Statewide PA

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    Status Report on PA Royalty Bill HB 1684 – Recess Limbo

    As MDN told you three weeks ago, Pennsylvania House Bill (HB) 1684 has hit some turbulence on its way to quick passage (see PA HB 1684 Guaranteed Minimum Royalty Act Hits a Snag). The bill, as originally introduced, was supported by the PA chapter of the National Royalty Owner’s Association and would provide for landowners to receive a minimum 12.5% in royalties, disallowing some of the shenanigans Chesapeake Energy has engaged in with reducing post-production expenses via a back door (see PA NARO Alert: Tell Your State Rep to Vote YES on HB 1684).

    But along the way the drilling industry objected–rather loudly–saying lease contracts signed by two parties, the landowner and the driller, should not be modified by the legislature (see Rare Schism Between Landowners & Drillers over PA Royalty Law). Since the original bill, a number of amendments have been proposed, one of them that may well get adopted, that would fundamentally gut the intention of the bill to provide a minimum 12.5%. Lawmakers debated HB 1684 and amendments last week–before adjourning and heading out of town for a 3-week recess (wish we had a 3-week vacation whenever we wanted!). Here’s a status report and update on what happened last week and where things now stand with HB 1684…
    Read More “Status Report on PA Royalty Bill HB 1684 – Recess Limbo”

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    PA DEP Publishes First Annual O&G Report + Video (Very Cool)

    Last week the Pennsylvania Dept. of Environmental Protection (DEP) published their first-ever Oil and Gas Annual Report–for the year 2013 (full copy below). The report celebrates the miracle of fracking shale in PA and the DEP’s hard work to keep it safe. Along with the report (with a lot of great information) the DEP has released a video starring some of the hard-working people for the Office of Oil and Gas Management. It is a FABULOUS video–we’ve embedded it below. Please give it a watch and as you have time, peruse the 31-page first-ever Annual report.

    First up, the DEP press release announcing the report and its raison d’être…
    Read More “PA DEP Publishes First Annual O&G Report + Video (Very Cool)”

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    PA Farmers Flourish Thanks to Marcellus While NY Farmers Fail

    A rather long, and surprisingly pretty balanced, article appeared over the weekend in The Buffalo News comparing and contrasting Pennsylvania and New York’s approach to the issue of shale drilling. The reporter actually talked to a number of sources on both sides of the drilling issue and wrote a good article that presents the facts of the economic miracle happening in PA, and the economic misery happening in upstate NY because of our state’s dithering. You can tell it’s a good article when the cadre of about a half dozen anti-drillers (pathetic people with no lives apart from opposing drilling) flock to the comments to condemn the article and condemn those who dare to post a positive comment about drilling.

    The article opens with the classic tale of two cities theme, comparing the fortunes (or lack thereof) of two farmers on opposite sides of the NY/PA border…
    Read More “PA Farmers Flourish Thanks to Marcellus While NY Farmers Fail”

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    Sunoco Builds Stronger Case for Mariner East as Public Utility

    Brilliant move or manipulating the system? Your view will depend on your drilling proclivity. Late last week Sunoco Logistics, in a bid to strengthen its case before the PA Public Utility Commission (PUC) that the Mariner East pipeline should be considered a public utility, filed an application to deliver propane from western PA to its Twin Oaks terminal in Delaware County (eastern PA) using the Mariner East. By delivering propane from one end of the state to the other and redistributing it to customers in that area, Sunoco is attempting to prove that it is a public utility under PA’s definition.

    MDN has chronicled Sunoco’s fight to use eminent domain against some recalcitrant landowners who refuse to allow the pipeline to cross their property in western PA, and homeowners in eastern PA who don’t want new compressor stations built along the pipeline’s existing route (see Sunoco Logistics Faces Hostile Crowd Over NGL Pipeline Station). Sunoco claims they are a public utility corporation with the right of eminent domain. Anti-drillers (and possibly some pro-drillers) fighting them claim they are not a public utility. The case is before the PA PUC and Sunoco has just hired attorney Michael Krancer and the legal beagles from the Blank Rome law firm to help out (see Sunoco Hires Big Gun Law Firms to Help Complete Ethane Pipeline). Looks like the legal assist is already paying off with this new strategy…
    Read More “Sunoco Builds Stronger Case for Mariner East as Public Utility”

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    New Issue: Ban Use of Cheap/Imported Steel Pipes in PA Marcellus?

    A new issue comes to light–for us anyway. The chairman of the Pennsylvania Public Utility Commission, Robert F. Powelson, writes an editorial in today’s Philadelphia Inquirer that claims America’s steel industry–in particular PA’s steel industry–is suffering from cheap steel pipeline imports from places like South Korea. The pipeline imported is used in shale drilling, namely in gathering pipelines and perhaps larger transmission pipelines. A lot of pipeline is also used during the drilling process itself. Powelson says “oil country tubular goods” or OCTG pipeline is illegally “dumped” on the market–meaning it’s sold below the cost to manufacture it. And that cuts some of the economic benefits PA would otherwise realize if PA or OH steel plants created that pipe.

    Powelson’s proposed fix? Amend the Pennsylvania Gas and Hazardous Liquids Pipeline Act (Act 127) and require companies to report to the PUC the country of manufacture of the steel pipe used to transport natural gas from unconventional wells in PA. Would that work?…
    Read More “New Issue: Ban Use of Cheap/Imported Steel Pipes in PA Marcellus?”

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    Feds Attempt a Power Grab of Delaware River Basin

    grabNew York Sen. Chuck Schumer earlier this week paid nominal lip service to the marvels of shale drilling (see Sen. Chuck Schumer Supports Fracking in NY – Sort of). Although some on the pro-drilling side didn’t like MDN’s take on the gasbag Schumer and his false support of drilling, we offer evidence of his true intentions. Yesterday Schumer and six other senators (all liberal Democrats) introduced a bill to “preserve and improve [the] Delaware River Watershed.” The so-called “Delaware River Basin Conservation Act of 2014” would “establish the Delaware River Basin Restoration Program within the U.S. Fish and Wildlife Service. The program would implement a coordinated approach, requiring the U.S. Fish and Wildlife Service director to adopt a basin-wide plan that sustains and enhances the Delaware River basin restoration and protection efforts. The program would support projects from federal, state, and local governments and stakeholders, ensuring that existing successful restoration plans are leveraged.”

    Translation: The feds want to trample over the states and take over the Delaware River Basin, which means there never will be any shale drilling in places like Wayne County, PA which happens to sit in the basin. It’s a horrible bill–a federal power grab–and it needs to be opposed. Vigorously. Thanks Chucky, for your so-called “support” of shale drilling. Schmuck. An even bigger schmuck is Sen. Bob Casey–from Pennsylvania! He’s one of the seven lib Dem senators sponsoring this abomination…
    Read More “Feds Attempt a Power Grab of Delaware River Basin”

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    First-Hand Account of History-Making PA Energy Rally

    PA Energy Rally - Tom Shepstone picAlthough MDN editor Jim Willis literally missed the bus and could not attend the PA Energy, PA Jobs rally in Harrisburg, PA on Tuesday (see PA Energy Rally Huge Success with Thousands Marching to Capitol), our good friend Tom Shepstone was there. He performs a miracle with his coverage–he captures the tone and essence of the event in written word (and pictures and a video). Tom is a real gem, staunchly pro-drilling, wicked smart–and a superb writer. If MDN could be anyone else, we would be Tom!

    Forthwith, here is Tom’s report (from his always excellent Natural Gas Now website) in its entirety–well worth your time to read, especially if you could not attend…
    Read More “First-Hand Account of History-Making PA Energy Rally”

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    New PA Bill Would Separate Conventional/Unconventional Regulations

    This one goes under the “that’s interesting” heading. Three Pennsylvania Republican legislators say they will soon introduce new legislation that will separate regulations for conventional (vertical only) and unconventional (shale) drilling in the state. According to Reps. Martin Causer (R-Turtlepoint), Kathy Rapp (R-Warren) and Matt Gabler (R-Clearfield/Elk), the two styles of drilling are way different and “it simply makes no sense to apply the same standards to these operations.” Huh.

    We’re sure the representatives have the best of intentions, but we’re not sure new and different regulations are required. The concern is not about unconventional rules and regulations–the concern is that new rules implemented for unconventional drilling are and have been onerous for traditional/conventional drilling. The claim is that the rules applied across the board to both types of drilling are driving many mom and pop drilling operations out of business. Below is the press announcement and justification for the politicians’ proposed new legislation. We’ll reserve judgment for now and wait to hear more. In the mean time, we come down on the slightly skeptical side that this is truly needed…
    Read More “New PA Bill Would Separate Conventional/Unconventional Regulations”

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    Sunoco Logsitics CEO Says Legal Issues Won’t Delay Mainer East

    Sunoco Logistics held an analyst call yesterday to discuss first quarter 2014 earnings and operations. On the call, Sunoco Logistics’ CEO Michael Hennigan had quite a bit to say about both the Mariner East 1 pipeline, due online starting later this year, and the proposed Mariner East 2 pipeline that would run along side Mariner East 1. MDN has been monitoring the latest legal situation with Mariner East and with Sunoco’s request to be made a public utility corporation (for the latest, see Sunoco Hires Big Gun Law Firms to Help Complete Ethane Pipeline).

    MDN found Hennigan’s comments interesting. When asked by an analyst about the NIMBY pushback their getting in building the 50-mile pipeline in western PA, and the pushback on building new compressor stations in eastern PA and whether that would delay or cost the company more money–Hennigan said “no” and that Sunoco is “very confident that we can work through those issues.” Bluster? Brave face for investors? Calm assurance? Who knows. MDN has extracted all of the comments and Q&A’s from yesterday’s call that touch on either the Mariner East 1 or 2, or Mariner West pipeline. We’ve also embedded (below) a copy of the PowerPoint slides used during the call. Pay attention, in particular, to the slides on pages 9, 10 and 11…
    Read More “Sunoco Logsitics CEO Says Legal Issues Won’t Delay Mainer East”

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    PA Energy Rally Huge Success with Thousands Marching to Capitol

    I Missed the BusA (not so funny) thing happened on the way to the forum, er PA Energy Rally yesterday. MDN editor Jim Willis showed up at the appointed bus stop at 6:45 am with 15 minutes to spare–and as he pulled in, the bus was pulling out onto Interstate 81. Jim missed the bus! The Marcellus Shale Coalition has been very apologetic (and very upset with the bus company–the contract clearly states don’t leave until 7 am). So after inviting you to the rally, and with intentions of having a first-hand account report, Jim missed it. He was equal parts sad and angry–but that’s life.

    But don’t despair. By all accounts it was a great day with anywhere from 2,500-3,000 people marching to the Capitol steps in Harrisburg. By the way, when was the last time you heard about 3,000 anti-drillers marching in Harrisburg? Yeah, us neither. There were, however, anti-drillers who tried to rain on the parade–something like 6 to 8 anti-drillers. You read that right–single digits for the loonies who turned out to hold up a sign against shale drilling in their big, huge “counter protest.” The only people who even noticed them were reporters sticking cameras in their faces. At one point a single anti-driller tried to shout something. A few pro-drillers noticed–and laughed. Silly fools.

    Below we have a couple of media accounts of the rally. Strangely, the AP article is about the most fair and balanced we found. The reliably anti-drilling StateImpact Pennsylvania covered it too, with their reliably anti-drilling slant. We also have a funny sour grapes comment from the anti-drilling Jan Jarrett, former president/CEO of the anti-drilling environmentalist group PennFuture…
    Read More “PA Energy Rally Huge Success with Thousands Marching to Capitol”

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    Sunoco Hires Big Gun Law Firms to Help Complete Ethane Pipeline

    An update on Sunoco Logistics’ legal battles to build a 50-mile pipeline in western PA to connect to an older 8-inch pipeline that’s being re-purposed to flow ethane and propane from western PA all the way to the Marcus Hook refinery near Philadelphia along the Delaware River. The problem is push-back from residents along the pipeline’s route–for the new 50 miles of pipeline and for the compressor stations that need to be built along the entire route (see More Pushback from PA Residents on Proposed Mariner East Pipeline). Sunoco feels it has no choice but to be granted state recognition as a public utility corporation (not the same thing as a public utility).

    They have a lot riding on their request to be recognized as a public utility corporation, so Sunoco has just hired a couple of big gun energy law firms to give them a hand with their multiple legal battles. One of those firms is Blank Rome, handling Sunoco’s application to be classified as a public utility corporation. The Sunoco case at Blank Rome is being headed by Michael Krancer–former Secretary of the PA Dept. of Environmental Protection, super sharp lawyer and all-around nice guy (MDN has spoken to, and heard Mike speak, a number of times). The other law firm lending a hand is Obermayer, Rebmann, Maxwell & Hippel, who will help out with Sunoco’s problems with new pipeline construction in western PA…
    Read More “Sunoco Hires Big Gun Law Firms to Help Complete Ethane Pipeline”

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    Radical Trout Unlimited Says Fracking OK Sometimes…Really??

    For the past few years MDN has pointed out that groups like Trout Unlimited (TU) are strongly anti-drilling. Maybe not every last member is against drilling, but every quote we’ve ever read from the organization proper or it’s members comes down on the side of being against shale drilling. In February the watchdog group Center for Consumer Freedom named TU and others as “radical green groups” (see Trout Unlimited, Other Groups Outted as Radical Green Groups).

    We thought it was interesting, and funny, that the increasingly anti-drilling Pittsburgh Post-Gazette (must be the industry spends more ad dollars with their rival the Pittsburgh Tribune-Review) ran an article focusing on the ever-so-reasonable TU and it’s considered, erudite, nuanced approach to shale drilling. A TU senior official says in the article: “We’re not opposed to fracking, we just think it shouldn’t happen everywhere.” Right. Just change that last word to “anywhere” and you have their real sentiments…
    Read More “Radical Trout Unlimited Says Fracking OK Sometimes…Really??”

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    Rex Energy 1Q14: Record High Production, Stacked Plays & Long Laterals

    Rex Energy, our “little energy company that could (and is)” continues to chug along. And because of the Marcellus, Rex isn’t so little anymore. They release their first quarter operations and financial update earlier this week. The Rex update shows quarterly production has hit 122.2 MMcfe/d, a new record for the company. Rex is drilling stacked plays, targeting not only the Marcellus and Utica but the Upper Devonian layer too–and experimenting with different lateral lengths. Doing all the right things, and it’s paying off for Rex.

    A a comprehensive update from the little energy company that’s doing it right…
    Read More “Rex Energy 1Q14: Record High Production, Stacked Plays & Long Laterals”

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    EQT: We’ll Let Range & Others Figure Out the Utica in SW PA

    Figure it OutLast Friday MDN told you that EQT is a bit wary and skeptical of the Utica Shale–at least in Ohio (see EQT Leaving the Utica? Maybe. Guernsey County Wells Disappoint). But what about the Utica in Pennsylvania? EQT CEO David Porges, in a Q&A with reporters yesterday, said the company is watching and waiting when it comes to the Utica in southwestern PA.

    Porges said “the Utica’s potential is enormous,” but…
    Read More “EQT: We’ll Let Range & Others Figure Out the Utica in SW PA”

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    U.S. Capital Advisers: PA Marcellus “Gift that Keeps on Giving”

    Investment firm U.S. Capital Advisers has just issued their third in a series of resource basin and infrastructure studies. Titled “Appalachia Infrastructure & Marcellus Basin Study Summary” (full copy embedded below), the new study begins this way: “Why Appalachia? It’s the biggest, baddest basin there is when it comes to gas production and the gift that keeps on giving, even in a $4 gas environment.” The study focuses exclusive on the Marcellus in Pennsylvania but the authors promise more studies are coming that will cover the West Virginia Marcellus and Ohio Utica Shale. Can’t wait!

    Read on to learn more about pipelines, NGLs, and even which counties showed the most well productivity improvement…
    Read More “U.S. Capital Advisers: PA Marcellus “Gift that Keeps on Giving””

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    PA Reporter Gets Law Firm to Withdraw from Sunoco Pipeline Case

    Since we’re tracking the progress of Sunoco Logistics’ Mariner East pipeline, and since this (minor) story has a potential impact on it, we’ll bring it to your attention. On Monday the anti-drilling PBS “reporter” Marie Cusick, who never misses a chance to trash-talk the Marcellus Shale industry, published an article on the reliably anti-drilling StateImpact Pennsylvania website highlighting what theoretically could be considered a conflict of interest for the law firm representing Sunoco Logistics. The law firm of McNees, Wallace and Nurick representing Sunoco Logistics is an associate member of the (hated) Marcellus Shale Coalition and they regularly represent (evil) gas industry companies. However, over the past two years McNees has also been used as outside (not inside, but outside) counsel for the state Public Utility Commission (PUC).

    The potential conflict is that the Mariner East case requesting Sunoco Logistics be classified as a public utility corporation with right of eminent domain is right now before the PUC and it is the PUC that will make a decision. Although different attorneys work for Sunoco case than for the PUC, the surface appearance of a conflict still exists (it’s the same law firm)–that we have to admit. A day after the story ran McNees filed paperwork removing themselves from the case. Now Marie can do a happy dance and put a feather in her cap. Atta girl, Marie! Not that it will make one fig of a difference in the end…
    Read More “PA Reporter Gets Law Firm to Withdraw from Sunoco Pipeline Case”