Statewide PA

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    Philly Judge Says Case Against Mariner East 2 Can Proceed

    A Philadelphia judge for the Court of Common Pleas (low-level court in PA) has ruled in favor of the anti-drilling Clean Air Council against Sunoco Logistics Partners and their Mariner East 2 pipeline. The ruling is nothing more than “this case has merits” (in the eyes of the judge) and can proceed. The case itself is challenging the right of Mariner East 2 to use eminent domain against landowners in building the new pipeline. The Clean Air Council’s argument is that since most of the natural gas liquids that will flow through the pipeline will get exported or otherwise not used in PA itself, that moves Mariner East from being a public utility with eminent domain power to an interstate pipeline more properly reviewed and permitted by federal authorities. It’s a delay tactic, because if Mariner East 2 were to come under the aegis of the Federal Energy Regulatory Commission and eventually permitted, they would also be entitled to use eminent domain. But a FERC review would take years. Which is what the Clean Air Council wants. Here’s the latest minor setback for Sunoco, whose eminent domain has been upheld in other PA courts and who is beginning to clear trees for the Mariner East 2 pipeline right now…
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    More on Wolf’s New 6.5% Severance Tax – What Could of Been

    A quick update on the new, higher severance tax being proposed by Pennsylvania Gov. Tom Wolf in his second budget (the first budget never passed and the state has survived on continuing budget resolutions). We reported yesterday that the new 6.5% severance tax would be “on top of” the existing impact fee. That may have left a wrong impression. Yes, the impact fee, which is already high, would remain. But drillers would be able to deduct the impact fee from the 6.5% severance tax, lowering the severance tax for them. It still works out to a 6.5% rate–ON TOP OF corporate income taxes these companies pay. Meaning Wolf’s new severance tax would be one of the highest in the country, if you include corporate income taxes paid by drillers (income taxes that don’t exist in other oil & gas states). In addition to more comment on Wolf’s proposed severance tax, we also have some inside scuttlebutt about the severance tax and what could have been had Wolf not blown it last year…
    Read More “More on Wolf’s New 6.5% Severance Tax – What Could of Been”

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    Wolf Vows to Push Forward with Clean Power Plan in PA

    Are there any doubts remaining that Pennsylvania Gov. Tom Wolf is anti-fossil fuel? He’s trying to tax the Marcellus gas industry out of existence (see Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%). He’s now trying to regulate the coal industry in PA out of existence. Yesterday we brought you the great news that the U.S. Supreme Court has stayed the execution of coal by stopping–for now–implementation of President Obama’s draconian and misnamed Clean Power Plan (see Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan). That means a decision on whether or not the plan can proceed will come from the courts no earlier than 2017. So what does Tom Wolf say? PA is going to go ahead and put a bullet in the head of coal (and to some degree natural gas) by moving forward with its own implementation of the Clean Power Plan. Arrogance personified…
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    Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%

    straight jacketSomeone needs to bring out a straight jacket for PA Gov. Tom Wolf. He’s gone stark…raving…mad. He’s not only a danger to himself, he’s a danger to all of Pennsylvania. The only thing missing from yesterday’s budget address in Harrisburg was frothing at the mouth. In his mean-spirited budget address, Wolf insulted nearly everyone present–blaming everyone but himself for the budget disaster of last year. Wolf is either bipolar (off his meds) or just plain nuts. How else can you explain that after not passing his first budget because he demanded a 5% severance tax on drilling (which was really closer to 15%, see Pittsburgh Economic Leader Says Wolf Severance Tax Really 15% Rate), in the worst oil and gas downturn in 30 years, he’s just proposed a second budget with a 6.5% severance tax? It’s sheer madness…
    Read More “Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%”

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    EIA Feb DPR: Utica NatGas Output Continues to Increase

    Earlier this week our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The February 2016 report shows what the EIA predicts oil and natural gas production will be in March from the seven largest commercial shale plays in the U.S. What does the report (full copy below) show? Very broadly, it shows that the decline in natural gas production is picking up speed, while the decline in oil slowed (reversed, actually). In January’s report, the EIA said for February the combined output of natgas would decline by 405 million cubic feet per day (MMcf/d). In this report, forecasting March production, the EIA says the decline will go down another 451 MMcf/d over the February number. That is, the rate of decline is increasing. There’s only one shale play of the seven with an increase in natgas output from the previous month. Can you guess which one? That’s right–the Utica…
    Read More “EIA Feb DPR: Utica NatGas Output Continues to Increase”

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    PA Rig Count Hits 9-Year Low Last Week

    Two days ago MDN briefed you on the latest rig counts–worldwide, U.S. and for the Marcellus/Utica (see Rig Counts for World, US & Marcellus/Utica Continue to Tumble). What we didn’t note in that article is last week Baker Hughes showed the number of active rigs in Pennsylvania had fallen to 19. Eeeks! That is the lowest number of active rigs working in PA since before the Marcellus Shale revolution got underway in 2007. How much lower will it go?…
    Read More “PA Rig Count Hits 9-Year Low Last Week”

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    Philly Council President Says Green Jobs Plan to Create 10K Jobs

    Philadelphia City Council President Darrell Clarke was one of the chief opponents of a deal that would have sold the city-owned Philadelphia Gas Works (PGW) to Connecticut utility company UIL for $1.86 billion. Clarke, more than anyone, torpedoed the deal (see UIL Makes it Official: $1.86B Deal to Buy Phila. Gas Works is Dead). Clarke is, in our opinion, corrupt and in the pockets of unions and others who benefited from that deal falling through. So it was with some amusement we noticed that Clarke announced on Monday that somehow, somewhere, he’s going to magically put his hands on $1 billion to “invest” in a “green jobs” boondoggle that will, supposedly, create 10,000 jobs over the next 10 years. This would be fall-off-your-seat funny if it weren’t so sad and angering. The city could have had a legitimate infusion of non-taxpayer money–$1.86 billion to be exact–but instead has chosen to continue its corrupt ways of using taxpayer money to line the pockets of political supporters…
    Read More “Philly Council President Says Green Jobs Plan to Create 10K Jobs”

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    PA Republicans Commit Adultery with Severance Tax – Again

    What is it with Republicans in Pennsylvania? They’ve just won a major victory by not putting a bullet in the head of the Marcellus Shale industry, i.e. by not implementing Gov. Tom Wolf’s horrible idea of a severance tax. Major victory. But then they return to a severance tax like a cheating spouse who is serially unfaithful. Some Pennsylvania “Republicans” in the state legislature are once again committing adultery with a Marcellus-killing severance tax plan–the day before Wolf re-introduces such a losing plan for a second year in a row. The PA House Environmental Resources and Energy Committee held an informational meeting yesterday to consider two Republican-backed severance tax bills. One bill is being floated by Rep. Kate Harper, RINO-Montgomery County, the other by Rep. Scott Petri, RINO-Bucks County. Notice both RINOs are from the Philly vicinity, which is where most of the nonsense typically comes from. Even House Majority Leader David Reed, R-Indiana County, seems to be going squishy. His mouthpiece said, “It’s just prudent to kind of go through these bills and see what they do.” We disagree. The chairman of the House Environmental Resources and Energy Committee, Rep. John Maher, RINO-Allegheny County, is a sellout too, saying: “I think that there are many people who are open to the idea of a properly crafted severance tax.” With “Republicans” like these, who needs Democrats?…
    Read More “PA Republicans Commit Adultery with Severance Tax – Again”

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    Rig Counts for World, US & Marcellus/Utica Continue to Tumble

    Shell Gas Drilling Rig Used in Tioga County, PAThe number of active drilling rigs worldwide, in North America and in the Marcellus/Utica continued to tumble in January. Baker Hughes released their average rig count data for January last Friday. The news, as we expected (but nevertheless hoped wouldn’t be the case) was not good. Worldwide the number of active oil and gas rigs fell by 78. In North America the rig count went down by 28 rigs, but that’s not the full story. Rig counts in the United States fell by a whopping 60 while the rig count in Canada went up by 32. So here at home the story was bloodier than the top level numbers indicate. What about in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. Region-wide rigs went down another by seven in the Marcellus/Utica. All three states that we track–PA, OH, WV–had rig count losses in January…
    Read More “Rig Counts for World, US & Marcellus/Utica Continue to Tumble”

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    PA DEP Sec. Quigley Keeps Secret Key Part of New Drilling Regs

    There is still a chance, beyond a lawsuit, that onerous new oil and gas regulations proposed by Pennsylvania Sec. John Quigley will not be adopted as they have been promulgated. We frankly thought it was a done deal–just get them printed in the Pennsylvania Register, wait 45 days and voila–new laws are born, without the involvement of the state legislature. But the state legislature DOES play a role after all. The House and Senate Environmental Resources and Energy committees will both take a look and approve, disapprove or take no action on the new regs that separate existing regulations, referred to as Chapter 78, into two sets of regulations, 78 and 78a (for conventional and unconventional, or shale). However, Gov. Wolf seems to have the last say in the matter and he’ll likely sign off on the new rules regardless of what the people, via their representatives in the legislature, want. That’s how Dems govern–against the will of the people. Dictatorial. Here’s the thing. Sec. Quigley is intentionally withholding 29 new forms that the industry will have to fill out as part of the new regulations. Legislators are asking how, in any sense of the word, it is fair to vote on something when you haven’t seen the full language, including these 29 forms? Quigley’s action is (in our opinion) illegal–disclosure of the forms is required under PA’s Right-to-Know law. This is yet another abuse of power by PennFuture PA DEP Sec. Quigley…
    Read More “PA DEP Sec. Quigley Keeps Secret Key Part of New Drilling Regs”

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    Insanity: O&G People Donating to Katie McGinty Campaign

    Here’s our definition of insanity: You work for an oil or gas company in the Marcellus/Utica region, and you donate money to the U.S. Senate campaign of Katie McGinty, formerly the chief of staff for PA Gov. Tom Wolf. McGinty once served as Secretary of the PA Dept. of Environmental Protection under then Gov. Ed “fast Eddie” Rendell. She is an anti-driller–a radical environmentalist. So why would you give money you earned in the oil and gas industry to the campaign of someone who wants to destroy your industry? That’s what we call insane. Here’s who has done it…
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    PA Board Adopts New Drilling Regs, PIOGA Blasts DEP “Deceptive”

    PA DEPYesterday the Pennsylvania Environmental Quality Board (EQB) approved “sweeping” new changes to the regulations governing oil and gas drilling in the state (for a copy of what was passed, see PA DEP Issues “Final” New Drilling Regulations; Industry Pushback). In the end the vote came down 15-4 to pass the onerous new regulations which, according to the Marcellus Shale Coalition, will cost the industry $2 billion per year without any corresponding safety improvements for the general public. The interesting thing is that two advisory boards appointed by Gov. Wolf and Dept. of Environmental Protection PennFuture Secretary John Quigley–the Conventional Oil and Gas Advisory Committee and the Technical Advisory Board (for unconventional)–came out against the new regulations. What does that tell you? A previous version of the new regs was ready to go at the end of 2014 and then Gov. Wolf won election, installed a radical environmentalist to run the DEP (Quigley) and promptly changed the rules to damage to the drilling industry–both conventional and unconventional. These new regs are the result. The Pennsylvania Independent Oil & Gas Association (PIOGA) minces no words by saying, “The four-year process of developing these regulations has been an exercise in deception, misinformation and disregard of the law by the Department of Environmental Protection that escalated under Gov. Wolf.” Below is a look at the sausage making behind the new rules, and industry’s response…
    Read More “PA Board Adopts New Drilling Regs, PIOGA Blasts DEP “Deceptive””

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    ND vs PA – How Adults Behave When Faced with Budget Crisis

    We’d like to draw a contrast between the way the Republican governor of North Dakota is handling a budget shortfall, and the way the Democrat governor of Pennsylvania is doing so. ND is, in many ways, like PA. It saw a huge ramp-up in economic activity with shale drilling in the Bakken Shale over the past 10 years. In ND the drilling is for oil–in PA it’s largely for natural gas. Both states were favorable to the shale drilling industry during its formative years. Both states had Republican governors (ND still does), until the idiots voters in PA voted Tom Corbett out and the in-over-his-head-and-stubborn-as-a-mule Tom Wolf in. Wolf thinks he’s the candy man, promising to steal money from the drilling industry and redistribute it to teachers unions. With commodity prices for oil and gas approaching 30-year lows, both states are in trouble with their budgets. In ND, Gov. Jack Dalrymple has ordered across the board cuts–forcing the state to live within its means. In PA, Tom Wolf has ordered…tax increases. Wolf and the Democrats NEVER cut anything. They NEVER live within their means. They have a voracious appetite for other people’s money so they can redistribute it in a scheme to hold on to political power. We thought you might like to see how adults, like those in ND, behave when faced with a budget crisis…
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    2015 PA Impact Fee Goes Down for Drillers, Towns Get Less Too

    Pennsylvania’s impact fee–their version of a severance tax–was crafted and became law in February 2012 as part of the Act 13 law. Since that time the impact fee has generated $854 million in revenue, with 60% of that revenue going to the local municipalities (towns and counties) where drilling actually happens, and the other 40% going to the black hole of politicians’ sticky fingers in Harrisburg for pork barrel projects. The 40% portion is the shakedown required to get the law passed in the first place. Disgusting, we know. The impact fee itself is a somewhat complex calculation with the highest fee paid during the first year and going down from there (see below). The fees across all years are based on the average price of natural gas sold at the Henry Hub for the previous year. Because the price of natgas tanked in 2015, impact fees paid by drillers will be lower than in previous years when the average price was higher. PA drillers will save $5,000 per well drilled for the first year, $5,000 per well in the second year, and so on…
    Read More “2015 PA Impact Fee Goes Down for Drillers, Towns Get Less Too”

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    New Effort to Pass HB 1391 Minimum Royalty Bill in PA

    Garth Everett
    Garth Everett

    Last June MDN told you about a renewed effort by Pennsylvania State legislators to pass a minimum royalty bill that will guarantee PA’s landowners get at least 12.5% royalties (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). House Bill (HB) 1391 is was introduced by State Rep. Garth Everett, Republican from Lycoming County, PA. Everett said in June the new bill was “narrowed” in focus from a previous bill (that had failed) and because the more narrowed focus, he hopes the Marcellus industry will not oppose it this time around. The issue of guaranteeing minimum royalties is one of those rare issues that has divided the drilling industry and landowners. Everett said he hasn’t (until now) pushed the bill because of the budget stalemate, but now that the budget impasse is mostly over, he’s going to make a renewed effort to get HB 1391 passed…
    Read More “New Effort to Pass HB 1391 Minimum Royalty Bill in PA”

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    MSC’s Dave Spigelmyer Says Rough Few Years Ahead for Marcellus

    David Spigelmyer, who once headed up Chesapeake Energy’s efforts in the Marcellus Shale region, is and has been head of the Marcellus Shale Coalition for the past couple of years. Great guy. Smart guy. Dave published an op-ed in the Pittsburgh Post Gazette in today’s issue. It’s titled, “Shale hits a rough patch: But natural gas remains a boon to Pennsylvania.” The sobering news, according to Dave, is that the price northeast drillers (drillers everywhere) are getting for their gas will remain low in 2016 and 2017 “and perhaps longer.” Businesses are “in survival mode” and and the slowdown in drilling is being felt by “tens of thousands of men and women” who work for this marvelous industry. The statistics, according to Dave, are “numbing.” Sobering words. But we have to face the reality and not look away and pretend otherwise. But, according to Dave, there is hope and we will get through it. Here’s a portion of his no-rose-colored-glasses op-ed…
    Read More “MSC’s Dave Spigelmyer Says Rough Few Years Ahead for Marcellus”