Pennsylvania

Energy Services | Industrywide Issues | NGLs | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Sunoco LP Building 2 Pipelines for Mariner East 2 Project
February 23, 2017February 23, 2017

We’ve known for the past couple of years that Sunoco Logistics Partners, owner and builder of the Mariner pipeline projects, wanted to build not one, but two Mariner East 2 pipelines–ME2 and ME2X. We wrote about their hope to build two pipelines back in June 2015 (see Mariner East 2 Giving Birth to Twin Pipelines). At the time, Sunoco said the plan to add two more Mariner 2s was still tentative–that they would need to conduct an open season to be sure they can sell contracts for the second pipeline before they would fully commit. True to their word, Sunoco ran an open season for the second Mariner East 2 pipe in September 2015 (see Sunoco LP Launches Open Season for Second Mariner East 2 Pipeline). Since that time, we’ve not head much about the second Mariner East 2 pipeline (2X). Last week the PA Dept. of Environmental Protection (DEP) issued the final permits needed to begin construction on the ME2 project (see Finally! PA DEP Issues Final Permits for Mariner East 2 Pipeline). The new news is that on a conference call yesterday to discuss the latest earnings report, Sunoco’s top brass said that yes, they ARE building TWO pipes for Mariner East 2–and they’re doing it right now, from the beginning of construction…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Gov Wolf’s 6.5% Severance Tax Proposal a Hot, Stinking Mess
February 22, 2017February 22, 2017

As politicians and analysts begin to dig into one of the centerpieces of Pennsylvania Gov. Tom Wolf’s proposed 2017 budget–a 6.5% severance tax on Marcellus/Utica drilling–new details begin to emerge. Like this: Most lease contracts contain a provision that says any taxes paid, including severance taxes, are a post-production expense and deducted from landowner royalties. So if Wolf’s severance tax were to pass, the people paying it will be landowners. That’s $200 million or so coming out of farmers’ pockets. Wolf & co. knew that situation would not earn them any votes, so they include a provision in the budget disallowing severance taxes to be deducted from royalties. Overturning existing contracts is illegal and sure to be challenged in court, but if somehow that provision gets upheld and the tax passes, it’s easy to predict Marcellus drilling will mostly cease. Wolf’s proposed 6.5% severance tax would put the state at, or near the top of, all states in severance tax rates. Some of the biggest drillers in the state have recently leased acreage in other plays and have no problem with shutting down new drilling in the Marcellus, moving on to other plays where the economics make more sense. Let’s assume the tax passes and drillers sue to remove the clause about severance tax deductions not being allowed, and win. Landowners then fund the severance tax out of their pockets (the drillers are the “bad guys” and Wolf says “don’t look at me”). Now let’s assume the tax passes and drillers sue to remove the clause about severance tax deductions and lose. Drillers simply walk away from PA. Either way, the Wolf severance tax proposal is a hot, stinking mess…
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Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

One Year Later PA Pipeline Task Force Report Gathers Dust on Shelf
February 22, 2017February 22, 2017

This is one of those stories that illustrates so beautifully how liberals always operate: all talk, no action. Form a committee, say lots of things, bluster, argue, look like you’re addressing a really important issue–and then do nothing. In this case that’s a good thing! We’re talking about the pomp and circumstance surrounding then newly-minted Pennsylvania Gov. Tom Wolf and his so-called Pipeline Infrastructure Task Force. In May 2015, Wolf and his underling Dept. of Environmental Protection (DEP) Secretary John Quigley (who has since been fired) created a “Task Force on Pipeline Infrastructure Development” (see Disaster on the Horizon: PA Gov Wolf Creates Pipeline Task Force). The purpose of the group was “to identify best practices for pipeline siting, permitting and safety.” That is, to hamstring the process of building new gathering pipelines to shale wells. We won’t recount all of the twists and turns–of how the Task Force was packed with government employees beholden to Wolf, etc. Along the way antis tried to protest and derail the meetings held by the Task Force (see PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”). In February 2016, Quigley released the Task Force’s Final Report, all 658 pages of it with 184 recommendations (see PA Pipeline Task Force Report: 658 Pages, 184 “Recommendations”). Around the same time, MDN noted “Looks like we worried for nothing,” and that a Task Force member predicted nothing would come from the recommendations (see PA Pipeline Task Force Wraps Up – Did We Worry for Nothing?). It’s now a year later–and the libs at StateImpact are calling attention to the fact that precisely nothing has happened–the report sits on a shelf gathering dust…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Pike County | Regulation | Wayne County

Antis Nervous that DRBC is Making Moves to Lift PA Drilling Ban
February 21, 2017February 21, 2017

We now have a bit more of the back story and reason why anti-frackers turned out in large numbers to attend last Thursday’s meeting of the Delaware Basin River Commission (see Anti-Fracking Protesters Turn Out in Force at DRBC Meeting). As we noted, antis carpooled protesters in from New York City and other locations. On the agenda were two items that had them irked: (1) a short, 8-mile pipeline that will cross through a small sliver of DRBC-controlled territory, and (2) adoption of a two-year water resource plan “that instructs staff to carry out the commission’s natural gas regulations.” The antis are concerned the water plan will restart the discussion on regulations to allow fracking. Overactive imaginations? Maybe not. An AP story brings new details to light we had not previously read. THE Delaware Riverkeeper and others have “learned” that “recently” the PA Dept. of Environmental Protection held a meeting with DRBC staffers to discuss “draft regulations for drilling in the Delaware watershed.” THAT’S what had the antis all hot-and-bothered and showing up in large numbers. We’re now going on six years that the DRBC has blocked drilling by shelving regulations they had drafted to allow drilling in the Delaware River Basin–at least in PA. Last year a landowner from Wayne County, PA sued the DRBC, asking the courts to rule the DRBC has no right to block drilling (see Wayne County, PA Landowner Sues DRBC Over Fracking Ban). Here’s the article that sheds new light on the nervous Nellies of the Delaware…
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Delaware County (PA) | Energy Services | Huntingdon County (PA) | Industrywide Issues | Pennsylvania | Pipelines | Sunoco Logistics | Washington County

Mariner East 2 Pipeline Constructions Begins Across PA
February 21, 2017February 21, 2017

Pop the cork on the champagne bottle! Sunoco Logistics Partners has begun construction of the Mariner East 2–a $2.5 billion, 306-mile natural gas liquids (NGL) pipeline that will run from eastern Ohio through the state of Pennsylvania to the Marcus Hook refinery near Philadelphia. Last week the Pennsylvania Dept. of Environmental Protection (DEP) gave its final approval for the project (see Finally! PA DEP Issues Final Permits for Mariner East 2 Pipeline). It didn’t take long for a coordinated attack from the the enviro left–THE Delaware Riverkeeper, the Philadelphia-based Clean Air Council and the Mountain Watershed Association (see Maya & Friends Sue (Once Again) to Stop Mariner East 2 Pipe). However, their efforts have (so far) failed, as we observed yesterday (see Last Minute Attacks Fail to Stop Mariner East 2 Pipeline Progress). Although you can’t discount a liberal judge throwing up roadblocks, the very good news is that construction has begun across PA–in Delaware County in the east, Huntingdon County in central PA, and Washington County in the west…
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Earthquakes | Energy Companies | Hilcorp Energy | Industrywide Issues | Lawrence County | Pennsylvania | Regulation

DEP Says Fracking at PA Utica Wells “Likely” Caused Earthquakes
February 20, 2017February 20, 2017

On Friday, the Pennsylvania Dept. of Environmental Protection held a hastily-called webinar to discuss findings that, frankly, aren’t all that newsworthy or surprising. After 10 months of study, the DEP has concluded that zipper fracking activities by Hilcorp in Lawrence County, PA “likely” caused a series of earthquakes in April 2016 so minor that nobody could feel them. And the DEP concluded this after 10 months of study, when a week before the DEP itself issued the permits to drill in Lawrence County, Hilcorp drilling was shut down about seven miles away, across the border in Mahoning County, Ohio, for potentially causing low-level earthquakes there (see Hilcorp Awarded Permits to Drill 7 New Wells Near Earthquake Zone). It wasn’t exactly rocket science to connect the dots and speculate that fracking over top an active fault had caused the low-level earthquakes on the PA side of the border, as it had on the OH side of the border. As we’ve stressed multiple times here on MDN, earthquakes related to shale are almost always connected with injection wells–when large amounts of liquid are injected near a fault. Earthquakes from fracking activities are rare–like under 10 times, ever, out of millions of fracked wells. Statistically zero. Still, let’s not let a good “crisis” go to waste. The DEP, in releasing a report about the incident (full copy below), said they will work up new regulations to detect and prevent such statistically zero occurrences from happening again…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Washington County

Dealing with Pipeline Cos. – Lessons re Rover’s Eminent Domain
February 20, 2017February 20, 2017

Two weeks ago MDN ran a story about the fact that time has run out on recalcitrant landowners in Ohio who have refused to negotiate with Rover Pipeline–and are now being sued using eminent domain (see Time’s Up – Rover Pipe Uses Eminent Domain on Holdout OH Landowners). Because of our nutty (or should we say batty) environmental regulations that require pipeline companies to clear trees only from Oct. 1 to Mar. 31 due to U.S. Fish and Wildlife regulations against disturbing nesting bats, and because the Federal Energy Regulatory Commission (FERC) was slow off the mark in approving the Rover project, the company must now clear trees in double time. There is no time left to negotiate–even though landowners have had two years to do so. As a last resort, Rover is using eminent domain procedures in court to (yes) force their way onto property and get it ready for construction this summer. Perhaps a little-known fact: Rover also runs through portions of Washington County, PA. The Pittsburgh Post-Gazette found a couple of landowners with sad stories about the big bully Rover using eminent domain against them. Look, we’re not unsympathetic. If we owned a farm (as one of the interviewees does) and they want to run the pipeline through a prized hay field, we’d likely be opposed too. However, the story highlights the fact that others in similar circumstances worked hard early on with Rover to reroute the pipeline through their property–and were successful. The moral of the story is this: the pipeline WILL come, your best chance of influencing WHERE it comes happens EARLY in the process…
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Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

PA Rep. Garth Everett Reintroduces Minimum Royalty Bill, 3rd Time
February 20, 2017February 20, 2017

Third time’s the charm? The Pennsylvania General Assembly convenes for two-year sessions. Almost six years ago during the 2013-2014 session of the General Assembly, PA Rep. Garth Everett introduced “minimum royalty” legislation that would guarantee PA landowners would get minimum royalty payments of 12.5%–regardless of any kind of post-production expenses. It was called House Bill (HB) 1684 and it failed to even come to the floor for a vote (see PA Royalty Bill 1684 Off the Agenda, Likely for Rest of 2014). Everett re-introduced it during the 2015-2016 session, renamed HB 1391. Once again, near the end of the term, it failed to get a full vote (see PA Royalty Bill Dead for Another Year – Supporters Vow to Fight On). Everett is not giving up. Last Friday he re-introduced the bill for the third time, this time called HB 557. Does it stand a chance?…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Last Minute Attacks Fail to Stop Mariner East 2 Pipeline Progress
February 20, 2017February 20, 2017

We appear to be in the final death throes of radical environmental efforts to block the construction of Mariner East 2–a $2.5 billion, 306-mile natural gas liquids (NGL) pipeline that will run from eastern Ohio through the state of Pennsylvania to the Marcus Hook refinery near Philadelphia. Last week the Pennsylvania Dept. of Environmental Protection (DEP) gave its final approval for the project (see Finally! PA DEP Issues Final Permits for Mariner East 2 Pipeline). It didn’t take long for a coordinated attack from the the enviro left–THE Delaware Riverkeeper, the Philadelphia-based Clean Air Council and the Mountain Watershed Association (see Maya & Friends Sue (Once Again) to Stop Mariner East 2 Pipe). On Thursday they asked the PA Environmental Hearing Board to block construction until they can figure out a new way to try and stop the project, claiming “irreparable harm” will happen if construction proceeds. On Friday a judge refused their request. They asked the judge to reconsider a few hours later, after they had manufactured new “evidence” for the judge. Meanwhile, supervisors in West Goshen (a Philly suburb) filed a complaint against Mariner East 1 and 2 with the PA Public Utility Commission, in a apparent effort to stop any new construction there. Try as they might to stop it, this pipeline is about to get built…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lancaster County | Pennsylvania | Pipelines | Williams

Small Group Begins Sleepover to Block Atlantic Sunrise Pipeline
February 20, 2017February 20, 2017

As we reported last week, a small group of anti-fossil fuelers were planning on grabbing their sleeping bags and heading to Amish country for a sleepover at the Magic Tree House (see Antis Plan a Weekend Campout to Protest Atlantic Sunrise Pipeline). Beginning Friday night, a group of about 50 launched their “encampment,” calling it The Stand. Supposedly this is a “peaceful” protest to prevent Williams from digging a trench across the property where the flimsy tree house shack is built. Organizers claim they don’t want any violence, like that in North Dakota (similar “peaceful” protest). They also claim someone would be present at the location from now until they are forcibly removed by law enforcement, in an illegal attempt to block construction of the pipeline. It’s a good thing the ~2.4 million miles of underground pipelines in the U.S. got in the ground before leftist enviro-nutters decided to make an issue out of it…
Read More “Small Group Begins Sleepover to Block Atlantic Sunrise Pipeline”
Columbia County | Energy Services | Industrywide Issues | Lancaster County | Lebanon County | Litigation | Northumberland County | Pennsylvania | Pipelines | Schuylkill County | Transco | Williams

Eminent Domain Begins for Landowners in Path of Atlantic Sunrise
February 17, 2017February 17, 2017

You beg and plead and beg and plead. You come with your hat in your hand. You try to explain that no, the pipeline isn’t going to avoid your property, Mr. or Ms. Landowner. But some landowners refuse to negotiate. So the last resort option must be exercised. That’s the situation with Williams’ Atlantic Sunrise Pipeline in several counties in Pennsylvania–including Lancaster, Lebanon, Columbia, Northumberland and Schuylkill. The Federal Energy Regulatory Commission (FERC) issued a final certificate for Atlantic Sunrise, allowing construction to begin, just two weeks ago today (see Atlantic Sunrise Pipeline Gets Final Approval by FERC). Although the project is still waiting on an approvals from the Army Corps of Engineers, the U.S. Fish and Wildlife Service and the State Historic Preservation Office, Williams expects to begin construction soon. Very soon. Landowners who either oppose the pipeline because they hate fossil fuels, or because they thought they might get a higher offer, or because they thought they could just make it go away by singing, “La la la la, I don’t hear you!”–are now out of time. Atlantic Sunrise is taking recalcitrant landowners to court and will soon have a court order allowing them to proceed with construction…
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Earthquakes | Energy Companies | Hilcorp Energy | Industrywide Issues | Lawrence County | Pennsylvania

DEP Concludes Hilcorp Drilling Caused Minor Earthquakes in W PA
February 17, 2017February 17, 2017

In April of last year (2016), MDN brought you the story of earthquakes so minor nobody could feel them in Lawrence County, PA were likely caused by fracking (see PA DEP Investigates Hilcorp Fracking in Earthquake Nobody Felt). However, seismic monitoring equipment could detect them. We have to stress that earthquakes caused by fracking is rare–like this is one of five instances we’re aware of. Far more common are earthquakes caused by deep injection wells. But fracking itself? Statistically zero percent of the time earthquakes are caused by fracking. So when it happens, it’s noteworthy. The conditions must be just right–fracking immediately overtop a fault in the rock layers. The driller in this case, Hilcorp, was ordered to stop all fracking and drilling activity at the well site, which they did. The Pennsylvania Dept. of Environmental Protection (DEP) says they have concluded their investigation and will today (on a webinar) disclose their results. Here’s the kicker: the DEP could have avoided this. Two years earlier the same driller, Hilcorp, caused minor earthquakes seven miles away–just across the border in Ohio. At that time Ohio officials stopped Hilcorp from drilling in that region. A week after the Ohio earthquakes that stopped Hilcorp, the PA DEP issued permits to drill in the same area (see Hilcorp Awarded Permits to Drill 7 New Wells Near Earthquake Zone). MDN was the only source to make that observation. We waved our little red flag and said maybe it’s not such a wise decision to grant those permits. Someone at the DEP needs to read MDN! At any rate, below is the news, as much of it as we currently know. By the time you read this, the DEP earthquake webinar will be over, but we’ve included the webinar notice as (so far) it’s the only information we have to indicate the DEP now concludes Hilcorp drilling was at fault for the earthquakes in Lawrence County…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Pro-Severance Tax Unions Give 600% More than O&G to PA Campaigns
February 17, 2017February 17, 2017

Rep. Greg Vitali

Pennsylvania State Rep. Greg Vitali, from the Philadelphia area, is an environmental extremist. In the past, he’s floated plans to force Pennsylvanians to use less natural gas (see PA Rep. Vitali Wants to Force Residents to Use LESS Natgas). Nobody, except some media outlets, pay any attention to him. He’s so far left even his own party has disowned him, removing a committee assignment from him and reassigning personnel away from his office (see Radical Democrat PA House Member Tossed to Curb by his Own Party). But Vitali needs to keep his name in the news–for reelection purposes. So a few weeks ago he popped back up again with a faux report that says “the system is rigged” in Harrisburg with respect to failing to pass a severance tax. That the reason a severance tax is not enacted is, according to Vitali, because of the money spent by Big Oil & Gas on lobbying and in campaign contributions. Of course mainstream media covers this nonsense without ever bothering to verify the claims. Here’s the facts Vitali won’t tell you in his report. While Marcellus industry PACs did spend $1.1 million last year in campaign contributions, government union PACs spent a whopping $7.8 million in campaign contributions! Of that, some $2.7 million was spent by Big Education unions–the same unions that contributed money to Vitali’s campaign. Huh. That fact got conveniently left out of all the reporting about the “unfair” advantage the Marcellus industry has. Let’s see, unions (in favor of the severance tax) are spending $7.8 million around, while shale (against the jobs-killing tax) is spending $1.1 million. Unions are spending 600% more than the shale industry–yet the shale industry has an “unfair” advantage. Tell us again how that works, Rep. Vitali…
Read More “Pro-Severance Tax Unions Give 600% More than O&G to PA Campaigns”
Allegheny County | Armstrong County | Atlas Energy | Beaver County | BLX-Redmill Gas | Butler County | Chesapeake Energy | Chevron | Clarion County | CONSOL Energy | Energy Companies | Energy Corporation of America | EQT Corp | Fayette County | Greene County (PA) | Hilcorp Energy | Indiana County | Lawrence County | MDS Energy | PennEnergy Resources | Pennsylvania | Range Resources Corp | Rex Energy | Rice Energy | Snyder Brothers | Southwestern Energy | Washington County | Westmoreland County | WPX Energy | XTO

Top 20 Marcellus Drillers in Southwest Pennsylvania
February 16, 2017February 16, 2017

The sharp folks over at the Pittsburgh Business Times have been looking through data from the Pennsylvania Department of Environmental Protection (DEP) and have compiled a list of 20 drillers who have at least a dozen shale wells in the southwest PA region. And they ranked them from lowest to highest. We’ve grabbed the list below. The interesting thing for MDN is that there is one name in the list not familiar to us, and we’ve been watching this space since 2009. Always fun to learn something new. Here’s the list of southwest PA’s “Top 20” Marcellus drillers…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Pike County | Pipelines | Regulation | Wayne County

Anti-Fracking Protesters Turn Out in Force at DRBC Meeting
February 16, 2017February 16, 2017

As we warned you earlier this week, a large contingent of anti-fossil fuel ~~wackos~~ protesters planned to crash a meeting of the Delaware River Basin Commission yesterday (see Josh Fox & Antis Plan to Disrupt DRBC Meeting This Wednesday). Their concern is that the DRBC may be reconsidering its years-long ban on fracking in the Delaware River Basin–a ban which illegally denies landowners in Pike and Wayne counties (PA) from profiting from the Marcellus Shale beneath their land. True to form, the protesters bused people to the meeting from places like New York City–so they could pack the room. On the docket were two items of concern for antis: (1) a short, 8-mile pipeline that will cross through a small sliver of DRBC-controlled territory, and (2) adoption of a two-year water resource plan “that instructs staff to carry out the commission’s natural gas regulations.” The antis are concerned the water plan will restart the discussion on regulations to allow fracking. Although DRBC Executive Director Steve Tambini told the motley crew that the Commission was there to listen only, NOT to answer questions, Maya van Rossum (THE Delaware Riverkeeper) demanded Tambini answer HER questions anyway…
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Chesapeake Energy | Energy Companies | Ohio | Pennsylvania | Statewide OH | Statewide PA

Chesapeake Energy 2017: Less New Drilling in M-U, More DUC Work
February 15, 2017February 15, 2017

Yesterday Chesapeake Energy provided a glimpse into their plans for 2017. In Chessy’s “gudiance” for 2017, we learn that the company plans to up the number of active drilling rigs (nationwide) from 10 to 17. We also learn that last year Chessy spent ~$1.75 billion to drill 213 new wells, and place 428 wells into production–the difference between the two numbers being they finished up already-drilled wells, or DUCs. This year? They will spend ~$2.5 billion to drill ~400 new wells–essentially doubling the number of wells drilled–and place ~450 into production. The only problem (from our perspective) is that most of the drilling will happen in places other than the Marcellus/Utica. Of the new wells they plan to drill, only 10-15 new wells will get drilled in the Marcellus, and 40-50 new wells in the Utica. Chessy says they will complete and turn into production 50-60 Marcellus wells in 2017, and 70-80 Utica wells. Translation: Not a lot of new drilling in our neighborhood, with more of an emphasis on completing already-drilled wells…
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