PA “Rule of Capture” Case has Power to Limit Marcellus Drilling
As we indicated in our post yesterday, the Pennsylvania Superior Court has handed down a decision that has the power to greatly restrict, even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well). This is a legal issue–and MDN is not written by a lawyer. Hence our earlier misreading of the importance and facts in the Superior Court decision. The issue, in brief, is that Monday’s court decision disallows using an age-old principle called the rule of capture, which we previously described. The rule of capture works for conventional drilling where underground deposits of oil and gas are in pools and the pool may exist underneath multiple surface property owners. Whoever gets there first and sucks the oil/gas out, wins. That’s the rule of capture in a nutshell. And it makes sense. You can’t be held responsible for oil and gas moving from one place to another as it’s extracted. And who knows how much of the pool is located under your property, or your neighbor’s property? The Superior Court justices ruled that the rule of capture doesn’t work for hydraulic fracturing because gas (and oil) trapped in shale rock does not freely move from one place to another as it does in a pool. The judges say the gas would “stay forever” where it is without fracking. In the case of Briggs v. Southwestern Energy, the Briggs family (in Susquehanna County, PA) alleges that when Southwestern drilled and fracked on the Briggs’ neighbor, the fracking was done close enough to their property that some of the gas located under their property (unleased) was released and extracted through the Southwestern well–a “trepass.” Southwestern countered that IF such a “trespass” took place, it falls under the rule of capture. The ultimate issue boils down to this: How far do fractures extend from a lateral well? An expert energy attorney told MDN off the record that Monday’s decision “could change the entire Pennsylvania shale industry” in two important ways…
Read More “PA “Rule of Capture” Case has Power to Limit Marcellus Drilling”
This is how it works in biased, fake news land: You make up unspecific, wide-open questions that nobody really understands, and then biased, liberal media outlets interpret the “data” the way they want–to fit the predetermined media narrative. That’s what has just happened with meaningless poll questions from Franklin & Marshall College with respect to natural gas drilling in PA. We read through the questions they asked and thought, “What do some of these questions even mean?” The average citizen being asked these questions will assume and “read into” the questions what they *think* (but aren’t sure) is being asked, and answer the questions accordingly. In the end, it’s nonsensical. Meaningless. Fake. Then the lib machine kicks in to “report” that PA citizens, while still supporting drilling by a razor thin margin, actually think Marcellus drilling is bad for the environment. The latest media narrative is born: PA citizens are turning against gas drilling…
Last December the Pennsylvania Dept. of Environmental Protection (DEP) issued “draft final language” for the proposed General Permit 5A (GP-5A) and the revised General Permit 5 (GP-5)–regulations that supposedly will cut down on fugitive methane from escaping from drill pads and pipelines (see 
Last Friday MDN editor Jim Willis had the pleasure of speaking at the National Association of Royalty Owners (NARO) Pennsylvania Chapter annual convention in State College, PA. Jim was humbled to present alongside a cast of terrific speakers, including Scott Perry, Deputy Secretary of the Office of Oil and Gas Management at the PA Dept. of Environmental Protection, Tom Murphy, Director of Penn State’s Marcellus Center of Outreach and Research (MCOR), and Scott Kurkoski, a top lawyer and head of the energy practice for Levene, Gouldin & Thompson (thanks for the ride home Scott!). One of the first attendees at the event to stop by the MDN table for a chat asked if we had heard about a letter recently sent by EQT to PA landowners. We had not. He gave us a copy (below). In the letter, EQT claims they have been “subsidizing a portion of the cost to gather the gas” produced by their PA wells, and they intend to begin claiming new deductions from royalty checks beginning this year. The way they position it in the letter is that landowners will begin “sharing” in these post-production costs. Who doesn’t like to share, right? We can tell you, not a single attendee at the event was impressed with EQT’s “sharing” letter. It smacks of the road Chesapeake Energy has gone down in robbing landowners of their royalties…
The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) has just amended an existing lease with EQT that allows EQT to extract natural gas (and other hydrocarbons) from underneath the Monongahela River in Allegheny, Greene, Fayette, Washington and Westmoreland counties. EQT is paying $4,000 per acre for 392 acres ($1.568 million total) in a signing bonus, along with a big 20% royalty on anything produced. However, the announcement raises an important question we’ve asked for more than four years: Is the land under rivers and streams actually owned by the state? PA says yes. We suspect landowners who own land along those rivers and streams would say otherwise. The state grabbing money for land under bodies of water has been going on for years (see 
One of the lies told by Pennsylvania Gov. Tom Wolf in attempting to sell a Marcellus-killing severance tax to the general population is that most of the tax would fall on businesses and corporations outside of PA. The rallying cry has always been that PA landowners would not bear any of the severance tax–as in deductions from royalties paid. That lie was exposed by none other than the PA Independent Fiscal Office last week when the IFO released a report that calculates of the estimated $210 million in severance taxes that would be raised, per year, by the latest Wolf proposal–some $28 million of it (over 13%) would come out of the pockets of landowners–IN THE FIRST YEAR. By the third year, that number rockets to $51 million (or 24%). That is, a meaningfully large portion of the proposed severance tax WILL get passed on to landowners as deductions from their royalties. Lesson for landowners: Don’t fall for the siren song from Wolf and RINOs who say “If you support the severance tax (it won’t affect you), we’ll get you your minimum royalty bill.” It’s a farce…
Pennsylvania Gov. Tom Wolf has been obstinate in demanding onerous new drilling rules for the conventional, as well as unconventional (shale) drilling industry since he took office. Reworked drilling rules for both conventional and shale drillers were done and ready to go under previous Gov. Tom Corbett. Then Corbett lost to Wolf, and Wolf demanded changes to the common sense rules everyone had already agreed to (see 
Two Pennsylvania Senate committees–the Environmental Resources and Energy and the Consumer Protection and Professional Licensure committees–held a joint hearing on Tuesday supposedly on the topic of “pipeline safety”–but instead the hearing turned into a bash Sunoco Logisitcs and the Mariner East 2 (ME2) Pipeline hearing. A variety of witnesses testified. Unfortunately, State Sen. Gene Yaw (RINO from Lycoming County), chairman of the Environmental Resources and Energy Committee, didn’t invite Sunoco to testify, so it was a one-way bash fest. Sunoco was not allowed to respond. Thanks Gene. It wasn’t a court hearing, so we can’t call it a kangaroo court. Perhaps we can call it a kangaroo Senate hearing? While the discourse in the hearing was mostly civil (although it was nonstop bashing of Sunoco), a group of rabble rousers nearby was not. A group of 10-15 (depending on the news source) marched on Gov. Tom Wolf’s office. They were there to serve Wolf with a mock “Notice of Probable Violation and Summons,” which the malcontents say requires Wolf to appear in Chester County before families impacted by construction of ME2. The small mob was met with locked doors and Capitol Police who turned them away…
Let’s be honest. Pennsylvania, Ohio and West Virginia compete against each other, fiercely, to attract business to their respective states. However, in 2015 the three states agreed to lay aside their competitive natures when it comes to shale and cooperate (pool resources) for things like marketing and promotion, workforce development, transportation/infrastructure and research (see 
In January MDN brought you the sad news that the Philadelphia Energy Solutions (PES), which operates the East Coast’s largest refinery on the banks of the Delaware River, had filed for Chapter 11 bankruptcy (see 
Rover Pipeline is in hot water again. This time it’s not Captain Craig “Ahab” Butler from the Ohio EPA, but the West Virginia Dept. of Environmental Protection. In a letter just released publicly (dated March 5), WVDEP slapped Rover with a “cease-and-desist” order, stopping all construction of Rover in the state, because of inspections in February that found 14 violations of water pollution regulations. The violations occurred in Doddridge, Tyler and Wetzel counties. Violations ran the range of leaving trash behind at construction sites to improper perimeter controls (no erosion devices installed) to failure to clean up the roads they used. In addition to trouble in WV, Rover is also facing new issues in both Ohio and Pennsylvania. In February heavy rains in the region caused “slippage issues” where the pipeline is being installed. Rover filed a report with the Federal Energy Regulatory Commission (FERC) last week to say it has eight crews working to correct slippage issues at six locations along its 51-mile Burgettstown Lateral. Here’s the latest on WV shutting down Rover, and Rover’s work to fix slippage issues…
Last week MDN reported that due to underground horizontal direction drilling (HDD) in Chester County, PA for the Mariner East 2 (ME2) Pipeline project, a third sinkhole had developed. ME2 is being built close to the existing Mariner East 1 (ME1) pipeline. The sinkhole exposed a portion of the ME1 pipeline to the open air, which is why the head of the state Public Utility Commission (PUC) temporarily shut down the propane and ethane flowing through ME1 (see