Pennsylvania

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    PA “Rule of Capture” Case has Power to Limit Marcellus Drilling

    As we indicated in our post yesterday, the Pennsylvania Superior Court has handed down a decision that has the power to greatly restrict, even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well). This is a legal issue–and MDN is not written by a lawyer. Hence our earlier misreading of the importance and facts in the Superior Court decision. The issue, in brief, is that Monday’s court decision disallows using an age-old principle called the rule of capture, which we previously described. The rule of capture works for conventional drilling where underground deposits of oil and gas are in pools and the pool may exist underneath multiple surface property owners. Whoever gets there first and sucks the oil/gas out, wins. That’s the rule of capture in a nutshell. And it makes sense. You can’t be held responsible for oil and gas moving from one place to another as it’s extracted. And who knows how much of the pool is located under your property, or your neighbor’s property? The Superior Court justices ruled that the rule of capture doesn’t work for hydraulic fracturing because gas (and oil) trapped in shale rock does not freely move from one place to another as it does in a pool. The judges say the gas would “stay forever” where it is without fracking. In the case of Briggs v. Southwestern Energy, the Briggs family (in Susquehanna County, PA) alleges that when Southwestern drilled and fracked on the Briggs’ neighbor, the fracking was done close enough to their property that some of the gas located under their property (unleased) was released and extracted through the Southwestern well–a “trepass.” Southwestern countered that IF such a “trespass” took place, it falls under the rule of capture. The ultimate issue boils down to this: How far do fractures extend from a lateral well? An expert energy attorney told MDN off the record that Monday’s decision “could change the entire Pennsylvania shale industry” in two important ways…
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    Shell Ethane Pipeline Hearing Draws Few Supporters, Many Antis

    Click for larger version

    Last night the first of three public hearings held by the Pennsylvania Dept. of Environmental Protection for the planned Shell Falcon Ethane Pipeline project was held in Monaca (Beaver County), PA. About 100 people turned up for the hearing, which lasted an hour and a half. No signs allowed. The only people who could speak had to register first. Of the 23 who did speak, 16 of them (including out-of-town movement antis) spoke against the project, while 7 people spoke in favor. The 97-mile Falcon Ethane Pipeline system has two “legs” that will feed Shell’s mighty ethane cracker plant. Shell is not using eminent domain for any of its leases for the pipeline. Every lease is negotiated and signed with individual landowners. Antis, in large part being organized and agitated by radical groups like FracTracker Alliance, are making a concerted effort to block the pipeline, hoping they can in turn stop the multi-billion dollar cracker plant currently under construction by blocking the pipeline that feeds it…
    Read More “Shell Ethane Pipeline Hearing Draws Few Supporters, Many Antis”

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    Meaningless Poll Questions Yield Meaningless Results re PA Fracking

    This is how it works in biased, fake news land: You make up unspecific, wide-open questions that nobody really understands, and then biased, liberal media outlets interpret the “data” the way they want–to fit the predetermined media narrative. That’s what has just happened with meaningless poll questions from Franklin & Marshall College with respect to natural gas drilling in PA. We read through the questions they asked and thought, “What do some of these questions even mean?” The average citizen being asked these questions will assume and “read into” the questions what they *think* (but aren’t sure) is being asked, and answer the questions accordingly. In the end, it’s nonsensical. Meaningless. Fake. Then the lib machine kicks in to “report” that PA citizens, while still supporting drilling by a razor thin margin, actually think Marcellus drilling is bad for the environment. The latest media narrative is born: PA citizens are turning against gas drilling…
    Read More “Meaningless Poll Questions Yield Meaningless Results re PA Fracking”

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    PA Superior Court Overturns “Rule of Capture” for Marcellus Well

    STOP PRESS: Shortly after this post was published, a MDN reader (an energy attorney) called us to alert us that our initial take on this case is not right. The case is NOT about a company stretching a lateral too far so that it trespasses under an adjoining property. Instead, the case is about the “zone of fracking”–that is, that fracking, by its nature, creates cracks that may open up and drain some of the gas under a neighboring property–even though the fracking was done properly within the boundaries of the leased property. The case (ominously) says that fracking itself can cause a trespass. Our attorney friend said this case has the potential to negatively affect Marcellus drilling in PA–in a BIG way. We will write another post on this issue tomorrow. In the meantime, just be aware that our initial take below is not correct. – Jim Willis, Editor

    The Pennsylvania Superior Court handed down an important decision yesterday that impacts both Marcellus landowners and drillers. The decision removes “rule of capture” as a way for shale drillers to drill under adjoining neighbors who haven’t specifically leased their property for drilling. The rule of capture came about with conventional (vertical only) drilling, cases in which a pool of oil or natural gas exists that runs underneath the property owned by multiple surface owners (see the image to the left). The rule of capture principle says “the first person to capture a natural resource owns that resource.” If you put a well or two or three on your property to extract the oil/gas, if it flows from the neighbor’s side to your side and up the well, it’s yours. Same for your neighbor. He/she can grab the oil and gas under your property if the pool exists under both. The principle originated in England (it’s a very old principle). However, Southwestern Energy tried to use the rule of capture principle to drill under property not leased for drilling that sits next to property that is leased–claiming the rule of capture. The molecules in shale are a whole other story than molecules sitting in a common pool. That’s what the Superiors ruled. Southwestern (and by extension, other Marcellus drillers) can’t simply extend a lateral well a few hundred feet under an un-leased neighbor, which certainly makes sense to us…
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    Offer to Relocate Families Near ME2 Sinkholes; ME1 Down Until May?

    Sinkhole in Chester County, PA

    Sunoco Logistics Partners (aka Energy Transfer Parnters) has had its challenges in constructing the twin Mariner East 2 (ME2) pipelines across Pennsylvania. In March, MDN told you that underground horizontal directional drilling (HDD) work in Chester County had led to a third sinkhole developing in that area (see 3rd Sinkhole Appears Near ME2 Construction in Chester County, PA). For most of its length, ME2 is being built next to the existing ME1 (Mariner East 1), a liquids pipeline originally built in 1931. The third sinkhole in Chester County exposed a portion of ME1, leading to the state Public Utility Commission “temporarily” shutting down ME1 on March 7 (see PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole). ME1 would be, according to Sunoco, out of commission for “10 to 14 days.” Nearly a month later it’s still not running and until the state Dept. of Environmental Protection gets solid answers about the sinkholes, it won’t restart. It now looks like ME1 won’t be operational again until May. ME1’s closure has put several shippers, primarily Range Resources, in a bind (see Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown). Sunoco needs to conduct geotechnical studies near the sinkholes to get answers that will allow it to resume work. So, Sunoco has offered to temporarily relocate five families living near the three sinkholes–for up to six weeks–while it conducts tests of the area…
    Read More “Offer to Relocate Families Near ME2 Sinkholes; ME1 Down Until May?”

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    PA Supreme Court Axes DEP $4.5M Fine in EQT Tioga Wastewater Leak

    EQT had to take their case all the way to the Pennsylvania Supreme Court, but in the end, the company was victorious over a wildly overinflated $4.53 million fine levied by the state Dept. of Environmental Protection (DEP) for a leaky wastewater impoundment in Tioga County dating back to 2014 (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine was unreasonable and arbitrary. In fact, EQT says the DEP levied the fine and took EQT to court because a few weeks prior EQT had sued the DEP over a different, unrelated matter (i.e., sour grapes on the part of the DEP). EQT appealed the fine and the case all the way to the PA Supreme Court, which heard oral arguments last November (see PA Supreme Court Hears Arguments in EQT Wastewater Leak Case). Last Wednesday the PA Supremes ruled (5-2) in favor of EQT, saying that the DEP’s levied fine was excessive and that the DEP misinterpreted language in the 1937 Clean Streams Law…
    Read More “PA Supreme Court Axes DEP $4.5M Fine in EQT Tioga Wastewater Leak”

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    Marcellus-Fired Panda Hummel Electric Plant Roars to Life in PA

    It takes a long time to build a natural gas-fired electric power plant–especially a big one. We began writing about one of the largest coal-to-gas conversion projects in the country, happening in the heart of PA Marcellus country, back in February 2014 (see Panda Power Building 3rd Marcellus-Fired Electric Plant in PA). Panda Power Funds, a private equity firm located in Dallas, TX announced a partnership with Sunbury Generation to build a whopping 1,124-megawatt Marcellus gas-fired electric plant on the site of a retired coal-fired plant near Shamokin Dam in Snyder County, PA. Final testing is now underway at the facility, which was supposed to go online in February but is now scheduled to begin operations in May. Here’s an inside look at the complicated process of bringing a new power plant online…
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    PA DEP Releases Draft Final GP-5 & 5A Methane Regulations

    Last December the Pennsylvania Dept. of Environmental Protection (DEP) issued “draft final language” for the proposed General Permit 5A (GP-5A) and the revised General Permit 5 (GP-5)–regulations that supposedly will cut down on fugitive methane from escaping from drill pads and pipelines (see PA DEP Signals Onerous New GP-5 & 5A Methane Regs Coming 1Q18). The onerous regulations, which for now only apply to *new* sources (not existing) were originally prompted by bullying from the Obama Environmental Protection Agency. Even though EPA pressure has disappeared under President Trump, PA Gov. Wolf is still pushing these onerous new regs. GP-5 applies to pipelines and compressor stations, while GP-5A applies to well pads and drilling. Following a flood of new comments, the DEP tweaked the onerous regs once again (for maybe the third or fourth time) and last Friday afternoon, when nobody was working or looking or caring, the DEP published yet another revised final final final final final version of the regs (below). Are they any better than previous versions?…
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    Opponents Slandering Potter Co. Wastewater Facility Legally Warned

    Is it free speech to make “false, destructive and defamatory statements” about a company and the project it proposes to build? Is it OK to pretend to be a news organization when you’re really just a shill for Big Green groups, and is your “speech” protected–when it’s false? Members of the Seneca Indian tribe and faux news outlet Public Herald have been put on notice, legally, by lawyers representing the proposed Epiphany shale wastewater recycling facility in Coudersport (Potter County, PA) and driller JKLM to “cease and desist” from their slandering, smearing false statements about the Epiphany project–statements that are misleading the public. Those served the legal notice say it’s an attempt to silence their free speech rights. What do you think?…
    Read More “Opponents Slandering Potter Co. Wastewater Facility Legally Warned”

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    Free Pipeline Training Course in April in SWPA & Eastern OH

    The Gas Technology Institute (GTI) has previously offered a 100% free training program for those interested in a career building pipelines in the Marcellus/Utica region (see 4-Wk FREE Training Program Helps Unemployed Get M-U Pipeline Jobs and Still a Few Openings for Free Training for M-U Pipeline Jobs in SWPA). GTI is offering the same training program once again in April, at two locations: Armstrong County Industrial Development Council in Freeport, PA, and Belmont College in St. Clairsville, OH. Each location is limited to 20 students. If you are interested and live somewhere within driving distance of either location, what are you waiting for? Sign up before all slots are taken! Starting salaries for graduates “often exceed $50,000” and can lead to careers with salaries in the six-figure range (hey, where do we sign up?!). We have the details of how to enroll for FREE in this valuable training course–a course worth $3,500…
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    A (Very) Rough Method for Calculating Royalties on Cabot Wells

    Cabot Oil & Gas, one of our favorite Marcellus drillers, has just published a new PowerPoint slide deck presentation as part of an investor’s conference they attended earlier this week (the Scotia Howard Weil Energy Conference). Normally a new slide deck isn’t all that big a deal. However, thanks to MDN friend Chris Acker who pointed it out to us, there is some new information in the deck worthy of note. Back in December MDN brought you the news that Cabot had signed a deal to sell off their Texas Eagle Ford Shale assets in order to concentrate solely on the Marcellus (see Cabot O&G Sells Texas Eagle Ford Assets for $765M, Focus on Marc.). The slide deck notes that the Eagle Ford divestiture closed on Feb. 28th (slide #3). Also in the slide deck is a mention that Cabot plans to experiment with drilling “upper Marcellus” wells in the second half of 2018 (slide #11). Most (all?) of the wells they’ve drilled to date are “lower Marcellus.” A successful program of drilling upper Marcellus certainly bodes well for existing landowners with existing lower Marcellus wells–perhaps Cabot will revisit those pads to drill new wells? Slide #11 has some great information on it. We’ve used it to create a (very) rough royalty estimation calculator for Cabot landowners…
    Read More “A (Very) Rough Method for Calculating Royalties on Cabot Wells”

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    PA DEP Stops ME2 Drilling in Huntingdon County for < 1 Gal. Spill

    Sunoco Logistics Partners has had its share of problems in building the Mariner East 2 (ME2) twin NGL pipelines that run from eastern Ohio all the way to Marcus Hook, near Philadelphia. The main issue with construction of the pipeline has been underground horizontal directional drilling (HDD)–drilling under things like roads and bridges and streams and rivers–places where you can’t just dig a trench to lay pipeline. Some early problems with HDD caused the Pennsylvania Dept. of Environmental Protection (DEP) to shut down all ME2 HDD work (indeed all work period) for an extended period in January (see PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline). After Sunoco agreed to pay the DEP a whopping $12.6 million “fine” (i.e. shakedown money), the DEP allowed work to resume in February (see Sunoco LP Pays PA DEP $12.6M to Resume ME2 Pipeline Construction). While doing ME2 HDD work in Huntingdon County last week, Sunoco contractors reported less than one gallon of non-toxic drilling mud (bentonite) went missing–it came back out of a hole it didn’t go down. And because of that, the DEP has shut down all work at the site…
    Read More “PA DEP Stops ME2 Drilling in Huntingdon County for < 1 Gal. Spill"

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    PA Court Tells SWPA Town Can’t Restrict MarkWest Compressor Stn

    Cecil Township

    Cecil Township (Washington County, PA) is one of the original seven selfish towns that sued Pennsylvania over the 2012 Act 13 oil and gas law, a law that replaced a mishmash of local zoning ordinances governing oil and gas activity with one uniform, and fair, set of state regulations. Cecil and the other selfish towns won their case on appeal with the PA Supreme Court (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). Although Cecil (and other towns) have been zealous in using their authority to zone out drilling and pipeline activity, sometimes they go too far, as Cecil has done. The PA Commonwealth Court ruled last Friday that Cecil exceeded their authority by “imposing a slew of conditions” (26 conditions!) on a proposed MarkWest Energy compressor station planned for the municipality, a plant first proposed back in 2010…
    Read More “PA Court Tells SWPA Town Can’t Restrict MarkWest Compressor Stn”

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    PA Appeals Court Rules ME2 Pipe NOT Under Local Zoning

    The entire panel of judges sitting on Pennsylvania’s Commonwealth Court, an appeals court in PA, ruled yesterday that zoning regulations in a local municipality–in this case Middletown (Delaware County)–do NOT supersede the state Public Utility Commission when it comes to regulating Sunoco Logistics Partners Mariner East 2 (ME2) NGL pipeline. In May 2017, six anti-pipeline residents living near where the ME2 pipeline will pass asked the Middletown town council to reject the path of the pipeline near their property because it would, supposedly, pass closer than town code allows. The town council told the residents they’re out of luck–the town will not pursue any action to block Mariner East 2. Period. The residents, amped-up, agitated and funded by Big Green groups filed a lawsuit against ME2, to force it to conform with Middletown’s ordinance (see 6 Middletown Antis Sue Sunoco LP to Stop Mariner East 2 Pipe). The lawsuit was filed in the the Delaware County Court of Common Pleas. The judge dismissed the case in June, so the antis, again funded by Big Green groups, appealed the case to the next higher court, Commonwealth Court. An “en banc” panel (meaning all of the judges) heard the case, indicating its high importance. The en banc panel ruled yesterday, against the Middletown residents…
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    Coudersport Council Votes to Oppose Frack Wastewater Facility

    In January MDN told you that a new shale wastewater treatment facility that works in tandem with a local sewage treatment plant is on the way in Coudersport (Potter County), PA (see Shale Wastewater Treatment Plant Planned for Potter County, PA). Epiphany Water Solutions, via a subsidiary company called Epiphany Allegheny, plans to build a centralized water treatment facility in Coudersport to process brine coming from shale wells drilled by JKLM. That has brought out the antis who make all sorts of wild accusations. The main accusation is that brine contains radioactivity and that even processed water will contain some radioactivity and will, over time, affect the stream or river where it is released (in this case the Allegheny River). A Seneca Indian tribe that lives 65 miles downstream opposes the project claiming radioactivity will pollute them. Epiphany has pushed back against false claims of radioactivity in their processed water (see Spirited Defense of Proposed Potter County Shale Wastewater Plant). However, real science and facts have fallen on deaf ears. Coudersport Borough Council, which has NO jurisdiction over the facility nor over the Coudersport Area Municipal Authority’s sewage treatment plant that plans to dispose of the processed wastewater, voted last week to go on record opposing Epiphany’s plan. Epiphany says the vote is meaningless and the plant will get built, with or without Coudersport Council’s so-called approval…
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    W Pike Run Antis Want 1000′ Setback to Zone Out EQT Drilling

    A debate is playing out in West Pike Run Township in Washington County, PA (near Pittsburgh) that we find interesting. A quick PA history lesson: Back in 2012 PA passed the Act 13 law to update oil and gas regulations to account for shale drilling. One of the updates was a uniform set of zoning requirements to protect residents and the environment. Unfortunately, seven selfish townships sued and eventually won (at the PA Supreme Court) challenging those regulations. So PA towns won the right to impose restrictions on drilling activities. In West Pike Run, the debate is over “setbacks”–how far does a well have to be from nearby structures, like homes and barns and businesses. State law imposes a minimum of 500 feet from the wellhead to an “occupied” structure–and 300 feet from the well to a body of water. In West Pike Run, antis want to up that number to 1,000 feet, which would effectively prevent any more drilling by EQT, the primary driller in the township. The town recently held a hearing on the proposed 1,000 foot setback, a hearing which has been continued to a future meeting on April 16…
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