MarkWest Energy Settles EPA Air Pollution Case for $5.6 Million
NOTE: A previous version of this post reported a total price of $3.2 million, now changed to account for the addition of an extra $2.4M for required SEPs. See below.
Two MarkWest Energy subsidiaries, MarkWest Liberty Midstream Resources and Ohio Gathering Co., have been forced into signing a settlement of claims brought by the U.S. Dept. of Justice, Environmental Protection Agency, and the Pennsylvania Dept. of Environmental Protection over charges of releasing too much air pollution from facilities they operate throughout eastern Ohio and western Pennsylvania in the Utica and Marcellus shale. The agreement signed yesterday by MarkWest calls for the company to spend $2.6 million to install and operate new technologies to minimize VOC (volatile organic compounds) emissions at their facilities–19 major, standalone facilities and 273 smaller facilities. The company will also implement three supplemental environmental projects (SEPs) for an additional $2.4 million. In addition, MarkWest will pay the government a $610,000 fine (i.e. shakedown). Total cost to get the government of out their hair: over $5.6 million. The government claimed MarkWest had not applied for nor complied with necessary permits. But the real disaster, the thing that sent government bureaucrats into fits, is that MarkWest failed to file proper paperwork required under the Clean Air Act. However, the settlement didn’t all go the government’s way. In agreeing to the settlement, MarkWest “expressly denies and does not admit any liability to the United States or PADEP arising out of the conduct, transactions or occurrences alleged in the complaint,” which means antis can’t file frivolous lawsuits against MarkWest over air pollution…
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Our favorite government agency, the U.S. Energy Information Administration, yesterday took a close look at natural gas production in Pennsylvania and how it has grown. A few interesting factoids: PA averaged a record high 15 billion cubic feet per day (Bcf/d) of natural gas production in 2017–3% higher than 2016. Most of PA’s natural gas production comes from the Marcellus Shale. PA production accounted for 19% of total U.S. marketed natural gas production in 2017. PA produces more natural gas than any other state except Texas. Several key pipelines have helped move some of PA’s enormous production to other markets. Here’s the insightful look at PA natgas production from expert number crunchers at EIA…
Ethane and propane had been flowing through the converted Mariner East 1 (ME1) pipeline safely for more than year, hauling the two natural gas liquids (NGLs) from southwest PA all the way to the Marcus Hook refinery near Philadelphia. However, ME1 was suddenly switched off on March 3 by order of the Pennsylvania Public Utility Commission (PUC) after a sinkhole opened up under the pipeline in Chester County, exposing some of the bare steel to the open air (see 
Right around Earth Day politicians become even nuttier than they usually are. This year is no exception. A truly breathtaking, totally insane pair of bills have just been introduced in the Pennsylvania legislature, in observance of Earth Day, that would force all Pennsylvanians to use electricity generated from 100% so-called renewable sources by the year 2050. It’s totally preposterous and lunatic–but there you have it. Actually being in your right mind is no longer a requirement for high office–at least in PA. Democrat Rep. Chris Rabb introduced the bill in the PA House, and Democrat-lite (i.e. RINO) Sen. Charles McIlhinney introduced the bill in the PA Senate. Unsurprisingly they’re both from the Philadelphia area, where living in the real world doesn’t exist. The object of the proposed law is to dump the use of all “fossil fuels” and instead rely on unreliable wind and solar to produce all electricity in the Keystone State. Do you know how much of PA’s electricity is produced by wind and solar today? A piddly 2.8%. Nuclear generation is the #1 source of electric in PA at 41%, followed by coal at 29.6% and natural gas at 25%. Do you really, in your heart of hearts, believe PA can generate 100% of its electricity from wind and solar by 2050? It’s a fantasy, totally unconnected with reality. Yet that’s all we’ll hear and read for the next few days until, blessedly, we get past so-called Earth Day…
In February Sunoco Logistics Partners agreed to pay a massive (historically high) $12.6 million fine to the PA Dept. of Environmental Protection (DEP) for “permit violations related to the construction of the Mariner East 2 pipeline project” (see 
Southwestern Energy has just taken the next very important step in a process that frankly has us holding our breath. Two weeks ago MDN brought you the news that the Pennsylvania Superior Court handed down a decision that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see 
Perhaps our headline for this article is a tad misleading. Maybe the better question is, Was a meeting held yesterday in Towanda, PA on the topic of gas royalties *meant* to resolve anything? The answer of which is, “Probably not.” PBS StateImpact Pennsylvania organized and hosted a forum yesterday on the topic of PA landowners getting screwed over by energy companies with respect to royalty payments. Both sides were well represented at the forum. We think it’s a cool concept, to get both sides talking about a very important issue. However, StateImpact, funded and controlled by Big Green backers including the William Penn Foundation and Heinz Endowments, is not an impartial, unbiased news organization that wants to honestly explore this important issue. StateImpact is NOT an impartial broker. Their purpose is to play both sides against each other and enjoy the chaos that ensues. Whip up more animosity between both sides. Make no mistake: StateImpact abhors shale drilling and prefers it not happen at all in PA. With that as the proper context to understand the event, some good points did emerge from the discussion, despite StateImpact’s bad intentions…
The Pennsylvania Dept. of Environmental Protection (DEP) released the results of it’s industry-leading program to monitor oil and gas wells for methane (and oil and brine) migration–that is, for anything would impact groundwater. The Mechanical Integrity Assessment Program, as it’s called, is “the most rigorous routine well integrity assessment program to protect groundwater in the United States,” requiring quarterly inspections by operators of their wells. The DEP is in the process of releasing the results of those reports for the past four years–from 2014-2017. They’ve just released results for 2014 (full copy below). What did the DEP find? “[L]ess than 1 percent of operator observations indicated the types of integrity problems, such as gas outside surface casing, that could allow gas to move beyond the well footprint.” In other words, there is virtually no methane migration happening from shale (and conventional) natural gas wells because of good well casings and regular checks. It is hard to overstate how important these findings are. The DEP’s own evidence disproves wild claims that methane is migrating from shale wells everywhere, claims made by anti-fossil fuel radicals and a colluding media (
It’s always fun to talk about strippers here on MDN. Uh, stripper wells that is. Background: In 2012 Pennsylvania passed the Act 13 drilling law that includes an impact fee on wells targeting shale layers, including the Marcellus. Snyder Brothers, headquartered in PA, drills mostly conventional (vertical only) wells in southwestern PA. In 2011-2012 they drilled 45 vertical-only wells targeting the Marcellus. All 45 of the vertical-only wells were fracked. Initially those wells produced more than 90 thousand cubic feet per day (Mcf/day), but by December of the year in which they were drilled, the wells produced less than 90 Mcf/day. The way the 2012 Act 13 law is written, if a well produces less than 90 Mcf/day during “any” month it is considered a stripper well and exempt from paying the impact fee. The state’s Public Utility Commission (PUC) assessed the fee anyway because for 11 months the wells produced more than 90 Mcf/day, arguing the word “any” is not a get-out-tax-jail-free card. Snyder Bros. sued and after an appeal of the case, Snyder Bros. won the case in March 2017, exempting those wells from paying impact fees (see 
Big Green groups are objecting to a plan to exempt Pennsylvania’s mom and pop conventional oil and gas drillers from regulations meant to apply to unconventional (shale) oil and gas drillers. The anti-drilling Environmental Defense Fund (EDF) along with the anti-drilling Pennsylvania Environmental Council (PEC) co-authored a letter to PA Senators encouraging them to vote against a bill now working its way through the Senate (and House). In March, two identical bills were introduced, one in the Senate, the other in the House, that would “roll back” (more like “lock in”) regulations that govern conventional PA drilling to the Oil and Gas Act of 1984 (see 
In March the Pennsylvania House State Government Committee debated and voted to approve a slate of five bills aimed at fixing not only the slowmo way the state Dept. of Environmental Protection (DEP) approves shale permits, but also roll back some of the egregious regulatory overreach that exists in PA (see 
As predictable as spring dandelions (weeds that won’t give up), a Marcellus Shale severance tax is once again being pushed by leftists in Harrisburg who want to raise hundreds of millions of dollars to give it away to teachers unions in the Philadelphia area. The interesting twist is that this time the bill introduced in the PA Senate is not from a Philly Senator, but is being authored and introduced by northeast PA Democrat Sen. John Yudichak–from Luzerne County (Wilkes-Barre area). Apparently Yudichak has been nominated as Gov. Wolf’s patsy, to do Wolf’s bidding and dirty work this time around. On Monday Yudichak issued a “co-sponsorship memo” to elicit names he can list on the bill when it’s formally introduced. No doubt he’ll get at least a few sell-out Republicans, like RINOs from the Philly area, and perhaps even some Republicans from drilling areas, like Sen. Gene Yaw from Williamsport, who voted for a similar bill last year…
Here’s one we didn’t see coming–a potential way to fix the ongoing disaster that is the Delaware River Basin Commission (DRBC) and their illegal attempt to regulate hydraulic fracturing within the Delaware River Basin under the claim they have the right to regulate anything that impacts groundwater. A Pennsylvania House of Representatives member, Dan Moul (Republican from Gettysburg), is about to introduce a bill that would replace the DRBC’s authority to regulate groundwater by vesting that authority solely in the hands of the state Dept. of Environmental Protection (DEP). The problem is, the bill appears to be targeted more at the Susquehanna River Basin Commission (SRBC) than DRBC. The bill will affect both organizations. Last time we checked, the SRBC does a fine job of regulating water withdrawals for fracking AND makes no attempt to regulate fracking, which the DRBC is attempting to do. But then, we don’t think this bill has the DRBC’s frack ban, nor fracking at all, in mind. It likely has more to do with farming and other water uses and some perceived shortcomings at the SRBC…
Propane is one of the NGLs (natural gas liquids) that come out of the ground along with natural gas and oil–especially in “wet gas” areas like southwestern PA, eastern OH, and the northern panhandle area of WV. Ethane and propane have been flowing through the converted Mariner East 1 (ME1) pipeline for more than year–hauling propane (and ethane) from southwest PA all the way to the Marcus Hook refinery near Philadelphia. At Marcus Hook, the propane is loaded onto ships and sent around the world. The world is an important market for our propane. However, ME1 was suddenly switched off on March 3 by order of the Pennsylvania Public Utility Commission (PUC) after a sinkhole opened up under the pipeline, exposing some of the bare steel to the open air (see 
The gloves have finally come off. Typically the Marcellus industry, as represented by the Marcellus Shale Coalition, has used restrained language when talking about Pennsylvania Gov. Tom Wolf. Hey, the industry has to work with the guy because the state Dept. of Environmental Protection (DEP)–the agency that regulates shale drilling–is part of the executive branch (under Wolf’s thumb). The industry often can’t say what it really thinks. No more. Wolf, who pretends to be a friend of the Marcellus industry and mouths words of support, recently launched a vicious, lying attack against the industry over the severance tax issue (as part of his re-election campaign). The gloves are now off and the MSC is punching back. MSC president Dave Spigelmyer published an editorial in today’s Philadelphia Inquirer pointing out the difference between Wolf’s words and his deeds. In a bout of political schizophrenia (some would say hypocrisy), Wolf says shale gas in PA represents “enormous economic opportunity.” He then turns around and claims high-paid Marcellus lobbyists have spread money around Harrisburg like candy, bribing legislators to block a severance tax. What Wolf doesn’t tell you is that he himself has received millions of dollars from the teacher’s unions he’s promised to give severance tax money to…
The Commonwealth Foundation is Pennsylvania’s premier free-market think tank. The aim of the Foundation is to “transform free-market ideas into public policies so all Pennsylvanians can flourish.” We’ve highlighted their excellent work over the years. They’ve just done it again. The Commonwealth Foundation has just published a report called “The State of Natural Gas in Pennsylvania” (full copy below). The opening begins this way: “Pennsylvania’s regulatory and tax environment is stunting job growth and deterring investment. A decade after the Marcellus Shale boom, lawmakers are still debating how to tax the industry instead of fixing the policies contributing to Pennsylvania’s increasingly uncompetitive energy market.” At the end of the report the Foundation shows a severance tax comparison of existing severance taxes in other states that PA competes against, like Ohio, West Virginia, Texas, Colorado, and Oklahoma. The chart shows that the existing impact fee (in essence a severance tax) runs around 1.1%. The severance tax in Ohio is running around 0.7%, and in West Virginia 3.5%. In places like Texas, which increasingly competes against PA with prodigious quantities of natural gas production, the severance tax is 4.2%. However, Gov. Wolf’s proposed severance tax would be 5%–the highest in the nation except for New Mexico’s 7.9% (which doesn’t compete with PA). The report shows how PA is restricting Marcellus activity with over-regulation and a high corporate income tax…