Nightmare: Appeals Court Upholds Right to Cancel Pipeline Deals
Drillers may have a new “get out of (pipeline) jail free” card. If you don’t like your 10-20 year pipeline contract, just file for bankruptcy and cancel the contract during the “reorganization” process, emerging from bankruptcy without the responsibility to fulfill the long-term contract you signed. That’s the option just upheld by the Second Circuit Court of Appeals (unsurprisingly located in New York). MDN has covered this issue for more than two years. In March 2016, MDN brought you the news that a NY bankrutpcy court judge had allowed Sabine Oil & Gas, going through bankruptcy, to cancel a pipeline gathering contract with Cheniere’s Nordheim Eagle Ford Gathering in Texas (see Midstream Nightmare Comes True: Judge Lets Driller Cancel Contracts). Nordheim spent $84 million building a pipeline system to Sabine’s wells. In return for laying out that kind of money, Sabine, as is almost always the case, signed a multi-year contract with Nordheim (10 years in this case), ensuring Nordheim would make a profit on its up-front investment. The judge allowed Sabine to unilaterally cancel the deal several years into the contract as part of the bankruptcy process. We asked at the time: If a driller signs a contract and that signature is no longer any good, will anyone build pipeline systems anymore? We later brought you insight from a pair of lawyers who said: “If other judges follow the analysis and conclusions reached in the Sabine Oil case, the expectations of midstream service providers in the oil and gas extraction process might be turned on their heads” (see Lawyers Warn Pipeline Case May Turn Midstreamers “On Their Heads”). Indeed. Now that the Second Circuit has upheld this disastrous lower court decision, with the only appeal option left being the U.S. Supreme Court (which likely won’t take the case), we’re holding our breath to see what happens next. It seems this is the nightmare we can’t wake up from. Will midstream companies quit building gathering systems?…
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Talk about cutting off a $200,000 nose to spite your face! One of the counties through which the Mountain Valley Pipeline (MVP) will travel is Franklin County, VA. MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. For more than a year residents in Franklin County have opposed and hassled the MVP project (see 
Last winter, from Dec. 26 to Jan. 9, the northeast and New England experienced an extreme cold snap. New England essentially ran out of natural gas needed to feed electric generating plants. The entire region came razor close to succumbing to rolling blackouts. The only thing that prevented the blackouts was the restart of 1960s oil-burning electric plants. During that two week period, New England burned through 2 million barrels of oil to keep the lights on. Scary. Although a number of circumstances conspired to produce this “perfect storm” that almost tripped over into blackouts, there is one main, towering, primary reason why it happened: lack of natural gas pipelines. And there is one main, towering, primary reason why there aren’t more pipelines to flow more natgas into New England: New York Gov. Andrew Cuomo. Andy has admitted, on camera, that his policy is to block any/every/all new natural gas pipelines (see 
Que the music with dramatic drums, cymbals and trumpets. Camera A, zoom in on Secretary McDonnell. The whole state is watching. It’s time for the Pennsylvania Dept. of Environmental Protection (DEP) Hunger Games to begin! In February Sunoco Logistics Partners 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 
An interesting development in the pipeline wars. Kinder Morgan has just agreed to sell its Trans Mountain Pipeline system to the Canadian government for C$4.5 billion ($3.5 billion U.S.). Why? Kinder is tired of the ongoing civil war in Canada over extending Trans Mountain from the oil sands of Alberta through British Columbia to the coast for exporting to Asia. As we reported last week, British Columbia is blocking the project and Alberta is now fighting back–and it’s nasty, a civil war in every way except armed conflict (see 
As MDN reported last Friday, fossil fuel opponents finally located a liberal judge that they could persuade to abuse her judicial power to shut down not only construction on the 98% complete Mariner East 2 (ME2) pipeline project, but also shut down Mariner East 1 (ME1), a pipeline that has been working with no issues or problems for over a year (see 
Anti-fossil fuel nutters have finally, after months and years, scored a minor victory. They’ve been shopping to locate an ultra-liberal judge who would ignore the law and instead issue edicts from the bench–to shut down both the Mariner East 1 (ME1) and Mariner East 2 (ME2) pipeline projects. Yesterday Elizabeth Barnes, an administration law judge for the Pennsylvania Public Utility Commission (PUC), unilaterally ordered Sunoco Logistics Partners to “cease and desist all current operation, construction, including drilling activities on the Mariner East 1, 2 and Mariner East 2X pipeline” in West Whiteland Township (Chester County, PA). The judge also moved to shut down all operations of Mariner East 1 across the state, ruling that she is “enjoining Respondent from operating Mariner East 1.” It is a breathtaking display of arrogance and seizure of power that does not belong to her. The ruling runs counter to other decisions regarding these critical pipeline projects–projects that have been thoroughly vetted by numerous regulatory agencies. Construction of ME2 is 94% complete! ME1 has been flowing NGLs for over a year–with ZERO problems! And yet Barnes has shut it all down, with the stroke of a pen. We predict it won’t last long…
All New England states are in desperate need of more natural gas–for both consumers (residences and businesses that use it to heat and cool) and for power generating plants. Yet each New England state in one fashion or another has actively opposed any new interstate pipelines to bring in more gas. Two major pipeline projects were proposed to help alleviate the situation. Kinder Morgan’s Northeast Energy Direct (NED) was canceled in April 2016 (see 
It’s about time! One of the favorite tactics of antis to fall back on when they don’t win in court is to simply take the law into their own hands (i.e. anarchy). If the courts or a regulatory body (like FERC, or the PA DEP) refuse to stop a critical energy infrastructure project, like a pipeline, antis take it upon themselves to trespass, illegally, in an attempt to block work on the project. They call it “free speech.” It’s nothing of the sort. To trespass is, by definition, breaking the law. Antis know this. However, such a violation of the law is currently only a misdemeanor–a lessor penalty. The PA Senate has just approved a bill that would make infrastructure trespass for pipelines and other key energy infrastructure a felony, giving antis more incentive to behave themselves. Most Republican Senators (except a few Philly RINOs) voted for the bill. Most Democrat Senators (who prefer to be lawless), voted against it. We can only hope the bill gets adopted–it now goes to the House–although with Wolf as governor, we’re not confident it will get signed into law…
A recent New Hampshire Supreme Court decision may breathe new life into a natural gas pipeline project believed to be dead–or at least on life support. Spectra Energy (now owned by Enbridge) first announced an unnamed pipeline project to shuttle gas from the Marcellus/Utica to New England in July 2014 (see 
Last week MDN told you that the U.S. Fourth Circuit Court of Appeals had invalidated (vacated) a permit issued by the U.S. Fish and Wildlife Service that allows Dominion Energy’s Atlantic Coast Pipeline (ACP) to accidentally kill a few bats and bumble bees (classified as endangered) as it builds the massive $6.5 billion, 600-mile project from West Virginia to North Carolina (see 
On average, New York residents pay 44% more for electricity than neighboring states, like Pennsylvania. In January of this year, New Yorkers (and NY utility companies) were briefly forced to pay a record high of $140.25 per thousand cubic feet (Mcf) for natural gas, as opposed to what everyone else was paying (an average of $3.08/Mcf)–which is 46 times as much! Both stats are rooted in the same issue: NY pays WAY MORE for energy than it has to, because Andrew Cuomo is blocking natural gas pipelines into the state from PA. So says a new report titled “Pipelines and their Benefits to New York” (full copy below). The report, published by the Consumer Energy Alliance, examines the benefits of pipelines to New York, highlighting the need for affordable energy supplies to keep the daily lives of families and businesses across New York moving. Without those pipelines, we’re toast. You can’t build windmills and solar farms fast enough to meet the growing demand for electricity–and natgas. Cuomo’s dysfunctional energy policies are blocking all New Yorkers, upstate and downstate, from living even moderately prosperous lives…