Statewide PA

  • | | | | |

    M-U Gathering Pipelines Blamed for Killing “Ancient” Salamanders

    The Eastern hellbender is the largest salamander in North America, reaching lengths of up to 24 inches. It’s also the official amphibian of Pennsylvania. Photo: Dave Herasimtschuk / Freshwaters Illustrated

    (Sigh.) Here we go again. An in-depth news story appearing on the PBS website Allegheny Front theorizes that the presence of natural gas gathering pipelines–run to individual shale wells–are causing a decrease in the population of hellbenders. The theory is that as more and more pipelines are installed under creeks and streams throughout the region (in western PA and easter OH), the construction process muddies the streams and kills aquatic life, including the hellbender. The hellbender is a giant salamander–growing to an average of 15 inches long. Ugly suckers–so ugly they’re cute! OK, so a pipeline gets installed and the water is muddy for a day or two and maybe it kills a hellbender or two, what’s the big deal? Are they an endangered species? No, they are not. They are, however, considered to be “near-threatened”–meaning any decade now they *may* get added to the “threatened” list (but still not endangered). The idea is, of course, to avoid killing enough of a species like the hellbender so that it ends up on a threatened or endangered list. So are pipelines having a negative impact on hellbender populations? The article wants you think so, but actually, there’s zero evidence of any kind of impact by pipelines on hellbender populations. Instead of scientific steak to show a connection between pipelines and hellbender populations, the article serves up anecdotal Cheetos of scary pictures of pipelines being installed. There is no connection between pipeline construction and hellbender populations–that’s the bottom line when you read the following story…
    Read More “M-U Gathering Pipelines Blamed for Killing “Ancient” Salamanders”

  • | | |

    PA DEP’s Short-Term Solution to Get More Help – Hire 92 Interns

    Everybody has a “fix” for the chronically slow Pennsylvania Dept. of Environmental Protection (DEP). The DEP has a policy of issuing erosion and sedimentation permits for shale drilling 14 days from the date of application. At last check, it was taking the agency over 250 days to issue those permits. The Marcellus industry has been pressuring the PA legislature for a fix. As we noted in a companion story today, the PA Senate’s “fix” is to study it (see PA Senate Passes Meaningless Resolution to “Study” DEP Slow Permits). The PA House is more proactive, with a series of 5 bills that would, among other things, enlist the help of independent third parties to take up the slack (see PA House Advances “Fix DEP & Other Agencies” Plan with 5 Bills). Even PA Gov. Tom Wolf got in the act, offering his own solution, which involves hiking fees and hiring more people (see PA Gov Wolf Floats Plan to Fix DEP Slow Drilling Permits: Hike Fees). Perhaps the DEP has found a way to fix itself. The DEP recently posted 92 openings for paid internships. Many of the openings are for “Engineering and Scientific Technical Interns” for which the intern will earn $13.23/hour. While some of the openings are in the coal program, or the water resources program, many of positions (we’d say most, judging by a random check) are in the oil and gas program. But wait, the DEP is on a tight budget, right? They don’t have an extra two nickels to rub together. That’s what we always hear. That’s why fees need to go up, right? Somehow the DEP has been able to find money for an intern program. If 92 interns work for a 3-month period earning $13.23 per hour (40 hour weeks), that’s more than $580,000. Maybe the DEP will pull the money from one of the slush funds Republicans wanted to empty as part of balancing the budget? At any rate, here’s the deets on becoming an intern for the PA DEP…
    Read More “PA DEP’s Short-Term Solution to Get More Help – Hire 92 Interns”

  • | | |

    PA DEP Plans to Raise Marcellus Well Permit Fee by 250%

    Pennsylvania Gov. Tom Wolf’s Dept. of Environmental Protection (DEP), the agency charged with overseeing oil and gas drilling in the state, has “blindsided” the shale industry with a proposal to hike the fee required when submitting an application to drill a new shale well. The current fee is $5,000. The proposed new fee is $12,500–or 2.5 times greater (i.e. 250% higher). The DEP Oil and Gas Technical Advisory Board (TAB) is scheduled to meet next week, on Feb. 14, to discuss the permit fee increase. The fee funds the oil and gas program within the DEP. Wells must be visited and inspected throughout their life–decades after they are initially drilled. The permit fee is a one-time, up-front fee. Over the past couple of years the number of new wells getting drilled has decreased (although in 2017 it went back up, see PA Shale Wells Drilled Soars 56% in 2017; Impact Fee Up $5,400/Well). Because there have been fewer wells drilled in recent years, there’s a lot less money in the DEP’s budget for well inspectors. Hence the plan to hike the fee. The industry does not object to a measured increase–but going up 250% is “excessive” and not called for, according to the Marcellus Shale Coalition. In addition to the permit fee hike, the TAB meeting will also hold a discussion on finalizing new GP-5 and GP-5A General Permits to control methane emissions from oil and gas operations. Buckle up, the next TAB meeting looks like it may get heated…
    Read More “PA DEP Plans to Raise Marcellus Well Permit Fee by 250%”

  • | | | | | | | | |

    Sunoco Appeals DEP’s ME2 Pipe Suspension to Enviro Hearing Board

    PA State Sen. Andy Dinniman

    In early January, the Pennsylvania Dept. of Environmental Protection (DEP) issued an order shutting down all construction for the Sunoco Logistics Partners Mariner East 2 (ME2) pipeline project (see PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline). The DEP claims Sunoco had violated the conditions of the permits that allow it to drill and trench for the project. In particular, the DEP is hot and bothered about drilling mud spills associated with underground horizontal directional drilling (HDD). The DEP said Suonco can restart work when/if certain conditions are met. So far the DEP has not allowed Sunoco to restart work. In the meantime, thousands of workers are in the unemployment line, and have been since Jan. 3rd. Sunoco has just appealed the DEP’s cease and desist order to the PA Environmental Hearing Board–a special court set up to hear appeals of DEP decisions. Sunoco lays out their case in a filing (below) for why the DEP is incorrect in issuing their stop work order…
    Read More “Sunoco Appeals DEP’s ME2 Pipe Suspension to Enviro Hearing Board”

  • | | |

    PA Shale Wells Drilled Soars 56% in 2017; Impact Fee Up $5,400/Well

    In early 2012, Pennsylvania enacted the most sweeping rework of oil and gas laws in the state in decades (see Gov. Corbett Signs New Marcellus Drilling Law). Called Act 13, one of the provisions of the law is an “impact fee” collected on each horizontal shale well drilled. The fee is intended to offset the impacts of drilling in places where drilling happens, hence the name. However, in order to get enough support to pass Act 13, politics were played and 40% of the “fee” got re-allocated to non-impact uses–i.e., 40% of the fee became a tax (see PA’s New Tax on Drilling (er Sorry, Impact Fee)). In reality, PA’s impact “fee” is the equivalent of a severance tax. The main difference is that the fee is calculated according to a sliding schedule based on how long a well has been around. Beginning with the first year a shale well is drilled, and every year thereafter, drillers pay a set fee, regardless of how much gas is produced. If a driller drills a well but doesn’t complete it in year one, that driller still pays the same (very steep) fee, regardless of no production. In that way, an impact fee is superior to a severance tax as a revenue generator for the state. Impact fees are paid for 15 years. In setting up the somewhat complicated schedule for how much a driller will pay, it depends on how old the well is. The PA Public Utility Commission (PUC), the agency in charge of assessing and collecting the fee, periodically adjusts the fee schedule up to account for inflation. The fee assessed depends on how much the price of natural gas is selling for at the benchmark Henry Hub trading point (in Louisiana). In 2017 (which collected fees from drilling in 2016), if the price of natgas at Henry Hub averaged between $2.26 – $2.99 for the year (which it did, at $2.46/Mcf), the impact fee for a newly drilled well during the year of 2016 was $45,300. In 2018 (collecting fees from 2017), the price of natgas at Henry Hub was in the next higher bracket, averaging between $3.00 – $4.99 (2017 averaged $3.11/Mcf). So the fee for first year wells drilled last year will be $50,700–which is $5,400 higher than a driller would have paid the previous year. Our point: Drillers in PA pay big bucks in “fees” (i.e. taxes) to drill in the state. Slapping a severance tax on top of the impact fee would be a disaster, virtually shutting down any new Marcellus drilling. Yet that’s what Gov. Wolf and his Democrat comrades insist on doing. Below is the newly released impact fee schedule for 2018 (covering wells drilled in 2017), along with details on the whopping increase in the number of wells drilled in 2017 vs. 2016…
    Read More “PA Shale Wells Drilled Soars 56% in 2017; Impact Fee Up $5,400/Well”

  • | | | | | |

    PennEast Pipe Forced to Do It Hard Way – Using Eminent Domain

    As we told you last week, today (Monday, Feb. 5) is the final day for landowners who live along the path of the PennEast Pipeline to accept an offer from PennEast to lease their land for the pipeline (see PennEast Pipe Gives Holdout Landowners Feb 5 Deadline to Sign). The landowners have had near three years to deal in good faith negotiations with PennEast, and now time has run out. On Friday, a group of holdout landowners symbolically tore up their PennEast lease offers in a vain media stunt. Starting later this week they will receive something via certified mail they better not tear up–a court summons for an eminent domain proceeding. It’s a shame when it has to come to that, but denial is a strong emotion. Now it’s off to court they go where they’ll get a splash of reality…
    Read More “PennEast Pipe Forced to Do It Hard Way – Using Eminent Domain”

  • | | |

    PA IFO Says 2017 Impact Fee Revenue Near Record High

    Since 2012, Pennsylvania has collected the equivalent of a severance tax from Marcellus Shale drillers via something called an impact fee. Same concept as a severance tax. You drill a well, gas comes out, you pay a tax. Except with an impact fee you pay whether or not anything comes out of the ground (a more reliable source of tax revenue than a severance tax). The impact fee quickly started to generate hundreds of millions of dollars a year in extra revenue for Pennsylvania–60% of which goes back to the communities where drilling happens (which Philadelphia politicians hate), and 40% of which goes to the black hole of Harrisburg for redistribution (which Philadelphia politicians love). Drilling began to slow in 2014, and crashed in 2015/2016, with low low commodity prices for natgas. As the price went down, so too did the number of new wells drilled. Impact fee revenue (which is delayed a year) also went down. The impact fee doled out this year is based on revenues raised in 2017. The PA Independent Fiscal Office (IFO) does a pretty good job of guesstimating how much impact fee revenue will be generated. Last July, the IFO predicted impact fee revenue from 2017 would end up being around $222 million in revenue (see IFO Predicts PA Impact Fees for 2017 Will Soar, Near Record High). Now that the year is in the can and production reports are rolling in, the IFO now predicts impact fee revenue will end up at $219.3 million. The all-time high for a single year’s impact fee revenue was 2013, when it was $225.7 million. Looks like 2017 will come within a whisker of that record. Meaning higher levels of new drilling is now “back” in the PA Marcellus…
    Read More “PA IFO Says 2017 Impact Fee Revenue Near Record High”

  • | | |

    PA Senate Ctte Passes Resolution to Restore Drilling in State Parks

    On Tuesday, Pennsylvania State Senate Resolution 104 passed in the Senate Environmental Resources and Energy Committee (party line vote, Republicans voted for, Democrats against). SR 104, introduced by Sen. Camera Bartolotta, urges PA Gov. Tom Wolf to get off his rear-end and reauthorize drilling in PA state forest land. The bill stands a good chance of being passed by the full Senate, which has the radicals at PennFuture up in arms. They issued a press release (i.e. marching orders to slavish Democrat Senators) to oppose the resolution. Frankly, they don’t have anything to worry about. As we pointed out yesterday with respect to the Senate’s so-called bipartisan resolution to study the sloooooow way DEP issues permits, resolutions aren’t worth the paper they’re written on (see PA Senate Ctte Sends “Study Slow DEP” Resolution for Full Vote). A resolution is a suggestion–it does not have the weight of law. Wolf can (and almost certainly will), ignore it. Resolutions are an exercise in futility. Still, it may score a political point or two–illuminating how Wolf is blocking an important revenue source from being tapped…
    Read More “PA Senate Ctte Passes Resolution to Restore Drilling in State Parks”

  • | | |

    PA DEP Tries to Convince Landowners/Drillers to Plug Orphan Wells

    Earlier this week MDN told you about a new bill that passed the Ohio legislature and now awaits Gov. John Kasich’s signature called House Bill 225, which triples the amount of money set aside to cap orphan wells in the Buckeye State (see OH Orphan Well Bill Wins Praise from Both Drillers & Enviros). The bill also “creates a more streamlined and efficient process for identifying and plugging” orphan wells. The amazing thing about the bill is this: both Big Green groups and the drilling industry support it! So-called orphan wells are old conventional oil and gas wells that have been abandoned (for decades). They are hazards for shale drillers who stumble across them when drilling new wells. If you drill horizontally and clip an old/abandoned well, it becomes like an elevator pumping fluids and gas to the surface. Ohio has an estimated 600 orphan wells. In Pennsylvania, it’s a whole other story. PA has some 200,000 orphan wells! The main issue in PA has been who will pay to cap them? Most of PA’s orphan wells are not mapped or known. Yet some of them are known–by the landowners on whose land they sit. A second (very important) issue in PA is that if a landowner or driller tries to cap an orphan well they come across, the party doing the work may be liable if there are any environmental impacts from the effort. Let’s see, nobody to pay for it–and if you assume all the legal risk. It’s a recipe for “Don’t touch that orphan well with a 10 foot pole!” In what is too coincidental to be a coincidence, the PA Dept. of Environmental Protection has just launched a program “encouraging private-sector partners to become Good Samaritans, by participating in a program that helps cap dangerous abandoned oil and gas wells statewide.” Was the DEP goaded into doing something about orphan wells after seeing the success Ohio is having? Whether coincidence or not, the DEP is telling landowners and drillers: If you pay for it and plug it yourself, first getting the DEP’s “mother may I?” permission, you will not be on the hook legally (i.e. can’t be sued) later on if “this old well” ends up harming the environment…
    Read More “PA DEP Tries to Convince Landowners/Drillers to Plug Orphan Wells”

  • | | |

    PA Senate Ctte Sends “Study Slow DEP” Resolution for Full Vote

    You have to understand something about politicians–a lesson we learned long ago when working in Washington, D.C. If a politician floats a plan to “study” something, that really means “we’re not going to do a single thing about it.” Over the past couple of years the Pennsylvania Dept. of Environmental Protection (DEP) has gotten slower and slower in issuing permits for shale drilling–for simple things, like erosion permits a driller needs to push dirt around to create a well pad. The DEP has a policy of issuing erosion and sedimentation permits 14 days from the date of application. These types of permits are common and necessary when building roads, well pads, etc. As of last summer it was taking the DEP 250 days to issue those permits (see More Pushback on PA Senate Plan to Fix Slow DEP Permit Reviews). The drilling industry has been loudly pushing for a change. The DEP says it has fewer people on staff and that’s the reason for the slowdown. The thing is, the number of requests for permits has gone down too–so that particular argument doesn’t hold a lot of water. PA House Republicans have introduced a number of bills to “fix” the DEP, not least of which is a bill introduced that allows certified third parties to assist the DEP in reviewing permit applications (see Bill Introduced to Fix PA DEP’s Extreme Delays Issuing Permits). The House bill got Gov. Wolf’s attention. Last week he introduced his own plan to fix the DEP–by hiring more people and hiking fees on the drilling industry to pay for it (see PA Gov Wolf Floats Plan to Fix DEP Slow Drilling Permits: Hike Fees). Not to be outdone, the PA Senate now wants to weigh in. Last fall a Democrat Senator from Wilkes-Barre, John Yudichak, floated a “let’s study the problem” resolution (see PA Dem Senator Calls for “Study” to Address DEP Permit Delays). That resolution was just reported out of the Senate Energy Committee (of which Yudichak is the Minority Chair). Yep, both the swamp-dwelling Republicans and Democrats on the committee voted to “study” the DEP slowness problem, meaning they plan to do NOTHING about it…
    Read More “PA Senate Ctte Sends “Study Slow DEP” Resolution for Full Vote”

  • | | | |

    Marcellus Industry AWOL at Philadelphia DRBC Frack Ban Hearings

    Last week the Delaware River Basin Commission (DRBC) held two public hearings in Philadelphia about its proposed plan to ban fracking in the Delaware River Basin (see Low Turnout for Philly DRBC Frack Ban Hearing, Antis Dominate). As we pointed out in our post, you would think a city with 1.5 million residents would turn out more than 120 people on a topic that is sold as “threat to everyone’s drinking water.” But no. Just a relative handful. However, the handful was almost exclusively in favor of the ban. One of two speaker who spoke against the ban was Dan Markind, an attorney in Philly. We’ve highlighted Dan’s comments here on MDN a few times over the years. Smart guy. We don’t always agree with his take, but we do this time. Dan circulated his thoughts after the DRBC hearing. His words are humbling. Dan makes the point that although many who spoke in favor of the frack ban have made up their minds and won’t change, some in the audience were open to being persuaded otherwise. Problem is, nobody from “our side” was there! One rep from the API spoke and left. And that’s it, beside Dan. We fielded nobody to present our side of the argument. As hard as it is to attend these types of events, attend we must. Here’s Dan’s take–that we missed a big opportunity by being AWOL at the DRBC hearings in Philly…
    Read More “Marcellus Industry AWOL at Philadelphia DRBC Frack Ban Hearings”

  • | | | | | | | |

    Landowners Who Negotiate with Shell Ethane Pipeline Get More $

    In February 2016, MDN exclusively broke the news that Shell had begun to sign leases with landowners for a 97-mile ethane pipeline (two branches) to feed their mighty cracker plant (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant). Since that time we’ve tracked any news we could find that reveals what Shell is paying landowners in Beaver County (and elsewhere) for the right to run the ethane pipeline (called the Falcon Ethane Pipeline) across their land. So far, we’ve seen rates as high as $75 per foot, and as low as $43 per foot. We just spotted another mention. An extensive (and well written) article in the Pittsburgh Post-Gazette interviews a number of landowners who have dealt with Shell, signing leases to allow the ethane pipeline across their land. The article opens with the story of a couple and their attempt to negotiate with Shell. If you play too hard to catch, Shell might route the pipeline around your land, onto your neighbor’s land instead. But sign too early, and maybe you’re leaving money on the table. It’s a fine line–causing stress and strain. In reading the article we really perked up when we read about Ed Bilik, founder of Greensburg-based Western Pennsylvania Gas Leasing Consultants. Ed was the first guy to sniff out the eventual path of the pipeline–which he did by knocking on doors to see where Shell landmen had already visited. Bilik eventually got 41 landowners to sign with him, allowing Bilik to help them with negotiations. According to Bilik, “Shell started out offering $40 per foot for the right to lay two pipelines.” Bilik would not say how much his clients eventually got from Shell, but he did say this: “We exceeded that [amount] multiple times,” meaning his clients got a whole lot more than $40/foot when they signed. Here’s a portion of this enlightening article…
    Read More “Landowners Who Negotiate with Shell Ethane Pipeline Get More $”

  • | | | |

    PA Gov Wolf Floats Plan to Fix DEP Slow Drilling Permits: Hike Fees

    As part of the Pennsylvania Senate’s misguided and mangled budget bill last year, Republicans managed to slip in fixes to the state Dept. of Environmental Protection’s (DEP) chronic delays in issuing permits related to shale drilling (see PA Senate’s “Olive Branch” of “Relaxed Regulations” for Drillers). Unfortunately the fixes came out before the final budget passed. Problems remain for Marcellus drillers. Delays are long in the Keystone State when it comes to permits for shale wells. The problems NEED to get fixed, now. House Republicans recently introduced a series of five different bills to help address DEP’s chronic delays (see PA House Advances “Fix DEP & Other Agencies” Plan with 5 Bills). No doubt feeling the pressure from the legislature, PA Gov. Tom Wolf on Friday introduced his own plan. Whereas the plan floated by legislators would allow third parties to assist with the backlog, Wolf’s plan is different. In a nutshell, Wolf wants to allocate more money to the DEP so they can hire more help–not third parties. Yeah, that’s the answer! More government. (Yes, we’re being sarcastic.) And what magic pocket will Wolf pull the money from to pay for an increase in head count at DEP, especially since Wolf can’t balance a budget to save his life? Why, from the pockets of the shale industry, of course. Wolf proposes boosting the $5,000 fee drillers now pay when filing to drill a new shale well to $12,500–a 250% (2.5x) increase. You want that permit on time for a change? It’ll cost you, buddy…
    Read More “PA Gov Wolf Floats Plan to Fix DEP Slow Drilling Permits: Hike Fees”

  • | | |

    PA DEP, DCNR on Hot Seat to Defend Budget Surpluses

    Last September, amidst a heated state budget battle in Pennsylvania (where the phrase “severance tax” was on the lips of every Democrat and RINO in Harrisburg), a group of PA House Republicans did the hard work Gov. Tom Wolf and his cronies in the legislature refused to do: They figured out how to fund a wildly overspent budget without raising a single tax (see PA House Introduces Balanced Budget with NO Severance Tax). How did House Republicans do it? They looked at state agencies hording money, with a plan to relieve them of their surplus. When Republicans went looking, they found even the Dept. of Conservation and Natural Resources (DCNR) and Dept. of Environmental Protection (DEP) have been squirreling money away, unused in some of their programs. The House Republican plan from last September was not adopted, but elements of it were included in the final budget. The final budget, passed in October, instructs Gov. Wolf to reallocate $300 million from surpluses at various state agencies–from the agencies of his own choosing–as part of the “funding” for this year’s budget. The House Appropriations Committee held a meeting yesterday to question DCNR Sec. Cindy Dunn and DEP Sec. Pat McDonnell about the use and operation of special funds under their purview–to see if there’s a bit of surplus there that can be used for the state budget. Here’s how it went…
    Read More “PA DEP, DCNR on Hot Seat to Defend Budget Surpluses”

  • | | | | |

    Low Turnout for Philly DRBC Frack Ban Hearing, Antis Dominate

    Philadelphia is the sixth most populous city in the United States, with over 1.5 million residents. And yet *maybe* 120 people turned out yesterday for a Delaware River Basin Commission (DRBC) hearing on their proposed plan to permanently ban fracking in the Delaware River Basin. A pair of hearings were held earlier this week in rural northeast PA–in Waymart–where the turnout was upward of 150 people! Judging from the wild claims by green groups like THE Delaware Riverkeeper that thousands (millions!) of people don’t want fracking in the river basin, you’d think more than maybe 120 people would turn up for a hearing in a city like Philly. Could it be not all that many people in southeast PA give a hoot about fracking in two northeastern PA counties? That thought crossed our minds as we read the accounts of those who showed up at yesterday’s meetings in Philly. Yes, antis outnumbered those in favor of fracking, but that’s to be expected in Philly. Here’s a recap of yesterday’s meetings…
    Read More “Low Turnout for Philly DRBC Frack Ban Hearing, Antis Dominate”

  • | | | | |

    Range Res. 2018 Budget & 5 Yr Outlook: Focus on SWPA Marcellus

    Yesterday Range Resources released a pair of press releases. One outlines a high level overview for what the company will spend in 2018 and beyond, for the next five years. The other release trumpets Range’s “proved reserves.” As for 2018, Range says they are reducing the amount of money they will spend to drill this year versus what they spent last year. Range previously said they would spend $1.15 billion this year. That’s now been reduced to $941 million. Last year Range spent $1.27 billion, so this year’s spending is down 26% over last year. That’s a pretty hefty decrease. The good news is that Range will spend 80% of this year’s budget on drilling in the Marcellus, mainly in southwestern Pennsylvania. Even though Range will spend and drill less this year, they predict production will grow another 25%. As for the 5-year outlook, Range says almost all growth will come in the Marcellus (not the Louisiana Haynesville, their other drilling location). Range still has some 3,200 locations where they can drill new wells. Range CEO Jeff Ventura says shale has entered a “new era” of shale development where companies (like Range) have “captured the most prolific resources” and will now switch to focus on returns for shareholders. Translation: We won’t be drilling as much as we did in the past so we can concentrate on bottom line profitability. Which explains why Range is spending less this year than last. In the release Range calls the Marcellus its “flagship asset” and clearly signals the company will keep its focus here, in our region. As for proved reserves (how much gas and oil is in the ground, retrievable with today’s technology and at today’s costs), Range says proved reserves as of December 31 increased by 26% from the prior-year, now at 15.3 trillion cubic feet equivalent (Tcfe). That’s alotta gas! We have the Range announcements below, along with an updated PowerPoint slide deck chocked full of useful information…
    Read More “Range Res. 2018 Budget & 5 Yr Outlook: Focus on SWPA Marcellus”