Kinder Morgan Sabotages Itself with Some Kentucky Landowners

shoot yourself in the footIn June MDN updated you on Kinder Morgan’s plans to repurpose part of the existing Tennessee Gas Pipeline that currently runs south to north, reversing the flow to send natural gas liquids (NGLs) southward (see KM’s SECOND Binding Open Season for Utica/Marcellus NGL Pipeline). One of the biggest pockets of resistance are landowners in Kentucky. One such landowner/farmer, who has had five pipelines crisscross his property over the years, relates a story about talking with a pipeline rep a few years ago who essentially threatened to bury him in lawsuits. We don’t like hearing these kinds of stories…
Continue reading

Kentucky Supreme Court Rules Against Landowners in Royalty Dispute

court gavelThe Supreme Court of Kentucky has just ruled, in a pair of cases, that producers (i.e. drillers) CAN deduct post-production costs before calculating royalties to landowners. Once case involves landowners suing Magnum Hunter, the other involves landowners suing EQT, claiming (much like what has happened in Pennsylvania) that post-production costs mean they are getting less than one-eighth or 12.5% of the fair value of the gas as a royalty payment. The Supreme Court of Kentucky ruled the language in the leases is unambiguous as is the law–and that the lease allows for post-production expenses to be deducted. Here’s a summary from the legal beagles at Vorys…
Continue reading

Rogersville Shale Secrets Exposed – Appalachia’s “Next Big Thing”?

The editors of the top-flight NGI Shale Daily publication have put together a free special report on the Rogersville Shale–and you can download it by providing only your name and email address. So far, the Rogersville Shale, a formation that’s part of the Rome Trough in the Appalachian Basin, has largely flown under the radar. A new special report from the editors of NGI’s Shale Daily exposes what some E&Ps had hoped to keep secret. A half dozen or more E&Ps are clandestinely attempting to learn more about the Rogersville Shale–and a land grab is on to lock up lease rights for thousands of acres before the word gets out. An E&P early pioneer in the Rogersville drilled a test well in October 2013 that was later permitted for full production. The company secured a one-year confidentially agreement before they are required to release a completions report. On or about August 20, the one-year time limit expires. What new information will be disclosed?…
Continue reading

KY Court Decision Goes Against Pipelines re Eminent Domain

In December of 2013, a group of people opposed to the Bluegrass natural gas liquids (NGL) pipeline in Kentucky called KURE (Kentuckians United to Restrain Eminent Domain) sued the Bluegrass, a joint venture of Williams and Boardwalk Pipeline Partners, to prevent them from using eminent domain (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court). The argument was that the NGLs flowing through the pipeline just pass through Kentucky and don’t benefit local Kentuckians, therefore the pipeline has no right to use the state’s eminent domain law to force landowners to accept the pipeline. That is, it’s not a permitted utility under the definition of the law. In March 2014, a circuit court judge agreed with KURE and told Bluegrass they could not use eminent domain (see Judge Rules Bluegrass Pipeline Cannot Use Eminent Domain in KY). That takes a pretty big stick away from the Bluegrass in their fight to lay the pipeline. Not long after the judge’s decision Williams gave up on the project, although Boardwalk didn’t (see Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”). The circuit court judge’s decision was appealed, and last week the Kentucky Court of Appeals upheld the previous no-eminent domain decision. This new decision has implications for the Bluegrass to be sure, but it has even more implications for an active project now under way by Kinder Morgan…
Continue reading

Cabot Drills Test Well in WV Rogersville Shale, More on the Way?

A fascinating story in Sunday’s Charleston Gazette shines a light on the Rogersville Shale formation in southwestern West Virginia and eastern Kentucky. We’ve mentioned the Rogersville a few times on MDN–a shale layer that is older and much deeper than the Marcellus. The Marcellus is about a mile down. The Rogersville is between 9,000-14,000 feet down, or 2-3 times the depth of the Marcellus. Until now we’ve heard about potential Rogersville activity in Kentucky (see Fracking on the Way in the Bluegrass State? Quite Possibly and Kentucky Fracking One Step Closer: Commission Considers 1st Permit). Two exploratory wells have already been drilled in the Rogersville in Kentucky. But the new news, the thing that interests us, is that Cabot Oil & Gas has now drilled a test well in the Rogersville in West Virginia…

Continue reading

Kentucky Fracking One Step Closer: Commission Considers 1st Permit

In January, MDN told you that shale drilling/fracking may soon come to Kentucky (see Fracking on the Way in the Bluegrass State? Quite Possibly). Several weeks ago the Kentucky Oil and Gas Conservation Commission, a group that “rarely meets” (last meeting was in 2006) held a meeting to consider granting Kentucky’s very first deep horizontal natural gas drilling permit. The company applying for the permit is Horizontal Technology Energy Company, a subsidiary of Pittsburgh-based EQT. Horizontal Technology wants to drill a well in the Rogersville Shale in the eastern part of the state. No word yet on the result of that meeting…
Continue reading

Fracking on the Way in the Bluegrass State? Quite Possibly

What’s this…fracking in Kentucky?? Maybe! No, it’s not the Marcellus or Utica Shale. Actually, the Marcellus underlies a small sliver of Kentucky where the state shares a border with West Virginia and Virginia–but no one is interested in fracking the Marcellus there. The shale play that’s driven “hundreds” of new leases to be signed in 2014 is called the Rogersville Shale in eastern Kentucky (see map below). Kentucky has been largely resistant to pipelines crossing the state. Will fracking also encounter resistance? It already is…
Continue reading