Statewide PA

Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Bad to Worse: PA Royalty Owner Asks Court for Chessy Class Action
April 9, 2014April 9, 2014

Chesapeake Energy continues to find itself under the metaphorical gun with respect to royalty payments in Pennsylvania. The PA legislature is considering a bill (HB 1684) that would plug a legal loophole and require Chesapeake and other drillers to pay landowners a 12.5% minimum royalty regardless of post-production costs (see PA NARO Alert: Tell Your State Rep to Vote YES on HB 1684). Landowners in Bradford County sued Chessy held an anti-Chesapeake rally to further express their extreme displeasure (see Bradford PA Landowner Rally over Chesapeake Royalty Shenanigans). Gov. Corbett asked PA’s anti-drilling Attorney General, Kathleen Kane, to investigate (showing how bad it’s gotten–to stoop to asking her to get involved).

And now from bad to worse: a company that owns royalty rights in PA, Scout Petroleum, claims they’ve been screwed out of royalties by Chesapeake and has asked a judge for a full refund and to force Chesapeake into arbitration and grant class-action status to the whole, festering mess…
Read More “Bad to Worse: PA Royalty Owner Asks Court for Chessy Class Action”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

Act 13 Case Goes Back to Court, Drillers Petition to Join Lawsuit
April 9, 2014April 9, 2014

The Marcellus Shale drilling industry in Pennsylvania is trying to make some lemonade from the truckload of lemons handed to them by the PA Supreme Court’s ill-fated decision to let seven selfish townships gut the state’s Act 13 drilling law passed in 2012. We’ve covered the issue extensively (see a list of MDN’s Act 13 articles here). Perhaps the most egregious and outrageous miscarriage of justice in the case is that the drilling industry, which is directly affected by the case, was never allowed to join the case. The courts said they didn’t have “standing”–and yet those same courts allowed the virulently anti-drilling Delaware Riverkeeper Network to be party to the case. Simply boggles the mind.

The PA Supreme’s in their “wisdom,” decided the zoning portions of the case and sent the rest of the case back to a lower court so they could finish gutting the Act 13 law. As MDN previously reported exactly a month ago, the drilling industry has, once again, respectfully requested they be allowed to join the case now that it’s in the home stretch (see Drillers Petition PA Court (Again) to Participate in Act 13 Case). While the drilling industry can’t undo what has been done by the Supreme Court, it is clear that they believe they can lessen the damage done if they win certain arguments in lower court–arguments like affirming the Public Utility Commission’s authority to review whether a zoning ordinance crosses the line and preempts state oil and gas law. In other words, the seven selfish towns may not have gotten their own selfish way after all–not entirely. The hearing on whether to allow the industry to join what’s left of the lawsuit is today…
Read More “Act 13 Case Goes Back to Court, Drillers Petition to Join Lawsuit”
Allegheny County | Energy Services | Ethane | Exporting | Industrywide Issues | NOVA Chemicals | Pennsylvania | Pipelines | Processing Plants | Statewide PA

NOVA Visits Pittsburgh, Takes About Sarnia Cracker Expansion
April 9, 2014April 9, 2014

Last December MDN brought you the news that NOVA Chemicals, which operates the Corunna ethane cracker plant in Sarnia, Ontario (Canada) plans to expand their cracker plant using more Marcellus and Utica Shale ethane (see NOVA Chemicals Plans Expansion of Corunna Cracker in Sarnia). At that time NOVA said they will expand capacity by an additional 20% gradually between 2014 and 2018.

At a special event in Pittsburgh designed to strengthen the already-strong connection between Pennsylvania and Canada, called Pop-Up Canada, NOVA vice president John Hotz provided a few more details about NOVA’s plans for the Corunna cracker plant…
Read More “NOVA Visits Pittsburgh, Takes About Sarnia Cracker Expansion”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

Rare Schism Between Landowners & Drillers over PA Royalty Law
April 8, 2014April 7, 2014

Several weeks ago MDN told you that the Pennsylvania chapter of the National Association of Royalty Owners had sent out a flash email to encourage support of House Bill (HB) 1684, the Guaranteed Minimum Royalty Act. The bill would clear up shady dealings from Chesapeake Energy (and perhaps others) in deducting certain expenses leaving some landowners with checks for royalties way under the 12.5% guaranteed minimum (see PA NARO Alert: Tell Your State Rep to Vote YES on HB 1684). Not long after NARO sounded the rallying cry, the Pennsylvania Farm Bureau joined NARO in supporting HB 1684 (see PA Farm Bureau Joins Chorus Against Chessy on Royalty Issue).

However, this is one issue on which landowners, who are strongly pro-drilling, and the drilling industry itself, part ways. The Marcellus Shale Coalition, through its new grassroots organization called Shale Advocates, is asking shale supporters to oppose HB 1684. According to the Shale Advocates website, they want their supporters to “Take a few moments to contact your representative and let them know you oppose HB1684 and any effort by the Commonwealth to intervene in private contracts. Here’s your opportunity to be heard. Your voice will make a difference.” After HB 1684 has been larded up with amendments, NARO met to consider whether or not they would still support it and in the end, they see more to like than no like about the bill–so they issued the following press release last week to reaffirm their strong support:
Read More “Rare Schism Between Landowners & Drillers over PA Royalty Law”
Pennsylvania | Statewide PA

New CSSD Director Says “Entrenched Views” Biggest Obstacle
April 8, 2014April 7, 2014

In January MDN told you that the Center for Sustainable Shale (CSSD) had come roaring back to life and had appointed a new executive director. Environmentalist lawyer Susan LeGros from Philadelphia was appointed to the post. In her previous law practice she worked with solar companies–which seems like an odd fit for someone to head up an organization aimed at shale drilling. As we said at the time, we’ll withhold judgment for the time being (see Center for Sustainable Shale Comes Roaring Back (to Life)).

The Pittsburgh Post-Gazette caught up with Ms. LeGros to ask her how it’s going at the CSSD and how she likes her new home in Pittsburgh. Here’s what she had to say:
Read More “New CSSD Director Says “Entrenched Views” Biggest Obstacle”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

2013 PA Impact Fee Sets Record: $224.5M, Grand Total Now $630M
April 7, 2014April 7, 2014

On Friday, PA Gov. Tom Corbett announced the Act 13 impact fee for 2013 will deliver the biggest haul yet–$224.5 million, which is up 11% from the monies collected under the impact fee for 2012. The official tallies are not yet released by the state Public Utility Commission (PUC), the agency charged with collecting the fees. However, the bills have gone out and drillers have until April 15 to pay the tax man.

There may be a few quibbles about how the numbers were calculated, but overall, the PUC knows about how much it will receive and so Gov. Corbett, feeling pressured by the tax-and-spend Democrat candidates running for his job (cough *Tom Wolf* cough), wanted to release the good news now…
Read More “2013 PA Impact Fee Sets Record: $224.5M, Grand Total Now $630M”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Lawyers Gutting Act 13 Law Claim PA DEP Covers Up Water Problems
April 4, 2014April 4, 2014

The Pennsylvania Dept. of Environmental Protection (DEP), along with the Act 13 law, has come under heavy fire from anti-drillers and the seven selfish towns who want to overturn Act 13. Even though the DEP is dedicated to the health and safety of the people and environment in PA, they’re regularly (falsely) accused of colluding with “industry” and throwing both people and the environment under the metaphorical bus. The latest accusations against the DEP stem from the Act 13 lawsuit remanded by the PA Supreme Court back to a lower court. Anti-drillers are doing their best to gut the protections afforded in Act 13 because they want the chance to re-do it and “do it right” (meaning onerous new regulations). And so after the seven selfish towns pulled on one Act 13 thread (zoning) and won, their action now threatens to unravel the entire law (see Ongoing Fallout from PA Supreme Court’s Wrong Act 13 Decision).

Lawyers for the seven selfish towns who are making an attempt to gut the entire Act 13 law in the lower court are accusing the DEP of intentionally suppressing information about contamination of private water wells due to drilling-related activity. The lawyers, along with a sycophantic media willing to regurgitate their claims, say that DEP regulators don’t keep files or issue violation notices to drillers in cases where the driller reaches a private settlement with a landowner. That is, they say it’s a government cover-up of enormous proportions. Which is, of course, preposterous. But it sure sells a lot of newspapers…
Read More “Lawyers Gutting Act 13 Law Claim PA DEP Covers Up Water Problems”
Air Quality | Industrywide Issues | Pennsylvania | Research | Statewide PA

PA DEP Releases 2012 Air Emissions from Drilling/Pipelines Report
April 4, 2014April 4, 2014

Yesterday the Pennsylvania Dept. of Environmental Protection (DEP) released their annual natural gas drilling emissions inventory data report. The data tabulates air pollution from drilling and pipelines for all of 2012 and came from 56 Marcellus Shale drillers covering 8,800 natural gas wells and from 70 operators of 400 compressor stations, which received gas from Marcellus Shale and traditional oil and gas well sites. Important to note: New to the 2012 report were 250 additional compressor stations that process gas from traditional (not shale) well sites. These compressor stations were not required to report in 2011.

What does the latest report show? As you might expect, when you drill more wells and move more gas through pipelines, there’s more air pollution. However, the DEP is quick to point out that cumulatively, for all Pennsylvanians, air pollution is down–rather dramatically. Why? Because with more natural gas use in electric generating plants (replacing coal) and as a substitute for diesel fuel, overall pollution drops. Still, as MDN has pointed out on previous occasions, we must keep a close eye on air pollution in heavily drilled areas to ensure residents in those areas are not exposed to unsafe levels of pollutants. Below we have the DEP’s announcement from yesterday, a copy of the 2012 numbers, links back to the 2011 numbers (so you can compare them), and a few more thoughts on drilling and air pollution…
Read More “PA DEP Releases 2012 Air Emissions from Drilling/Pipelines Report”
Energy Services | Industrywide Issues | NGLs | Pennsylvania | Pipelines | Regulation | Statewide PA | Sunoco Logistics

Sunoco Logistics’ New Roadblock in Building Mariner East Pipeline
April 4, 2014April 4, 2014

It appears the PA Supreme Court’s ill-fated decision to toss out zoning provisions in the Act 13 drilling law is now affecting more than just drilling. Sunoco Logistics is trying to build a new natural gas liquids (NGL) pipeline that spans the state–running from western PA all the way to the Marcus Hook refinery near Philadelphia (see Sunoco Logistics Planning Second Mariner East Pipeline for NGLs). MDN reported in January that Sunoco Logistics has a lot riding on a court case in Washington County, PA because they are attempting to use eminent domain to force some landowners to allow the pipeline across their property (see PA Judge Hears Mariner East NGL Pipeline Eminent Domain Case).

We now throw in a new wrinkle for Sunoco Logistics and the Mariner East NGL pipeline: Sunoco Logistics has made a request to the state Public Utility Commission (PUC) to exempt the pipeline from local zoning regulations in building some 31 pump and valve control stations across the length of the pipeline. Based on the PA Supreme Court decision in December, two Philadelphia state senators say Sunoco Logistics does not have the right to be exempted from local zoning…
Read More “Sunoco Logistics’ New Roadblock in Building Mariner East Pipeline”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

PA Farm Bureau Joins Chorus Against Chessy on Royalty Issue
April 3, 2014April 3, 2014

The Pennsylvania Farm Bureau is adding its considerable weight behind the effort to pass new legislation that will guarantee landowners in the state don’t get shafted by companies like Chesapeake Energy when it comes to royalty payments. As MDN has previously reported, the royalty situation in PA has turned messy with claims that Chesapeake Energy has engaged in an elaborate scheme to pass post-production costs on to landowners–costs they technically don’t have a right to deduct (see Chesapeake Shafting Landowners out of Royalties Mess Gets Messier). What it means is that some landowners are getting peanuts–far below the state mandated 12.5% minimum royalty.

The Farm Bureau is up in arms because its members are up in arms–and so the organization is pushing for new legislation to plug the loophole that Chesapeake (and maybe others) are apparently exploiting…
Read More “PA Farm Bureau Joins Chorus Against Chessy on Royalty Issue”
Industrywide Issues | Litigation | Pennsylvania | Statewide PA | Taxation | York County

York County Park Getting $150K Upgrade Courtesy Marcellus $
April 3, 2014April 3, 2014

Even though there is no Marcellus Shale drilling in York County, PA, residents of the county will get $150,000 of improvements to a county park courtesy of Marcellus Shale drilling. MDN sees at least two or three of these kinds of stories–every week. We ignore most of them, but every now and again we bring you one of them to remind you of what the state is about to lose thanks to the “selfish seven” townships that sued the state to gut the Act 13 Marcellus drilling law–a law that provides for an impact fee that raises over $200 million per year that is distributed throughout the state–some of it in places like York County.

Here’s the story of the $150,000 upgrade coming to a York County park courtesy the drillers and landowners out of whose pockets the money comes…
Read More “York County Park Getting $150K Upgrade Courtesy Marcellus $”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA | Taxation

Dangerous Economic Road Ahead for PA if Shale Economy is Topedoed
April 2, 2014April 2, 2014

In a letter to the editor published (amazingly) in the Pittsburgh Post-Gazette, Consumer Energy Alliance Mid-Atlantic executive director Mike Butler points out, in just a few paragraphs, the grave danger now hovering over Pennsylvania because of the PA Supreme Court’s poor decision to side with seven selfish towns to overturn important and large portions of the Act 13 law, and in danger from PA Democrats who want to stop all future Marcellus drilling in the state with an ongoing moratorium.

Pennsylvania is at a crossroads and if her citizens choose poorly in the next election, they risk plunging the state into an economic disaster, as eloquently pointed out by Mr. Butler:
Read More “Dangerous Economic Road Ahead for PA if Shale Economy is Topedoed”
Lease & Royalty Payments | Pennsylvania | Statewide PA

PA’s “Secret” Deal to Lease Land Under Rivers & Streams (Gasp!)
April 1, 2014April 1, 2014

Pssst. We need to whisper this news, because no one is supposed to know. Those nefarious Republicans in Harrisburg, PA have been (gasp) leasing land underneath rivers and streams to those nasty, evil shale drillers–shameless Republican mooks. And such leasing has brought in $5.9 million into the coffers of the state for politicians to redistribute.

So says the reliably anti-drilling StateImpact Pennsylvania–which is really just a couple of NPR reporters that issue their anti-drilling views via a website. The state, since 2012, has leased more than 1,000 acres under rivers and streams for $4,000 per acre signing bonus, and when/if drilling happens, 20% royalties. Pretty darned good deal if you ask us. So has Gov. Tom Corbett been hushing this up, keeping it a secret?…
Read More “PA’s “Secret” Deal to Lease Land Under Rivers & Streams (Gasp!)”
Industrywide Issues | Pennsylvania | Research | Statewide PA | Taxation

PA Partisan Study Finds PA Needs to Soak Drillers with New Taxes
March 31, 2014March 31, 2014

The partisan Pennsylvania Independent Fiscal Office (IFO) last week released a so-called study on oil and gas taxes and concluded (surprise!) PA doesn’t pay enough in taxes (see PA Shale Industry Demonized for “Lack” of Severance Tax). The group compared apples with oranges and did it’s “best” to try and make a “fair” comparison and of course concluded PA drillers need to be drilled themselves–you know, to spread the wealth around in good socialist fashion. A full copy of the “study” is embedded below.

It seems the IFO and PA Democrats are a bit thin-skinned when sources like MDN poke holes in their precious studies and dare to call them what they are: partisan hucksterism. And so news outlets like the Pittsburgh Post-Gazette rush in to try and prop them up with “look at how fair and balanced this study really is” kinds of articles, like this one:
Read More “PA Partisan Study Finds PA Needs to Soak Drillers with New Taxes”
Lease & Royalty Payments | Meetings | Pennsylvania | Statewide PA

NARO PA Meeting: CA Speaker Says PA Needs Better Reporting
March 31, 2014March 31, 2014

More from the National Association of Royalty Owners PA chapter annual conference last week in State College, PA. One speaker who runs a California-based oil and gas appraisal firm was taking pot shots at the PA Dept. of Environmental Protection saying that twice a year reporting on production numbers is not enough–especially for those who want an accurate appraisal on what their oil and gas rights may be worth for leasing purposes.

Matt Henderson with Penn State’s Marcellus Center for Outreach and Research also chimed in with some thoughts on DEP reporting. Below is a report from the second day of the NARO event in State College…
Read More “NARO PA Meeting: CA Speaker Says PA Needs Better Reporting”
Lease & Royalty Payments | Pennsylvania | Statewide PA | Utica Shale

NARO-PA Meeting: Marcellus Decline Rates, Utica Shale in PA
March 28, 2014March 28, 2014

Yesterday kicked off the first day of the annual National Association of Royalty Owners (NARO) Pennsylvania chapter annual convention in State College, PA. There were (at least) two major presentations of consequence at the meeting for landowners in PA in particular, but also for NY and other states too. The first was a presentation by Steve Karabin, CEO of the Rhino Group and Jim Ladlee, associate director with Penn State Marcellus Center for Outreach and Research, on the topic of Marcellus well decline rates. You may recall both Steve and Jim co-authored a new section in the most recent Marcellus and Utica Shale Databook (Volume 3 of the 2013 series). They presented their findings on well decline rates at the meeting yesterday, along with unveiling a new royalty calculator that landowners can use. Read below for their rule-of-thumb numbers all landowners with Marcellus wells can use to estimate royalties.

Second was an intriguing talk by Penn State professor and Marcellus Shale expert Dr. Terry Engelder–only this time he was talking about the Utica Shale in PA. Engelder explained where he believes the Utica may or may not be economically drillable in PA–and why. Interesting stuff. See some of his talk below too…
Read More “NARO-PA Meeting: Marcellus Decline Rates, Utica Shale in PA”