Statewide PA

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    Dramatic Budget Cutbacks in Marcellus Budgets for 2015

    It’s not an understatement to say that drillers in Pennsylvania are in a fight for their very existence. Socialist Gov. Tom Wolf has convinced a great many PA residents in the state that it’s perfectly fine to steal money from drillers and landowners and redistribute it to Big Education. What Wolf and those who blindly follow him don’t realize is that Wolf’s nosebleed severance tax is the equivalent of a butcher knife to the neck of the goose laying Marcellus golden eggs–those eggs being jobs and current tax revenue. If Wolf & company pull the trigger on the tax, it will be catastrophic for the drilling industry in the state. Drilling is already decreasing–by huge numbers. Capital budgets for 2015 have been slashed–typically in one-third to one-half of 2014 levels. New drilling may all but stop with such a new tax–denying the tax and spend Democrats the revenue they seek “for the children.” What will they do then? The Marcellus Shale Coalition is blowing the trumpet to warn people of the coming train wreck that is Tom Wolf’s severance tax. One of the ways they are doing it is with an emailed newsletter called Marcellus Moments. Yesterday’s edition contains an excellent table showing Marcellus drillers and how much they’ve announced they are cutting back on their capital budgets for 2015. When you see it table form (below), it’s rather shocking. Do the Dems really think drillers will just keep on drilling when their already-squeezed profits disappear into a socialist tax black hole? Although the Marcellus is the biggest, it’s not the only shale play around. Rigs can be moved…
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    Majority of PA Voters DON’T Support a New Severance Tax Right Now

    The results of a recent poll conducted of PA voters, paid for by the Marcellus Shale Coalition, is (in our opinion) being misreported. The headlines, which all seem to quote a single story in the Pittsburgh Tribune-Review, claim that a “majority” of PA voters support slapping a new tax on shale drillers. That’s not how we read the results…
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    CSSD Expands Certification Standard to Include Wastewater Disposal

    The Center for Sustainable Shale Development (CSSD) has popped back into the news. The CSSD is an effort by both the drilling industry and environmental groups to craft a set of standards that both sides can support resulting in (for those companies who follow the standards)–a sort of Underwriters Laboratory “seal of approval” certification. You can boil it down to an effort to, “Can’t we all just get along?” As MDN has chronicled over the past two years since it was launched in March 2013, it’s been a rocky start for the CSSD (see MDN’s string of stories on the CSSD here). MDN has been critical of the organization from the beginning, although lately we’ve begun to warm to the organization and its mission. We’ve spoken in person with both the former executive director of the CSSD, Andrew Place (from EQT) and the current executive director, Susan LeGros. They both make a compelling case for the organization. LeGros and the CSSD announced last week they have, for the first time, expanded one of their 15 standards to include guidelines for what happens to frack wastewater after it has left the drilling site…
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    Ripping the Mask off PennFuture & It’s Former Employees

    ripping mask offFor months now, since the announcements of who then Gov.-elect Tom Wolf would appoint in his new administration to head up environmental efforts at both the Dept. of Environmental Protection (John Quigley) and the Dept. of Conservation and Natural Resources (Cindy Dunn), MDN has called attention to the fact that both of those individuals are problematic based on their previous roles in the anti-drilling organization PennFuture. A third member of the Wolf administration is John Hanger, a previous Secretary at the DEP and an early member (supposedly founder) of PennFuture. All three once worked for Democrat Gov. Ed “Fast Eddie” Rendell and now are at the top of the power structure in Harrisburg working for Wolf. MDN friend and ace analyst Tom Shepstone rips the mask off PennFuture and exposes it for what it is in a new article published on his always excellent Natural Gas Now website. Tom delves into the intricate (and sleazy) web that connects PennFuture to anti-drilling organizations like the Heinz Endowments, the Delaware Riverkeeper, William Penn Foundation, FracTracker Alliance and others. Because it’s important for PA citizens to understand who these people are–and because it’s important for PA’s legislators to question (grill) Quigley and Dunn about their anti-drilling activities before confirming them–we bring you Tom’s excellent expose below…
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    Crushing Defeat for PennFuture in Lawsuit re Compressor Stations

    Bill Clinton definition of is isPennFuture, the anti-drilling organization that has produced three top lieutenants in the PA Gov. Tom Wolf administration (see Ripping the Face off PennFuture & It’s Former Employees), frequently uses the court system in its attempt to slow or stop the Marcellus industry. One such case was a lawsuit PennFuture filed against Ultra Resources in 2011. Ultra had eight compressor stations scattered across Tioga and Potter counties–all of them many miles apart from each other. PennFuture tried to make the legal argument that all of the compressor stations should be combined together and treated as a single entity for the purposes of the federal Clean Air Act, which would have resulted in either very expensive equipment to reduce each facility’s nitrgen oxide (NOx) output, or perhaps closed some of them down to make the combined total come in under a certain threshold. PennFuture tried to say the eight facilities are “adjacent” for the purpose of the Clean Air Act. Ultra argued adjacent means “next to,” as in sharing a border. It all boils down to what the definition of adjacent means. Earlier this week U.S. District Court for Pennsylvania’s Middle District ruled in favor of Ultra and against PennFuture…
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    PA’s “Independent” Fiscal Office Says Drillers Pay Low Taxes

    It appears PA Gov. Tom Wolf’s severance tax proposal isn’t the slam dunk he thought it would be. Must be time to sneak in a supposedly “impartial study” that says raising taxes on drillers won’t hurt anybody–they ain’t goin’ nowhere ’cause that gas in under Pennsylvania soil. And right on cue the partisan so-called Pennsylvania Independent Fiscal Office (IFO)–populated with Democrats appointed by Ed Rendell and paid with taxpayer’s money–has issued a “research brief” which says the “effective tax rate” on PA drillers four years ago was 5.3%–but today it’s a measly 2.1% (robber barrons!). The new “brief” delights Gov. Wolf and the soak-the-drillers-we-hate-fossil-fuels-anyway Democrats in Harrisburg. This is not the first so-called research issued by the IFO calling for high taxes on drillers. They said the same thing last year–only last year’s report was longer (see PA Partisan Study Finds PA Needs to Soak Drillers with New Taxes). Here’s the latest pathetic attempt to build a case for stealing the money from one industry (oil & gas) to give it away to another (big education)…
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    Member of Wolf DEP Transition Team Confused by Severance Tax Plan

    confusedCharlie Schliebs is managing director of Stone Pier Capital Advisors in Pittsburgh–a boutique mergers & acquisitions (M&A) advisory firm that provides “highly sophisticated services to companies with enterprise values ranging from $5 million to over $50 million” according to their website. Charlie was on the PA Gov. Tom Wolf transition team for the Dept. of Environmental Protection (DEP) and said “it was a good experience.” Charlie is also, generally, a Tom Wolf fan. He likes the fact that Wolf isn’t a typical politician and was/is a successful businessman. Charlie supported Wolf in the last election. Charlie is also an MDN reader. You know we’re not Tom Wolf fans–in particular with respect to his severance tax proposal. In Stone Pier’s latest newsletter for friends and customers, Charlie writes an important cover story about Wolf and his severance tax proposal–and why he’s confused by it. We’re happy to bring it to you–it’s an important read…
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    Wolf’s Severance Tax Threat Costs Small PA Town $315,000

    threatTwo weeks ago the hapless newly elected governor of Pennsylvania, Tom Wolf, introduced a new 7.5% severance tax plan to soak the Marcellus Shale industry in his state (see PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax). Wolf wants to target one industry, oil and gas, to give their hard-earned money away to another industry, teachers. He’s trying to pay back all of those good union voters in Philadelphia who elected him. But Wolf’s threat of a tax is already having very tangible consequences. Huntley & Huntley Energy Exploration has pulled out of a deal to lease 90 acres of land owned by Harmar Township (Allegheny County), PA. That just cost Harmar $315,000. Why did Huntley & Huntley pull out? The uncertainty over Wolf’s severance tax. If the tax passes, a great deal of drilling in PA’s Marcellus Shale will be idled–and that’s not idle speculation…
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    Will DEP Sec Quigley Intentionally Miss Deadline for New Drilling Regs?

    Last week MDN gave you the heads up that new “acting” Sec. of the PA Dept. of Environmental Protection, John Quigley, is already signaling his desire to clamp down on the Marcellus industry. He mass-fired the members of the Oil and Gas Technical Advisory Board (OGTAB)–something no other governor and head of the DEP has done in living memory (see Why did PA DEP Acting Sec Quigley Mass Fired Gas Advisory Board?). Scott Perry, deputy secretary of the DEP, says long-awaited new regulations formulated after the Act 13 law was passed in 2012 will not be delayed because of the mass firings on the OGTAB. Others, however, are not so sure. We still see tremors of a coming earthquake in which Wolf/Quigley screw around and miss the deadline (intentionally) and then rewrite the new regulations once again, to suit their own proclivities on drilling…
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    PA MCOR Director Goes on the Road — to Alergia

    We’ve never been to Algeria, but Thomas Murphy, the co-director of the Marcellus Center for Outreach and Research (MCOR), has. Last week Murphy attended an oil and gas conference in Algiers, Algeria to present on the “American experience” in extracting oil and gas from shale. We don’t have a transcript of his statements, but we do have international reaction. According to reports, Murphy admitted that “the shale industry will always pose some environmental risk” including “the contamination of aquifers, infiltration of natural gas in drinking water or failures related to landfill processes of chemical and radioactive waste are the main risks relating to the exploitation of unconventional gas.” We suspect the comments in context are a simple acknowledgement that you have to be careful and follow regulations to avoid problems. But international Arab media seems to be presenting his comments as some sort of grudging admission that shale drilling pollutes the environment, which of course is not the case (when it’s done properly)…
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    PA Gov Wolf Tries to Walk Back Ban Comment, PIOGA Doesn’t Buy It

    passive aggressiveIs Pennsylvania Gov. Tom Wolf an extortionist? Or is he just dumb? Last week, in response to a reporter’s question about his proposed severance tax and what might happen if it doesn’t pass the legislature, Wolf said this: “You know, the alternative is not really no tax… the alternative is no drilling – a ban as in the case of New York” (see PA Gov Wolf Turns Bully, Threatens Ban on Drilling Absent New Tax). What the heck did he mean by that? And why are there NO mainstream media outlets covering it? Yesterday Wolf tried to walk back his comment without looking like a dolt. He didn’t succeed. The Pennsylvania Independent Oil and Gas Association (PIOGA) is fighting mad and says Wolf’s comment is tantamount to extortion (see their letter below). So which is it Gov. Wolf? Are you threatening the Marcellus industry in your state–pay the tax or die? Did you take one too many Xanax pills before the presser last week and you “misspoke”? What, precisely, did you mean by your comment?…
    Read More “PA Gov Wolf Tries to Walk Back Ban Comment, PIOGA Doesn’t Buy It”

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    New Peer Reviewed Study: Marcellus Fugitive Methane is Minuscule

    A new study on methane emissions in the Marcellus by researchers at the University of Colorado’s Cooperative Institute for Research in Environmental Sciences and the National Oceanic and Atmospheric Administration (NOAA) has just been published in the peer reviewed Journal of Geophysical Research: Atmospheres. The study, titled “Quantifying atmospheric methane emissions from the Haynesville, Fayetteville, and northeastern Marcellus shale gas production regions” (full copy below), finds very little methane leakage in the Marcellus Shale region. This study is one more nail in the coffin of the wild theories of professors Robert Howarth and Tony Ingraffea (from the once-great Cornell University) about “fugitive methane” leaking out all over the place, heating up Mother Earth. In fact, this new research finds leakage from Marcellus operations is between 0.18% to 0.41%. That’s less than 2/10ths of a percent to about 4/10ths of a percent on average. It’s minuscule…
    Read More “New Peer Reviewed Study: Marcellus Fugitive Methane is Minuscule”

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    PA Production in 2H14 Soars to New Record; 4 Tcf in 2014

    The Pennsylvania Dept. of Environmental Protection (DEP) published its semi-annual (every 6 months) production report yesterday for Marcellus/Utica Shale gas production. The big news is that once again PA has shattered another record. In the second half of 2014 PA produced 2 trillion cubic feet (Tcf) of natural gas, making it ~4 Tcf for the entire year. That works out to be around 16% of all gas used throughout the United States–coming from a single state. Chesapeake Energy produced the most gas in 2H14 (with 712 producing wells), followed by Cabot Oil & Gas (340 producing wells). Below we have some more stats and facts about PA’s production for 2014…
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    PA Gov Wolf Turns Bully, Threatens Ban on Drilling Absent New Tax

    no bullyingSomehow in the flurry of news last week when Pennsylvania Gov. Tom Wolf released his so-called proposal to tax the Marcellus Shale industry (see PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax), we missed the fact that Wolf threatened the entire Marcellus Shale industry with a ban on drilling if the industry doesn’t fall into line and support his tax. Sure sounds like good old Philly-style break-their-kneecaps talk from the kinder, gentler and oh-so-much-smarter than everyone else Tom Wolf. His precise words: “…the alternative is not really no tax, the alternative is no drilling, a ban as in the case of New York.” Our collective jaws hit the ground. How can anyone not see this man for what he is? For what he’s trying to do (end drilling)? Like an old-style mob boss–you pay him or you get hurt–and hurt real bad. Fortunately, some groups like the Pennsylvania Independent Oil and Gas Association (PIOGA) isn’t taking Wolf’s threat lying down. They’re in the mood to fight…
    Read More “PA Gov Wolf Turns Bully, Threatens Ban on Drilling Absent New Tax”

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    Why did PA DEP Acting Sec Quigley Mass Fire Gas Advisory Board?

    Even though he’s still only “acting” Secretary of the Dept. of Environmental Protection (DEP), John Quigley is cleaning house at the DEP–installing his own yes-men and women in important positions–and doing it just prior to issuing important new drilling regulations. For some time politicians and old-line mom and pop conventional (non-shale) drillers have been making a fuss that the rules that apply to shale drillers should not apply to non-shale drillers. Fair enough. There are some major differences. But the timing for creating a new Conventional Oil and Gas Advisory Committee in addition to the Oil and Gas Technical Advisory Board (OGTAB)–and mass firing the members of the OGTAB (as Quigley has done) seems darned peculiar in light of the fact they have to publish new drilling regulations this year or what has been a 3-year process will need to be restarted all over again…
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    PA DCNR Program Leases Under Rivers/Creeks for Marcellus Drilling

    Well now THIS is just not supposed to happen. The pure-as-the-wind-driven-snow PA Gov. Tom Wolf’s Dept. of Conservation and Natural Resources (DCNR) is stepping up its program of leasing underneath rivers, creeks and mud puddles for Marcellus and Utica Shale drilling–much to the consternation of anti-drilling groups like PennFuture (whose immediate past president, Cindy Dunn, is about to become Secretary of DCNR). When DCNR collected for river and stream leases under Republican Gov. Tom Corbett, the Democrat media machine reported it as a clandestine and secretive activity (see PA’s “Secret” Deal to Lease Land Under Rivers & Streams (Gasp!)). It actually has been quite public–MDN told you about this program all the way back in 2012 when it was launched (see PA DCNR Wants Money for Drilling Under Public Streams/Rivers). Our concern was/remains that the state of Pennsylvania may be claiming money for land that belongs to private landowners–denying private landowners of lease bonuses and royalties. Below we have the lease terms dictated by DCNR, a map of the (almost innumerable) waterways PA claims they own, a list of the names for those waterways, and the criteria DCNR uses in determining whether or not a waterway is owned by the state…
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