PA IFO Predicts 2 Possible Scenarios for 2020 Impact Tax Revenue

The Pennsylvania Independent Fiscal Office (IFO) does a good job of guesstimating how much impact fee revenue will get generated in the coming year, based on permit and producing wells activity in the current year. Impact fees are PA’s equivalent of a severance tax–a fee paid by drillers for each new well they drill, paid over a 15-year period. This year IFO is offering up two scenarios for how much money the state will receive in impact fee revenues next year (based on wells drilled and active this year). One scenario is based on natgas prices averaging at least $2.25/MMBtus (million British Thermal Units) on the NYMEX, and the other scenario assumes gas prices slip below that level.
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McCandless Twp Tries to Block Shale Drilling with New Zoning Law

McCandless, a township in Allegheny County, PA (near Pittsburgh) is attempting to block any and all shale drilling within its borders by getting creative. The town is in the process of adopting changes to its zoning laws that make it illegal to drill a well in land zoned for commercial development. Since towns have to allow drilling in at least one zone, McCandless will allow it only in “institutional districts.” That means drilling will only be allowed on land with schools, hospitals, universities, and parks. Fat chance any drilling will ever happen in those places!
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3,000 Workers Back on the Job at Shell Cracker Construction Site

Shell slowly but surely continues to ramp back up the work being done at its mighty ethane cracker construction site in Beaver County, PA following a shutdown of activity due to the coronavirus pandemic. When the COVID-19 coronavirus hit in March, Shell stopped all work on the cracker plant, sending nearly 8,000 workers home in mid-March for what was thought to be “a few days to a few weeks” (see Shell Shuts Down SWPA Cracker Plant Construction re COVID-1). In early May Shell began bringing back roughly 300 workers each week. The total number of workers back on the job now stands at 3,000.
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Plum Injection Well Back On – Boro Ends Legal Fight

In April of this year, MDN told you that the Pennsylvania Dept. of Environmental Protection (DEP) had finally, after more than two years of evaluation, granted a permit to build a shale wastewater injection well in Plum Boro in Allegheny County (see Miracle! PA DEP Approves Plum (Pittsburgh) Injection Well Permit). The Boro’s mayor and other Boro officials are opposed and have tried their best to stop the project. However, they’ve just thrown in the towel and have admitted the well is going to get built.
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Law Firm Targets Cabot for Class Action Claiming Securities Fraud

We should have guessed this was coming. A New York City law firm has launched what it hopes will turn into a class action lawsuit against Cabot Oil & Gas for securities fraud following the sleazy attempt by Pennsylvania Attorney General Josh Shapiro to turn a 12-year-old accident (methane migration) into a felony (see PA AG Charges Cabot with Enviro Crimes for Long-Settled Dimock). The law firm is currently “investigating” Cabot, encouraging shareholders to sign up to express their interest in forming a class action lawsuit. An actual lawsuit hasn’t been filed…yet.
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Marcellus Gas Begins Flowing to Central PA Food Processing Plant

Pennsylvania’s Pipeline Investment Program (or PIPE) grants cover part of the cost of building new natgas pipelines to connect homes and businesses in rural parts of the state to homegrown Marcellus Shale gas supplies. We’ve written about many of the more-than-a-dozen (so far) PIPE grant projects in the past (see our PIPE stories here). One such grant issued in Centre County, PA (State College area) more than two years ago has just started flowing Marcellus gas to the Hanover Foods processing plant.
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PA Antis Pack Virtual Hearing on Wolf’s Onerous New Methane Regs

regulations

Last December the Pennsylvania Dept. of Environmental Protection’s (DEP) Environmental Quality Board (EQB) approved onerous new regulations that supposedly will capture every last molecule of stray methane that leaks from shale drilling operations (see PA DEP Goes WAY Too Far in Approving New Methane Regulations). The new regs are unnecessary and will shut down even more shale drilling operations in the state. As part of the EQB’s final steps to ratify the onerous new regs, they are conducting three virtual public hearings this month. Yesterday’s hearing (the second hearing) was packed with 32 anti-fossil fuel radicals who support Wolf’s plan. Gee, color us surprised.
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COVID Impact on PA Landowners: Low Royalties, Lease Expirations

The Washington & Jefferson College Center for Energy Policy and Management (Washington, PA) is hosting a free webinar series on “Effects of COVID-19 and the Economic Downturn on Western Pennsylvania Shale Gas Development” during June and July. Two of the three sessions have already been held, including a session yesterday that discussed the impacts of COVID-19 on landowners who have leased their land for shale drilling. According to the speaker, there have been two notable effects of the virus for landowners: lower royalties and drillers not renewing leases (allowing leases to expire).
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PA Senate Virtual Hearing Blasts Gov. Wolf’s Carbon Tax Plan

Yesterday the Pennsylvania Senate Environmental Resources and Energy Committee held a virtual hearing on Gov. Wolf’s plan to bypass the state legislature and force the state to join the so-called Regional Greenhouse Gas Initiative (RGGI), a group of northeastern states attempting to assassinate coal and gas-fired power generation by taxing it to death with an insane carbon tax (see Gov. Wolf Goes Bonkers: EO Destroying Gas-Fired Elec, Carbon Tax). Committee Chairman Sen. Gene Yaw (Republican) slammed RGGI in his opening/closing remarks. So too did a number of business leaders who addressed the hearing, telling Senators RGGI will be an economic disaster for the state.
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PA Gov. Wolf Gives DEP Extra Time to File Carbon Tax Plan

Last October PA Gov. Tom Wolf, in a naked power-grab, said he would try to force PA to join the so-called Regional Greenhouse Gas Initiative (RGGI), a group of northeastern states attempting to assassinate coal and gas-fired power generation by taxing it to death with an insane carbon tax (see Gov. Wolf Goes Bonkers: EO Destroying Gas-Fired Elec, Carbon Tax). Wolf signed an Executive Order (EO) tasking his Dept. of Environmental Protection (DEP) with the job of concocting a plan by July 31. Yesterday Wolf tweaked his original EO and extended the deadline for DEP by an extra six weeks–to Sept. 15.
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ME2 Pipe Inspector Admits Falsifying Welding Records 77 Times

In March a worker hired to x-ray welds on sections of the Mariner East 2 pipeline in southwestern Pennsylvania was charged with falsifying records–that he falsely claimed to have performed work when he didn’t (see ME2 Pipeline Worker Charged with Falsifying Welding Records). Yesterday the worker, via a video hearing, plead guilty to 77 counts of falsifying documents.
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Enviro-Left Threatens CEO if Cabot Doesn’t Cop to Crimes

In the American system of justice, when someone is accused of committing a crime, they are presumed innocent under the law until it is proven, in a court of law, they have committed said crime. But when a defendant, someone accused of committing a crime, is a fossil fuel company, that defendant is automatically presumed to be guilty. There is no presumption of innocence. That’s what is happening to Cabot Oil & Gas.
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PA Shale Drilling Permits Become Most Expensive in the Nation

In Ohio, it costs drillers $5,500 to file for and receive a permit to drill a new shale well. In West Virginia, the cost is $10,150. In Pennsylvania, it has cost drillers $5,000 for a new shale well permit. Following a meeting yesterday of the PA Independent Regulatory Review Commission (IRRC), PA’s permit fee is about to zoom to the top of the M-U list: $12,500 (2 1/2 times the previous fee). In fact, the cost of a shale permit in PA will become the highest in the country.
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Town Revokes Permit to Drill Shale Well at Pittsburgh Steel Mill

Edgar Thomson Steel Works (credit: Craig Sturge)

In early 2018 MDN told you that Pittsburgh’s oldest still-operating steel mill, U.S. Steel Corp.’s Edgar Thomson steel mill, is looking to drill shale wells on its property in order to supply natgas for the mill (see Marcellus Wells to be Drilled at Pittsburgh’s Oldest Working Steel Mill). Following delays from the state Dept. of Environmental Protection (DEP) in ironing out permit conditions, the local town zoning board has capriciously revoked a conditional use permit that allows the wells to be drilled.
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PA PUC Distributes $200M from Impact Tax, Down $52M from Prev Yr

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Each June the Pennsylvania Public Utility Commission (PUC), the agency charged with keeping tabs on impact fee revenue from shale drillers (PA’s version of a severance tax) releases the final numbers for impact fee revenues and disbursements for the prior calendar year. Yesterday was the appointed day for 2019 fee revenue generated. The PUC reports impact fees on natural gas producers in 2019 totaled $200,364,500, down roughly $52 million from $251,830,900 generated in 2018. With this year’s distribution, over the past nine years, PA has collected and distributed over $1.9 billion to communities across Pennsylvania–a massive amount!
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