Industrywide Issues

  • | | | |

    Report: Utica Investment has Injected $50 Billion into Ohio!

    A comprehensive study by Cleveland State University researchers shows just how mind-blowing the economic investment in Ohio has been from the Utica Shale. The just-published study, titled “Shale Investment Dashboard in Ohio” (full copy below), finds that between upstream ($39 billion), midstream ($8 billion) and downstream ($3 billion), all related to the Utica Shale, there has been an incredible $50 billion invested in Ohio since Utica drilling began in 2011. It’s really hard to overstate just how big a deal this is. Can you image a $50 billion economic stimulus from the government? No way! It would never happen. And if it did, the money would come out of YOUR pocket–from taxpayers. But this $50 billion ALL came from the private sector. Good ole capitalism. Free enterprise. Private ownership. Private property. Love it! It’s what our great country was built on. Let’s dig into the numbers and relish this fantastic news…
    Read More “Report: Utica Investment has Injected $50 Billion into Ohio!”

  • | |

    New USGS Study: Fracking Does Not Contaminate Water Wells

    The U.S. Geological Survey has just done us all a big favor. USGS decided to do some in-the-field research to see if there’s any truth to the wild claims of anti-drillers that fracking somehow leaks up through a mile or more of solid rock to pollute water wells. We’ve heard that bogus claim for years–since shale drilling in the Marcellus began in 2004. Those claims were made popular by the Josh Fox and his fake documentary “Gasland.” So USGS researchers went down to Texas, Louisiana and Arkansas–where there’s a lot of oil and gas drilling–and randomly selected 116 domestic and public-supply water wells located as close as 360 feet to unconventional (i.e. shale) oil and gas wells. The researchers published their findings in a new study/paper in the journal Environmental Science & Technology in a paper titled “Methane and Benzene in Drinking-Water Wells Overlying the Eagle Ford, Fayetteville, and Haynesville Shale Hydrocarbon Production Areas” (full copy below). What did the USGS researchers conclude? “Using chemical, isotopic, gas and groundwater-age tracers to thoroughly evaluate those samples — USGS researchers concluded that low concentrations of methane and benzene detected were likely naturally occurring and not attributable to shale development.” Thank you USGS…
    Read More “New USGS Study: Fracking Does Not Contaminate Water Wells”

  • |

    Trump Decision on Leaving Obama Paris Climate Treaty Due Today

    If you live by the sword, you die by the sword. Put another way, if you commit your country to a “treaty” without getting Senate ratification (an illegal act, which Obama did with the so-called Paris climate treaty), then your successor can uncommit. And that, dear reader, is what we earnestly hope President Trump announces today at 3 pm. We extensively covered the Obama railroading of the horrible Paris agreement–that disadvantages the United States–from the beginning (see Paris Climate Treaty Signed by Obama NOT Binding on U.S.). For a while, it seemed as though Trump, who as candidate spoke against the agreement, would reverse course. If the leaks are accurate, that fear is unfounded. As we previously covered, Big Business (including some Big Oil companies) wants Trump to remain in the Paris deal (see Why does Big Oil Continue to Support Horrible Paris CO2 Treaty?). Our thought on that: Those are the same Big Businesses that supported Hillary Clinton for president. Why would Trump listen to them? He shouldn’t. Trump needs to listen to those of us who put him in office and dump this insidious treaty. The one fact mainstream fake news sources refuse to cover: U.S. carbon dioxide output is falling–without this agreement–due to the use of more natural gas. Why should America pay even MORE taxes–to the rest of the world–as called for in the Paris agreement? We shouldn’t… Read More “Trump Decision on Leaving Obama Paris Climate Treaty Due Today”

  • | | | | | |

    WV Rights/Pooling Case May have Big Impact on Shale Industry

    A court case from Marshall County, WV decided in April 2016 is heading to the WV Supreme Court of Appeals (the state’s highest court). The stakes in Contraguerro v Gastar Exploration could not be higher for the Marcellus industry in the Mountain State. In brief, 70 years ago a 106-acre track of property was sold. The sellers retained a one-quarter “non-participating interest” in the oil and gas rights. That means the buyer got to decide when/if to lease the property for drilling, and if so, has the right to negotiate the price, etc. The remaining one-quarter non-participating interest holders would get royalties, but nothing else. Fast forward several generations and the heirs of the original sellers didn’t even know they owned an interest in the land until contacted by Gastar, which needed a signature in order to send them checks for royalties. The heirs decided to sue to stop the deal, either in a bid to negotiate a better deal or perhaps because they don’t like fossil fuels. Who knows? The case went to the Circuit Court of Marshall County and a judge there found in favor of the heirs–giving them, and by extension any minority rights owner, the power to stop lease deals. An unmitigated mess that threatens many lease deals because divided rights ownership is common in WV. Perhaps this case was part of the motivation to pass a new law this year addressing “co-tenancy” (see Analysis of New WV Bill SB 576 re Co-Tenancy & Joint Development). The co-tenancy law, if passed, means if there are multiple owners for the mineral rights under a property, you would only need a simple majority of those owners to approve a drilling lease. Currently, if one person with a teeny tiny share objects, it stops the process. In the Contraguerro case, although the heirs are owners, they are “non-participating”–so they should not have had a say anyway. However, a lower court judge found otherwise. So the case was appealed and is now before to the WV Supreme Court… Read More “WV Rights/Pooling Case May have Big Impact on Shale Industry”

  • | | | | |

    Rover Pipeline Says Part of Phase 1 Will be Delayed Nearly a Month

    Rover 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. The Federal Energy Regulatory Commission (FERC), charged with overseeing interstate pipeline projects, granted final approval for the project in early February (see ET Rover Pipeline Gets Final Approval by FERC). Since then, the company has aggressively moved forward with construction. Energy Transfer has maintained, from the beginning, it will complete Phase 1 of the project in “July 2017” (usually quoted by Rover ET officials as July 1st), and the rest of the pipeline will be done in “November 2017” (Nov. 1st). Phase 1 will build the pipeline as far west as Defiance, OH. Phase 2 finishes the pipeline–all the way to the Dawn Hub in Canada. Some say the company has moved too quickly, resulting in accidents (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). Rover has put new procedures in place to prevent more accidents like the 2 million gallon drilling mud spill, asking FERC for permission to drill underground in two locations key to completing Phase 1 (see Rover Gets Serious About Mud Spills, Asks FERC for OK to Drill). Yesterday MDN brought you the news that FERC denied permission to begin new underground horizontal drilling (see FERC Responds to Rover Request to Begin Drilling in 2 Locations: NO). So that begs the question: Can Rover keep to its schedule? ET officials are now modifying the date for completion of Phase 1…
    Read More “Rover Pipeline Says Part of Phase 1 Will be Delayed Nearly a Month”

  • | | | | | |

    Antis Score Small Victory Against ME2 Pipeline re Eminent Domain

    The radical Philadelphia-based Clean Air Council (CAC) has scored a very small, but notable, victory in it’s battle to block Sunoco Logistic Partners’ from building the Mariner East 2 Pipeline project. Last Thursday a judge with the Philadelphia Court of Common Pleas allowed a case filed by CAC to proceed. The case claims that Sunoco cannot use eminent domain powers granted by the State of Pennsylvania to force its way through properties where the landowner refuses to cooperate, because (CAC claims) the pipeline is technically not an intrastate pipeline (only located in PA), but is instead an interstate pipeline (crossing the border into Ohio). The judge said the case has enough merit that it can go to trial. We call it a small victory because Common Pleas court is the lowest trial court in the state. There are several layers higher where appealed cases are decided. This is more of a statement than a serious threat. But let’s play “what if.” What if CAC wins, and on appeal, wins again?…
    Read More “Antis Score Small Victory Against ME2 Pipeline re Eminent Domain”

  • | | | | | |

    WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry”

    Last December the West Virginia Supreme Court ruled in a case to disallow Marcellus driller EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” Last week, just five months later, four of five justices (including a newly elected judge) reversed their December decision (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). The lone judge voting against the decision was Robin Jean Davis. Yesterday she released her dissenting opinion. In very strong language, Judge Davis said the court’s other four members “used legal sophistry” to prop up their decision, and that “the majority opinion is simply wrong.” Here’s what else Judge Davis had to say… Read More “WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry””

  • | |

    Vermont Gas Pipeline Fined $58K for Killing 77 Sunflower Plants

    How long does it take to lay 43 miles of natural gas pipeline? If you live and work in the socialist paradise of Vermont, it takes at least two years. In May 2015, MDN reported the following: “The fossil fuel hating nutjobs are out in force in Vermont. Anti-drillers who hate fracking because they hate natural gas because natural gas is an evil, nasty ‘fossil fuel’ are trying to stall progress on a 43-mile natural gas pipeline Vermont Gas Systems is laying between Chittenden and Addison counties to deliver clean burning natural gas to Vermonters. Those opposing the pipeline include the wackos from a group called Rising Tide Vermont. But unfortunately, the pipeline is also being opposed by the Vermont Fuel Dealers Association (companies that deliver fuel oil) and opposed by even the socialist Vermont AARP.” (see Vermont Wackos (Including AARP) Oppose 43-Mile Natgas Pipeline). Two years later, and Vermont Gas is STILL laying that pipeline. How sad and how tragic. Here’s the latest twist: Vermont’s contractor, hired to help build the pipeline, “accidentally” mowed down 77 sunflower plants that are (supposedly) “rare” and protected. It will cost Vermont Gas $58,687.50 in fines. That’s $762 for each of the sunflowers mowed down that, according to state officials, will grow back anyway. Excuse us while we spit out sunflower seed shells we’ve been munching on as we write this… Read More “Vermont Gas Pipeline Fined $58K for Killing 77 Sunflower Plants”

  • | |

    Study: New England Electric Shortage from Lack of NatGas by 2025

    There is a coming shortage of natural gas to fire electric power plants in wintertime in New England. So says an analysis presented last week to the ISO-New England Planning Advisory Committee. ISO New England Inc. is the independent, non-profit Regional Transmission Organization (RTO) that manages the electric grid for Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. The study presented last week shows that there will be enough natgas reaching New England in summer for the foreseeable future, but in the winters of 2025 and 2030, almost every planning scenario shows New England will only have half (50%) of the gas it needs to operate electric generating plants. This is seriously bad news for New Englanders–and something we previously predicted (see Study Finds Dire Consequences if New England Pipelines Not Built). New England’s steadfast opposition to new pipelines will have a real, very tangible effect. They get to choose between no gas for heating, or no gas for electricity… Read More “Study: New England Electric Shortage from Lack of NatGas by 2025”

  • | |

    Watch Out Marcellus/Utica, Here Comes Gas from the Permian

    The Wall Street Journal has an interesting article appearing in today’s edition that points out the Permian Basin shale play (in West Texas) may, in a few years, “rival new gas output” from the mighty Marcellus Shale. Really? Where did that come from?! It makes a great deal of sense. The Permian is an oil-focused play. Drillers can’t stand enough rigs in the Permian fast enough. Drilling for oil in the Permian at $50/barrel is profitable–for everyone. So where does natural gas come in? Ever read about “associated gas” here on MDN? We’ve talked about it a fair deal over the years. Whenever you drill for one hydrocarbon–like oil–you get other hydrocarbons coming out of the borehole too. Like natural gas, and gas liquids (propane, ethane, butane, etc.). The converse is also true. Drillers targeting natural gas sometimes get oil and NGLs. In the Permian, an “oil play,” there is a LOT of associated gas coming out of the holes drilled, along with the oil. And the massive drilling program under way there means overall output from the Permian may, at some point, rival (or come close to) the output in the Marcellus. What does that mean for Marcellus drillers and landowners?…
    Read More “Watch Out Marcellus/Utica, Here Comes Gas from the Permian”

  • | | | | | |

    WV Supreme Court Reverses Itself, Post-Production Deductions OK

    In a decision that will thrill drillers, but anger landowners, the West Virginia Supreme Court decided last week to overturn its own previous decision (from just last December) and allow driller EQT to deduct post-production expenses from royalty payments. Last December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). Those who won the case say newly elected Supreme Court Justice Elizabeth D. Walker has conflicts of interest and should not have been allowed to vote to rehear the case in the first place (which she did). On that basis, they tried to avoid the rehearing altogether, but that failed, and lawyers were in court arguing the case earlier this month. As it turns out, the lawyers mainly argued over the meaning of three short words: “at the wellhead” (see WV Supreme Court Post-Production Royalty Case Hinges on 3 Words). On Friday, the justices reversed their earlier decision, voting 4-1 in favor of allowing EQT to deduct “reasonable” post-production expenses (copy of the decision below). Newly elected Justice Beth Walker, with (according to the other side) conflicts of interest, voted in favor of EQT. This has BIG implications for landowners and drillers in the Mountain State… Read More “WV Supreme Court Reverses Itself, Post-Production Deductions OK”

  • | | | | | | | |

    FERC Responds to Rover Request to Begin Drilling in 2 Locations: NO

    It was full speed ahead for Energy Transfer’s Rover Pipeline construction project in Ohio–until a series of drilling mud spills hit, including one that dumped some 2 million gallons of bentonite mud into a wetland near the Tuscarawas River in Stark County, OH (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). Not long after the Federal Energy Regulatory Commission (FERC) slapped Rover with a “stop horizontal drilling” order (see FERC Slaps Rover Pipeline with Stop Drilling Order). Let’s put that into context. Most of the pipeline getting laid for Rover is in trenches–not from underground horizontal drilling. There are some places along the route when you can’t dig a trench–like crossing a creek or river, or major highway. In those cases, you drill horizontally underground, underneath the object. When drilling, bentonite mud is used to keep the drill bit cool. Sometimes the mud pumped underground finds its way back out again via cracks in the rock. It is those accidents that FERC (and the Ohio EPA) find a little too frequent and voluminous for their liking. So FERC told ET to stop any new underground drilling. Less than a week after FERC ordered ET to stop drilling, ET filed a request with FERC to begin drilling in two locations key to finishing the first leg of the pipeline–locations where the equipment is already in place, and the erosion controls already set up: Captina Creek in Belmont County, OH, where Rover wants to complete the Clarington lateral, and Middle Island Creek in Tyler County, WV, where Rover wants to complete the Sherwood lateral (see Rover Gets Serious About Mud Spills, Asks FERC for OK to Drill). FERC responded to ET’s request to drill in those locations last Thursday: NO…
    Read More “FERC Responds to Rover Request to Begin Drilling in 2 Locations: NO”

  • | | | | | | |

    PA DEP to Hold 4 Public Hearings for Atlantic Sunrise Pipe in June

    Seems like forever we’ve been waiting for the Pennsylvania Dept. of Environmental Protection (DEP) to issue the final permits needed for the Williams Atlantic Sunrise Pipeline project to begin construction. Atlantic Sunrise is a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. The Federal Energy Regulatory Commission (FERC) gave its final seal of approval for the project in February (see Atlantic Sunrise Pipeline Gets Final Approval by FERC). But like NY, PA is holding up the project. The DEP has not, so far, granted necessary permits to allow construction to begin–those permits being Chapter 102 (earth disturbance) and Chapter 105 (waterway and wetland encroachment). Williams embarked on a public relations campaign to enlist support across the state to pressure PA Gov. Tom Wolf and the DEP to grant the permits so construction can (finally) begin. The Wolf DEP is holding up this project and the 8,000 jobs it will create during construction. Williams delivered a petition to Gov. Wolf with the signatures of 3,000 people supporting the project earlier this month (see PA Roars Its Approval of Atlantic Sunrise Pipeline with Petition, Comments). Perhaps that did the trick. Last Thursday the DEP announced four public hearings in June (otherwise known as circus freak shows, where antis parade in front of microphones and behave like asses). The DEP will also accept public comments until June 26. After that, we will hopefully get a swift round of issued permits and the backhoes will start digging… Read More “PA DEP to Hold 4 Public Hearings for Atlantic Sunrise Pipe in June”

  • | | | | | |

    Chesapeake Scores Court Victory to Prevent PA Royalty Class Action

    Sometimes we wish we had gone to law school–to better understand some of the cases involved with oil and gas. This is one of those times. When you read words like “arbitrability,” the eyes start to glaze over. We’ll do our best to summarize some important news for landowners who want to sue Chesapeake over shorted royalty checks. Starting in 2008, Chesapeake Energy, under then-CEO Aubrey McClendon, began leasing acreage in northeastern Pennsylvania for shale drilling. Said drilling happened and in 2013, Scout Petroleum purchased royalty rights from some NEPA landowners. That is, Scout took over receiving the royalty payments in return for giving those landowners an up front, lump sum. In 2014, when it became obvious Chesapeake was using aggressive deductions from royalty payments (i.e. landowners were getting hosed), Scout filed a lawsuit against Chesapeake, requesting (under the lease language) that their grievances against Chessy be arbitrated AND (not specifically under the lease language) that Scout and thousands of other landowners be lumped together into class action arbitration (see Bad to Worse: PA Royalty Owner Asks Court for Chessy Class Action). Scout lost the case over class action and appealed. In late April, an appeals judge found that class action arbitration is not part of the original lease language, express or implied, and therefore is not allowed. Scout is appealing the decision once again. This is far from over, but for now, Chesapeake has a small victory in forcing landowners to file individual lawsuits…
    Read More “Chesapeake Scores Court Victory to Prevent PA Royalty Class Action”

  • | | | |

    NJ DEP Keeps Badmouthing PennEast Pipeline

    PennEast Pipeline route through NJ

    PennEast Pipeline is caught between a rock and a hard place in New Jersey, and the NJ Dept. of Environmental Protection (NJDEP) isn’t lifting a finger to help. In April, MDN told you NJDEP has temporarily rejected PennEast Pipeline’s Freshwater Wetlands Individual Permit and Water Quality Certificate application, submitted April 6 (see NJ DEP Temporarily Rejects PennEast Request for Wetland Permits). NJDEP said in their response that PennEast has not provided enough detail about the project–leaving out key pieces of information for two-thirds of the pipeline’s 37-mile trek through NJ. NJDEP says they want the application refiled within 30 days, and if PennEast doesn’t give them what they want within 60 days, the DEP will consider the application “withdrawn.” Here’s the Catch-22: In order to get the details needed via surveys, PennEast needs access to property. But many NJ landowners have been convinced by groups like the odious Sierra Club to deny permission. So PennEast can’t do their surveys to get the details needed for the the NJDEP. Since it’s a federally approved project, NJDEP certainly won’t issue eminent domain to allow PennEast access to survey. For that, PennEast must wait on FERC. It’s rumored that FERC will grant eminent domain sometime this summer for PennEast to allow them the right to access NJ (and PA) properties of holdout landowners. Antis are elated and breathlessly say PennEast will be delayed for months, maybe years (doing things like multi-year surveys on plants). PennEast continues to say the NJDEP’s responses are routine and being handled. Who’s right?…
    Read More “NJ DEP Keeps Badmouthing PennEast Pipeline”

  • | | | | | |

    Fate of 2 Important Pipelines May Rest in Virginia Governor Race

    Election matters, and elections for governor really matter–at least with respect to shale drilling and pipelines. Here in New York State, where MDN is written, we are ruled by a corrupt autocrat by the name of Andrew Cuomo. Single-handed Cuomo has decided to ban fracking and block new shale gas pipelines (see After 6+ Years, Andrew Cuomo Bans Fracking in New York; NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline; and Cuomo’s Corrupt NY DEC Blocks NFG Northern Access Pipeline Permit). So when a Democrat candidate in Virginia to be the next governor vows to block pipelines there, we don’t take it as just electioneering. These people are serious–and dangerous. Our court systems have failed to reign in Democrat autocrats who rule by fiat. It’s up to the people to ensure they don’t get elected. On June 13 Virginia will hold a primary in their gubernatorial race. Since a Democrat has won the governor’s mansion in nine out of the last ten elections, it pays to pay attention to the two leading Dem candidates for governor in Virginia. One of them, former Congressman Tom Perriello, says he’ll block both the $5 billion Atlantic Coast Pipeline through his state, and the $3.5 billion Mountain Valley Pipeline. His opponent, the sitting Lieutenant Governor Ralph Northam, doesn’t outright oppose the projects but instead says they will be put under an extreme review by the Virginia Department of Environmental Quality (DEQ). Just one problem with that: The DEQ says FERC is the one who will monitor and review the project, not the DEQ. In other words, what Northam has been promising is just another empty political promise (surprised?). With a close race, will this late-breaking news from the DEQ tip the balance in favor of the radical Perriello?… Read More “Fate of 2 Important Pipelines May Rest in Virginia Governor Race”