FERC Will Not Oversee UTOPIA NGL Pipeline Project in Ohio
In December 2013, MDN told you about Kinder Morgan’s new NGL (natural gas liquids) pipeline cleverly named UTOPIA (Utica To Ontario Pipeline Access). UTOPIA is a $500 million, 210-mile, 10-inch pipeline from Harrison County, Ohio to Riga, Michigan and from there connecting with another pipeline heading into Windsor, Ontario (see UTOPIA is Coming! The UTOPIA Pipeline, that is…). Kinder has held an open season and in January 2016 they will file a full application and target November 2016 to begin construction. What we didn’t know, or realize (until today) is that all of the new pipeline that needs to be constructed for the project will happen within Ohio. No new pipeline is needed in Michigan or indeed into Ontario. Why is that important? Because newly constructed pipeline doesn’t cross state lines, the Federal Energy Regulatory Commission (FERC) will not be involved with approving or overseeing construction for the project. Because it’s all within Ohio, the lead agency for approval and oversight will be the U.S. Army Corps of Engineers, with an assist from the Ohio Dept. of Natural Resources, the Ohio Environmental Protection Agency and the U.S. Fish and Wildlife Service (an agency drunk on its own power)…
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This is a shout out to the marvelous people we (meaning me, Jim Willis) met in Pittsburgh on Wednesday at the 3rd Annual Oil & Gas Awards. I was truly humbled and thrilled to meet so many MDN readers! You gave me some great feedback on MDN–feedback that has me thinking about some new initiatives going forward. So stay tuned for the future and what I believe will be some good things coming. During the day I was privileged to host two panel discussions. A special thank you to the panelists on the “Minimizing Environmental Impact” panel: Melissa Hamsher, Vice President at Eclipse Resources; Lauren Parker, Principal at Civil & Environmental Consultants; and Gregg Stewart, Permitting Manager with PennEnergy Resources. And a special thank you to the panelists on the “Health and Safety” panel: Charlie Dixon, Safety and Workforce Director with Ohio Oil and Gas Energy Education Program; Frank Harrison, President of Areion Energy; and Chad McCutcheon, Communications Professional with McCutcheon Enterprises. Stellar panelists all! They made me look good, and that’s a hard thing to do. 😉 There were about 150 attendees at the Industry Summit during the day. MDN will bring you videos (when they become available) for each of the sessions. The evening was the “main” event–a gala awards ceremony with folks decked out in tuxedos and evening gowns. We have the complete list of winners for the 2015 Northeast Oil and Gas Awards below…
A change in strategy? The Wheeling News Register is reporting an uptick in the purchase of mineral rights in the Upper Ohio Valley area. If a landowner owns both the surface and mineral rights, the typical situation is that the landowner will lease the mineral rights to an energy company for a certain period of time, receiving an up-front signing bonus. If drilled, the landowner will receive ongoing royalties from any gas (or oil) produced. But in some cases, instead of leasing, energy companies are buying the mineral rights. That is, the mineral rights become separated from ownership of the land on the surface. The energy company then owns the mineral rights, along with the right to use a bit of the surface to locate a drill pad and wells. The landowner selling the mineral rights gets a higher initial signing bonus by selling the mineral rights as opposed to leasing. But they also get zero royalties when selling the mineral rights. It becomes a decision between a little more money now, or a lot more money later. What kind of money are we talking about?…
There’s once again renewed interest in Ohio’s Clinton sandstone. This time the interest is in drilling horizontal wells–“baby” wells compared to a Utica well. Over a dozen horizontal wells either have been or are now being drilled in the Clinton. One company, traditionally a conventional (vertical-only) driller, says drilling a horizontal well in the Clinton is 3 times more expensive than a vertical-only well, but it’s 7-8 times more productive. Another driller puts the cost at 10 times more than conventional drilling but 20 times more productive. Any way you slice it, it seems that small and large firms alike are taking a close look at the Clinton, drilling for “leftover natural gas and oil.” Here’s details of who’s doing the drilling and where…
We’ve commented before on the lawless tendencies of anti-drillers, particularly in Ohio where, when they lose a court case, they declare the government is illegitimate (see