Pennsylvania

Alpha Natural Resources | Energy Companies | Greene County (PA) | Pennsylvania

Alpha Natural Res. Expands in Marcellus, Drilling Begins in 30d
July 2, 2015July 2, 2015

Coal company Alpha Natural Resources is expanding their operation in the Marcellus Shale natural gas business. Yesterday Alpha announced its wholly-owned subsidiary, Pennsylvania Services Corporation (PSC), has purchased back a 50% interest in its natural gas exploration and production joint venture, Pennsylvania Land Resources Holding Company (PLR) from joint venture partner EDF Trading Resources (EDFTR) for $126 million. Alpha’s PSC subsidiary now becomes the the sole owner and operator of the PLR joint venture (which is no longer joint). Lots of acronyms of subsidiaries owning subsidiaries! Bottom line: Alpha can now control and expand a highly economic natural gas development program with 25,000+ net acres AND associated infrastructure–in the Marcellus Shale. Alpha’s EVP Brian Sullivan says they plan to begin drilling in their Marcellus acreage position (in Greene County, PA) in the next 30 days…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA | Susquehanna County

PA Court Decision: Leases Don’t Go on Pause When Landowners Sue
July 2, 2015July 2, 2015

Put on your hip boots, we have some deep waters to wade through with respect to an important court decision in Pennsylvania that affects landowners and drillers. Last October MDN told you about an important lawsuit that went to the Pennsylvania Supreme Court, a case called Harrison v Cabot Oil & Gas (see Important Landowner/Driller Case Heads to PA Supreme Court). In brief, Susquehanna County, PA landowners Wayne and Mary Harrison signed a lease with Cabot Oil & Gas for $100 per acre and 12.5% royalties in 2010. Learning that others in their area got better deals and feeling they were not only hoodwinked but pressured into signing, they sued Cabot halfway through the lease (before any drilling was done) to dissolve the lease. Ultimately that lawsuit was decided in favor of Cabot. But by the time the lawsuit was done and dusted, the original 5-year term had expired without Cabot drilling. The Harrisons claimed since Cabot hadn’t drilled, the lease is now over with. Cabot said the lease went on “pause” when the Harrison’s sued–you can’t very well drill with an active lawsuit. This “lease on pause” case was appealed all the way to the Supreme Court in PA, and in February the Supreme Court ruled that just because there is ongoing litigation, Cabot didn’t have the presumption that the lease was paused (see Cabot O&G Loses PA Supreme Court Case to Extend Lease). That is, Cabot lost the case. But it was referred back to the Third Circuit Court of Appeals for more work before a final final ruling. We now have that final final ruling…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Greenlights Offshore Platform – Good Sign for PA Cracker?
July 2, 2015July 2, 2015

Time, once again, to haul out the tea leaves to see if there’s anything we can divine from an announcement yesterday by Shell that they’ve made a “final investment decision” (or FID) to move forward with a multi-billion dollar project to build a new deep-water offshore drilling platform in the Gulf of Mexico. What in the world does that have to do with the Marcellus/Utica? Good question! Let us read the tea leaves and connect some dots for you…
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Guest Post | Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Guest Post: The Political Disaster that is Gov. Wolf’s PA Severance Tax Proposal
July 2, 2015July 2, 2015

MDN friend Charlie Schliebs, managing director of Stone Pier Capital Advisors in Pittsburgh, sent along a copy of his firm’s latest newsletter yesterday. In it, Charlie has penned a superb article about the PA Gov. Tom Wolf administration’s current disaster with respect to the state budget (and Wolf’s demand for a high severance tax). As MDN reported yesterday, Wolf did something no governor has done for 40 years–he vetoed the entire budget (see PA’s Partisan Gov Wolf Vetoes No-Severance-Tax State Budget). Let’s put Wolf’s veto in perspective. He turned down, wholesale, a balanced budget that raises education funding (for the chil’ren) all while holding the line on tax increases. Instead, Wolf chose to shut down the PA state government. Why? Because he wants a nosebleed high tax on Marcellus Shale drillers to transfer their hard-earned money over to teachers’ unions. It’s sick. Charlie is more of a diplomat than we are and uses nicer words, but make no mistake, he has an iron fist in his velvet editorial glove when it comes to “The Political Disaster that is Gov. Wolf’s PA Severance Tax Proposal”…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA’s Partisan Gov Wolf Vetoes No-Severance-Tax State Budget
July 1, 2015July 1, 2015

Proving just how partisan (and mean spirited) the Democrats in Pennsylvania have become, every single Democrat senator voted against a Republican balanced budget bill yesterday (highly partisan, those Dems) and when the bill went to Gov. Tom “in over his head” Wolf, Wolf immediately vetoed the budget bill–the first time a sitting governor has vetoed an entire budget bill in 40 years. Tell us again, John Hanger, whose philosophy is “my way or the highway”? It’s certainly not the Republicans’ philosophy. Wolf and the Dems are playing a high stakes game of “chicken.” They are in the minority in PA and they want to see if they can bully, pressure, and otherwise force Republicans to tax the Marcellus Shale industry out of existence in the state. The Republicans, to their credit, are hanging tough. Unfortunately the Republicans don’t have enough of a majority to simply override Wolf’s childish veto–but give it time. Sooner or later, if they hang tough, some Democrats will cave and vote to override the veto…
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Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

New EIA Monthly Report Breaks Out Natgas Production by PA/OH/WV
July 1, 2015July 1, 2015

Our favorite government agency, the U.S. Energy Information Administration (EIA), has just replaced a previous monthly report with a new report that will be of keen interest to MDN readers. It used to be that the EIA produced the Monthly Natural Gas Gross Production Report. That report is no more. Instead, it has been replaced by the Monthly Crude Oil and Natural Gas Production report. The old report tracked and reported natgas production by state/region for LA, NM, OK, TX, WY and the Federal Gulf of Mexico. Those locations were, traditionally, where the vast majority of natural gas was produced in the U.S. But with the shale revolution, that’s now changed–dramatically. In addition to reporting monthly natgas production by state for the traditional locations, the EIA is adding 10 new states to the monthly report: AR, CA, CO, KS, MT, ND, OH, PA, UT and WV. Yep–where the super producing shale plays are located, including PA, OH and WV where the Marcellus/Utica is located. What’s the difference between this new report (which we’ve included below) and the monthly Drilling Productivity Report (DPR) produced by the EIA?…
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Anti-Drilling/Fossil Fuel | Electrical Generation | Industrywide Issues | Lackawanna County | Pennsylvania

MDN Interprets NEPA Editorial on Coal, Natgas, Electric Generation
July 1, 2015July 1, 2015

Sometimes you need a plain language guide to help you decipher the gobbledygook editorials issued by liberal newspapers. It’s like, what do they really mean? What are they trying to say? Why don’t they just use plain English to say what they mean? We spotted such an editorial in the Scranton Times-Tribune with respect to coal, natural gas, electric generation and so-called alternative energy sources, like wind. Below we’ve interpreted what the editorial writers really wanted to say in their otherwise indecipherable editorial…
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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Last Minute Change in PA Budget Stops DEP’s New Drilling Rules
June 30, 2015June 30, 2015

How can we put this gingerly? Pennsylvania Democrats (and Democrats in general) like to do the screwing, but they don’t like to get screwed. That about sums up what’s happening with the Pennsylvania budget and some last minute legislation slipped into a budget-related bill that will tie the PA Dept. of Environmental Protection’s hands on proposed new drilling rules. The 2012 Act 13 law required the Pennsylvania Dept. of Environmental Protection (DEP) to update sections of the older 1984 PA Oil & Gas Act (see Rewrite of 1984 PA Oil and Gas Act Underway). That process was pretty much done and dusted under PA Gov. Tom Corbett. But then Tom Wolf won the governor’s race and installed John Quigley to head up the DEP. Quigley re-opened a closed process to change drilling rules for both conventional and unconventional (shale) drillers (see PA DEP Sec Quigley Pulls a Fast One, Changes Drilling Rules). That is, Quigley did some screwing of the drilling industry. Over the weekend the PA House introduced and passed an amendment that would require the DEP to go back and start over with respect the rules they plan to adopt. That is, Quigley has now gotten screwed. And he doesn’t like it…
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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Quigley Not Just Creating New Registry, He’s Dumping FracFocus
June 30, 2015June 30, 2015

Two weeks ago MDN told you that the PA PennFuture Sec. of the Dept. of Environmental Protection, John Quigley, has decided he wants to start his own version of FracFocus in Pennsylvania (see PA DEP Sec Quigley Creating His Own FracFocus; SRBC in Crosshairs). What we didn’t know or understand at the time is that Sec. Quigley, who continues to be antagonistic toward the shale industry, isn’t just creating a PA version of FracFocus–he now arrogantly intends to dump PA’s participation in FracFocus…
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Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA | Williams

More Pipeline Payola: Williams Doles Out $2.5M in PA Grants
June 30, 2015June 30, 2015

We won’t harp yet again about how we feel about paying local (very worthy) groups and organizations money to support your pipeline project BEFORE it’s approved and built (cough *borderline sleazy* cough). We’ll just bring you the news that Williams has seen fit to dole out $2.5 million to 17 Conservation Fund projects in Pennsylvania. A spoonful of $ugar to help the Atlantic Sunrise Pipeline medicine go down–in a most delightful way. (Note that we think the Atlantic Sunrise is a great project and worthy on its own, without need for corporate bribes to hush up local opposition.) Here’s the details of which projects in PA got funded, and where…
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Blair County | Energy Services | Industrywide Issues | Marcellus GTL | Pennsylvania | Processing Plants

Altoona’s Marcellus Gas-to-Liquids Plant Gets Canceled, For Now
June 29, 2015June 29, 2015

While most Pennsylvania supply chain businesses are hanging tough during the current down cycle in drilling–the downturn has claimed at least one potential project in the Keystone State. It was with much fanfare and great hope in March 2013 that Marcellus GTL of Gilberton, Schuylkill County, announced it would build its first Clean Energy Center in Blair County, PA. The “gas to liquids” (GTL) project would cost $200 million to build and would convert PA Marcellus Shale gas into 84,000 gallons per day of regular gasoline and propane to be marketed locally as transportation fuel and for heating uses (see Altoona Area Getting $200M Marcellus Gas-to-Liquids Plant). The project was even promised a 7-year tax break (see Altoona Gas to Liquids Plant Will Qualify for 7-Year Tax Break). But sadly, Marcellus GTL recently told the Altoona-Blair County Development Corp the project has been “tabled” due to the low price of oil and the volatility of the market right now…
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Blair County | Industrywide Issues | Pennsylvania | Supply Chain

PA Supply Chain Firms Hang Tough in Drilling Downturn
June 29, 2015June 29, 2015

Businesses that part of the Marcellus Shale supply chain–providing goods and services to the drilling industry–have been impacted by the drop-off in drilling activity. However, the supply chain businesses located in the Altoona area of Pennsylvania have proved pretty resilient. Some are willing to “ride the wave” until the cyclical oil and gas industry picks up again, laying off very few if any workers. Some are branching out into other markets. And some provide goods and services that are still very much in demand, even in a “down” cycle for drilling. Some are even adding workers! Here’s a few examples of resilient south central PA businesses hanging tough in the current downturn, and how they do it…
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Industrywide Issues | Pennsylvania | Pipelines | Statewide PA

The Facts on Pipelines and Their Impacts on PA Landowners
June 29, 2015June 29, 2015

Pipelines, and opposition to them from shrill anti-fossil fuel kooks, seems to be the primary battlefield in the ongoing war against fossil energy. If we had a nickle for every time we’ve heard antis talk about pipelines exploding and other scare tactics, we’d be shaleionaires. When it comes to pipelines in Pennsylvania, where a number of projects are on the books, it helps to have the facts. Dave Messersmith, an educator and member of Penn State’s Marcellus Shale Education team, is a man with the facts when it comes to drilling and pipelines. Messersmith recently did a Q&A with the Allentown Morning Call newspaper and he shares important, impartial facts about pipelines and how they impact landowners…
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Electrical Generation | Industrywide Issues | Pennsylvania | Pipelines | Research | Statewide PA

PA Gas Outlook Report 2015 – Electric Plants Changing to Natgas
June 29, 2015June 29, 2015

Last week the Pennsylvania Public Utility Commission (PUC) released its annual Pennsylvania Gas Outlook Report, which provides insight into trends in the natural gas market, both nationwide and within Pennsylvania (full copy below). The report summarizes the financial and supply data for PA’s natural gas distribution companies (NGDCs) and looks at changes and trends in the natural gas market, including usage, financial status of utilities, and market pricing. The report is prepared to provide data about the regulated gas industry in Pennsylvania and the broader natural gas markets in the region and nationally. There’s lots of good information in the report. In particular we like the EIA list of pipelines due to be “in service” sometime in 2015 in the Marcellus/Utica region, included on page 6 of the report. The big news in the report is the dramatic increase in the change from coal to natgas for electric power generation–a trend that will continue to expand into the foreseeable future…
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Accidents | Allegheny County | Energy Services | Industrywide Issues | Pennsylvania | Regulation | Sunoco Logistics | Washington County

PA DEP Fines Sunoco $95K for Mud Spills During Pipeline Drilling
June 26, 2015June 26, 2015

Although there’s been no publicly published notice, the Pennsylvania Dept. of Environmental Protection (DEP) has fined Sunoco Logistics for spilling non-toxic drilling mud (bentonite) at several locations when they were drilling for the Mariner East I pipeline. One of those instances was last September when Precision Pipeline, hired by Sunoco, was drilling under the Little Mingo Creek (see Mariner East Pipeline Drilling Spills Mud in Local Creek). Bentonite is non-toxic and used in products from shampoo to deodorant and toothpaste. It’s also used to lubricate the drill bit and carry drill cuttings out of the ground. While non-toxic, a whole lot of bentonite in the water can, of course, suffocate fish and cause problems for wildlife that happen to drink it. In March of this year, we noted that the DEP was telegraphing that they were about to assess a “significant” fine for the mud spills at Mingo Creek and a few other locations (see PA DEP: Sunoco Facing “Significant” Fine for Non-Toxic Mud Spills). The fine has been levied. The “significant” fine ended up being $95,000. Clipping Sunoco $95K, compared to the $8.9 million fine the DEP recently slapped on Range Resources for methane leaks, seems somewhat trivial and rather insignificant. Which is perhaps why the DEP hasn’t published, as they usually do, an official notice on their website about the fine…
Read More “PA DEP Fines Sunoco $95K for Mud Spills During Pipeline Drilling”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Partisan Gov Wolf Says He’ll Veto Any Budget Republicans Send Him
June 26, 2015June 26, 2015

Earlier this week Pennsylvania Gov. Tom Wolf’s budget and policy secretary, John Hanger, said this with regard to Republicans refusing to go along with Wolf’s Marcellus-killing severance tax: “Frankly, the Republican leadership is saying it’s our way or the highway” (see PA Republicans Say No Severance Tax in Budget Heading to Gov. Wolf). Yet yesterday top Democrat lawmakers let slip that when the Republicans send a budget to Wolf today or tomorrow, Wolf says he will automatically veto it–without having seen or read it. Tell us John, who’s really saying “my way or the highway” when it comes to the budget?…
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