PA Senate Ctte Approves Tax Credit for Hydrogen, Natural Gas
Two days ago, we told you that Pennsylvania Gov. Tom Wolf and Republicans from the state legislature are reportedly working hard on a “massive development package” of tax credits that would, among other things, encourage MORE natural gas development in the Keystone State (see PA Lawmakers, Gov Working on $3.6B Tax Credits for Natgas, H2, More). The tax credit amendment effort is being rushed to beat the end of the year, before a new legislature and new governor are installed. The PA Senate Appropriations Committee yesterday voted 21-3 on a bipartisan basis to add the tax credit amendment to House Bill 1059 with no debate. This initiative appears to be on a fast track to passing.
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Two days ago, Range Resources issued its third quarter 2022 update, and yesterday the company held a conference call for upper management to brief analysts. By all accounts, Range had a great 3Q. Range produced an average of 2.13 billion cubic feet equivalent per day (Bcfe/d), with approximately 70% of it as natural gas and the rest in NGLs. Range only spent $138 million to drill, but cash flow from operations was a staggering $550 million–the highest in company history. The company drilled 7 wells and completed 22 wells during 3Q. Range brought 12 wells online to sales in the southwestern part of PA, and it brought 6 wells online to sales in northeastern PA.
A court case decided in late April in Pennsylvania Superior Court appears (to us) to have significant ramifications for landowners and drillers with respect to deducting post-production expenses. The case is Dressler Family, LP v. PennEnergy Resources, LLC (copy of the decision below), and it addresses “market enhancement” royalty clauses found in many PA leases. Market enhancement clauses typically prohibit the deduction of post-production costs that are incurred when transforming gas into a marketable form. Some drillers ignore such clauses and deduct all “post-production costs” from the landowner’s royalty based on the drillers’ incorrect assumption that gas is “marketable” at the wellhead. This case and decision helped clear up definitions of what is and is not marketable gas.
Although we didn’t watch all of last night’s debate between Pennsylvania Lt. Gov. John Fetterman and Dr. Mehmet Oz, we’ve read plenty of accounts and have watched some of the clips. Fetterman, by all accounts, was a disaster. We read numerous accounts by both Republicans and Democrats that watching Fetterman self-destruct was “painful.” In particular, Fetterman stumbled and bumbled when rigorously questioned about his flip-flop on the fracking issue. We watched it (segment embedded below), and indeed, it is painful to watch.
Last week we told you about a group of brainwashed children at the University of Pennsylvania (UPenn), who were behaving like spoiled rotten brats, demanding UPenn divest from any company with a whiff of oil or natural gas about it (see
According to law firm Houston Harbaugh, P.C., deducting fuel costs from landowner royalties continues to be an ongoing and widespread practice. Some leases allow the use of a portion of the raw gas recovered at a well to “fuel” well-pad operations (processing of the gas). Not only are landowners denied a royalty on the fuel gas volume, they also have that same “cost” deducted from their production royalty! According to Houston Harbaugh, this practice of deducting fuel costs must be closely monitored by all landowners.
Republicans in the Pennsylvania Senate have, since April 2021, refused to appoint new members to the five-member Public Utility Commission (PUC) in response to Democrat Gov. Tom Wolf’s unilateral push to force the state to join the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme (see 
In September, the U.S. Court of Appeals for the Third Circuit ruled that the state senators who represent Pennsylvania landowners living in the Delaware River Basin, primarily in Wayne and Pike counties in the northeastern corner of Pennsylvania, don’t have “standing” to sue the Delaware River Basin Commission (DRBC) to overturn its ban on fracking (see
The Pennsylvania Senate Environmental Resources and Energy Committee was busy yesterday. In a companion post today, we told you about opposition to a bill by Sen. Carolyn Comitta that would do nothing more than study the concept of exporting LNG from the Philadelphia region (see PA Sen. Carolyn Comitta, Anti from Philly, Confuses LNG and NGL). A second bill that Comitta and her pal on the Environmental Committee, Sen. Katie Muth (also a left-wing Democrat), opposed yesterday is a bill that withholds impact fee (tax) revenue from counties that ban fracking on or under public lands, like parks.
In March 2019, MDN told you about a new Williams plan to beef up the Transco pipeline in Pennsylvania and New Jersey, to deliver an extra 829 MMcf/d (originally 1 billion cubic feet per day) of Marcellus gas to PA, NJ, and Maryland (see
Yesterday the Pennsylvania Dept. of Environmental Protection (DEP) and its Environmental Quality Board (EQB) rammed through (in a rush) a set of regulations to control volatile organic compounds (VOCs), and by extension methane, for conventional drilling sites throughout the site. The DEP has had SIX YEARS to get these regulations done, and has missed deadline after deadline. Now, with a Dec. 16 deadline approaching to finish up the regs or risk losing half a billion dollars in federal highway funds, the DEP is trying to bully the conventional drilling industry into accepting its onerous regulations with no comment period, no feedback, no nothing–under threat of risking half a billion dollars. It’s DEP blackmail, plain and simple. What will the conventional industry do? Take it lying down? Or fight?
The U.S. Energy Information Administration (EIA) published an article yesterday to say that according to their data, the U.S. hit a new record high for natural gas production in 2021. As part of the article, EIA points out that the Marcellus/Utica region now accounts for nearly one-third of all U.S. dry natural gas production! The chart included with the article (below) shows gas production by source, including both the #1 source (Texas) and #2 source (Pennsylvania).