Pennsylvania

Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Dem Media Spins New PA Severance Tax Proposal as “Conservative”
January 11, 2016January 11, 2016

At least one Republican, Pennsylvania State Rep. Jim Christiana (from Beaver County, PA), is pushing a new severance tax plan he considers kinder and gentler than that proposed by PA Gov. Tom Wolf. Christiana has proposed a tax with a rate of “just” 3%, instead of Wolf’s demand of 5% (see Some PA Republicans Beginning to Cave on Severance Tax). However, Christiana’s tax plan would, in time, increase to 5%–just like Wolf’s. Of course all of these numbers are hocus pocus horse manure. The actual percentage goes much higher when you factor in all of the extras. What’s interesting to us is how Democrat-controlled media organizations like the Scranton Times-Tribune (and its subsidiary the Wilkes-Barre Citizens’ Voice) are attempting to spin this news. They published an article referring to Christiana as a “conservative” trying to imply conservatives are now on board with a severance tax on drilling in the Keystone State. Let us assure you, such is not the case. It is another sterling example of media bias and spin…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

Antis Wrong: No Link Between Fracking & Smallmouth Bass Decline
January 8, 2016January 8, 2016

Back in 2012 Congressman Camille “Bud” George, Democrat from Clearfield County, PA, opened his big mouth and tried to blame fracking for a problem with smallmouth bass in the Susquehanna River (see PA Dems Blame Marcellus Drilling for Smallmouth Bass Problem). Last May, the nutters from a group called “Occupy the Constitution Pipeline Route” repeated the same accusation, showing a picture of a diseased smallmouth with a huge tumor (see below). Thing is, none of it is true. Earlier this week the head of PA’s Dept. of Environmental Protection, John Quigley, and the head of PA’s Fish and Boat Commission, John Arway, both said the smallmouth bacterial disease issue is unrelated to fracking…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Issues “Final” New Drilling Regulations; Industry Pushback
January 7, 2016January 7, 2016

John Quigley, the Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), yesterday released a finalized version of proposed new oil and gas drilling regulations, otherwise known as Chapters 78 and 78a. A copy was sent to the Environmental Quality Board (EQB) for their required review which is planned for Feb. 3. The entire set of revised/new regulations (copy below) will then get published in the Pennsylvania Register and become final. Both the Marcellus Shale Coalition (MSC), representing unconventional drillers, and the Pennsylvania Independent Oil & Gas Association (PIOGA), representing conventional drillers, have come out against the new regulations. The MSC says the new regulations will cost the industry $2 billion annually without a corresponding benefit for the environment or safety, and PIOGA minces no words when it says the four-year revision process “has been flawed to the point of being fraudulent”…
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Allegheny County | CNX Resources | CONSOL Energy | Energy Companies | Pennsylvania | Utica Shale

CONSOL Pursues Drilling Test Utica Well at Pittsburgh Airport
January 7, 2016January 7, 2016

Sometimes when we’re wrong, we’re still right! Last June MDN reported that CONSOL Energy, currently in the process of drilling a series of Marcellus and Upper Devonian shale wells at the Pittsburgh International Airport, was mulling over the possibility of drilling a single test Utica well at the airport (see CONSOL Energy May Add More Utica Wells to Pitt. Airport Project). Our error was in reporting CONSOL had already received a permit to drill a Utica well–they had not. However, CONSOL has just received permission from local town officials to swap out one of the planned Marcellus wells with a Utica well…
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Energy Services | Industrywide Issues | Kinder Morgan | Pennsylvania | Regulation | Statewide PA

PA DEP Fines Kinder Morgan $745K for Spills in Philly
January 6, 2016January 7, 2016

EDITOR’S NOTE: It’s interesting what a negative story can produce. The DEP posted a back-dated press release on their site after MDN released this story pointing out they had not informed anyone but StateImpact. We can assure you the release was not there until we pointed out its absence. You can read the back-dated press release here.

Is the Democrat-controlled PBS outlet StateImpact Pennsylvania now the official stenographer for PennFuture Secretary of the PA Dept. of Environmental Protection (DEP), John Quigley? That’s the thought we had when reading a StateImpact story that the DEP has fined Kinder Morgan $745,000 for leaks at two Philadelphia-area storage facilities owned by Kinder. In every case we can recall, going back more than six years of writing the MDN blog site, whenever the DEP fines a driller or midstream company (Kinder is the latter), the DEP issues an official public press release on their own website. Not this time. Apparently the only “news” outlet to receive notification of the fine has been StateImpact because we’ve searched high and low and nobody else is (so far) carrying the news. Why did the DEP not post the news on their own website as they always have in the past? Why did only certain (perhaps just one) news outlets get this particular press release? Hence our observation that perhaps StateImpact is the new official stenographer for the PennFuture DEP. Here’s what the Dems at StateImpact say about the Kinder fine…
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Beaver County | Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Some PA Republicans Beginning to Cave on Severance Tax
January 6, 2016January 6, 2016

Kudos to Pennsylvania Republicans for hanging tough and pushing back against the bullying of PA Gov. Tom Wolf with respect to a Marcellus-killing severance tax. However, the battle for a severance tax may have taken its toll. At least one, perhaps more, Republicans are going squishy now that the fight is over for the 2015/2016 budget. State Rep. Jim Christiana, a Republican (RINO) from Beaver County (where Shell may build an ethane cracker plant) says he will propose new legislation that creates a 3% severance tax. His tax plan includes abolishing the existing impact fee, which is the equivalent of a severance tax, and using some of the 3% tax revenue to replace the impact fee. Christiana says, “many Republicans support the concept of a severance tax, but simply reject the governor’s punitive approach.” He also says Republicans “have lost the public relations battle in explaining that the impact fee is a severance tax.” In other words Christiana has lost his nerve. Christiana is a major disappointment and, possibly, an harbinger that PA Republicans may cave and pass a severance tax after successfully fending one off this year…
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Economic Impact | Greene County (PA) | Industrywide Issues | Pennsylvania | Washington County

SWPA Local Leaders Forecast 2016, What’s Ahead for Marcellus?
January 6, 2016January 6, 2016

We’ve brought you a number of opinions and perspectives on what lies ahead for 2016 with respect to our beloved shale energy industry. But it’s one thing for investors and politicians and commentators to pontificate. What about leaders in local communities, like the leaders of one of the most-drilled places in the Marcellus: southwestern Pennsylvania? What do local economic leaders see coming along in 2016? We think getting the opinion of some locals provides much-needed balance…
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Berks County | Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Sunoco Logistics

How to Successfully Negotiate a Pipeline Easement & How Not To
January 5, 2016January 5, 2016

This is the story of two landowners in Berks County, PA whose property Sunoco Logistics needs to cross/use for the Mariner 2 set of pipelines. One landowner, on whose property Sunoco not only wants to install the pipeline but also wants to install a big valve in his front yard, successfully negotiated with Sunoco and got his price. The other landowner, who owns a dog park where Sunoco wants to put a pipeline, hasn’t negotiated and is trying to stop the pipeline from coming through his property. Guess which landowner will be the biggest loser? Here’s the story of how to craft a pipeline deal, and how not to, if you are a landowner faced with the threat of eminent domain…
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Electrical Generation | Energy Services | FirstEnergy | Greene County (PA) | Industrywide Issues | Pennsylvania

Greene County, PA Electric Plant May Reopen Using Marcellus Gas
January 5, 2016January 5, 2016

Ohio-based utility FirstEnergy Corp. shuttered a huge coal-powered electric plant in Greene County, PA in 2013–a move that surprised many. FirstEnergy is making plans to reopen the 1,700 megawatt plant–but this time it will not only burn coal, but yummy, cheap, clean-burning Marcellus Shale gas too…
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Industrywide Issues | Pennsylvania | Public Opinion | Statewide PA | Taxation

57% of Pennsylvania’s CPAs Favor a Marcellus Tax – Surprised?
January 5, 2016January 5, 2016

Each year the Pennsylvania Institute of Certified Public Accountants (PICPA) conducts a poll of its membership. Last year PA accounts answered the question “How should PA close the state budget gap?” by indicating the state should privatize liquor sales – 69%, by instituting a Marcellus Shale severance tax – 67%, and by legalizing pot smoking – 27% (see PA Accountants Love Marcellus Severance Tax (and Smoking Pot)). This year’s PICPA poll results have just been published. Perhaps it was our criticism and poking fun at the absurdity of the question last year–but this year the question changed. This is the question they asked this year of PA accountants: “Pennsylvania faces a structural budget deficit estimated at nearly $2 billion. Which of the following should the state use to close the deficit?” The #1 preferred solution for PA’s accountants? A Marcellus Shale severance tax–57% favor it. As we said last year, does anyone else find it suspicious that the people who would have to manage and file reams of tax forms on a severance tax (generating lots of billable hours) are in favor of such a tax? Can anyone say, conflict of interest? Why do we care a wit about what CPAs think about taxes and budget deficits? They’re the ones who helped create it!…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

PA AG’s Lawsuit Derails Demchak/Chesapeake Royalty Settlement
January 4, 2016January 4, 2016

In March 2015 MDN reported on the “Demchak” royalty case in which a group of Pennsylvania landowners had agreed to a settlement with Chesapeake over Chessy’s alleged shorting of royalty payments (see Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners). As we reported at the time, “several thousand” landowners sharing two-thirds of the $11 million settlement (the other one-third going to the lawyers) didn’t seem all that great a deal to us. But we’re not PA landowners with a dog in this fight. Toward the end of last year the issue got heated again as landowners (many landowners) were faced with a decision of whether or not to opt out of the settlement (see Packed Meeting in Towanda Discusses Chesapeake Royalty Settlement). Then along came PA Attorney General Kathleen Kane, herself under indictment for felony crimes, with her own lawsuit against Chesapeake over the royalty issue (see PA Atty General Sues Chesapeake Energy, Williams for Royalty Fraud). It seems Kane’s lawsuit has now put the brakes on the Demchak settlement that was supposed to have taken place in early February. That plan is now delayed…
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Energy Companies | Pennsylvania | Tioga County (PA) | Travis Peak Resources

The 411 on New Driller Firing Up Rig in Tioga County, PA
December 30, 2015December 30, 2015

Looks like there’s a new driller in the Marcellus/Utica. MDN received a tip from an industry insider to let us know that Travis Peak Resources, an Austin, TX-based exploration and production company (E&P, or “driller”), is firing up a rig to begin drilling in Tioga County, PA. Who’s Travis Peak? And are they targeting the Marcellus, or the Utica? We don’t have 100% definitive answers for you, but we do have some informed speculation…
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Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Snyder Brothers | Statewide PA | Taxation

Impact “Fee” or Impact “Tax”? It Matters in this (Court) Case
December 30, 2015December 30, 2015

Is the money collected from drillers in Pennsylvania for wells a fee, or a tax? Under the Act 13 law passed in 2012, it’s called an impact fee. We’ve long made the case that it’s part fee, part tax (see our story from 2012: PA’s New Tax on Drilling (er Sorry, Impact Fee)). Our definition, which we think makes eminent sense, is that a fee is money collected to reimburse the government for a service used. You drill a well in a community, you run big trucks over rural roads–those roads get damaged and it takes money to repair them. Or if there’s an accident because of the increase in traffic and fire/police are called out more frequently–there’s a cost associated. Local towns meeting to review and debate requests related to new wells? Takes precious time, and money. The impact fee, as originally intended, would compensate local municipalities for out-of-pocket expenses they incur when drilling comes to town. But then greedy politicians who like money to flow through their stick fingers got involved and in order to “sell” the impact fee in Harrisburg, compromises were made. In the end, 60% of the money collected from the impact “fee” stays local–to reimburse towns and counties for out-of-pocket expenses. The other 40% goes into the Harrisburg black hole and disappears into the fingers of local and state politicians who don’t incur any expense from drilling. So we call that 40% portion a tax–an obscene one at that. Why does it matter whether it’s considered a tax or a fee? Because of a Commonwealth Court case in which a driller maintains it’s a tax and the company doesn’t owe it if it’s considered a tax…
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Energy Companies | EQT Corp | Industrywide Issues | Litigation | Pennsylvania | Regulation | Tioga County (PA)

PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case
December 30, 2015December 30, 2015

Over a year ago the Pennsylvania Dept. of Environmental Protection (DEP) fined PA driller EQT $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT is not saying there wasn’t a problem with leaks at the site, they are saying the way the DEP is calculating the fine is unreasonable and arbitrary. In fact, EQT says the DEP levied the fine and took EQT to court because a few weeks prior EQT has sued the DEP. Seems to be a tit for tat thing going on. There is, more than a year later, a development in the case. EQT appealed the fine and the case to PA Supreme Court and the high court has just handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine. The Supreme Court has sent the case back to a lower court for follow up work…
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Industrywide Issues | Lackawanna County | Pennsylvania | Statewide PA | Taxation

Scranton Newspaper Supports Stealing Gas Money for Philly
December 30, 2015December 30, 2015

It shouldn’t surprise anyone that the Democrat-controlled Scranton Times-Tribune doesn’t like the fair impact fee collected on Marcellus drilling in the state and instead prefers an unfair severance tax. It certainly doesn’t surprise us that they they think in such a twisted way. After all, 60% of the impact fee stays local and out of the hands of Harrisburg politicians. That’s just not “right” in Democrat-land. The other 40% that does go through the sticky fingers of Harrisburg politicians isn’t “enough” for good Lib Dems like those who control the Times-Tribune. So in their latest editorial, the Times-Tribune fans the flame of PA Democrat Auditor General Eugene DePasquale’s investigation into the industry in tracking down the “missing” $30 million of impact fee money (see PA Auditor General to Investigate “Lost” $30M Marcellus Impact Fee). True to Lib Dem form, the Times-Tribune wants DePasquale to go far beyond a simple investigation. They want DePasquale to somehow override the will of the legislature, and the residents of Pennsylvania, and extra-Constitutionally change the tax structure–throwing out the impact fee and instead slapping a nose bleed severance tax on the industry. That’s their preferred outcome. It will produce more money (so they reason) for them to play with and hand out to welfare slugs in “struggling urban areas” who keep voting for them…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA PUC Commissioner’s Full-Throated Support of Marcellus Shale
December 29, 2015December 29, 2015

Pamela A. Witmer is one of five Commissioners of the Pennsylvania Public Utility Service (PUC). She is, in our opinion, one of the stars of the PUC–having been appointed by then-Gov. Tom Corbett in 2011. Pam is also a strong supporter of the Marcellus Shale industry and the miracle of fracking, as she indicates in a column she wrote for the Pittsburgh Tribune-Review. Pam writes about the “numerous benefits” of the Marcellus…
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