Energy Services | Industrywide Issues | Ohio | Pipelines | Statewide OH | Tallgrass Energy | Taxation
OH Supreme Court Rules REX Pipe Owes $2M in Excise Tax
The Ohio Supreme Court ruled yesterday that the Ohio tax commissioner correctly charged Tallgrass Energy’s Rockie Express (REX) pipeline $2 million in excise tax (based on $699 million of income), for gas transported from and to (within) Ohio. REX claimed it did not owe the tax because the same law that exempts gas transported out of state applies to gas sales in-state. But the tax commission, and now the Supremes, say that the portion of gas transported through REX that stays in Ohio is not exempt and can be taxed. So pay up.
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The Ohio Supreme Court, on Christmas Eve, threw a lifeline to an effort to overturn an Ohio law that provides corporate welfare in the form of $1 billion of ratepayer (taxpayer) money to FirstEnergy, which recently changed its name to Energy Harbor (see 
Yesterday the U.S. Environmental Protection Agency announced it has reached a settlement with Gulfport Energy over alleged air emissions violations found at 17 well pad locations Gulfport operates in the Ohio Utica. The violations happened in 2015. The settlement includes Gulfport paying $1.7 million in fines and spending another $2 million in “improvements” to cut down on volatile organic compound (VOC) emissions at the 17 well pads.
The $4.2 billion, 713-mile Rover Pipeline system that flows Marcellus/Utica natural gas from western PA and eastern OH all the way to Canada, placed the final two pieces of the system online in November 2018 (see 
Good news for oilfield services companies that offer fracking services in the Ohio Utica Shale. The Tenth District Ohio Court of Appeals recently ruled that an amendment to an existing law granting tax exempt status for oil and gas equipment not only applies to equipment purchased by frackers from now on, it also applies to equipment they’ve purchased (and paid sales tax on) going back in time too. In other words, some frackers are owed refunds on the sales tax they’ve paid in the past.
If you use the number of active rigs operating in a given shale play/state as the measure for “success,” 2019 wasn’t such a good year for the Marcellus/Utica. In January, Pennsylvania entered 2019 with 48 active rigs. In December that number was cut nearly in half, to 25 active rigs. It was a similar story for Ohio, which entered 2019 with 17 active rigs and exited with 12 rigs. West Virginia, on the other hand, entered 2019 with 15 rigs and exited the year with the same number. But at one point during the year WV had 21 active rigs. We have the monthly rig stats below for all three states.
The Ohio Supreme Court, on Christmas Eve, threw a lifeline to an effort to overturn an Ohio law that provides corporate welfare in the form of $1 billion of ratepayer (taxpayer) money to FirstEnergy (which recently changed its name to Harbor Energy). The Ohio law provides the funds to FirstEnergy so they can keep two economically failing nuclear power plants up and running, giving the plants an unfair advantage over gas-fired plants that don’t receive corporate welfare.
Columbia Gas of Ohio (NiSource) recently announced a new $135 million pipeline project to bring new supplies of Utica-sourced natural gas to homes and businesses located north and west of Columbus, in central Ohio. The project, called the Northern Loop Project, will file for regulatory approval with the Ohio Power Siting Board and hopes the OPSB will approve the project in 2020, with construction set to happen in 2022.
The Ohio Oil and Gas Energy Education Program (OOGEEP), a nonprofit energy education and public outreach organization, recently commissioned a poll of Ohio voters in eight eastern counties–in the Ohio Valley area. The counties surveyed include those with the most active Utica Shale drilling in the state. The poll asked residents’ about their views on shale drilling and its related activities. Some 88% said the natural gas and oil industry is important to their community, and 78% support natural gas and oil development in the Ohio Valley area.
The Ohio Dept. of Natural Resources (ODNR) issued third quarter 2019 numbers for Utica shale oil and gas production last Friday. Drum roll please! The numbers show new state record highs for quarterly oil AND natural gas production, the most ever since quarterly reporting began in 2013. Through the roof! Utica oil production was up 29.8% over 3Q18, and Utica natural gas production was up 11.3% over 3Q18.
In Nov. 2017 the Ohio Attorney General’s office under then-AG Mike Dewine (RINO swamp dweller, now governor) sued Energy Transfer at the prompting of the Ohio EPA claiming the company’s Rover Pipeline project was guilty of “polluting state waters while constructing a natural gas pipeline across Ohio” (see 
Columbia Gas of Ohio says it can’t build local natural gas delivery pipelines fast enough to meet the demand for new customers. “We’re adding new customers, commercial, industrial, residential, in every quadrant of the region” according to Columbia Gas President Dan Creekmur. And he doesn’t it see it stopping any time soon. So the company is spending big bucks (nine figures) to build new local gas pipelines–this year!
The rig count in the Marcellus/Utica region is crashing–down to its lowest level for a December since the M-U became a “thing.” It’s now lower than the levels reached in 2014, which was the advent of the first “crash” in rig counts. BUT (and this is a big BUT), lower rig counts do not necessarily mean less drilling or less production. How can that be?
The mafiosi at FirstEnergy lost their lawsuit filed with the Ohio Supreme Court in a bid to block a referendum aimed at giving all Ohio residents the right to vote to overturn an ill-conceived corporate welfare law passed that puts $1 billion into FirstEnergy’s pocket in order to keep two failing nuclear power plants open. Although they lost the case, FirstEnergy claims the Supreme Court decision is a “victory” for their attempt to keep their grubby hands on taxpayer’s money. How does that work?