Pennsylvania

Industrywide Issues | Pennsylvania | Research | Statewide PA | Taxation

PA Partisan Study Finds PA Needs to Soak Drillers with New Taxes
March 31, 2014March 31, 2014

The partisan Pennsylvania Independent Fiscal Office (IFO) last week released a so-called study on oil and gas taxes and concluded (surprise!) PA doesn’t pay enough in taxes (see PA Shale Industry Demonized for “Lack” of Severance Tax). The group compared apples with oranges and did it’s “best” to try and make a “fair” comparison and of course concluded PA drillers need to be drilled themselves–you know, to spread the wealth around in good socialist fashion. A full copy of the “study” is embedded below.

It seems the IFO and PA Democrats are a bit thin-skinned when sources like MDN poke holes in their precious studies and dare to call them what they are: partisan hucksterism. And so news outlets like the Pittsburgh Post-Gazette rush in to try and prop them up with “look at how fair and balanced this study really is” kinds of articles, like this one:
Read More “PA Partisan Study Finds PA Needs to Soak Drillers with New Taxes”
Lease & Royalty Payments | Meetings | Pennsylvania | Statewide PA

NARO PA Meeting: CA Speaker Says PA Needs Better Reporting
March 31, 2014March 31, 2014

More from the National Association of Royalty Owners PA chapter annual conference last week in State College, PA. One speaker who runs a California-based oil and gas appraisal firm was taking pot shots at the PA Dept. of Environmental Protection saying that twice a year reporting on production numbers is not enough–especially for those who want an accurate appraisal on what their oil and gas rights may be worth for leasing purposes.

Matt Henderson with Penn State’s Marcellus Center for Outreach and Research also chimed in with some thoughts on DEP reporting. Below is a report from the second day of the NARO event in State College…
Read More “NARO PA Meeting: CA Speaker Says PA Needs Better Reporting”
Bradford County | Economic Impact | Electrical Generation | Industrywide Issues | Pennsylvania | Processing Plants

Rural PA County Hopes NatGas Electric Plant Attracts Businesses
March 31, 2014March 31, 2014

Here’s a new twist: Economic development leaders in Bradford County, PA are hoping a local natural gas-fired electrical generating plant now being built will be a magnet that attracts petrochemical businesses to the area. We’ve known for some time (since last year) that Moxie Liberty, which later sold the rights to Panda Liberty, would build a new electrical generating plant near Wyalusing (Bradford County), PA (see Moxie Liberty Sells PA Electric Plant Project to Panda Power). The Panda Liberty plant is now under construction with large cranes and more than 100 workers in and around the site.

Local economic development leaders are hoping the Panda Liberty plant, which will use locally mined Marcellus gas, will catch the attention of petrochemical manufacturers of waxes, lubricants and other products that use natural gas as an ingredient. Already inquiries from such “downstream” businesses have been coming in–a very good sign indeed…
Read More “Rural PA County Hopes NatGas Electric Plant Attracts Businesses”
Lease & Royalty Payments | Pennsylvania | Statewide PA | Utica Shale

NARO-PA Meeting: Marcellus Decline Rates, Utica Shale in PA
March 28, 2014March 28, 2014

Yesterday kicked off the first day of the annual National Association of Royalty Owners (NARO) Pennsylvania chapter annual convention in State College, PA. There were (at least) two major presentations of consequence at the meeting for landowners in PA in particular, but also for NY and other states too. The first was a presentation by Steve Karabin, CEO of the Rhino Group and Jim Ladlee, associate director with Penn State Marcellus Center for Outreach and Research, on the topic of Marcellus well decline rates. You may recall both Steve and Jim co-authored a new section in the most recent Marcellus and Utica Shale Databook (Volume 3 of the 2013 series). They presented their findings on well decline rates at the meeting yesterday, along with unveiling a new royalty calculator that landowners can use. Read below for their rule-of-thumb numbers all landowners with Marcellus wells can use to estimate royalties.

Second was an intriguing talk by Penn State professor and Marcellus Shale expert Dr. Terry Engelder–only this time he was talking about the Utica Shale in PA. Engelder explained where he believes the Utica may or may not be economically drillable in PA–and why. Interesting stuff. See some of his talk below too…
Read More “NARO-PA Meeting: Marcellus Decline Rates, Utica Shale in PA”
Energy Services | Industrywide Issues | Litigation | Lycoming County | Pennsylvania | Pipelines | PVR Midstream

ULS Says PVR Marcellus Bankrupted Their Company by Not Paying
March 28, 2014March 28, 2014

Utility Line Services Inc. (ULS), a company that does construction work for utility companies–like digging trenches and laying pipeline–is suing PVR Marcellus Gas Gathering in a Delaware County, PA court. ULS says PVR owes them more than $17.7 million in unpaid invoices and another $7.8 million in lost profits. The lawsuit stems from work done by ULS for PVR in laying 17 miles of pipeline in Lycoming County. Like all lawsuits, this one is a bit complicated, but essentially ULS says PVR slowed and then stopped payments, even though the pipeline was completed and gas now flows through it.

Both companies are pointing the finger at the other saying the other company was responsible for obtaining certain permits, and lack of those permits caused delays and increased costs in overtime and project overruns. Unfortunately PVR’s lack of payments to ULS has bankrupted ULS. They’ve closed their doors, laid off 600 workers and sold their equipment at auction. Not a happy ending. Here’s the story behind the lawsuit just getting under way and expected to run for at least three weeks in Delaware County Common Pleas Court…
Read More “ULS Says PVR Marcellus Bankrupted Their Company by Not Paying”
Industrywide Issues | Pennsylvania | Research | Roads | Statewide PA

Study Says Each PA Well Creates $5-$10K+ in Road Damages
March 28, 2014March 28, 2014

A new study recently published in the peer reviewed Journal of Infrastructure Systems from a half dozen students and professors, some of them working for RAND Corporation, attempts to answer the question, How much road damage due to truck traffic happens in Pennsylvania–and how much does it cost? The study, titled “Estimating The Consumptive Use Costs of Shale Natural Gas Extraction on Pennsylvania Roadways” (full copy embedded below), was submitted for consideration a year ago–in March 2013. It was accepted by the Journal in November and finally published in their February 2014 issue.

The folks doing the research are smart–members of the American Society of Civil Engineers–we don’t dispute their credentials. What did they find? Using estimates of how many truck trips it takes to drill a well from data collected by the New York Dept. of Environmental Conservation (yes, NY data where there is no shale drilling), the authors estimate that for more frequently traveled state and local roads in PA the damage amounts to an average of $5,000 to $10,000 per well drilled. If you include less-traveled rural roads, that number jumps to $13,000 to $23,000 per well average…
Read More “Study Says Each PA Well Creates $5-$10K+ in Road Damages”
Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

County Officials Meet with Shell on PA Cracker, Come Away Hopeful
March 27, 2014March 27, 2014

Seems like it’s “cracker day” at MDN. Long before Odebrecht announced their potential ethane cracker plant for Parkersburg, WV, Shell announced plans to build a cracker in Pennsylvania. In fact it was exactly two years ago this month that Shell announced the location would be Monaca (Beaver County), PA (see Shell Announces Location of Ethane Cracker Plant). PA state legislators eventually voted on a package of significant tax breaks for the proposed new plant (see PA Legislature Reaches Deal on Tax Credit for Cracker Plant). However, since that time, it seems like the PA cracker deal has cycled through highs and lows as to whether it would actually get built (see PA Ethane Cracker – On Again, Off Again…Now On Again?).

More recently MDN told you the pendulum had swung back to the pessimistic side (see Shell’s Shale Pessimism Signals Worry for Some re PA Cracker). But what’s this? Last week some 30 Beaver County officials met with Shell about the proposed ethane cracker plant and left that meeting feeling “hopeful”–which is a good sign. Shell told the officials about moving forward with plans to move a portion of a local roadway, relocate power lines and other big-ticket projects that Shell would not be spending money on unless there is serious interest in moving forward. Here’s more from last week’s hopeful meeting between Shell and Beaver County officials…
Read More “County Officials Meet with Shell on PA Cracker, Come Away Hopeful”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Dem Floats 5% Marcellus Severance Tax “For the Children”
March 27, 2014March 27, 2014

Pennsylvania Democrats continue their push for economic suicide. Borrowing from their 50 year-old playbook, the latest push is to impose a 5% severance tax on Marcellus Shale drilling in the state–which would effectively kill all drilling–and use the money (please don’t laugh)…”for the children.” Yes folks, PA’s schools suck big-time, and the only thing that can save them now is to extract some money out of the pockets of those nasty, filthy (and rich) drillers so teachers can educate young crumb crunchers to the superiority of socialism and taking money from one group (those who work) to redistribute to another (those who don’t work). What better way than to sink a pipeline right into the piles of money that come from drilling? What dunces.

State Sen. Vincent Hughes, dunderhead Democrat from the Philadelphia area, said he will introduce legislation to impose a 5% Marcellus Shale severance tax that will be DOA, so he and other Dems can use it as a politically divisive campaign issue come November. Such caring (and intelligent) folks those PA Democrats. Just a teeny, tiny problem Vinny–your party has voted to stop all Marcellus drilling (see PA Democrat Party Votes to End Marcellus Shale Drilling Statewide). How will you tax something that doesn’t happen anymore? Oops…
Read More “PA Dem Floats 5% Marcellus Severance Tax “For the Children””
Energy Services | Industrywide Issues | New York | Pennsylvania | Pipelines | Regulation | Statewide NY | Susquehanna County | Williams

EPA/DOI Ask for More Time to Review PA-NY Constitution Pipeline
March 27, 2014March 27, 2014

NGI’s Shale Daily is reporting both the federal Environmental Protection Agency (EPA) and the Dept. of Interior (DOI) have filed requests with the Federal Energy Regulatory Commission (FERC) to extend the comment period on the proposed 124-mile Constitution Pipeline. The Constitution will run from the prolific gas fields of Susquehanna County, PA across the border and up into Schoharie County, NY where it will interconnect with two major interstate pipelines–carrying Marcellus Shale natural gas produced by Cabot Oil & Gas and other drillers (see New Marcellus Constitution Pipeline Announces “Final” Route). Along the way a local utility company will tap into the Constitution to deliver natural gas to rural locations (see Leatherstocking to Tap Constitution Pipeline for Local Deliveries).

However, the Constitution will need to make a few changes, according to FERC (see FERC: Constitution Pipeline Should Make Changes to Lessen Impacts). But nothing too major. That is, unless the EPA and DOI jump in with new demands. Their delay is unwelcome and potentially troubling–although we’re not ready to hit the panic button just yet. Here’s what Shale Daily says about the request from EPA & DOI:
Read More “EPA/DOI Ask for More Time to Review PA-NY Constitution Pipeline”
Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell

Cracker Plant Talk Spurs Economic Growth in Beaver County, PA
March 26, 2014March 26, 2014

Over the past couple of years the prospects for an ethane cracker plant in Beaver County, PA have swung from wild optimism to wild pessimism and everything in between. Most recently the pendulum has once again tilted negative (see Shell’s Shale Pessimism Signals Worry for Some re PA Cracker). But don’t talk negative to the businesses setting up shop and expanding in Beaver County. The mere talk that it’s possible Shell will build the $2-$3 billion ethane cracker in Monaca has caused a significant uptick in the local economy. One Realtor has said for businesses looking to get a piece of the coming economic pie–you’re already late! Many have already grabbed up space and it’s increasingly difficult to find commercial real estate in the county.

Here is the story of the economic boom already under way in Beaver County just from talk–talk that Shell may build a cracker plant there…
Read More “Cracker Plant Talk Spurs Economic Growth in Beaver County, PA”
Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | Taxation | West Virginia

Best Way to Kill Drilling in PA/OH/WV: “Uniform” Severance Tax
March 26, 2014March 26, 2014

A few weeks ago MDN said the plan floated by lefties and libs to create a so-called uniform severance tax across PA, OH and WV is one of the dumbest things we’ve heard in a long time (see Stupid Idea of the Year: Create Uniform Severance Tax in PA-OH-WV). The plan as proposed means all three states hold hands and jump off the economic cliff together. Apparently it’s more fun to die together (economically) than alone.

MDN is not the only voice to point out the lunacy of this plan. The head of the PA Chamber of Business and Industry also says the proposed mega-tax is nuts. As Gene Barr highlights in the following letter to the editor, it’s apparent the people proposing such a plan–including the Pennsylvania Budget and Policy Center–are ignorant of how taxes in PA and other places actually work. You would think an organization with a name that includes the word “budget” would employ at least one economist or accountant. Apparently they don’t. They are economic illiterates who don’t realize what they are proposing is anything but fair–especially to Pennsylvanians…
Read More “Best Way to Kill Drilling in PA/OH/WV: “Uniform” Severance Tax”
Accidents | Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Statewide PA

Anti-Drillers Attack Crude-by-Rail Traveling Through PA
March 26, 2014March 26, 2014

The leftist anti-drillers at the Pennsylvania news organization called PublicSource, backed by the likes of Teresa Heinz Kerry, is taking aim at shale-produced crude oil that travels by railroad. In a hit piece in which they begin by doing a bait-and-switch, starting with a derailment of ethanol (nothing at all to do with oil or gas), they then parry and say derailments of oil in Pennsylvania are an imminent threat and danger to PA residents. The hue and cry has gone up: Either have the feds regulate shale oil on railroads out of existence, or preferably just stop shipping crude by rail. Who wants all that nasty crude from North Dakota anyway? Funny how the answer is always the same no matter the question: just stop extracting fossil fuels.

Here’s how the latest PublicSource hit piece begins…
Read More “Anti-Drillers Attack Crude-by-Rail Traveling Through PA”
Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

Birthplace of Fracking (NE USA) Once Again Leads O&G Innovation
March 26, 2014March 26, 2014

Fracking as a concept has been around for a long time. Would you believe us if we said the first rudimentary forms of fracking date back to the 1860s–around the time of the American Civil War? That’s when liquids were first used to fracture “shallow, hard rock wells” in places like PA, NY and WV. Somewhere along the way oil and gas drilling drifted to places like Texas and Louisiana and Oklahoma. In the modern era, fracking started to be widely used commercially in 1947. Oil and gas drilling “grew up” in, and innovations came from, drilling in the southwestern part of the U.S.

Shale drilling is a more recent development–the combination of fracking and horizontal drilling. Shale drilling has been around commercially for 15-20 years, and yes, it was first pioneered and developed by George Mitchell in the Barnett Shale of Texas. However, drillers in Texas and other locations are now learning from innovations coming from the Marcellus and Utica Shale. The country and indeed the world now looks to how companies like Cabot Oil & Gas are able to economically drill for gas in a low-price environment. The innovation that started in the northeast “once upon a time” some 150 years ago has finally returned to its birthplace in the northeast, and the northeast is showing the world how to do it better, faster, and safer than ever before…
Read More “Birthplace of Fracking (NE USA) Once Again Leads O&G Innovation”
Cameron County | Elk County | Energy Companies | Lycoming County | Pennsylvania | Seneca Resources | Upper Devonian Shale

Seneca Drills First Upper Devonian Well with Impressive Results
March 25, 2014March 25, 2014

Seneca Resources, a wholly-owned subsidiary of Buffalo-based National Fuel Gas Company, reports drilling their very first Upper Devonian shale well in Lycoming County, PA. The results are impressive: a peak 24-hour production rate of 14.1 million cubic feet (MMcf) per day, and an average 8.6 MMcf per day during its first 30 days. The Upper Devonian (UD) is a number of shale layers lumped together under one umbrella name. The specific layer targeted by Seneca for their first UD well is the Geneseo rock layer.

Word of Seneca’s success in the UD comes as part of an operational update issued by National Fuel Gas yesterday. Another gem in the update: Seneca has just completed drilling a 9-well pad and is almost finished drilling a 6-well pad. Here’s the full update from Seneca with the exciting UD news…
Read More “Seneca Drills First Upper Devonian Well with Impressive Results”
Anti-Drilling/Fossil Fuel | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

PA Anti-Drilling Activist Asks Court to Lift Cabot Restraining Order
March 25, 2014March 25, 2014

Vera Scroggins, a local and outside NEPA a little-known anti-driller in Susquehanna County with a potty mouth (see this video of her harassing filmmaker Phelim McAleer), had her day in a Montrose, PA court yesterday in which she and her commie-lib ACLU lawyers tried to get a restraining order lifted. Vera, according to Cabot Oil & Gas, repeatedly violated no trespassing requests from the company. She would show up at Cabot drill sites playing tour guide to obtuse politicians from New York City and on occasion even Hollywood celebrities (like Susan Sarandon), pretending the drill sites and compressor plants she showed them are somehow harming the environment. Cabot repeatedly told Vera to please stop entering roadways and drill sites as a safety precaution. She wouldn’t listen, so Cabot was forced to turn to the local Susquehanna County Court for help (see NE PA Anti-Driller Slapped with Trespassing Injunction)…
Read More “PA Anti-Drilling Activist Asks Court to Lift Cabot Restraining Order”
Energy Companies | Forced Pooling | Hilcorp Energy | Industrywide Issues | Lawrence County | Litigation | Pennsylvania | Regulation

Hilcorp Forced Pooling Hearing Postponed, More Landowners Added
March 24, 2014March 24, 2014

MDN previously told you about Hilcorp’s lawsuit to force some hold-out landowners in Lawrence County, PA to allow drilling under their land–a concept called forced pooling. The PA Dept. of Environmental Protection (DEP) and the PA courts treated it like a hot potato. The courts finally told the DEP that they (the DEP) would need to decide the matter. So the DEP had set aside two days this week to conduct public hearings in New Castle (see Forced Pooling Circus (ie Hearing) Coming to Lawrence County, PA).

However, the circus/hearing scheduled for this week has been postponed. No new date has been announced. The DEP and Hilcorp both wanted the delay offering the explanation that they need more time, “to provide more complete notice to potentially affected people.” Apparently some landowners haven’t yet been served notice that they will be affected–forced–to be part of a Hilcorp drilling unit, and both Hilcorp and the DEP want them to know it before the public hearing commences. Seems like the forced pooling in Lawrence issue keeps getting better and better (not)…
Read More “Hilcorp Forced Pooling Hearing Postponed, More Landowners Added”