West Virginia

Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

A Crack of Light for the West Virginia Cracker?
February 1, 2016February 1, 2016

Speaking at an industry conference in Pittsburgh last week, West Virginia’s Dept. of Commerce Secretary, Keith Burdette, indicated there’s still a faint blip on the monitor that Odebrecht may yet decide to build an ethane cracker plant in Wood County, WV. According to Burdette, Odebrecht’s subsidiary Braskem will purchase more land for the cracker by the end of the first quarter. If the Odebrecht cracker project was as dead as a door nail (which it has appeared to be in recent months), it doesn’t seem like they would continue to spend money on it. Right? Burdette also said all three large cracker projects, Odebrecht, Shell’s project in PA, and PTT Global’s project in OH have indicated they are likely to push off a final investment decision (FID) until 2017. Bummer…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

Why Can’t We be Friends: Can Coal & NatGas Get Along in WV?
February 1, 2016February 1, 2016

Can’t we all just get along? That was the message from Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association, in responding to a call from Murray Energy CEO Robert Murray that West Virginia should trim the coal severance tax from 5% to 2%, and raise the natural gas severance tax from 5% to whatever in order to give coal a break in the Mountain State. Murray went after natural gas in a speech last week at the West Virginia Coal Mining Symposium in Charleston, WV. It appears Murray’s philosophy is “every man for himself” when it comes to government taxation. He’s wrong. Here’s why…
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Energy Companies | EQT Corp | Fayette County | Industrywide Issues | Litigation | Regulation | Wastewater | West Virginia

Judge Stops WV County from Enforcing Injection Well Ban, For Now
January 27, 2016January 26, 2016

The second step has been taken in overturning an illegal ban on wastewater injection wells in Fayette County, WV. You may recall we told you two weeks ago that three Democrat county commissioners voted to ban injection wells (see WV County Officially Bans Injection Wells; Children Brainwashed). There are two injection well operators in Fayette County: Danny Webb Construction and EQT. The day after the vote EQT sued to overturn the new ban (see EQT Sues WV County that Banned Injection Wells, Seeks Injunction). On Tuesday, Jan. 19, U.S. District Court Judge John T. Copenhaver Jr. granted an injunction preventing the county from enforcing the ban at least until a Feb. 11 hearing. As part of his reasoning, Judge Copenhaver said EQT “is likely to succeed” in their lawsuit to overturn the ban…
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Dominion Energy | Energy Services | Industrywide Issues | Pipelines | Regulation | Statewide VA | Statewide WV | Virginia | West Virginia

US Forest Service Blocks Atlantic Coast Pipeline in National Forests
January 25, 2016January 25, 2016

Cow Knob Salamander

In the end it was the cow nobs and red spruce that have slowed down Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project from West Virginia through Virginia and into North Carolina. Specifically, the U.S. Forest Service (USFS) has refused to grant Dominion a special permit to cross teeny tiny sections of the Monongahela and George Washington national forests in West Virginia and Virginia. Why? Because of concerns about cow knob salamanders, northern flying squirrels and red spruce trees. Just last November MDN told you that Dominion and ACP were bending backwards, forwards and sideways to avoid running through cow nob salamander territory (see Dominion Files Pipeline Route Change to Avoid Salamanders, Swamp). Apparently the USFS doesn’t think Dominion’s plan is good enough. It’s now back to the drawing board to see where, in those regions, ACP can safely be run to avoid radical environmentalist demands. Of course the answer is “no where” as they are always unreasonable about these things. There is no “how can we work this out to your satisfaction” when it comes to nut cases. The antis simply demand, like petulant children, that you not do it at all. Which is just what the other side is now saying about ACP…
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Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Southwestern Energy | Statewide PA | Statewide WV | West Virginia

Southwestern Energy Cuts Workforce 44%, 200 Marcellus Jobs Gone
January 22, 2016January 22, 2016

We have some very sad news to share today. Yesterday Southwestern Energy Company, one of the largest drillers in the Marcellus/Utica and the third largest independent natural gas driller in the U.S., announced it will lay off 1,100 people and pause its drilling program. That 1,100 is out of 2,500 employees–or 44% of the company. It was just a few weeks ago that Southwestern got a new CEO, Bill Way (see Southwestern Energy Gets New CEO – What’s Ahead for 2016?). We mused at the time: “When there’s a change in leadership, it has the potential to impact company strategy. So we’re always interested when changes of this type come along. The question now is, what’s ahead for 2016 with Bill Way at the helm?” Indeed. We can see what kind of changes Mr. Way is bringing. In October 2014 Southwestern announced a deal to buy 413,000 Marcellus/Utica acres from Chesapeake Energy, most of it in West Virginia (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Then in December 2014, Southwestern bought 46,700 net acres of leases in northeastern PA from WPX for $300 million (see First Shoe Drops: WPX Sells 1/2 Marcellus Assets to Southwestern). Southwestern holds about 755,000 acres total in the Marcellus/Utica region. When everyone else was slowing down, Southwestern was doubling down on their drilling program (see Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus). It seems that the wind has finally gone out of Southwestern’s sails. The company did not post an official press release on their website, so we’ve pieced together coverage from a number of sources to try and give you a complete picture of what they said yesterday…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Gov. Tomblin Proposes to LOWER Oil & Gas Severance Tax
January 22, 2016January 22, 2016

Ohio Gov. John “foreigner hunter” Kasich has been hellbent on raising Ohio’s oil and gas severance tax–for years. As recently as last June Kasich predicted his 6.5% proposed severance tax would get adopted (see Kasich Predicts Severance Tax Deal Will Happen, Others Say No). Last fall OH Republicans continued to flirt with the idea (see Ohio Legislators Continue Dalliance with Kasich Severance Tax). The state still has not raised it, even though Kasich has lobbied hard for over three years. Pennsylvania, on the other hand, continues to consider converting their better impact fee for a less better severance tax. Republicans there are getting weak-kneed too (see Some PA Republicans Beginning to Cave on Severance Tax). It seems the severance tax is like the mythical siren song attempting to lure states onto the rocks of less drilling. But hold on to your hat. In contrast to OH and PA, there’s one state, and one governor, who’s not falling for higher severance taxes. PA Democrats trot out West Virginia as their shining example of how severance taxes don’t chase drillers away–to bolster their argument that PA should adopt a severance tax. Guess what? WV figured out high severance taxes DO chase drillers away, and WV’s Democrat governor, Earl Ray Tomblin, is proposing the state LOWER its oil and gas severance tax in 2016! It’s a devastating blow to PA Gov. Tom Wolf and his obsessive-compulsive insistence on a severance tax…
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Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

Some Give Up, Others Continue to Oppose WV Forced Pooling Law
January 22, 2016January 22, 2016

The fight for a forced pooling law in West Virginia continues. Some who have opposed such a law in the past are now changing position and attempting to get as favorable terms as possible. They’re throwing in the towel. Others are still hoping to stop the bill, for a fifth time. So far the forced pooling bill has not been introduced, even though the WV legislature began its 60-day session last Wednesday, Jan. 13…
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Energy Companies | EQT Corp | Fayette County | Industrywide Issues | Litigation | Regulation | Wastewater | West Virginia

EQT Sues WV County that Banned Injection Wells, Seeks Injunction
January 20, 2016January 20, 2016

That was fast. A week ago three Democrat county commissioners in Fayette County, West Virginia voted to ban injection wells in the county (see WV County Officially Bans Injection Wells; Children Brainwashed). Immediately after that vote was taken (last Tuesday), on Wednesday EQT filed a lawsuit against the county. EQT not only operates an injection well in the county, they also operate 200 conventional oil and gas wells in the county, providing the county with $100,000 per year in tax revenue, and “tens of thousands of dollars in royalty payments” to private landowners. According to EQT’s lawsuit, the ban in Fayette is so broad, it would prohibit not only injection wells, but all oil and gas production in the county. EQT is seeking an injunction to stop enforcement of the new ban while the court case plays out. The county will now spend big bucks to defend their farcical ban that will no doubt end up being overturned. Perhaps taxpayers want to rethink whom they elect as county commissioners?…
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Statewide WV | West Virginia

WV’s 2014 Natural Gas Production was “Shocking” – 1 Tcf
January 19, 2016January 19, 2016

The most recent year full production numbers are available for West Virginia is 2014, recently released. In talking about how much the Mountain State produced for natural gas, oil, and NGLs (natural gas liquids, like ethane, pentane, propane and butane), the head of the Independent Oil and Gas Association of West Virginia (IOGAWV), Charlie Burd, said the production numbers are “shocking”–in a good way. Example: If you include conventional and unconventional natural gas production in the state, in 2014 WV produced 1 trillion cubic feet of natgas…
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Anti-Drilling/Fossil Fuel | Fayette County | Industrywide Issues | Regulation | Wastewater | West Virginia

WV County Officially Bans Injection Wells; Children Brainwashed
January 14, 2016January 14, 2016

As we reported in December, two left-wing Democrats in Fayette County, WV voted, in a first reading of a new ordinance, to ban all injection wells in the county (see 2 Democrat Commissioners Ban Injection Wells in Fayette County, WV). The full commission (three members instead of two) took a final vote Tuesday night and passed the measure, making it “the law” in Fayette County (until it’s found illegal by a court). The interesting part in reading about this turn of events is how some of the left loony toons parents have brainwashed their own children into becoming socialist/communists. One little girl gave “an impassioned plea” to encourage passing the ordinance, and then ignorantly accused people from the oil and gas industry of causing the death of “our grandparents, family and friends for you to have private jets.” Talk about colossal stupidity on parade. We call it brainwashing…
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Cunningham Energy | Energy Companies | Kanawha County | West Virginia

Cunningham Using Horizontal Drilling to Target Weir Sand in WV
January 11, 2016October 23, 2017

This story is, for us, fascinating. A small driller based in West Virginia, Cunningham Energy, is zagging while everyone else is zigging. We told you in 2013 that Cunningham planned to drill three “shallow” horizontal wells in Clay County, WV (see The Injuns are Coming! Injun Formation Drilling, that is). Cunningham targeted the Big Injun sandstone formation, looking for oil. They struck oil this past year (see Cunningham Strikes Oil in West Virginia’s Big Injun Territory). Once again Cunningham is targeting a shallow formation, this time the Weir Sand formation, a few layers below the Big Injun (same group of rocks called the Mississippian system), once again looking for oil. Cunningham announced last week they are drilling two new horizontal wells, this time in Kanawha County, WV…
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Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

Bill Sponsor Says It’s Now or Never for WV Forced Pooling Law
January 11, 2016January 11, 2016

At 11 pm on the last day of the 2015 legislative session in West Virginia, a session that lasts only 60 days at the beginning of each year, the WV legislature voted down what everyone thought was a sure thing to pass–House Bill (HB) 2688, otherwise known as the forced pooling bill (see The Real Story of Why Forced Pooling Bill Failed in WV). As we reported at the time, it was defeated by Democrats who had their knickers in a twist over another bill they wanted passed that Republicans defeated. So the Dems decided to give as good as they got and voted down HB2688 in retribution. Last March, following the negative vote, we said this: “Forced pooling is a dead issue in WV this year. Will it be back next year? You can bank on it.” And back it is. The Republican chairman of the House Energy Committee, Lynwood “Woody” Ireland believes a new version of the forced pooling bill is as fair as it gets for both landowners and drillers. Ireland also believes if the bill doesn’t pass this year, it is likely a dead issue–period. It’s “now or never” for a forced pooling bill in WV…
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Columbia Pipeline Group | Energy Services | Industrywide Issues | Kanawha County | Pipelines | West Virginia

Columbia Pipeline Gets FERC Approval for WV Utica Access Project
January 11, 2016January 11, 2016

Columbia Pipeline Group has just received a green light from the Federal Energy Regulatory Commission (FERC) to proceed with their Utica Access Project. The project will cost Columbia $45 million and involves building five miles of new pipeline and upgrading compressor stations in Kanawha County, WV. When complete, the project, begun under NiSource (before Columbia separated into its own company), will transport 200 million cubic feet per day of Utica Shale gas for Eclipse Resources Corporation to liquid trading points on the Columbia Gas Transmission interstate pipeline system…
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Columbia Pipeline Group | Energy Services | Industrywide Issues | Pipelines | Regulation | Statewide VA | Statewide WV | Virginia | West Virginia

Columbia Pipeline Files to Build $850M WB XPress Project in WV/VA
January 11, 2016January 11, 2016

In addition to receiving Federal Energy Regulatory Commission (FERC) approval for the Utica Access Project, Columbia Pipeline Group has just filed their full, official application with FERC for approval of the $850 million WB XPress Project, consisting of two new compressor stations, 26 miles of pipeline replacement located along existing corridors, and 2.9 miles of new pipeline in Virginia and West Virginia. The WB XPress Project will expand capacity of the Columbia Gas Transmission pipeline in the region by 1.3 billion cubic feet per day, linking Marcellus gas supplies to new markets…
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Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Southwestern Energy | West Virginia

Southwestern Energy Renewing Leases in WV, PA
January 8, 2016January 8, 2016

Tick tock tick tock. Every day that passes brings landowners and drillers closer to the end of an initial five-year lease contract. In October 2014, Southwestern Energy purchased a humongous 413,000 acres of leases from Chesapeake Energy, most of that land in West Virginia (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Southwestern paid over $5 billion for the deal. That leased acreage came with an expiration–which is happening now, at least for some (most?) of the acreage. Every lease is different. Some leases allow the driller to pay the same (or a different) renewal payment to keep the lease going for another period of time, typically another five years. The $5 billion question is, what will Southwestern do? Everyone is scaling back right now. Companies just can’t afford to do much drilling. Will Southwestern opt to renew those leases that they paid big bucks for? It seems we have an answer to that question. A WV newspaper is reporting that Southwestern has begun extending leases in Ohio and Marshall counties…
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Accidents | Industrywide Issues | NGLs | West Virginia | Wetzel County

CSX Train Hauling Propane Derails in Wetzel County, WV
December 28, 2015December 28, 2015

Very early Christmas Eve morning, at 2:45 am, six CSX rail cars loaded with liquefied petroleum gas (LPG, or propane) ran off the tracks in New Martinsville (Wetzel County), West Virginia. We don’t know if the LPG in those rail cars came from the Marcellus/Utica, but there’s a decent chance it did. Increasingly NGLs like propane are being shipped in the northeast by rail. The good news about the accident: no one was injured and the rail cars didn’t leak. The accident is being investigated by federal authorities for the cause…
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