Regulation

Industrywide Issues | Ohio | Regulation | Statewide OH

ODNR Proposes New Spacing Rules for Shale & Conventional Wells
March 14, 2018March 14, 2018

Yesterday the Ohio Department of Natural Resources (ODNR), Division of Oil and Gas Resources Management, posted draft rules for changing well spacing for both conventional and Utica Shale wells. The new rules, which the public can comment on now (comments due by April 10th), will establish new minimum distances horizontal shale wells may be drilled from the boundaries of drilling units and new minimum distances from other horizontal wells. In our quick read of the proposed regs, it looks like shale wells must be drilled at least 400 feet from the drilling unit boundary line. There is no required minimum between shale wells drilled on the same pad as part of the same drilling unit. Below are the proposed regs from ODNR…
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Electrical Generation | Energy Services | Industrywide Issues | Litigation | Millennium Pipeline | New York | Orange County | Pipelines | Regulation

Court Rejects NY DEC Attempt to Stop Short Power Plant Pipeline
March 13, 2018March 13, 2018

Valley Lateral Pipeline map – click for larger version

The Andrew Cuomo-corrupted New York Dept. of Environmental Conservation (DEC) is now out of options in its quest to block a tiny, 7.8-mile pipeline that would connect the Millennium Pipeline to a gas-fired electric generating plant under construction in Orange County, NY. Yesterday the U.S. 2nd Circuit Court of Appeals denied a petition by the DEC asking the court to vacate two orders by the Federal Energy Regulatory Commission (FERC) allowing the pipeline to continue construction. Which means construction on the pipeline has restarted and will almost certainly be completed within a month. The plant the pipeline will feed, Competitive Power Ventures (CPV) Valley Energy Center, is wrapping up construction. Recently antis had a cow when they saw steam coming from the plant, part of the commissioning process (see Antis Apoplectic at Sight of Steam Coming from NY Power Plant). Before the new plant can go online, it needs fuel, which is why the Millennium project is so important. Now that the 2nd Circuit has rejected its petition, the DEC says it is still “reviewing its options” with respect to “next steps.” Frankly, there are no options and no next steps. The Cuomo-corrupted DEC has lost…
Read More “Court Rejects NY DEC Attempt to Stop Short Power Plant Pipeline”
Industrywide Issues | Lease & Royalty Payments | Regulation | Statewide WV | West Virginia

WV Gov Justice Signs Bill to Guarantee 12.5% Minimum Royalty
March 12, 2018March 12, 2018

While everyone was focused on the passage of a co-tenancy bill in West Virginia (see WV Gov. Justice Does 180 – Says He’ll Sign Co-Tenancy Bill), another bill, with arguably more impact on both rights owners and drillers, quietly made its way through the legislative process and was signed into law by Gov. Jim Justice on Friday. We’re talking about a bill that guarantees that rights owners (i.e. landowners) will get an actual, guaranteed minimum royalty of 12.5%–regardless of post production deductions. WV Senate Bill (SB) 360 is now the law! The bill was proposed to counter what landowners say was a miscarriage of justice at the hands of the WV Supreme Court in the Leggett v. EQT Production, a case in which the Supremes (in a very unusual move) reversed their own decision from a few months before and allowed EQT to deduct post-production expenses (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). While this is fantastic news for landowners/rights owners in WV, you can’t escape the larger implications, which is that there is now no reason (no excuses left) why the PA version of this bill, introduced for the past three consecutive two-year sessions (six years total), can’t also get passed…

Important Note: SB 360 does NOT apply across the board, to all WV leases. It only applies to limited cases, like Leggett v. EQT, which are “flat rate royalty leases.” See a further explanation below.
Read More “WV Gov Justice Signs Bill to Guarantee 12.5% Minimum Royalty”
Allegheny County | Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Shell | Washington County

PA DEP Schedules 3 Hearings for Shell Ethane Pipeline
March 12, 2018March 12, 2018

Click for larger image

In February, MDN told you the Pennsylvania State Dept. of Environmental Protection (DEP) had caved to pressure from anti-fossil fuelers with regard to Shell’s proposed Falcon Ethane Pipeline project (see PA DEP Caves to Pressure, Extends Comment Period for Shell Pipeline). Shell is working on an ethane “pipeline system” with two “legs” to feed the mighty cracker plant being built in Monaca, Beaver County (see Shell Working on 94-Mile Ethane Pipeline to Feed PA Cracker). The DEP advertised an official comment period for the project on Jan. 20, giving interested parties until Feb. 20 to file their comments–an entire month. However, one month isn’t enough time for anti-drillers to marshal the faithful to try and sink the project. FracTracker Alliance, an anti-fossil fuel organization, colluded with other groups to put the word out to flood the DEP with demands to keep the comment period open. The DEP caved and extended the comment period to April 17th along with three public hearings (circus freak shows), to give the FracTracker faithful time to mount publicity and legal offensives to try and stop the project. The DEP has just announced the dates and locations for the three public hearings…
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CNX Resources | Energy Companies | Industrywide Issues | NGLs | Pennsylvania | Pipelines | Range Resources Corp | Regulation | Statewide PA

Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown
March 9, 2018March 9, 2018

MDN reported yesterday that due to underground horizontal direction drilling (HDD) in Chester County, PA (near Philadelphia) for the Mariner East 2 (ME2) Pipeline project, a third sinkhole had developed (see PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole). ME2 is being built close to the existing Mariner East 1 (ME1) pipeline. The sinkhole exposed a portion of the ME1 pipeline to the open air. Not a good situation, which is why the state Public Utility Commission has temporarily shut down the propane and ethane flowing through ME1. The shutdown is for 10-14 days. Problem is, both Range Resources and CNX Gas pump propane and ethane through ME1. With the shutdown, both companies are “scrambling” to find alternative means to get their NGLs to market…
Read More “Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown”
Industrywide Issues | Regulation | Statewide WV | West Virginia

WV Gov. Justice Does 180 – Says He’ll Sign Co-Tenancy Bill
March 9, 2018March 9, 2018

West Virginia Gov. Jim Justice has done a complete 180 degree turn around with respect to signing a co-tenancy bill. As we previously reported, the co-tenancy bill was passed first by the House, and then the Senate (see WV Co-Tenancy Bill Passes in Senate – Now Waits for Gov to Sign). However, on the way to final passage, Justice wanted to link co-tenancy with joint development, which would allow drillers who own existing (old) leases on adjoining properties to pool them into a unit without signing new shale leases with the owners. He threatened to veto a co-tenancy bill if there is no joint development bill too (see WV Gov. Justice Kills Co-Tenancy Bill by Linking it to Joint Dev). Justice got a lot of blowback, from everyone, and soon after his shoot-from-lip comments, he backed off his threat to veto. Yesterday Justice said he will sign the co-tenancy bill, that there are a lot of “positive benefits” to the legislation. What a turnaround!…
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Accidents | Chester County | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Sunoco Logistics

PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole
March 8, 2018March 8, 2018

3rd sinkhole opens up in Chester County, PA

Sunoco Logistics Partners (aka Energy Transfer Parnters) has had its challenges in constructing the twin Mariner East 2 (ME2) pipelines across Pennsylvania. Earlier this week MDN told you that underground horizontal directional drilling (HDD) work in Chester County has led to a third sinkhole developing in the area (see 3rd Sinkhole Appears Near ME2 Construction in Chester County, PA). For most of its length, ME2 is being built right next to ME1 (Mariner East 1), a liquids pipeline originally built in 1931. ME1 now flows 70,000 barrels a day of NGLs like propane to Marcus Hook, PA. The third sinkhole has exposed a portion of ME1. That is, bare steel pipeline was uncovered due to the sinkhole. Not good. That situation led to the PA Public Utility Commission (PUC) slapping ME1 with an emergency shut down order yesterday…
Read More “PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA House Considers “Fix DEP” Bills at Hearing on March 13
March 7, 2018March 7, 2018

The Pennsylvania Dept. of Environmental Protection (DEP) needs fixing. That fact is acknowledged by everyone. The question (or rather disagreement) is in how to fix it. The DEP can’t seem to get its act together with respect to approving simple erosion permits. Turnaround from the time a permit is requested until it is supposed to be approved is, by DEP’s own statutory standards, 14 days. Last year it was taking over 250 days in some areas of the state (see More Pushback on PA Senate Plan to Fix Slow DEP Permit Reviews). Since that time the DEP has, according to DEP Secretary Pat McDonnell, improved on that number. Statewide erosion permit delays stand at just under 100 days. Still not acceptable. How to fix the DEP? The PA House of Representatives has a plan, covered in five proposed bills. The House will hold a hearing on their plan next week…
Read More “PA House Considers “Fix DEP” Bills at Hearing on March 13″
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Extra $2.5M for 33 Hires Will NOT Go to O&G Program
March 7, 2018March 7, 2018

DEP Sec. Pat McDonnell

As we point out in a companion story today, the Pennsylvania Dept. of Environmental Protection (DEP) needs fixing, and the PA House has a plan to do it (see PA House Considers “Fix DEP” Bills at Hearing on March 13). Perhaps fearing at least some of the House initiatives may bear fruit, a few weeks ago DEP Secretary Pat McDonnell proffered his own plan to fix his agency–spend an extra $2.5 million to hire 33 new full-time employees to assist in the permit review process (see PA DEP Says $2.5M Will Fix Chronic Drilling Permit Delays). However, there’s a teeny tiny problem with that. According to the February quarterly meeting held between the DEP and oil and gas industry, all of those 33 (or 35, depending on the source) positions would be hired for the safe drinking water program, NOT for the oil and gas program. So McDonnell’s statements about the reason for the new positions and increase in budget are misleading at best…
Read More “PA DEP Extra $2.5M for 33 Hires Will NOT Go to O&G Program”
Electrical Generation | Industrywide Issues | Pennsylvania | Regulation | York County

York, PA Gas-Fired Electric Plant Fined $25K for 2-Day Shut Down
March 7, 2018March 7, 2018

Brunner Island Power Plant

Brunner Island Power Plant is located in York County, PA, straddling Lancaster County. It is a huge, 1,490 megawatt coal-fired electric generating plant, and has been the target of environmentalists for years. In February 2017, MDN told you that the new owner of the plant (Talen Energy) is investing $100 million to retrofit the plant so it can, at least part of the time, burn Marcellus Shale gas (see York County, PA Electric Plant Begins Using NatGas as Fuel). The plant recently signed an agreement with the state to burn only Marcellus gas during “peak ozone season”–from May 1 through Sept. 30–starting in 2023 (see York, PA Electric Plant to Drop Coal, Burn Only Marcellus Gas). Talen will phase out coal completely by 2028. Until 2023, the plant burns Marcellus gas at various times–hence our interest. The PA Dept. of Environmental Protection (DEP) has just levied a $25,000 fine against the plant for shutting down for two days in the dead in the winter. Why is that a problem? Don’t these plants sometimes need to shut down?…
Read More “York, PA Gas-Fired Electric Plant Fined $25K for 2-Day Shut Down”
Allegheny County | Industrywide Issues | Litigation | Pennsylvania | Regulation | Wastewater

Federal EPA Approves Permit for Plum, PA Wastewater Injection Well
March 6, 2018September 5, 2018

Plum, PA

As MDN reported last July, the Federal Environmental Protection Agency (EPA), the agency in charge of approving oil and gas wastewater injection wells, was actively reviewing an application and plan from Penneco Environmental Solutions (division of Penneco Oil Co.) to convert a plugged gas well into a brine (wastewater) injection well in Plum, PA–in Allegheny County, near Pittsburgh (see New Frack Wastewater Well on the Way in Allegheny County, PA). The good news is that the EPA has given its final approval for the project. However, Penneco has miles to go (a lawsuit & state permits) before they begin retrofitting the well…
Read More “Federal EPA Approves Permit for Plum, PA Wastewater Injection Well”
CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Maryland | Regulation | Statewide MD

FERC Grants Cove Point LNG Permission to Begin Commercial Ops
March 6, 2018March 6, 2018

As MDN reported last Friday, the very first cargo of LNG (liquefied natural gas) left the Cove Point LNG export facility in Lusby, Maryland (see Cove Point Ships First LNG Cargo – But Not M-U Gas). However, as we accurately surmised, that first shipment did not contain Marcellus/Utica gas molecules, but instead the gas aboard was previously shipped in from Nigeria by Shell, used in the commissioning process to test the facility. Now that the commissioning process is complete, Dominion Energy, operator of the plant, requested (on Friday) a full-blown kiss of approval from FERC to begin real, commercial operations–chilling and liquefying Marcellus gas for export. On Monday, FERC granted its big, sloppy, wet kiss of approval. Cove Point is now up and running “for real”…
Read More “FERC Grants Cove Point LNG Permission to Begin Commercial Ops”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Secretary on Senate Hot Seat During Budget Hearing
March 6, 2018March 6, 2018

Patrick McDonnell – Secretary, DEP

Last Thursday Pat McDonnell, Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), appeared before the PA Senate Appropriations Committee to discuss the DEP’s proposed budget–and to answer questions about the (unimpressive) performance of his department. Among the issues discussed: The 250% increase in oil and gas well permit fees; the proposed DRBC fracking moratorium; abandoned oil and gas wells; controlling methane emissions; and Sen. John Yudichak’s do-nothing plan to “study” enormously slow permit approvals for erosion and sedimentation–critical permits for shale drillers that are often delayed by months. Here’s some of the back and forth from last week when McDonnell sat on the hot seat…
Read More “PA DEP Secretary on Senate Hot Seat During Budget Hearing”
Industrywide Issues | Regulation | Statewide WV | West Virginia

WV Co-Tenancy Bill Passes in Senate – Now Waits for Gov to Sign
March 5, 2018March 5, 2018

On Saturday, the full West Virginia Senate voted on House Bill (HB) 4268–the “co-tenancy” bill–passing the measure by a vote of 23-11. This is tremendously good news–for both landowners and drillers. Although WV Gov. Jim Justice had previously threatened to veto the bill because he wanted it tied (like a millstone) to the neck of another bill (joint development), Justice backed off that position after getting a lot of blowback, from virtually everyone (see WV Gov. Justice Gets His Head Straight, Stops Targeting Co-Tenancy). The bill now awaits his signature. Let’s hope Justice keeps his head clear enough to sign it…
Read More “WV Co-Tenancy Bill Passes in Senate – Now Waits for Gov to Sign”
CNG/LNG | Energy Services | Exporting | Industrywide Issues | Kinder Morgan | Regulation

Elba Island LNG Wants to Start Up in Q3 This Year
March 2, 2018March 2, 2018

Southern LNG, a unit of Kinder Morgan, filed a request with the Dept. of Energy yesterday asking the DOE for “blanket authorization” to export LNG from the Elba Island LNG plant in Georgia beginning in the third quarter of this year…
Read More “Elba Island LNG Wants to Start Up in Q3 This Year”
Industrywide Issues | Regulation | Statewide WV | West Virginia

WV Gov. Justice Gets His Head Straight, Stops Targeting Co-Tenancy
March 2, 2018March 2, 2018

Well looky at this. West Virginia Gov. Jim Justice has pulled his head out of his…political fugue…and has reversed course on his opposition to the existing co-tenancy bill that’s near final passage. Justice previously threatened to veto the bill if it should hit his desk…
Read More “WV Gov. Justice Gets His Head Straight, Stops Targeting Co-Tenancy”