams believes the state DEP is about to grant stream crossing permits for the project, which they still need. The good news is that the courts are backing Atlantic Sunrise, and work on the pipeline will begin in days…
    Read More “Court Clears Path for Atlantic Sunrise Pipe to Begin Work in PA”