New Gas-Fired Power Plant Announced for Tioga County, PA

Energy Solutions Consortium, based in Buffalo, NY, has been trying to build a number of gas-fired electric plant projects in West Virginia for years (see Big News: 3 More Marcellus-Powered Electric Plants Coming to WV and WV Builder Tells PSC Power Plant Can Burn Methane AND Ethane). However, the regulatory environment in WV creeps along, like molasses, and none of the projects are even under construction–yet. WV’s own Secretary of Commerce, Woody Thrasher, recently said WV is downright unfriendly to electric plant projects (see WV Sec Commerce Says State Unfriendly to Gas-Fired Power Plants). Meanwhile, Pennsylvania is building new Marcellus-fired electric plants left and right. Perhaps noticing the difference in regulatory climates, Energy Solutions has decided to try a project in PA–in Tioga County (about 2.5 hours from Buffalo). The $500 million project will be called Tioga County Power–a 680 megawatt plant capable of powering 430,000 homes, fed by yummy Marcellus Shale gas produced in PA…
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UGI Buys NatGas Pipeline Gathering System in NE PA

UGI is a major utility company in Pennsylvania, providing natural gas and electric service to 700,000 Pennsylvania residents across the state. UGI, via its Energy Services subsidiary, operates natural gas storage facilities, compressor stations, LNG plants and local pipeline gathering systems. UGI operates several gathering systems in northeastern PA. Yesterday the company announced is has purchased an existing gathering system from Rockdale Marcellus for an undisclosed sum. The Rockdale gathering system consists of 60 miles of gathering lines–along with dehydration and compression facilities–located in Tioga, Lycoming and Bradford counties in northeast PA. The system was purchased, on paper, by UGI subsidiary Texas Creek, so the gathering system has been rebranded UGI Texas Creek. MDN has a map of the new system below…
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TGP’s Susquehanna West Project Gets Green Light to Begin Service

In April 2015 Kinder Morgan’s Tennessee Gas Pipeline (TGP) subsidiary filed an application with the Federal Energy Regulatory Commission (FERC) to build 8.2 miles of new looping pipeline in Tioga County, PA and beef up two compressor stations in Bradford County, PA. The $142 million project is called the Susquehanna West Project. It will increase capacity along the 300 Line section of TGP, bumping it up by 145 million cubic feet per day (Mmcf/d). All of the extra capacity is spoken for by Statoil and the wells they’ve drilled in NEPA. Last September, FERC approved the project (see FERC Approves Another KM Pipeline Project in the PA Marcellus). The project was forecast to be done and dusted, going online, by Nov. 1. Usually we bring you news about such projects being delayed. In a happy reversal of that trend, last week FERC granted Kinder Morgan permission to bring the project online, NOW, a full two months ahead of schedule. Christmas came early this year…
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Cardinal Midstream Forms New Co. Targeting Utica, Other Plays

6/2/17 Update: A previous version of this post was incorrect. MDN confused Cardinal Midstream with Cardinal Gas, which led us to create a confusing post. We apologize to both companies–and regret the mistake! Below is a corrected introduction.

Cardinal Midstream II operates a pipeline gather/processing system in Tioga County, PA. The Tioga system gathers and processes gas from Utica Shale wells in the county (not Marcellus wells, at least not yet). Earlier this week Cardinal announced a new spin-off called Cardinal III, backed with money from EnCap Flatrock Midstream–the same company that has backed Cardinal’s other ventures. The new Cardinal III is getting a $250 million infusion from EnCap to “pursue midstream acquisitions and development opportunities in both conventional and unconventional resource plays across North America.” That means possibly more work in the Marcellus/Utica, but any/all other major plays are also up for grabs. Here’s the announcement…Continue reading

PA Hearing Board Reduces EQT Fine from $4.5M to $1.1M

In October 2014, the Pennsylvania Dept. of Environmental Protection (DEP) fined Marcellus driller EQT a whopping $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine is unreasonable and arbitrary. EQT appealed the fine and the case all the way to the PA Supreme Court. In December 2015, the high court handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine (see PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case). The Supreme Court sent the case back to a lower court, PA Commonwealth Court, for follow up work, and in January 2017, a three-judge panel ruled that the method the DEP currently uses to assess fines–by how many days pollution lingers, instead of by how many days the initial release of pollution lasted–is not legal nor common sense (see EQT Wins Court Case Against PA DEP re $4.5M Wastewater Leak Fine). The judges said such a method in fining, “would result in potentially limitless continuing violations.” Under the old way of calculating fines, the DEP was considering upping the fine on EQT to an insane $157 million. Calculating it under the new way will mean a fine of around $120,000. We thought with that ruling it was all done and dusted. Not so. The soap opera continued when the DEP appealed the Commonwealth Court panel’s ruling back up to the PA Supreme Court where the Supremes will consider it all over again (see DEP Appeals $4.5M Wastewater Leak Fine Against EQT to Supremes). Into this mess, let’s now throw in another wrinkle. While the courts have been grappling with issues of procedure and whether or not the DEP can assess fines the way it claims it can (that is, Constitutional issues), at the same time the matter was brought up before the PA Environmental Hearing Board (EHB), a sort of quasi-court set up to hear appeals of decisions made by DEP. The EHB has decided to adjust the fine down significantly–from the DEP’s initial levy of $4.53 million down to $1.1 million. Here was their reasoning…Continue reading

DEP Appeals $4.5M Wastewater Leak Fine Against EQT to Supremes

There’s a reason hospitals and court rooms are frequently the settings for soap operas on TV–there’s always so much drama surrounding medicine and the law–the latter of which is our focus today. In January MDN reported what seemed like the final chapter in a long, drawn-out case between Marcellus driller EQT and the Pennsylvania Dept. of Environmental Protection (DEP). In October 2014, the DEP fined EQT a whopping $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine is unreasonable and arbitrary. In fact, EQT says the DEP levied the fine and took EQT to court because a few weeks prior EQT had sued the DEP over a different matter–that is, sour grapes. EQT appealed the fine and the case all the way to the PA Supreme Court. In December 2015, the high court handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine (see PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case). The Supreme Court sent the case back to a lower court, PA Commonwealth Court, for follow up work, and in January 2017, a three-judge panel ruled that the method the DEP currently uses to assess fines–by how many days pollution lingers, instead of by how many days the initial release of pollution lasted–is not legal nor common sense (see EQT Wins Court Case Against PA DEP re $4.5M Wastewater Leak Fine). The judges said such a method in fining, “would result in potentially limitless continuing violations.” Under the old way of calculating fines, the DEP was considering upping the fine on EQT to an insane $157 million. Calculating it under the new way will mean a fine of around $120,000. We thought with that ruling it was all done and dusted. Not so. The soap opera continued when the DEP appealed the Commonwealth Court panel’s ruling back up to the PA Supreme Court where the Supremes will consider it all over again. When you read the “friend of the court” brief just filed by those supporting the DEP in their case, it’s a Who’s Who of Big Green organizations and virulent anti-drillers–which tells you all you need to know about which side is in the right in the case of EQT v DEP…Continue reading

IMG Midstream: Army of Tiny PA Marcellus-Powered Electric Plants

MDN first told you about IMG Midstream in August 2014 (see 7 Small Marcellus-Powered Electric Plants Coming to NEPA). At the time, IMG was proposing to build seven “tiny” natural gas-fired electric plants–each plant producing on the order of 20-22 megawatts of electricity (enough to power 13,000 homes). IMG added a couple of more to their plans in November 2014 (see Details on IMG’s “Tiny” Marcellus-Powered Electric Plants in NEPA). The beauty of IMG’s tiny natgas electric plants is that they are really small–about the size of a basketball court; they produce almost no air pollution; and they are quiet. It’s a really cool concept. IMG’s very first tiny electric plant, in Susquehanna County, PA, went online in October 2015. The second plant, in Bradford County, PA, went online this past June (see IMG’s Tiny NatGas-Fired Electric Plants Take Off in the Marcellus). The former 9 planned plants ballooned with plans for 25 plants operating within the next five years! We spotted a recent article about IMG’s activities in southwestern PA and that got us to thinking. How are they doing with their plan to build 25 plants? So far, they’ve built 11 and are on the prowl for more locations. We have the latest update on IMG and their startegy of zigging (building small power plants) when everyone else is zagging (building large plants)…
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Positive Signs that Shale Drilling is Coming Back in Central PA

As MDN has noted over the past several months, the signs have been positive that Marcellus/Utica drilling is picking up once again. But that doesn’t mean it’s picking up in every location. Or does it? One of the hotbeds of drilling activity “back in the day” was in several northeastern/central Pennsylvania counties, including Tioga, Bradford, Lycoming and Sullivan. But then the bottom fell out of the industry (with super low prices) and drilling all but dried up in those counties. The good news is that there are signs of life, once again, in the central counties of PA. Between Nov. 1 and Mar. 6, 30 drilling permits were issued in Tioga County, 12 permits in Lycoming County, and (somewhat surprising), 8 permits issued in Sullivan County. Shale is coming back!…
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Northeastern PA Counties Explore Alliance to Pass Royalty Reform

One of the issues that isn’t going away is the demand by landowners in some Pennsylvania counties, like Bradford, for lawmakers in the state to pass a bill that guarantees them what they believe they are already guaranteed–a 12.5% minimum royalty, based on a 1979 law that states they should get such a royalty. We’ve extensively covered what we call a civil war between two parties who are otherwise friendly toward each other–landowners and shale drillers. Last year the issue came to a head with House Bill (HB) 1391 (see our list of stories here). In a nutshell, landowners say Chesapeake Energy and some other drillers are taking post-production deductions out of landowners’ royalty checks, resulting in royalty payments far below 12.5%. In some cases landowners are receiving bills for money owed to the driller–after the driller pulled the gas out of the ground! Who in their right minds leases land for drilling so they can PAY the driller! It is an outrage and landowners want it stopped. Drillers, on the other hand, say you can’t just change contracts after they’ve been signed, punishing the entire industry for the bad actions of a few. Drillers say the proper response is for landowners to sue the bad apples. Frankly, it’s all a mess. The new news is that landowners from Bradford and several other northeastern PA counties, tired of being outmaneuvered by drillers, are actively talking about forming an alliance to try and garner enough support in Harrisburg to get a bill like HB 1391 passed this year…
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Breakthrough for M-U Drillers: First Mini-LNG Unit Up & Running

The Dresser-Rand business commissioned its first micro-scale natural gas liquefaction system at the Ten Man liquefied natural gas facility in Pennsylvania

If you’ve read MDN for any length of time, you know how important LNG–liquefied natural gas–is to the future of the Marcellus/Utica. We’re all eagerly awaiting the day Dominion flips the switch on its Cove Point LNG liquefaction facility in Cove Point, Maryland (see Cove Point LNG Now 78% Complete, On Track to Open This Year). Cove Point will condense and ship 1.8 billion cubic feet per day (Bcf/d) of Marcellus/Utica gas to Japan and India. Other big LNG projects are also in the works, several of them on the East Coast of Canada. However, some Marcellus/Utica gas is already getting liquefied and shipped–via the Gulf Coast. In particular from the Cheniere’s Sabine Pass LNG facility in Louisiana (see LNG Slowly Changing the NatGas Game in the Marcellus/Utica). Cove Point, Sabine Pass and other such facilities take years to build and cost billions of dollars. But there’s another kind of LNG, “micro-scale” LNG liquefaction that is taking root in the Marcellus. Dresser-Rand, a subsidiary of German giant Siemens, has commissioned its first small-scale natural gas liquefaction system at the Ten Man LNG facility near Mansfield (Tioga County), PA. The new mini-LNG facility will, according to Dresser-Rand, allow Marcellus driller Frontier Natural Resources “monetize stranded gas assets,” by which we take to mean wells drilled that are not and cannot quickly be connected to a pipeline system. If this catches on, it can be an important alternative for drillers where pipelines are nonexistent or slow in coming…
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EQT Wins Court Case Against PA DEP re $4.5M Wastewater Leak Fine

In October 2014 the Pennsylvania Dept. of Environmental Protection (DEP) fined PA driller EQT $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine is unreasonable and arbitrary. In fact, EQT says the DEP levied the fine and took EQT to court because a few weeks prior EQT had sued the DEP over a different matter. EQT appealed the fine and the case to PA Supreme Court and a year later the high court handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine (see PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case). The Supreme Court sent the case back to a lower court, PA Commonwealth Court, for follow up work. The work is done and EQT has won. A three-judge panel ruled that the method the DEP currently uses to assess fines–by how many days pollution lingers, instead of by how many days the initial release of pollution lasted–is not legal nor common sense. The judges said such a method in fining, “would result in potentially limitless continuing violations.” Under the old way of calculating fines, the DEP was considering upping the fine on EQT to an insane $157 million. Calculating it under the new way will mean a fine of around $120,000. This is a major victory for EQT and a reigning in of egregiously overzealous state regulators…
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Tioga County, PA: Marcellus Boom Followed by Not-So-Boom

tioga-county-pa
Tioga County, PA

The oil and gas industry has always gone through cycles–times when the industry expands like crazy, and times when it contracts. The cyclical nature of oil & gas is often characterized by fossil fuel detractors as “boom and bust.” We’ve heard the boom and bust argument for years, previously tackling the issue all the way back in 2012 (see Anti-Drilling Objection: Shale Drilling Causes Boom & Bust). We think it’s time to rename this phenomenon to something more reflective of what it really is: boom and not-so-boom. Many industries, indeed we would argue ALL industries, go through such cycles. The example we gave back in 2012 was to recount the history of the Binghamton, NY area, with our loss of IBM (founded in Endicott), and the loss of Endicott-Johnson Shoes (founded in Johnson City)–two huge employers in the region that eventually left. At least with shale the work returns after a time. IBM and EJ are long gone and never coming back. We’ll take the “boom and bust” of the shale industry over faithless manufacturers any day of the week! Here’s a close-up look at the boom, followed by the not-so-boom, in Tioga County, PA shale country…
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SWEPI Puts 9,346 Acres of PA Marcellus Leases Up for Auction

auctionFrom time to time exploration and production companies (aka “drillers” or “producers”) decide to sell leases for acreage they don’t plan to drill on or under. Typically when a new play is discovered there is a bit of a land rush as drillers begin leasing. In the Marcellus, a driller may decide to concentrate on a specific county in the state, as Cabot Oil & Gas did with Susquehanna County in northeastern PA. Cabot happened to hit the jackpot with some of the most productive gas wells on the planet. Other times, when the leasing is done and drilling has begun drillers begin to figure out where they want to spend their money. It takes a lot of money to drill a Marcellus well–on the order of $7 million. Eventually drillers find there are isolated tracts of acreage they’ve leased that don’t fit with their future plans, so they either horse trade and swap, or perhaps put the acreage leases up for public auction. Such is the case with Shell’s SWEPI subsidiary. They recently posted three largish tracts of leased acreage up for auction–two in Tioga County, PA and one in Potter County, PA. Here’s a description of the land SWEPI is trying to dump…
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FERC Approves Another KM Pipeline Project in the PA Marcellus

approvedIn April 2015 Kinder Morgan’s Tennessee Gas Pipeline (TGP) subsidiary filed an application with the Federal Energy Regulatory Commission (FERC) to build 8.2 miles of new looping pipeline in Tioga County, PA and beef up two compressor stations in Bradford County, PA. The $142 million project is called the Susquehanna West Project. The project will increase capacity along a section of the TGP, bumping it up by 145 million cubic feet per day (Mmcf/d). All of the extra capacity is spoken for by Statoil and the wells they’ve drilled in NEPA. Good news: On Tuesday FERC issued their approval for the project, which means construction will begin in January 2017…
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Tioga County, PA Landowners Won’t Let Driller Clean Up

keep outThis one has us scratching our heads. Landowners Damon and Kendra Baker, in Tioga County, PA, signed a lease with Shell’s SWEPI in 2006. We’re guessing the signing bonus was peanuts because at that time the Marcellus was still in its infancy in PA. SWEPI constructed a well pad on their property in 2010 but had drilled no wells by the time the lease expired in 2011. The Bakers wanted a healthy re-signing bonus to allow SWEPI to lease their land again. SWEPI’s final offer was $150,000 (not sure for how many acres). The Baker’s, according to SWEPI, wanted half a million dollars. SWEPI said “no thanks” and therefore, according to state Dept. of Environmental Protection standards, needs to restore the property to its original state and be done with it. But the Bakers won’t let them re-enter the property. So SWEPI is suing and the clock is ticking–they only have until December to put it back to original condition or the company will be fined $500/day until it’s done…
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PA Supreme Court Decision on Deeds Affects Some O&G, Landowners

court-gavel.jpgEver hear of a legal doctrine called “estoppel by deed”? No, we hadn’t either. But if you’re an attorney who specializes in oil and gas mineral rights in Pennsylvania, you may have. The Pennsylvania Supreme Court recently decided a case that upholds state laws of estoppel by deed. The case, called Shedden v. Anadarko, revolved around landowners in Tioga County, PA who thought they owned all of the mineral rights to 62 acres, only to find out half the rights belonged to someone else going all the way back to the 1800s. From there it gets complicated. What we can tell you is that some attorneys were concerned that the newly reconstituted PA Supreme Court would overturn the estoppel by deed law in the state–but that didn’t happen. Estoppel by deed is safe and sound in PA. Here’s the details…
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