PA Senate Bill Encourages Use of Conventional Brine on Roadways

A bill under active consideration in the Pennsylvania Senate would remove the PA Dept. of Environmental Protection’s (DEP) prohibition against using brine from conventional oil and gas wells on PA’s roadways (see DEP Continues to Block Use of Brine on PA Dirt Roads). This past spring the DEP notified townships they could no longer use brine, a cheap source of “road salt” for deicing roads and (in liquid form) for spreading on dirt roads to keep the dust down. Brine from shale wells has never been allowed on PA’s roads–so this only concerns conventional drillers/wells. The move by DEP to block brine use, among other DEP actions, angered the industry and led to bills being introduced by both the House and Senate that “roll back” (more like “lock in”) regulations that govern conventional PA drilling to the Oil and Gas Act of 1984 (see 2 PA Bills Would Roll Back Conventional Drilling Regs to 1984). The House already passed their version of the bill back in June (see PA House Passes Bill Exempting Conventional Drillers from Shale Regs). The corresponding Senate bill is now being discussed. Part of the bill, if passed, tells the DEP it must “encourage” (not ban) the use of conventional brine…
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Cabot, Seneca, Chief Ramp Up Production for Atlantic Sunrise

According to a report from BTU Analytics, the top three shippers who will soon flow natural gas along Williams’ Atlantic Sunrise Pipeline (ASP)–Cabot Oil & Gas, Seneca Resources and Chief Oil & Gas–have “nearly doubled” their rig counts over the past few months leading up to the imminent startup of ASP. The pipeline is due to go online any day now–by the end of August (see Genscape Confirms Atlantic Sunrise Pipe Ready to Flow in August). Cabot has reserved 1 billion cubic feet per day (Bcf/d) of the 1.7 Bcf/d capacity of the new ASP. One third of Cabot’s 1 Bcf/d (350 million cubic feet per day, MMcf/d) will flow to Dominion’s Cove Point LNG export plant in Maryland–heading for Japan. Another 500 MMcf/d of Cabot’s gas will go to Washington Gas via ASP–meaning northeast PA Marcellus molecules will help heat, cool and power D.C. swamp dwellers. Joy. Here’s the great news that a single pipeline is stirring up a lot more drilling in northeastern PA…
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MSC Calls PA 250% Hike in Shale Permit Fees “Excessive”

Industry trade associations are not impressed with a proposed 250% hike in shale permit fees in Pennsylvania and they’re saying so. PA Gov. Tom Wolf’s Dept. of Environmental Protection (DEP), the agency charged with overseeing oil and gas drilling in the state, blindsided the shale industry in February with a proposal to hike the fee required when submitting an application to drill a new shale well (see PA DEP Plans to Raise Marcellus Well Permit Fee by 250%). The current fee is $5,000. The proposed new fee is $12,500–or 2.5 times (250%) higher. Yes, the DEP has fewer people working there than it once did, and needs to hire more help. However, the DEP wants to slap this insanely high fee on shale drillers to (in part) cover the expenses associated with non-shale activities! The shale permit fees will, “fund the broad scope of the [DEP] office’s operations, including its oversight of traditional [i.e. conventional] oil and gas wells, gas storage wells, abandoned wells and earthmoving activities.” How is it, in any sense, fair to hike the fees of shale drillers so DEP agents can better keep an eye on non-shale wells? The DEP is trying to steamroller the increase through. DEP’s own Environmental Quality Board has already approved the increase and published an official notice in the Pennsylvania Bulletin (see PA Seeks Comments on Boosting Shale Permit Fees 250%). Publication in the Bulletin triggered a 30-day public comment period which just ended. Among those commenting on the plan were the Marcellus Shale Coalition (MSC) and the Pennsylvania Independent Oil & Gas Association (PIOGA). Neither had good things to say about the dramatic increase. MSC’s David Spigelmyer called it “excessive and not proportional to the costs incurred by the oil and gas program to oversee the unconventional natural gas industry.” Making the same point we’ve made: It’s not fair for shale drillers to fund the whole darned program that includes conventional and other aspects of the oil and gas program not related to shale…
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FERC Rejects PennEast Pipe Rehearing Request – Antis Sue

Elvis – song & dance

Last Friday the Federal Energy Regulatory Commission (FERC) denied a rehearing request by radical enviro groups with respect to the PennEast Pipeline project. That is, FERC said “we’re sticking with our original decision to approve the project.” In January, FERC voted 4-1 to approve the $1 billion, 120-mile natgas pipeline that will stretch from northeast PA to the Trenton area of New Jersey (see FERC Grants Final Approval for PennEast Pipe – Real Battle Begins). FERC Commissioner Richard “Dick” Glick voted against the project claiming it will lead to more man-made global warming. But the other Dem FERC Commissioner, Cheyl LaFleur, voted to approve it–at least in January. In Friday’s “order on rehearing” LaFleur flipped and said she’s had second thoughts about the project. She voted “in part” to rehear the original decision. Glick voted to rehear. Bottom line: both LaFleur and Glick want to kill the PennEast project. That’s the upshot of Friday’s FERC communication. Unfortunately FERC Commissioner Rob Powelson has abandoned us and we will now face a 2-2 deadlock on key decisions like this one for the foreseeable future–because Senate Democrats will block a vote on a new, third, Republican member of the Commission until after the November election. Thanks Rob. The radical anti groups that filed the rehearing request–THE Delaware Riverkeeper (aka Maya van Rossum) and the NJ Sierra Club (aka Jeff Tittel)–immediately filed lawsuits with the Washington, D.C. Circuit Court of Appeals. The antis could only take their case to court once FERC had denied a rehearing request. That’s the song and dance routine we must go through on the way to fighting to build every square inch of any new pipeline project in the northeast. Pipeline company files application, FERC approves, radical groups request a rehearing, rehearing denied, lawsuit filed. That’s the formula that plays out over and over again. Below is a copy of FERC’s approval along with details about antis filing their lawsuits…
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100+ PA Landowners Sue EQT re Gas Storage Field Payments

According to Washington County, PA landowner Joe Raposky, EQT has been storing natural gas under his property in Finleyville without permission and without compensation since at least 2007. Last year Raposky asked EQT to compensate him and they refused. So Mr. Raposky has organized over 100 of his neighbors along with landowners who sit over top of other similar underground storage fields in the region, and on July 30 they filed a lawsuit against EQT. PA has some 60 gas storage fields spread across 26 counties in the state. The fields are used to temporarily store and then retrieve natural gas. Storage, which is not something we write about very much, is in fact a big deal when it comes to the natural gas market. Not all gas is used as soon as its extracted and sold along a pipeline. There are two main “seasons” in the natural gas industry–injection season, from April 1 through October 31, when a surplus is stored underground, and withdrawal season, from November 1 through March 31, when more gas is used than is produced. Storage fields like the one in Finleyville are an important part of the natgas puzzle. In some cases, landowners are only now becoming aware of the existing fields under their feet and they (rightly) want to be compensated for the use of their property. Is storage the next big bone of contention between landowners and drillers?…
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PA PUC Wants to Expand 811 to Include Stripper Wells

In just about every state in the country, before you start digging a hole in the ground for some reason (water well, septic system, laying an underground electric line, etc.)–the first thing you do is call 811 or some similar phone number. The “one call” or “first call” reaches a state-authorized (not necessarily state-run) office where they have, on file, maps detailing any kind of underground cables, pipelines and other infrastructure. If such underground structures exist, a representative of the owner for the underground line will, if necessary, stop by and mark the areas so when you do begin digging, you don’t hit it. Makes sense. A bill introduced in 2016 in the Pennsylvania legislature “enhances” the existing 811 law in PA. One of the “enhancements” is that it removes an exclusion for low-pressure natural gas gathering pipelines from being required to be part of the 811 system, mainly lines run to conventional gas wells. The bill was opposed by the Pennsylvania Independent Oil & Gas Association (see PIOGA Opposes Bill to Regulate Unregulated PA Gathering Pipelines). The bill was reintroduced in March 2017 (see PA State Senator Introduces Bill to Regulate Gathering Pipelines). Once again PIOGA pushed back. In June 2017, a compromise was reached to exclude pipelines running to “stripper wells”–i.e. low-producing conventional wells. With that compromise in place, both the PA Senate and House voted to adopt the plan and it was signed into law (see Shale + Large Conventional Gathering Pipes Added to PA One Call). The PA Public Utility Commission (PUC) is the state agency charged with oversight of the enhanced 811 system. They have been staffing up and rolling out the changes. We spotted a story that talks about the PUC’s efforts. It mentions (bemoans) the fact that stripper wells are still exempt, and seeks to apply pressure to the owners of those wells to “voluntarily” join the 811 system. We all know what comes next after “voluntarily” joining any government-run program…
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Chesapeake Settles NEPA Royalty Lawsuit for Pennies on the Dollar

Chesapeake Energy has, according to the Pittsburgh Post-Gazette, “reached a $7.75 million settlement agreement with about two-thirds of its Pennsylvania natural gas royalty owners.” At the end of last year Chesapeake Energy offered a $30 million deal to Pennsylvania landowners to settle claims the company had screwed them out of royalty money by artificially inflating post-production costs in an elaborate scheme to pocket more money at landowners’ expense (see Chesapeake Agrees to $30M Royalty Settlement for PA Landowners). Chesapeake’s proposed deal last year would have given the average PA leaseholder (some 14,000 of them) a one-time $2,140 payment–adjusted up or down for the size of their acreage. This new deal, for 10,000 of the same leaseholders, offers $7.75 million–an average of $775 per landowner. Which is piddly. It’s nothing. An insult. Last year Chesapeake’s deal with leaseholders required the state Attorney General’s office, which has an ongoing, separate lawsuit filed against Chesapeake over the same issue, to settle as well. The AG’s office refused (see PA AG Not Backing Down re Chesapeake Energy Royalty Lawsuit). In fact, the AG’s office is still refusing to settle, with this new deal. Yet now Chesapeake is willing to move forward without the AG as part of the settlement. Heck yeah! Convince these desperate folks to take, literally, pennies on the dollar. What company wouldn’t go for that deal? Any way you slice this, northeast PA landowners are getting screwed if they agree to Chesapeake’s deal. They get a maximum of 8% back of the inflated “costs” Chesapeake originally deducted from royalty checks. We suppose some will say 8% now is better than maybe nothing or very little years from now. We don’t see it. We see these good landowners getting shafted in this deal…
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Other Shoe Drops: PA Methane Emissions Regs for Existing Sources

Pennsylvania Gov. Tom Wolf’s Administration has been fiddling with proposed regulations to cut down on so-called fugitive methane emissions from drilling and pipelines for years. The regulations are known as General Permit 5 (GP-5) and General Permit 5A (GP-5A). GP-5 applies to pipelines and compressor stations, while GP-5A applies to well pads and drilling. In June, the PA Dept. of Environmental Protection (DEP), author of the revised regs, published its final final final final version of the regs (see PA DEP Releasing Onerous New GP-5 & 5A Methane Regs June 8). The new regs will go into effect this month. But here’s the thing. These onerous regulations apply only to *new* and not *existing* sources of methane emissions. With the revised regs about to go into effect for new sources, right on cue Big Green groups began pressuring Wolf to apply them to existing sources too (see Big Green Pressures Gov. Wolf to Expand Onerous Methane Regs). That was, of course, the intention all along–to hamstring (and shut down) the Marcellus industry by saddling it with insanely high costs to comply with regulations that won’t do a thing to “save the planet” from methane poisoning (a non-existent threat). Unfortunately the Wolf DEP is signaling it will propose insanely onerous new methane emissions regulations for *existing* sources in early 2019. So this is fair warning to the industry to begin a counter-offensive now. It’s also fair warning to conventional drillers–the DEP is going to float new regs for you in 1Q19 as well…
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Cool New Video Debunks/Explains PA Severance Tax Issue

Mark Mathis – Clear Energy Alliance

A killer video on the topic of a severance tax in Pennsylvania has just been published (on Youtube) by the Clear Energy Alliance. The severance tax issue is one that we’ve tracked and written about for years–since Ed “fast Eddie” Rendell was governor. MDN caught up with Mark Mathis, founder of CEA, to talk about his latest video. Mark is an author and documentary film maker, and before that, a television reporter and anchor for ten years. Mark said he’s “a big language guy.” He began tracking issues in the energy industry some 15 years ago. Mark maintains the language we use to talk about energy is wrong–that the public doesn’t really understand. The PA severance tax issue is a perfect example. According to Mark (and the 4 1/2 minute video) PA Gov. Tom Wolf is being disingenuous when he says PA is “the only state without a severance tax.” While technically that’s true, what Wolf and other Harrisburg politicians don’t say is that PA has an “impact fee”–the equivalent of a severance tax. Plus PA has the second highest corporate income tax in the country, while other severance tax states (like Texas) have no corporate income tax. It’s virtually impossible to run an apples to apples comparison when it comes to how much a given company pays in taxes in a specific state. But according to Mark, slapping an additional tax on natural gas production in PA would be a disaster. The short video (which you MUST watch) explains it all in just a few minutes…
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Riverkeeper Too Late to Challenge Penn East Pipe Water Certificate

In Feb. 2017, THE Delaware Riverkeeper filed a lawsuit challenging water permits issued by PA for the PennEast Pipeline (see PennEast Pipeline Gets 401 Water Quality Certificate from PA DEP). Riverkeeper filed their challenge late, arguing it was confused over where to file the challenge–in federal or state court. Commonwealth Court told Riverkeeper nice try, but no cigar. Last Wednesday Commonwealth Court told Riverkeeper, “you’re too late.” The court said Riverkeeper’s “confusion” over where they should file is not justification for filing WAY past the deadline to challenge the permit. We doubt Riverkeeper even thought this particular lawsuit (one of dozens they’ve launched against PennEast) would bear fruit. This is just one more instance of Riverkeeper’s “throw it against the wall and see what sticks” legal strategy. This particular handful fell to the ground…
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Mariner East 2 Pipeline 99% Done, Online in ~2 Months

With all of the negative news stories from mainstream media in Pennsylvania regarding the Mariner East 2 (ME2) Pipeline project, and the seemingly endless challenges by Philadelphia politicians in bed with Big Green groups to try and block the project, here’s a couple of facts to warm your heart, and give antis heartburn: (1) ME2 is now 99% done; (2) ME2 will most likely go online in the next two months–by the end of 3Q18. There will still be a few small areas where ME2 proper is not online in two months–locations near Philadelphia where there have been sinkhole problems. But Sunoco Logistics Partners (aka Energy Transfer), the builder, has a workaround–repurposing an out-of-service pipeline for a few months…
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PA Briggs “Rule of Capture” Case Turns on Concept of Drainage

In April, MDN brought you the news that Pennsylvania Superior Court had handed down a decision (known as the “Briggs” case) that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed to Superior Court and three judges heard the case. Two of the three overturned the lower court and sided with the landowner. Southwestern, following that decision, petitioned the Superior Court to have all of the sitting justices (called en banc) hear the case. Sadly, in June the Superiors proved they aren’t so superior after all, declining to rehear the case (see PA Superior Court Rejects Southwestern “Briggs” Trespass Appeal). Southwestern then appealed the case to the PA Supreme Court in early July (see Southwestern Appeals “Briggs” Trespass Case to PA Supreme Court). No word yet on whether or not the Supremes will take the case. In the meantime, this case and its ultimate effect on drilling in PA and beyond is still a hot topic of discussion throughout the industry. We spotted two recent articles tackling it–one from a lawyer who does a great job of crystallizing the important elements in the case–that this case turns on the concept of drainage, and the other article which tackles the broader topic of how energy law in PA is charting its own path separate from Texas and other big oil/gas states…
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Berkeley/Johns Hopkins Publish Junk Study on Fracking & Depression

The usual suspects from Johns Hopkins University, working with researchers from the University of California, Berkeley, have completely soiled themselves this time. It’s really kind of embarrassing. In a “study” just published in Nature, researchers claim they have found a link between living near fracking sites in Pennsylvania and an increased incidence of being *mildly* depressed. We get mildly depressed just reading this drivel. Maybe there’s a link between junk science and mild depression? Launch a study! The research team this time around includes a fellow from the Post Carbon Institute, a rabidly anti-fossil fuel organization that has called fracking a “virus.” You can tell just how biased and false this study truly is just based on the wackos who published it. The “study” is titled, “Associations of unconventional natural gas development with depression symptoms and disordered sleep in Pennsylvania” (full copy below). It’s not even real research. They used a bunch of medical records from a local hospital network (Geisinger) and didn’t actually interview anyone themselves. Totally made up. Total fiction. That’s what you need to know about the latest attack on Marcellus drilling…
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Enviro Groups Back Down on Challenging DEP Permits for ME2 Pipe

An interesting development on Friday, when the Pennsylvania Dept. of Environmental Protection (DEP) issued a press release to announced that three radical environmental groups have dropped their objections to permits the DEP previously granted for the Mariner East 2 Pipeline. Clean Air Council, Mountain Watershed Association, and THE Delaware Riverkeeper “settled” their appeal of 20 permits issued to Sunoco for the ME2 project. What does it mean that they “settled?” According to the announcement, “The settlement does not alter any of the 20 permits in the appeal.” In other words, this is face-saving by the radical groups. They backed down. Gave up. Threw in the towel–recognizing that ME2 is about to be completed. In other words, they’ve lost. And we won! We love saying that. No matter how hard the radicals tried to spin the news (via their affiliated mouthpieces, like StateImpact Pennsylvania), you simply can’t gloss over the fact that they’ve backed down…
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PA DEP Orders CNX, XTO & Diversified to Plug 1,058 Abandoned Wells

Yesterday the Pennsylvania Department of Environmental Protection (DEP) issued administrative orders requiring three oil and gas companies–Alliance Petroleum Corporation (a subsidiary of Diversified Gas & Oil), XTO Energy, and CNX Resources–to plug 1,058 abandoned oil and gas wells across Pennsylvania. Alliance has 638 wells, CNX has 327, and XTO has 93. In a quick scan of the list of wells to be plugged, we didn’t spot a single shale well. All 1,058 wells are conventional/vertical wells. So why is this news for MDN? Because all three drillers (but in particular CNX and XTO) drill shale wells, and plugging old conventional wells takes time and money–time and money that could be spent on drilling shale wells. It takes anywhere from $10,000 to $100,000 to plug an abandoned conventional oil/gas well. Most of the wells are located in the southwestern part of the state. CNX responded that in reviewing the list, some 190 of the wells in their list (out of 327) were part of a recent asset sale. Here’s the details on where, and how long these companies have, to plug old/abandoned oil and gas wells…
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DCNR Report: Less Shale Drilling in PA State Forests Due to Ban

It’s probably self-evident to most people that if you slap a ban on new leasing of state land for shale drilling, as was first done by liberal Democrat Ed Rendell, and later solidified by liberal Democrat Gov. Tom Wolf, it will result in (tada!) less drilling on state land. That’s the conclusion of an updated report just issued by the Dept. of Conservation and Natural Resources (DCNR). The “Shale Gas Monitoring Report” (full copy below) was first published in 2014. An updated second edition of the report was just issued by DCNR. It shows: gas development on state forest lands has “slowed considerably” since 2014; even though roads to interior parts of forests have been improved (paid for by shale drillers), some folks would rather have “pristine” dirt roads full of potholes instead; there has been a growth of “invasive” plants, perhaps carried into forests by hitching a ride on drilling equipment; drilling hasn’t affected the quality of nearby creeks and rivers. Here’s an overview of the report, followed by a copy of the full 202-page report…
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