EQT Pulls a Chesapeake, New Deductions from PA Leases
Last Friday MDN editor Jim Willis had the pleasure of speaking at the National Association of Royalty Owners (NARO) Pennsylvania Chapter annual convention in State College, PA. Jim was humbled to present alongside a cast of terrific speakers, including Scott Perry, Deputy Secretary of the Office of Oil and Gas Management at the PA Dept. of Environmental Protection, Tom Murphy, Director of Penn State’s Marcellus Center of Outreach and Research (MCOR), and Scott Kurkoski, a top lawyer and head of the energy practice for Levene, Gouldin & Thompson (thanks for the ride home Scott!). One of the first attendees at the event to stop by the MDN table for a chat asked if we had heard about a letter recently sent by EQT to PA landowners. We had not. He gave us a copy (below). In the letter, EQT claims they have been “subsidizing a portion of the cost to gather the gas” produced by their PA wells, and they intend to begin claiming new deductions from royalty checks beginning this year. The way they position it in the letter is that landowners will begin “sharing” in these post-production costs. Who doesn’t like to share, right? We can tell you, not a single attendee at the event was impressed with EQT’s “sharing” letter. It smacks of the road Chesapeake Energy has gone down in robbing landowners of their royalties…
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The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) has just amended an existing lease with EQT that allows EQT to extract natural gas (and other hydrocarbons) from underneath the Monongahela River in Allegheny, Greene, Fayette, Washington and Westmoreland counties. EQT is paying $4,000 per acre for 392 acres ($1.568 million total) in a signing bonus, along with a big 20% royalty on anything produced. However, the announcement raises an important question we’ve asked for more than four years: Is the land under rivers and streams actually owned by the state? PA says yes. We suspect landowners who own land along those rivers and streams would say otherwise. The state grabbing money for land under bodies of water has been going on for years (see 
One of the lies told by Pennsylvania Gov. Tom Wolf in attempting to sell a Marcellus-killing severance tax to the general population is that most of the tax would fall on businesses and corporations outside of PA. The rallying cry has always been that PA landowners would not bear any of the severance tax–as in deductions from royalties paid. That lie was exposed by none other than the PA Independent Fiscal Office last week when the IFO released a report that calculates of the estimated $210 million in severance taxes that would be raised, per year, by the latest Wolf proposal–some $28 million of it (over 13%) would come out of the pockets of landowners–IN THE FIRST YEAR. By the third year, that number rockets to $51 million (or 24%). That is, a meaningfully large portion of the proposed severance tax WILL get passed on to landowners as deductions from their royalties. Lesson for landowners: Don’t fall for the siren song from Wolf and RINOs who say “If you support the severance tax (it won’t affect you), we’ll get you your minimum royalty bill.” It’s a farce…
It takes a loooooong time to get a wastewater injection well approved and then up and running in Pennsylvania. Maybe that’s way there are less than a dozen of them in the entire state. In February 2014, the federal Environmental Protection Agency (EPA) gave a “final” approval to Windfall Oil and Gas to drill a wastewater injection well near Dubois (Clearfield County), PA (see 
The Adorers of the Blood of Christ, a group of nuns in Lancaster County, PA, simply can’t stay away from sacrificing Christ on the alter of politics. The Sisters didn’t want the Atlantic Sunrise Pipeline project passing through their property. They own several buildings (one of them an old folks home heated with natural gas) on the very same property. The pipeline was due to run through a nearby field owned by the Sisters that they lease to a local farmer who grows corn on it. The Sisters took up with radical anti-fossil fuelers from Lancaster Against Pipelines to protest the project, putting a few wooden park benches and a flower tressle in the middle of the corn field, calling it a “chapel” (see 
Pennsylvania Gov. Tom Wolf has been obstinate in demanding onerous new drilling rules for the conventional, as well as unconventional (shale) drilling industry since he took office. Reworked drilling rules for both conventional and shale drillers were done and ready to go under previous Gov. Tom Corbett. Then Corbett lost to Wolf, and Wolf demanded changes to the common sense rules everyone had already agreed to (see 
Two Pennsylvania Senate committees–the Environmental Resources and Energy and the Consumer Protection and Professional Licensure committees–held a joint hearing on Tuesday supposedly on the topic of “pipeline safety”–but instead the hearing turned into a bash Sunoco Logisitcs and the Mariner East 2 (ME2) Pipeline hearing. A variety of witnesses testified. Unfortunately, State Sen. Gene Yaw (RINO from Lycoming County), chairman of the Environmental Resources and Energy Committee, didn’t invite Sunoco to testify, so it was a one-way bash fest. Sunoco was not allowed to respond. Thanks Gene. It wasn’t a court hearing, so we can’t call it a kangaroo court. Perhaps we can call it a kangaroo Senate hearing? While the discourse in the hearing was mostly civil (although it was nonstop bashing of Sunoco), a group of rabble rousers nearby was not. A group of 10-15 (depending on the news source) marched on Gov. Tom Wolf’s office. They were there to serve Wolf with a mock “Notice of Probable Violation and Summons,” which the malcontents say requires Wolf to appear in Chester County before families impacted by construction of ME2. The small mob was met with locked doors and Capitol Police who turned them away…
Sunoco Logistics Partners (aka Energy Transfer Parnters) has had its challenges in constructing the twin Mariner East 2 (ME2) pipelines across Pennsylvania. Earlier this month MDN told you that underground horizontal directional drilling (HDD) work in Chester County had led to a third sinkhole developing in that area (see 
Let’s be honest. Pennsylvania, Ohio and West Virginia compete against each other, fiercely, to attract business to their respective states. However, in 2015 the three states agreed to lay aside their competitive natures when it comes to shale and cooperate (pool resources) for things like marketing and promotion, workforce development, transportation/infrastructure and research (see 
Antis in the Scranton suburb of Jessup just won’t leave it alone. They’re mad they can’t stop what will be the state’s largest natural gas-fired electric plant (fed by Marcellus gas) from coming online–and they’ve turned their anger on the state Dept. of Environmental Protection (DEP). As we reported two weeks ago, a puff of yellow “smoke” (more like vapor) was seen coming from the plant for a brief period of time and it sent antis into an apoplectic shock (see 
In early March MDN reported that Sunoco Logistics’ underground horizontal drilling (HDD) work on its massive Mariner East 2 NGL pipeline near Philadelphia had resulted in several sinkholes developing (see 
The Pennsylvania Dept. of Environmental Protection (DEP) has just shut down further drilling for the Mariner East 2 Pipeline project at Snitz Creek in Lebanon County, PA because of a 50 gallon spill of non-toxic drilling mud. This isn’t the first time the DEP has stopped underground horizontal directional drilling (HDD) work at Snitz Creek. Last November they did the same thing for a piddly 1 gallon spill (see 
