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…
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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 
Major General James A. “Spider” Marks is the former Commanding General, U.S. Army Intelligence Center, and was the senior intelligence officer for the 2003 liberation of Iraq. Since retiring from the military, General Marks has led many business ventures in education, energy, and research, and served as the President and CEO of Global Linguist Solutions, a private company that provided linguistics services to the U.S. military in Iraq and was the largest employer of native Iraqis. He is an on-air national security, military, and intelligence contributor to CNN and an adjunct professor at Georgetown University. Spider Marks doesn’t suffer fools gladly. In an op-ed written for the Harrisburg Patriot-News, Marks takes aim at so-called protesters (paid activists) who ran up a $40 million tab of destruction in North Dakota (paid for by taxpayers) with their so-called protest camp there, and who now are attempting to invade Pennsylvania and recreate the same chaos. Marks calls a spade a spade in his deft column… 
Radical environmental groups are seeking to stop the Energy Transfer Rover Pipeline project by using recent violations as leverage. The FreshWater Accountability Project, begun in Ohio after the Muskingum Watershed Conservancy District signed agreements to sell water to the shale industry, along with Michigan Residents Against the ET Rover Pipeline, filed a complaint with the Federal Energy Regulatory Commission (FERC) on Wednesday asking the federal agency to stop all construction on Rover. The request will almost certainly go nowhere–but Rover’s own actions have opened the door to this action. We understand that accidents happen when drilling horizontally underground for pipelines and that sometimes you get an “inadvertent return” (leak) of drilling mud slipping up to the surface. But it’s tough to explain away a 2 million gallon leak (see 
On Wednesday, the Pennsylvania Senate Majority Policy Committee and Environmental Resources and Energy Committee held a joint hearing to examine the economic benefits natural gas production has brought the Keystone State. MDN friend David Spigelmyer, president of the Marcellus Shale Coalition, was present and let legislators know that PA has become the #2 natural gas producer in the country, and that remarkable feat has brought PA billions of dollars in investment. The investment in new or converted natural gas electric plants alone has reached $10 billion! Thad Hill of Calpine Corporation (nation’s largest generator of electricity from natural gas) also spoke. While the adults were inside talking about serious issues, children in adult bodies were outside misbehaving, as they typically do. Radicals (paid protesters) from Earthworks held a protest rally on the steps of the Capitol where they held up big, black balloons. Yeah, we have no idea what makes them tick either… 
In October 2016, MDN reported that electric company FirstEnergy had begun construction of a new electric substation in Washington County, PA to provide electricity to “support two natural gas processing facilities being developed in the area” (see 
When (not if) the Atlantic Sunrise Pipeline begins construction this summer in Lancaster County, PA, area businesses plan to take advantage of the economic boon that will arrive along with some 250 workers who will build it. 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. Construction in Lancaster County will last approximately nine months and is projected to inject $75 million in the local economy. What kinds of businesses will benefit? Some include “housing, rental equipment, food sources, welding supplies, waste disposal, construction material, security, fuel, water trucks, concrete services, buses and transportation, auto repair, laundry services, drain tile work and hauling services.” And that’s only some of the services needed. Campgrounds are another business expected to experience a big uptick in demand. According to Williams spokesman Christopher Stockton, “We are encouraging all our construction contractors to utilize local service providers as much as possible.” That’s good news for local businesses. Here’s how local businesses in Lancaster County (and elsewhere) can sign up to get their piece of the Atlantic Sunrise action… 
The U.S. Court of Appeals for the District of Columbia Circuit slapped down THE Delaware Riverkeeper in yet another crushing defeat for the virulent anti-fossil fuel organization (and mouthpiece for the William Penn Foundation, its main funder). Even though Williams’ Transco Leidy Southeast expansion project went online some 18 months ago, Riverkeeper sued the Federal Energy Regulatory Commission (FERC) some 14 months ago over its approval of the project (see 
Life is messy and complex. Nowhere is that more true than with the issue of using eminent domain to “condemn” a property, forcing the landowner to allow a pipeline company to cross the property with a decades-long (often extending past the lifetime of the current landowner) lease on the land. Sometimes landowners just don’t want a pipeline. We get it. MDN’s extended family owns rural property (a small farm), so we understand the objections. What if you plan to one day build a new barn in an area where a pipeline is set to run? No can-do. However, pipelines that cross a field or a pasture are (mostly) fine–you can grow back hay and grass and a few years after a pipeline is in the ground, you have use of that land again. You can even plant crops over top of a pipeline. Even though the presence of a pipeline can yield a number of benefits, money for the landowner being the chief benefit, there are drawbacks. But let’s put a different hat on. What if 9 out of 10 landowners along a pipeline’s route in a particular town have signed and welcome the pipeline, but one landowner smack in the middle of the others objects? And what if there’s no feasible re-routing to be done? Should the 9 suffer because of the actions of the one? Tough question. And what about all of the people who will benefit from the gas flowing through the pipeline? Should they suffer because one landowner objects? Again, tough question. For us, property rights are sacrosanct. You don’t tell me I can’t allow a pipeline or drilling–and I don’t tell you that you must allow it. What’s fair is fair. How do we resolve these issues?…
The Maine Public Utilities Commission (PUC) recently declined to help fund a new LNG peakshaving facility in the state, concluding it would not reduce consumer natural gas and electricity prices. Er, a, what’s an LNG peakshaver anyway? Good question! According to industrial engineering company Fives, “LNG peak shaving units are used for storing surplus natural gas, so as to be able to meet the requirements of peak consumption later during the different seasons. Gas distribution companies and local administrations use this application to be more flexible in their consumption of natural gas. Thanks to these Liquid Natural Gas (LNG) peak shaving units, they will be able to face periods of peak consumption during cold winter times and extreme summer heat. Peak shaving can also be used to keep natural gas prices from soaring during periods of high gas consumption.” That helps. They are small LNG plants that kick in when demand for natural gas exceeds supply. There are 44 such peakshaving tanks at 29 locations in the northeast. Last September the Maine legislature authorized the PUC to spend $25 million on leasing capacity at a peakshaving plant, if they could find the right plant to do it. A number of projects were submitted, and the PUC said nyet–they don’t like any of them and don’t think a peakshaver will be needed going forward… 
The following is a post from MDN friend Tom Shepstone about using humor (and sarcasm) to fight back against what MDN calls certifiably insane anti-fossil fuelers. Read (and watch) it, and enjoy!… 
For the past few years MDN has had an eye on a trend we find exciting–“virtual pipelines”–by which we mean facilities that are located along a pipeline that compress natural gas (CNG), load it onto tanker trucks, and then distribute that gas to businesses that are not fortunate enough to be located near a natgas pipeline. With irrational opposition to pipelines rampant, virtual pipelines are a good alternative. We were first alerted to this trend when International Paper’s Ticonderoga mill in northern New York, near the Vermont border, opted for a virtual pipeline from NG Advantage, back in 2015 (see