PA Enviro Quality Board Approves Massive Hike in Shale Permit Fee

In Ohio, it costs drillers $5,500 to file for and receive a permit to drill a new shale well. In West Virginia, the cost is $10,150. In Pennsylvania, it has (until now) cost drillers $5,000 for a new shale well permit. Following a vote yesterday by the state Environmental Quality Board (EQB), that number is zooming to the top of the M-U list: $12,500 (2 1/2 times the previous fee). With current low gas prices, it’s pretty easy to predict new drilling permits in PA are going to crash and burn in 2020. The received wisdom is true: You always get less of what you tax more.
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PA Big Green Supports Lawsuit to Gut FERC re Pipe Approvals

The sleaziest of Pennsylvania’s Big Green groups–THE Delaware Riverkeeper and PennFuture–have filed a “friend of the court” (amicus) brief in a federal lawsuit hoping they can help gut the Federal Energy Regulatory Commission by denying FERC the only way the agency has of combating these sleazy groups–something called a tolling order.
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Another Marcellus Driller Converts to Electric Fracking

Electric fracking (or e-fracking) continues to displace traditional fracking in the Marcellus/Utica. What’s the difference between the two? Traditional fracking uses diesel-fueled engines to produce electricity to power pressure pumps for hydraulic fracturing operations. Electric fracking uses natural gas from the well pad to power turbines to create electricity. Electric fracking fleets are roughly half the size of traditional diesel fleets–and a whole lot quieter.
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PA Rep. Metcalfe Calls Wolf “Rogue Governor” – Can’t Force RGGI

The gloves are off in Harrisburg. We previously told you about Gov. Wolf’s plan to have PA join with northeastern states in the so-called Regional Greenhouse Gas Initiative (RGGI), a regional alliance to slap a carbon tax on natural gas-fired electric plants (see Gov. Wolf Goes Bonkers: EO Destroying Gas-Fired Elec, Carbon Tax). PA Rep. Daryl Metcalfe (Republican from Butler County, PA), Majority Chair of the House Environmental Resources and Energy Committee, sent a letter yesterday to the RGGI Executive Committee saying PA has a “rogue Governor” (his exact words) who lacks the authority to force PA to participate in RGGI without legislative approval.
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PA PUC Approves Aqua America Purchase of Peoples Gas for $4.3B

Aqua America, the nation’s second-largest water/wastewater utility company headquartered near Philadelphia, announced in October 2018 it would buy Peoples Gas, the nation’s fifth-largest natural gas utility company headquartered in Pittsburgh, for $4.275 billion (see Aqua America Buys Peoples Gas for $4.3B – Old Pipes, Similar Nature). It took a while, but the last hurdle was cleared yesterday when the Pennsylvania Public Utility Commission gave its blessing on the deal.
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Mariner East Pipe Flips PA from Propane Shortage to Surplus

Credit: Energy Transfer

The 2014 Polar Vortex event, when most of the U.S. was plunged into record low temps for an extended period, created a propane shortage for many. One of the states most affected by lack of propane during that event was…Pennsylvania! Should such an event hit again, PA is now in the clear, thanks to the Mariner East pipelines.
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16 Democrat State AGs Oppose Trump Plan to Ship LNG via Rail

Last April President Trump issued an Executive Order directing the Secretary of Transportation to write a new rule allowing specially constructed tanker cars for railroads (DOT-113 tank cars) to ship LNG, i.e., liquefied natural gas (see Here Come the “Bomb Trains” – Trump to Allow LNG by Rail). The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), in coordination with the Federal Railroad Administration (FRA), issued a “Notice of Proposed Rulemaking” (draft regulations) to move the process forward in October (see US DOT Gets Serious About LNG by Rail – Publishes Proposed Rules). Monday was the final day for comments on the proposed rules. Unsurprisingly 16 uber-partisan Democrat state attorneys general filed a joint letter opposing the new regs.
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New IFO Report: PA Shale Drillers Paid $1.5B in Royalties in 2017

Just coming to light for us now is a report issued by the Pennsylvania Independent Fiscal Office (IFO) that estimates the amount of gas production royalties paid by drillers to landowners for calendar year 2017 (the most recent year available). It’s a fascinating report that breaks down royalty payments by the eight top gas-producing counties in the state. You may be surprised to learn the county producing the most natural gas in the state (Susquehanna County) does NOT, in fact, pay out the most in landowner royalties.
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3rd Lawsuit Filed Against Energy Transfer re Mariner Corruption

MDN previously told you about unconfirmed rumors that the FBI is investigating the PA Gov. Tom Wolf administration over how permits came to be issued for the Mariner East 2 pipeline project (see FBI Investigates Wolf Admin for Corruption re ME Pipe Permits). The allegation/rumor is that Wolf and/or members of his staff pressured the Dept. of Environmental Protection (DEP) to approve permits for the pipeline project in return for something (money or something else). Two different law firms seized on the rumor as reason enough to launch speculative class action lawsuits for shareholders, accusing Energy Transfer (the builder) of corruption (see 2nd Class Action Lawsuit Against ET/Sunoco re Mariner East Pipe). A third such lawsuit was filed last week–this one by a public employee retirement fund.
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Bill Separating PA Conventional from Shale Regs Advances in Senate

For years Pennsylvania’s small, independent conventional oil and gas drillers have objected to the one-size-fits-all regulations concocted by the Gov. Tom Wolf Administration that applies the same regulations to them as to big shale drillers. The two types of drilling are apples and oranges. To make small drillers jump through the same hoops as big shale drillers will bankrupt many of the smaller drillers. So in 2016, PA’s conventional drillers filed a lawsuit to block Wolf’s new regs from going into effect (see PA Conventional Drillers File Lawsuit to Stop New DEP Regulations).
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IFO Projects 2019 PA Impact Fee Revenue Fell by $53.6M (21%)

In 2019 Pennsylvania raised a record high of $247 million from its version of a severance tax, called an impact fee, based on drilling activity from 2018 (see PA IFO Report Says Record High Impact Tax for 2018 – $247M). The state’s Independent Fiscal Office (IFO) is out with projections for how much revenue will be raised this year (based on drilling in 2019). Given we hit a downturn last year, you won’t be surprised to learn the impact fee will drop by $53.6 million (21%), to a projected $198.2 million.
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Corning Gas Buys Out JV Partner in PA Leatherstocking Gas & Pipe

Corning Natural Gas (based in Corning, NY) has a 50% joint venture partnership in Leatherstocking Gas Company and Leatherstocking Pipeline Company with another Upstate NY-based company, Mirabito. Leatherstocking runs gas mains to residents and businesses in small, mainly rural communities–like Montrose, PA (see PA Rural Residents Burn Marcellus Gas, Save Big Bucks on Heating). Corning announced yesterday they are buying out Mirabito’s 50% interest on the PA side of the border.
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PA DEP to Finalize 250% Hike in Shale Permit Fee on Jan 21

Pennsylvania 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 2018 with a proposal to hike the fee required when submitting an application to drill a new shale well by 2 1/2 times, or 250% (see PA DEP Plans to Raise Marcellus Well Permit Fee by 250%). The industry reacted, negatively. It’s taken nearly two years, but on Jan. 21 the DEP’s Environmental Quality Board will meet to finalize and activate the new insanely high fee schedule.
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Big Green Groups Ask FERC to Deny PennEast Pipe More Time

The companies behind PennEast Pipeline, a $1.2 billion new greenfield pipeline project from Luzerne County, PA to Mercer County, NJ, have not given up on the long-delayed project. As we told you in November, PennEast plans to file an appeal to the U.S. Supreme Court (on Feb. 3) to overcome a lower court ruling that prevents PennEast from using eminent domain in New Jersey for some of the route (see PennEast Pipe to Appeal Bungled Fed Court Decision to US Supremes). Since the original Federal Energy Regulatory Commission (FERC) certificate authorizing construction of the project expires on Jan. 19, 2020, PennEast asked FERC to extend it another two years (see PennEast Pipe Still Hopeful, Asks FERC for 2-Year Extension). Three Big Green groups have filed an objection, asking FERC to kill the project now.
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