FERC Gives Rover OK to Resume All HDD Work, Incl. Tuscarawas River
We have been waiting for this day for a LONG time. Yesterday the Federal Energy Regulatory Commission (FERC) issued an order to Rover Pipeline allowing Rover to restart all outstanding underground horizontal directional drilling (HDD) projects, including the location at Tuscarawas River. All Rover HDD projects were stopped back in April following a string of “inadvertent returns” (i.e. leaks) of drilling mud, the most serious being a ~2 million gallon spill at the Tuscarawas River HDD location (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). Several months after stopping Rover HDD work, following investigations and corrective action, FERC slowly began to allow Rover to restart HDD work in some (not all) locations. There have been perhaps 4-5 tranches of “go ahead and restart HDD work at these couple of locations.” But until yesterday, Rover could not restart HDD at the location of the worst spill site, near the Tuscarawas River. With yesterday’s order, all sites are cleared. Craig “Captain Ahab” Butler, director of the Ohio EPA, blew a gasket. He’s still trying to harpoon the Rover “Moby Dick” Pipeline as it travels through Ohio. A few weeks ago Butler asked Rover (and FERC) to STOP all HDD work (see Ohio EPA Continues Vendetta Against Rover Pipe, Demands HDD Stop). A few days later Rover asked FERC for permission to restart the balance of their HDD work (see Rover Ignores Shrill Ohio EPA, Asks FERC to Continue HDD Drilling). On Monday, Rover sent a letter to Butler (and FERC) saying Ohio EPA “grossly mischaracterizes Rover’s activities.” Yesterday FERC very loudly and clearly ignored Butler and sided with Rover…
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Fairmount Santrol, an Ohio-based sand producer that sells sand as a proppant for use in Utica and Marcellus Shale drilling, announced yesterday it has accepted an offer to sell itself to another sand company–Unimin, a subsidiary of Belgium-based SCR-Sibelco. Fairmount Santrol shareholders will get a $170 million payment and 35% ownership in the newly combined company. The new company will have revenues approaching $2 billion per year. Fairmount Santrol’s CEO, Jenniffer Deckard, is expected to become the CEO of the new company (the name of the new company has not yet been decided). However, make no mistake–Fairmount is selling itself. The board of directors for the new company will have 6 members picked by Unimim parent SCR-Sibelco and 4 members picked by Fairmount Santrol. The location of the headquarters is still up in the air. A lot of unknowns at this point. However, one thing that IS known is that this is a done deal…
The International (non-U.S.) Baker Hughes rig count for November 2017 was 942, down 9 from the 951 counted in October 2017, but up 17 from the 925 counted in November 2016. The U.S. rig count for November 2017 was 911, down 11 from the 922 counted in October 2017, but up 331 from the 580 counted in November 2016. The average Canadian rig count for November 2017 was 204, unchanged from the 204 counted in October 2017, and up 31 from the 173 counted in November 2016. What about rig counts in the Marcellus/Utica? Pennsylvania lost one rig (second month in a row PA has lost a rig), running an average of 31 rigs during October. Ohio gained a rig to run an average of 30 rigs. West Virginia saw the biggest swing–a huge swing–by losing 3 rigs, running an average of 12 rigs last month. So the Marcellus/Utica combined lost 3 rigs last month. Here’s the BH update…
The legal beagles at the Vorys energy law firm have been keeping a close eye on court cases in Ohio that affect the oil and gas industry. Two of those cases caught our attention as being worthy of mention because they have the potential to affect Utica Shale rights owners, and conversely drillers, in the Buckeye State. In one case, a landowner thought she could terminate a lease by not picking up her mail and depositing royalty checks in the mail. Just ignore the mail and claim the driller wasn’t paying up. Oops. Nice try, but that didn’t fly in court. In another case, a landowner with an old oil & gas lease (dating back to the 1970s) tried to break the lease because the driller is happy as a clam to simply get gas out of conventional/vertical/shallow wells, and not go after (or allow someone else to go after) the deeper shale layers. The landowner tried to get the court to at least agree to free up the deeper layers so he could lease those–but no dice. The court found the existing lease is producing in “paying quantities” and under the terms of the lease, the landowner does not have the right to sever the lower layers from the upper layers. Here’s the details, with copies of the respective court decisions…
A month ago MDN brought you the news that the U.S. District Court in Akron, OH had made a major ruling that affects all Utica landowners and drillers (see 
On Monday MDN brought you the news that Captain Ahab, er, a, Ohio EPA director Craig Butler, had demanded Rover Pipeline stop all horizontal directional drilling (HDD) work now under way in the state because another (tiny, 200 gallon) drilling mud spill happened on November 16th (see 
Each year (for the 11th year running) the Canadian-based Fraser Institute surveys petroleum industry executives and managers (333 of them for 2017) asking them their opinions on the barriers to investing in exploration and production in various geographies across the globe. That is, what makes them more likely or less likely to spend money drilling in a particular location? The Global Petroleum Survey (full copy below), tallies the survey responses and ranks each geography from most desirable place to invest, to least desirable. The rankings for this year are interesting and illustrative that politicians’ words and regulatory environment have a direct bearing on where, and how much, drilling companies are willing to spend. No money spent, no drilling. The barriers to spending in a given geography include: high tax rates, costly regulatory schemes, uncertainty over environmental regulations and the interpretation and administration of regulations governing the petroleum industry, and security threats. Only one state in the Marcellus/Utica ranked in the Top 10 “most attractive” jurisdictions for oil and gas investment–West Virginia…
The ultra-radical group from Pennsylvania called the Community Environmental Legal Defense Fund (CELDF) is devoted to stirring up anarchy and lawlessness, not only in Pennsylvania but elsewhere, like Ohio. CELDF has launched a campaign to amend the Ohio State Constitution. Two CELDF ballot initiatives (full text below) would amend the Constitution to make it legal for local communities to usurp the state’s role in regulating oil and gas. We’ve written plenty about the CELDF, which is behind a number of bizarre lawsuits like the one claiming that an ecosystem is a “person” with rights (see 
The Ohio Oil and Gas Association (OOGA) and Energy In Depth (EID) Ohio recently published a new report that shows Utica drillers have spent more than $300 million in eight Ohio counties from 2011 until earlier this year improving and fixing 630 miles of Ohio’s roadways. The study, titled “Ohio’s Oil & Gas Industry Road Improvement Payments” (full copy below) takes a close look at Road Usage Maintenance Agreements (RUMAs) in eight counties. You read that right. The O&G industry has spent over $300 million in eight counties over the past seven years. That’s $300 million in PRIVATE (not government-confiscated-via-taxes) money to fix up roads. Those living in eastern Ohio are lucky dogs…
The uber-litigious Sierra Club and it’s vaunted stable of attorneys have been caught with their pants down–legally speaking. One of the (many) pipelines the Clubbers oppose is NEXUS, a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. NEXUS got final approval for the project from FERC in August (see 
Honestly, the Sierra Club launches so many petitions with FERC (Federal Energy Regulatory Commission), and so many lawsuits against FERC regarding pipelines, it’s hard to keep them all straight. One of the northeast pipelines the Clubbers oppose is NEXUS, a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. NEXUS got final approval for the project from FERC in August, the first major pipeline to get approved following a newly restored quorum at FERC (see 
Last week Eclipse Resources, the “super-lateral” Marcellus/Utica driller, turned in its third quarter 2017 update. Eclipse is a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in the Ohio Utica. Eclipse has drilled the top three longest onshore oil/gas wells in the world. What do we glean from the 3Q17 update? Two of their world’s longest onshore wells–the Great Scott 3H and Outlaw C11H–are now online and pumping. They are pumping record-setting amounts of condensate. Each is averaging 3,300 barrels of oil equivalent (BOE) to date on a restricted choke, consisting of almost 50% condensate and 68% in total liquids. Gushers! During 3Q17 Eclipse drilled 10 wells in all, including four super-laterals with an average lateral length of over 17,500 feet. So far the company has drilled 11 super-lateral wells with an average lateral length of ~18,000 feet–averaging just 16 days from spud to total depth. Incredible! The company had average daily production of 353 million cubic feet equivalent per day (MMcfe/d). On an analyst phone call, Eclipse’s top brass said they are working to create a “reputable” super-lateral program, meaning (our words) building a successful program of long laterals that also makes big money. Here’s the 3Q17 update, along with portions of the analyst phone call and the latest slide deck…
Energy Transfer’s top brass delivered some bad news and some good news on yesterday’s analyst phone call to discuss third quarter 2017 performance. Two projects vital to the Marcellus/Utica are being built by ET–Mariner East 2 (ME2) and Rover Pipeline. The bad news is that ME2, a natural gas liquids (NGL) pipeline project that stretches from eastern Ohio across the state of PA to the Marcus Hook refinery near Philadelphia, will be delayed an extra nine months. ME2 has a new in-service target date of “second quarter 2018.” Progress on ME2 is not as fast as it could be primarily due to an ongoing onslaught of lawsuits by Big Green organizations, coupled with delays from the PA Dept. of Environmental Protection. The good news for ME2 is that by Dec. 31st, 99% of the pipeline will be in the ground and buried. The news for Rover is all good. Rover is a $3.7 billion, 711-mile natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. Rover had been dogged by problems with horizontal directional drilling (HDD), but those problems are now behind it. Yes, head of the Ohio EPA, Craig Butler, continues his Captain Ahab routine to try and stop the project (see 
The International (non-U.S.) Baker Hughes rig count for October 2017 was 951, up 20 from the 931 counted in September 2017, and up 31 from the 920 counted in October 2016. The U.S. rig count for October 2017 was 922, down 18 from the 940 counted in September 2017, but up 378 from the 544 counted in October 2016. Notice that we have almost as many rigs operating in the U.S. as the entire rest of the world (minus Canada). Canada’s rig count has improved a lot since earlier this year. However, Canada’s October rig count drooped a bit–204 in October (down 4 from September) but up 48 from October 2016. What about rig counts in the Marcellus/Utica? Pennsylvania lost one rig and ran an average of 32 rigs during October, versus Ohio running 29 rigs and West Virginia running 15 rigs, the same as September…