Statewide PA

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    Dividing Line: Role of NatGas in NE PA vs. NY’s Southern Tier

    MDN editor Jim Willis lives right on the dividing line between New York and Pennsylvania–in the Binghamton, NY area (on the wrong side of the line). Pennsylvania, on the right side of the dividing line, has embraced shale drilling, and enormous economic benefits have flowed to communities where it happens. Cabot Oil & Gas alone (just one company) has spent over $4.6 billion in the last 10 years in Susquehanna County, PA (see Amazing: Cabot O&G Invests $4.6 BILLION in One PA County in 10 Yrs). Meanwhile, NOTHING is spent just over the border, in Broome, Chenango, Otsego and other Southern Tier counties on the New York (wrong) side of the border. It is a heartbreaking tale. Back in 2014 the Buffalo News ran a story comparing two farmers, one on each side of the border, to illustrate how the shale revolution has changed NEPA (see PA Farmers Flourish Thanks to Marcellus While NY Farmers Fail). We now have an updated version of that story line. The Pennsylvania Manufacturers Association (PMA) recently released a 28-minute MUST SEE video titled, “The Dividing Line: PA vs. NY Natural Gas Economics” (watch it below). Listen to landowners and business owners on both sides of the border talk about their experience. New Yorkers have been shafted by a corrupt governor, that much is clear…
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    PA Severance Tax Not Dead Yet, Industry Unites to Oppose

    Sadly, the severance tax issue in Pennsylvania is not yet dead, as we had hoped. Last week budget negotiations broke down and PA Gov. Wolf took matters into his own hands by borrowing $1.25 billion from the state’s Liquor Control Board to plug a gap in this year’s budget (see PA Gov Wolf “Acts” to Finalize the State Budget, No Severance Tax). However, it’s not enough money, and it’s temporary. So Wolf, the PA Democrat Party, and a variety of RINOs (Republicans in Name Only, i.e. swamp dwellers) continue to beat the drum for a severance tax this year. Yesterday Gov. Wolf went to Erie, PA to stump for “a reasonable severance tax.” He and others in his party still think it’s possible to get a tax passed this year. Next Monday the PA House Finance Committee (controlled by Republicans) will reconvene and hold a hearing on a plan to impose a 3.2% severance tax this year. The shale industry and their friends are holding a rally in Harrisburg on the same day, to make the point loud and clear that such a tax is a Marcellus-killer. Below is news about Wolf’s tax stump speech, the hearing next week, and details about the rally opposing the severance tax…
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    Guest Post: An Opposing View of PA’s Severance Tax “Mess”

    Dan Markind

    You know how MDN feels about a new/extra severance tax in Pennsylvania–we’re dead set against it. We have been from the beginning. We think the impact fee (i.e. tax) is doing just fine, having raised over $1 billion in revenue from 2013 to 2017 (assuming the Independent Fiscal Office’s 2017 projections are accurate). The best part of the impact fee is that 60% of it stays local–in counties where drilling happens–instead of going to the black hole of Harrisburg overspending. However, there are Republicans in the state legislature addicted to spending, just like Democrats, and they continue to lobby for a new severance tax, to be placed on top of the existing impact fee. As we saw yesterday, PA’s rig count has been static to slightly down all year long (see Marcellus/Utica Rig Count Race Tightens: OH Count Closes in on PA). Does PA want to drive even more business out of the state and into neighboring Ohio and West Virginia? That, in our humble opinion, is exactly what a severance tax will do. Although, MDN doesn’t play favorites, we love all our state children equally! We don’t want PA to make a serious mistake. However, there are opposing opinions on the severance tax issue from people we respect. One of those people is Dan Markind, a partner with law firm Weir & Partners. Dan writes a regular email newsletter covering the Marcellus Shale in PA. Last week he wrote about the budget negotiation collapse and the (admitted) debacle of House Republicans clutching at alternative straws–first a warehouse tax and then a hotel tax–anything but a severance tax. Dan believes the shale industry in PA has alienated other industries, and has boxed itself into a corner by not accepting some form of a severance tax. We disagree with Dan’s view on this matter–but his view is shared by many. Which is why we bring you his email newsletter from last week (with his permission), to present an alternative view on the severance tax issue…
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    Marcellus/Utica Rig Count Race Tightens: OH Count Closes in on PA

    It’s been a few months since we’ve brought you news about the monthly average for Baker Hughes’ venerable rig count–largely because after GE completed it’s merger with Baker Hughes they quit issuing monthly press releases from their website! We spotted a story in the Pittsburgh Business Times that talks about Ohio coming close to parity in their rig count with Pennsylvania–which is a really big deal–and the reasons for it. That story sent us looking for the latest rig count numbers and indeed, it’s true. As of September, PA averaged 33 shale rigs in operation, while OH averaged 29–the closest we’ve ever seen it. If you look at the counts for last week (BH does a weekly rig count too), the numbers are even closer: PA with 31 rigs, OH with 29. We don’t typically monitor the weekly counts as they always fluctuate up and down–better to look at monthly averages. But the fact remains that PA has been pretty steady, operating between 32 and 34 rigs per month since January of this year, while OH has gone from operating an average of 20 rigs in January to 29 last month, and West Virginia has gone from operating an average of 8 rigs in January to 15 rigs last month (nearly doubling). Yet PA is static. Is there an explanation? Some experts think there is, and it can be explained in a single word: pipelines…
    Read More “Marcellus/Utica Rig Count Race Tightens: OH Count Closes in on PA”

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    SWPA House Republican to Introduce PA ‘Clean Power Plan’

    PA Rep. John Maher

    That wily Pennsylvania House Rep. John Maher (Allegheny & Washington Counties) is doing it again. Maher, a Republican, is the guy who came up with the brilliant plan to rename PA’s impact fee to a “severance tax”–because the impact fee is the rough equivalent of a severance tax (see PA House Ctte Votes to Rename “Impact Fee” to “Severance Tax”). The measure, which did not make it to the House floor for a vote, was intended to point out that the Marcellus industry in PA is already taxed–just as much (or more) than if it were called a severance tax. Maher is doing it again. Jumping on the (very good) news that President Trump is dismantling Obama’s odious Clean Power Plan (CPP)–a plan that favors so-called renewables over coal and natural gas for power generation–Maher is proposing a Pennsylvania Clean Power Plan. There are no details as yet. Maher has sent out a memo (copy below) to his fellow lawmakers asking them to join him in sponsoring such a plan–details and a meeting to come later. At first blush you might think Maher has defected to the dark side, proposing that PA stick it’s collective finger in President Trump’s eye in an act of defiance by adopting its own mini-version of the Obama CPP. We don’t think that’s what is happening at all. We think Maher’s CPP will focus on letting the free market figure out how best to reduce carbon dioxide emissions. We have no doubt natural gas will play a starring role in Maher’s version of a CPP…
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    Sunoco Makes Marcellus Ethane-by-Truck Available at Marcus Hook, PA

    The first truck enters the loading pad for the new ethane distribution rack at Sunoco Partners Marketing and Terminals’ Marcus Hook Industrial Complex in Marcus Hook, Pa., on Sept. 21. The facility’s 300,000 barrel chilled ethane tank is in the background. (Photo Credit: Energy Transfer Partners, L.P.)

    In March 2016 an Ineos tanker ship carrying 173,000 barrels of Marcellus ethane set sail from the Marcus Hook terminal near Philadelphia, bound for Norway (see Bon Voyage! First Ethane Export Ship Leaves Marcus Hook in Philly). Since that time, regular shipments of Marcellus ethane have traveled from Marcus Hook to various European destinations. Yesterday Sunoco Partners, a subsidiary of Energy Transfer Partners and the operator of the Marcus Hook refinery, announced they have opened a new ethane distribution facility inside the Marcus Hook refinery complex. It is a truck loading facility–the first such facility in the U.S. to load liquid ethane onto tanker trucks for local delivery. Wait, what? You thought ethane was only used in gigantic cracker plants, used as the raw material to make ethylene (i.e. plastics)? That is the primary use of ethane–but not the only use. Ethane can also be used as a refrigerant in cryogenic refrigeration systems. And there are other uses for small quantities of ethane, including the manufacturing of electronics. Sunoco says local trucked ethane deliveries will be used for “various ethane uses, from energy research and development to cooling and other industrial applications.” Sunoco already has its first customer–Gas Innovations–a reseller that trucks NGLs like ethane and propane throughout the U.S. (and ships it around the world). Gas Innovations is excited that their “cryogenic ethane business” is now supplied domestically via Marcus Hook. Previously, Gas Innovations had to import liquefied ethane. Marcus Hook’s truck facility opens up a whole new market for smaller users of Marcellus/Utica ethane throughout the U.S….
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    Shell Files PA Application for Ethane Pipe to Feed Cracker Plant

    Click to view a larger version of the map

    Shell’s long-talked about ethane pipeline, called Falcon Pipeline, is finally official. That is, official in the sense that Shell filed an application with the Pennsylvania Dept. of Environmental Protection last week, looking for permission to build it. Brief history: In February 2016, MDN brought you exclusive news that Shell had begun approaching landowners in Beaver County to get them to sign easements for two ethane pipelines to feed the mighty cracker plant they plan to build in the county (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant). At that time Shell had still not fully committed to building the cracker–something they finally did in June 2016 (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). NGI’s Shale Daily broke a story in August 2016 that shed new light on the project–news that Shell is working on a 94-mile ethane “pipeline system” with two “legs” to feed the cracker, confirming the tip we received in February (see Shell Working on 94-Mile Ethane Pipeline to Feed PA Cracker). As NGI reported at that time, the new ethane pipeline system has a name: the Falcon Ethane Pipeline System. In October 2016 Shell launched a binding open season for the Falcon pipeline (see Shell Launches Open Season for PA-WV-OH Falcon Ethane Pipeline). You might justifiably think that with open seasons and a scad of easements signed between landowners and Shell, that the project had already filed for permission to build. Not so. Last week Shell made it official by filing that paperwork–for the portion of the pipeline running through PA…
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    Pin Oak Energy’s Unique Strategy and PA Focus

    MDN has run two stories about a new Marcellus/Utica drilling company called Pin Oak Energy Partners, one in August (see New Marcellus/Utica Driller Snaps Up Assets in OH, PA) and the other just last week (see Pin Oak Energy Snaps Up 4,300 Acres, 16 Wells from Seneca in NWPA). While Pin Oak is a “new” company, the people running it have been around. CEO Chris Halvorson says Pin Oak is comprised of folks who were formerly with AB Resources. You may recall that AB Resources built a position in the southwestern “core” of the Marcellus and sold out to Chevron several years ago. Pin Oak is “what’s next” for for the former AB folks. Their target: the Appalachian basin. However, they’re doing things differently than most others–zigging while everyone else zags. They like to pick up already-producing oil and gas wells instead of raw acreage. And they don’t take private equity money to fund their operations. They’re using cash from producing wells to help finance new drilling. How about that? Someone that wants to “pay as you go.” That is unique! Here’s a closer look at Pin Oak’s aggressive strategy to expand quickly in north central and northwestern PA…
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    Harrisburg Job Fair Oct 6-7 Looks to Fill 400 Pipeline Jobs

    Listen up job seekers in eastern Pennsylvania: The International Brotherhood of Teamsters is looking for 400 people to work on building Williams’ Atlantic Sunrise Pipeline–a $3 billion, 198-mile natural gas pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. The job fair is happening TODAY (Friday) and TOMORROW (Saturday) ath the Harrisburg-Hershey Crown Plaza located at 23 South 2nd Street in Harrisburg (8am-4pm both days). According to the Teamsters, there are “hundreds of jobs to fill” and they are “looking to expand our workforce quickly.” Qualifications? You need to be 21 years old or older, have a driver’s licence, and be willing to travel. Construction experience is a plus, but not required. Here’s the deets…
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    Shell Holding Career Expo in SWPA Oct 12 to Discuss Cracker Jobs

    While the Teamsters are holding a job fair today and tomorrow in Harrisburg to recruit for pipeline workers (see today’s lead story), next week Shell and the Community College of Beaver County (CCBC) will hold two back-to-back career expos on the other side of the state, in the Pittsburgh region, to “inform residents about all the current and emerging job opportunities” at Shell’s ethane cracker plant. On Thursday, Oct. 12, Shell will host the Pennsylvania Chemicals Military Petrochemical Day from 8am to 2pm–for former military service members. The event will be held in room 9103 of CCBC’s Learning Resources Center. Then at 6pm on the 12th, a free career expo will be held at the CCBC Dome–open to the public. Preregistration is not required, but is encouraged. This is your chance to meet with folks face-to-face who can help you land a job working on (or in) the mighty Shell ethane cracker. Don’t miss it!…
    Read More “Shell Holding Career Expo in SWPA Oct 12 to Discuss Cracker Jobs”

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    FERC Issues Final Approval for Delmarva Pipeline Expansion

    In July 2016 MDN told you about a smallish, but important pipeline project in the Delmarva Peninsula area, which includes most of Delaware and portions of Maryland and Virginia. Eastern Shore Natural Gas’ 2017 System Expansion project will bring new sources of natgas from an interconnection Eastern Shore has with the mighty TETCo (Texas Eastern Company) pipeline near Philadelphia (see PA/MD/DE Pipeline Project Heats Up with Open House Mtgs This Week). The project includes 22.7 miles of new looping pipeline (laid next to existing pipeline) in Pennsylvania, Maryland and Delaware; a 16.9-mile extension to a pipeline in Sussex County, DE; and upgrades to compressor and valve stations. Chesapeake Utilities, the parent company, calls the project the single largest such expansion in Eastern Shore’s history, a project that will bump up gas delivery volumes by 25%. In May the Federal Energy Regulatory Commission (FERC) gave the project a glowing environmental review (see Delmarva Pipeline Expansion Gets Positive FERC Enviro Review). A favorable EIS from FERC is typically prelude to a full, final approval. And such is the case with this project. On Wednesday, FERC issued a certificate approving the project–a final approval. The next step will be for Chesapeake Utilities, the parent company building the project, to request FERC permission to start the bulldozers and backhoes…
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    Southwestern Energy Reduces Methane Leaks, WITHOUT Onerous Regs

    The debate rages, both nationally and on the state level (in Pennsylvania, anyway) about the best way to reduce fugitive methane. That is, to stop methane from leaking out of pipes and into the atmosphere where it supposedly contributes to mythical man-made global warming. Leaving aside the nonsensical global warming stuff, it’s in the best interests of any producer (or pipeline company) to ensure no methane molecules leak out of the system. It’s the stuff they extract and sell! They don’t want their inventory flying away into heaven. The debate is how best to ensure less methane leaks. On one side you have the typical Big Government types that want to regulate everything, down to the type of equipment you use to detect leaks and the methods for fixing it. We have nothing against common sense regulations, but as everyone knows, government tends to screw things up, rather than fix things. On the other side you have drillers and midstream companies who content “just give us a standard and let us figure out how best to meet that standard.” Case in point is Southwestern Energy. Southwestern launched a leak detection and fixing program five years ago–and has dramatically cut the amount of methane leaking from its operations. Southwestern, and others, show us the way it should be done, WITHOUT needing onerous regulations from the federal government or from the regulation-happy PA Gov. Tom Wolf…
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    PA DEP Offers $1M in Grants for CNG, Propane Refueling Stations

    The Pennsylvania Dept. of Environmental Protection (DEP) is offering $1 million in grants to companies willing to build “alternative fuel infrastructure projects” in Pennsylvania. What the heck is that? CNG (compress natural gas) fueling stations, propane fueling stations, and electric vehicle charging stations. The catch? The fueling stations must be open and available to the general public, and must be located with the “designated alternative fuel corridors” of certain interstate highways: I-76, I-276, I-476, I-70, I-95, and I-80. PA wants to goose the use of alternative fuels. Here’s the deets on the program…
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    PA Gov Wolf “Acts” to Finalize the State Budget, No Severance Tax

    Attempting to bluster his way through an epic fail to get a budget agreement done, Pennsylvania Gov. Tom Wolf tried to lay the blame for a late budget on House Republicans, for their refusal to pass a severance tax. Yesterday Wolf unilaterally acted to plug a budget deficit (to fill the gap in a wildly overspent budget) by borrowing $1.25 billion from the state’s Liquor Control Board, from future liquor revenue payments. Playing politics, Wolf laid blame on Republicans in the House, saying he has “had enough of the games” and is “drawing a line in the sand.” Wolf’s willingness to act unilaterally by borrowing against future liquor revenues appeared to have stunned Republicans in the House, who rightly ask this question: If Wolf could have acted unilaterally like this to pull forward revenue and plug the gap, why didn’t he do it a month ago to prevent a downgrade in PA’s credit rating? That’s a great question. So who’s really playing politics with the people of PA? Wolf’s official statement belies his petulant, crybaby attitude in not getting his own way with a Marcellus-killing severance tax. Wolf held out hope that traitorous Republicans in the Senate could bully House Republicans into accepting a severance tax. Wolf lost that political gamble and he now must scramble to try and cover his political backside before the next election. Wolf’s base of far-left Philadelphia teachers won’t be happy. Wolf couldn’t get a severance tax passed in his first four years in office–so why expect he can in the next four? Wolf’s future as governor is now on life support–thanks to principled House Republicans who held the line and refused to cave to the pressure. So for now, the budget battle has ended. It’s over. Yes, a few more things need to get done, but the pressure is off. You might as well say the budget for this year is a done deal, WITHOUT a severance tax!…
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    Latest PA Budget Bill Drops Fix for Slow DEP Permit Reviews

    In an issue that’s growing old, fast, the Pennsylvania legislature has still not dragged the dead horse known as the 2017 state budget across the finish line. It all started months ago when the Republican-led legislature passed a $32 billion budget–with only $30 billion available to pay for it. Big mistake. The pressure was intense to pass a severance tax to help fill the gap. Traitorous Republicans in the Senate caved to that pressure and in July passed a budget bill that hikes taxes on lots of things, including a severance tax (see Traitorous PA Senate Republicans Pass Severance Tax Bill). As part of that misguided and mangled budget bill, Senate Republicans slipped in fixes to the state Dept. of Environmental Protection’s chronic delays in issuing permits related to shale drilling (see PA Senate’s “Olive Branch” of “Relaxed Regulations” for Drillers). As we said at the time, the writing was already on the wall–Democrats would lobby to remove the DEP fix and leave the severance tax. The DEP fix (surprisingly) continued in further revisions to the budget plan–until yesterday, when the DEP fixes came out. Fortunately there is still no severance tax. However, Republicans have floated a plan to nearly double the tax on hotel/motel rooms. Such a tax would make Philadelphia’s hotel tax a staggering 21.25%, the highest in the nation! Gov. Tom Wolf is (so far) not commenting on the hotel tax idea–he still wants a severance tax and said so yesterday. So although a severance tax appears dead, and we think it’s 99% dead, it’s not yet 100% dead–so we need to remain vigilant in our efforts to kill it. And although the fixes to the DEP would be most welcomed, they won’t happen as part of the budget. There’s still some hope those fixes will happen apart from the budget bill. Here’s the latest word on PA budget negotiations…
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    PA State Budget Deal Close, with NO Severance Tax

    Yesterday afternoon Pennsylvania Senate Majority Leader Jake Corman told the media that talks on finishing the state budget are “closer than we’ve been in some time.” He also cautioned, “nothing is agreed to until everything is agreed to.” As for a severance tax, Corman said current discussions do not include a severance tax, which is interesting as Corman is one of the traitorous Republican Senators who voted for a severance tax back in July (see Traitorous PA Senate Republicans Pass Severance Tax Bill). Maybe he’s now seen the light? So how will the state raise more revenue to meet its voracious appetite to overspend? Basically from three sources: (1) truck stop slot machines and “mini” casinos; (2) borrowing against future tobacco settlement payments; and (3) new taxes on warehouses. We haven’t 100% dodged the severance tax bullet for this year, but we’d say we’re 99% sure there will be no severance tax as part of the final budget, which is very good news…
    Read More “PA State Budget Deal Close, with NO Severance Tax”