Regulation

Energy Services | Industrywide Issues | Litigation | New York | Pipelines | Regulation | Statewide NY | Williams

FERC Grants Limited Rehearing Request for Constitution Pipeline
March 16, 2018March 16, 2018

There’s a number of threads to the ongoing saga of Constitution Pipeline, a $683 million, 124-mile pipeline from Susquehanna County, PA to Schoharie County, NY to move Marcellus gas into New York State and from there, into New England. The Andrew Cuomo-corrupted NY Dept. of Environmental Conservation (DEC) refused to grant the pipeline necessary federal stream crossing permits, blocking construction, in April 2016 (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). There have been a number of court cases and regulatory actions since that time. Williams, the builder of Constitution, asked the Federal Regulatory Commission (FERC) to overrule the DEC and allow construction to begin. In January of this year, FERC denied that request (see Death of the Constitution Pipeline? FERC Refuses to Overrule NY DEC). In February of this year, Williams asked FERC to reconsider their decision (see Constitution Pipe Files for FERC Rehearing, Then Back to Court). FERC has 30 days to rule on the rehearing request. If they don’t do anything, it’s considered an automatic rejection. However, on Wednesday (just under the wire), FERC granted a “limited” rehearing request–meaning FERC wants more time to consider the request before making a final decision. It’s not a “yes” that they will reconsider and perhaps overrule the DEC–but it’s also not a “no.” Which is a good thing…
Read More “FERC Grants Limited Rehearing Request for Constitution Pipeline”
Berkeley County | Industrywide Issues | Maryland | Morgan County (WV) | Pipelines | Regulation | Statewide MD | West Virginia

Mountaineer Gas Begins Work on Morgan County, WV Pipeline
March 15, 2018March 19, 2018

Anti-fossil fuel nutters have been on a holy mission to stop a 3.5-mile, 8-inch pipeline from being installed under the Potomac River (see Maryland Antis Oppose 13th Pipeline Under Potomac as “Dangerous”). They are trying to pressure the pusillanimous RINO governor of Maryland, Larry Hogan, to block the project–a project from Columbia Gas Transmission (now part of TransCanada). Don’t tell the antis, but the pipeline system Columbia’s proposed 3.5-mile pipeline will feed is now under construction in West Virginia, just on the other side of the Potomac. In 2017, Mountaineer Gas launched the Eastern Panhandle Expansion pipeline project–a project to deliver natural gas via local distribution channels to a new industrial facility in Berkeley County, WV, and to provide gas to other local businesses and residents in the Tri-State area. Mountaineer’s pipeline expansion will be fed by the 3.5-mile Columbia Gas pipeline under the Potomac. There are three phases to the Eastern Panhandle Expansion project: Phase One runs a 22.5-mile, 10-inch-diameter steel pipeline from Morgan County to Martinsburg; Phase Two includes a loop to Charles Town; and Phase Three will build a four mile segment of pipeline into Martinsburg. The West Virginia Dept. of Environmental Protection approved the Eastern Panhandle Expansion in February (see WV DEP Issues Permit for Mountaineer Gas Pipeline in Eastern WV). As of last week, work on Phase One has begun, on both ends of the 22.5-mile pipeline…
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Dominion Energy | Duke Energy | Energy Services | Industrywide Issues | North Carolina | Pipelines | Regulation

NC Republicans Slam Democrat Gov. for Approving Atlantic Coast Pipe
March 15, 2018March 15, 2018

We’re not quite sure what to make of this story. North Carolina has been, as we’ve long pointed out, nitpicking in an attempt to slow down (or stop) the Atlantic Coast Pipeline (ACP) from traversing the state (see NC Plays “Death by a Thousand Questions” with Atlantic Coast Pipe). Dominion Energy and Duke Energy are building the $5-$6.5 billion, 594-mile ACP–a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina–reaching almost to the border with South Carolina. NC has a Democrat governor, Roy Cooper, whose administration has been hassling ACP for months. But then, all of a sudden, the NC Dept. of Environmental Quality issued permits approving the pipeline–which happened at the same time Dominion and Duke set up a $58 million fund “to protect the environment” in those counties where the pipeline will run. Sure sounds like a $58 million bribe to us, but hey, what do we know? If it gets the job done, it’s a cost of doing business, right? So now NC Republicans, who would normally be in favor of a project like ACP, are crying foul and launching an investigation into NC Gov. Roy Cooper’s $58 million “slush fund,” threatening to hold up work on ACP…
Read More “NC Republicans Slam Democrat Gov. for Approving Atlantic Coast Pipe”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

EPA Throws Bankrupt Philly Refinery a Lifeline
March 15, 2018March 15, 2018

In January MDN brought you the sad news that the Philadelphia Energy Solutions (PES), which operates the East Coast’s largest refinery on the banks of the Delaware River, had filed for Chapter 11 bankruptcy (see Philadelphia Refinery Files for Chapter 11 Bankruptcy). PES’ stated reason for bankruptcy is due to an onerous EPA requirement that refiners must blend in biofuel with gasoline and diesel, or purchase very expensive credits. PES can’t blend, so they must buy the credits, and buying the credits put them under water financially. Sadly, the Trump administration caved to the Midwest corn growers lobby and decided to uphold the Obama EPA’s onerous requirement to buy credits. But what’s this? Following withering criticism of the EPA, and visits to PES from luminaries like U.S. Sen. Ted Cruz, the EPA has had a change of heart. The EPA has asked the bankruptcy court judge to waive $350 million PES owes for the credits (about half of the total bill). Will it be enough to save PES?…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Pennsylvania | Pipelines | Regulation | Statewide OH | Statewide PA | Statewide WV | West Virginia

WV DEP Orders Rover Pipe to Stop Construction for Violations
March 14, 2018March 14, 2018

Rover Pipeline is in hot water again. This time it’s not Captain Craig “Ahab” Butler from the Ohio EPA, but the West Virginia Dept. of Environmental Protection. In a letter just released publicly (dated March 5), WVDEP slapped Rover with a “cease-and-desist” order, stopping all construction of Rover in the state, because of inspections in February that found 14 violations of water pollution regulations. The violations occurred in Doddridge, Tyler and Wetzel counties. Violations ran the range of leaving trash behind at construction sites to improper perimeter controls (no erosion devices installed) to failure to clean up the roads they used. In addition to trouble in WV, Rover is also facing new issues in both Ohio and Pennsylvania. In February heavy rains in the region caused “slippage issues” where the pipeline is being installed. Rover filed a report with the Federal Energy Regulatory Commission (FERC) last week to say it has eight crews working to correct slippage issues at six locations along its 51-mile Burgettstown Lateral. Here’s the latest on WV shutting down Rover, and Rover’s work to fix slippage issues…
Read More “WV DEP Orders Rover Pipe to Stop Construction for Violations”
Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA | Sunoco Logistics

PA PUC Votes Thursday to “Ratify” Shutdown of ME1 Following Sinkholes
March 14, 2018March 14, 2018

Last week MDN reported that due to underground horizontal direction drilling (HDD) in Chester County, PA for the Mariner East 2 (ME2) Pipeline project, a third sinkhole had developed. 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, which is why the head of the state Public Utility Commission (PUC) temporarily shut down the propane and ethane flowing through ME1 (see PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole). The shutdown is for 10-14 days, which sent ME1 customers Range Resources an CNX Resources scrambling to find alternate ways to ship their ethane and propane (see Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown). Tomorrow the PUC will meet and as part of that meeting, they will vote to ratify the action of PUC Chairwoman Gladys Brown in issuing last week’s emergency shutdown order…
Read More “PA PUC Votes Thursday to “Ratify” Shutdown of ME1 Following Sinkholes”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Introduces New Paperwork to “Save Time” on Permit Reviews
March 14, 2018March 14, 2018

We bet you didn’t know that a bloated, inefficient government bureaucracy like the Pennsylvania Dept. of Environmental Protection (DEP) can cut down on the amount of time it takes them to review permits necessary in the drilling process (like erosion and stream crossing permits)–just by changing the paperwork. That’s the claim the DEP is making. Yesterday the DEP released new paperwork–new forms to fill out–for Chapter 105 General Permit Registrations relating to water obstructions and encroachments. These new forms “will improve the quality of General Permit registration requests, eliminate unnecessary redundancies, and reduce review time frames.” Yeah, and we have a bridge in Brooklyn we’d like to sell ya…
Read More “PA DEP Introduces New Paperwork to “Save Time” on Permit Reviews”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA House Committee Approves 5 “Fix DEP” Bills – What’s Next?
March 14, 2018March 14, 2018

As we reported last week, this week the PA House of Representatives was due to host a hearing on a slate of bills aimed at fixing not only the slowmo way the state Dept. of Environmental Protection approves permits, but also roll back some of the egregious regulatory overreach in PA (see PA House Considers “Fix DEP” Bills at Hearing on March 13). The House State Government Committee met yesterday and approved three bills (out of five) to fix the DEP. Another two bills were previously approved by the same committee back in January. With all five common sense bills now reported out of committee, what happens next?…
Read More “PA House Committee Approves 5 “Fix DEP” Bills – What’s Next?”
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…
Read More “PA DEP Schedules 3 Hearings for Shell Ethane Pipeline”
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!…
Read More “WV Gov. Justice Does 180 – Says He’ll Sign Co-Tenancy Bill”
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″