West Virginia

  • | | |

    Co-Tenancy Front and Center for WV Legislature as Session Nears

    At the beginning of each new year the West Virginia legislature meets for a 60-day session. This year the session runs from Jan. 10 to Mar. 10. For the previous maybe 6-7 years, the shale industry has pushed for some sort of forced pooling legislation. Each year those bills, as close they sometimes got, were defeated. This year the industry is staying well away from saying anything about “forced pooling.” Last time around (in 2017) we came close with something MDN calls forced pooling lite–a bill that would have allowed for co-tenancy and joint development. That bill was eventually defeated (see WV Force Pooling Lite Goes Down in Flames – Lawmakers Blame Pot). For the rest of last year WVONGA (the West Virginia Oil and Natural Gas Association) hyped both co-tenancy and joint development. What are they? Co-tenancy says a majority of rights owners can vote to accept a lease for drilling. It corrects a situation in which multiple rights owners are listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them to sign on the dotted line. Joint development (sometimes called “lease consolidation”) is more nuanced. Currently there are a number of existing old leases, signed before shale drilling began, that prevent drillers from drilling a horizontal well across an individual property boundary line–until a new lease is signed. Joint development says if the driller already owns the leases on all adjoining properties they want to combine into a single drilling unit, they can do so without signing a new lease. WVONGA says it corrects a loophole that prevents more drilling from happening. Rights owners say joint development legislation lets drillers have a freebie–instead of signing a new lease (for more money), the driller gets something never envisioned when the original lease was signed. It is a form of theft. We’re happy to see WVONGA leave joint development behind. This year WVOGNA and legislators are laser-focused on co-tenancy, which we think is a good thing…
    Read More “Co-Tenancy Front and Center for WV Legislature as Session Nears”

  • | | | | |

    Finalists Announced for 2018 Northeast & 2018 Texas Oil & Gas Awards

    Once again Marcellus Drilling News is happy to partner with and support the Oil & Gas Awards, for 2018. The Awards boys have just released two lists of finalists–one for the Northeast Awards, being held March 1 in Pittsburgh; and one for the Texas Awards, being held March 7 in Houston. This year six of the entrants for the awards contracted with MDN editor Jim Willis to help them prepare their entries (both Northeast and Texas). It was a blast for Jim to dig in and understand more about the companies submitting an application for the awards–and to help them craft what we hope are winning entries! Jim worked with some true professionals from the companies entering the awards–it was a pleasure. Below is a list of the finalists in each region. Good luck!…
    Read More “Finalists Announced for 2018 Northeast & 2018 Texas Oil & Gas Awards”

  • | | | |

    As MVP Gears Up for Feb 1 Construction, WV Landowners Try to Block

    A relatively small number of landowners in West Virginia is using a novel legal argument to try and stop Mountain Valley Pipeline (MVP) from beginning construction. MVP is a $3.5 billion, 303-mile natural gas pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The Federal Energy Regulatory Commission (FERC) issued a final approval for the project in October (see FERC Approves Atlantic Coast, Mountain Valley Pipeline Projects). In order to keep the project on track for completion by the end of 2018, they need to begin tree clearing no later than Feb. 1st. Problem is, there are landowners in WV (and VA) who won’t negotiate with MVP on leases–so MVP has sued them using eminent domain. Here’s what typically happens in an eminent domain case (knowledge we gained at a session at last year’s Shale Insight event): Since this is a federally regulated project, MVP has the right (under FERC authority) to use eminent domain to “condemn” properties where the landowners won’t play ball. The cases are typically filed in U.S. District Court–in this case for the Southern District of West Virginia. MVP filed that paperwork back in October. What usually happens next is that the judge/court will grant an order allowing the pipeline company to enter the property and do the work–but the details about how much money the landowner gets is not decided, sometimes for a year or more. That’s a separate issue. First the company is allowed in and does the work, later on the court will decide how much money to award the landowner for the work. However, the WV landowners filed a response and motion for partial summary judgment in late December that makes the argument that how much each landowner gets should come first, before MVP is allowed on their property. Frankly, it just doesn’t work that way. Question is, what will the justices do in this case?…
    Read More “As MVP Gears Up for Feb 1 Construction, WV Landowners Try to Block”

  • | | | |

    Appalachian NGL Storage Hub Gets Serious with DOE Loan Guarantee

    Just yesterday MDN told you that Mountaineer NGL Storage wants to be THE main ethane/NGL storage hub for the Marcellus/Utica region (see Mountaineer NGL Wants to be THE Appalachian Storage Hub). There has long been talk of a major, $10 billion regional NGL storage hub. But until know it’s been just that–talk. A major hub is now much more of a possibility. Last June West Virginia’s U.S. Senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat), introduced Senate Bill 1337–the “Capitalizing American Storage Potential (CASP) Act”–a bill that would make a regional ethane storage hub (hopefully built in WV) eligible for the Department of Energy’s Title XVII loan guarantee program (see WV Sens. Capito & Manchin Introduce 2 More Ethane Storage Hub Bills). The bill didn’t go anywhere, but the intention of the bill certainly did. Yesterday it was announced that the DOE has invited those promoting the regional ethane storage hub to submit “Part II” of the application for a Title XVII loan guarantee of $1.9 billion. There’s a lot to unpack in the announcement below. First, the regional storage hub has an official name: The Appalachia Storage & Trading Hub (first time we’d read of it). Second, the project has an official backer: the Appalachia Development Group, LLC (or “ADG”). Third, ADG previously filed Part I of the application with the DOE, back in September. Fourth, since the DOE has invited ADG to supply Part II of the application, that implies Part I from September was/is approved. Fifth, $1.9 billion is far short of the eventual cost bandied about of $10 billion–but it can certainly get this project off the ground and running. And sixth, this is NOT a loan from the government, it is a guarantee. Someone else would make the loan, but the full faith and credit of the United States would back it up, in case of default. A Title XVII loan guarantee makes it much easier to find a loan…
    Read More “Appalachian NGL Storage Hub Gets Serious with DOE Loan Guarantee”

  • | | | | | | | | |

    Dominion, MVP File to Dismiss VA-WV Lawsuit Against Pipe Projects

    In September a group of 57 gentry landowners in Virginia and West Virginia, backed by an out-of-state Big Green group, sued the Federal Energy Regulatory Commission (FERC) in an attempt to gut the 80-year old Natural Gas Act that gives FERC the right to grant eminent domain for pipeline projects (see VA, WV Landowners Sue FERC re Pipelines, Seek to Gut Natural Gas Act). Specifically, the colluding landowners oppose Dominion’s $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina, and EQT’s $3.5 billion Mountain Valley Pipeline project, a 303-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The frivolous lawsuit, titled BOLD ALLIANCE, et al. v. FEDERAL ENERGY REGULATORY COMMISSION, et al., was filed in the U.S. District Court for the District of Columbia. It claims the landowners’ property is a “taking” not properly compensated under the U.S. Constitution. Yesterday two important parties to the lawsuit–Dominion (representing Atlantic Coast Pipeline) and Mountain Valley Pipeline–filed a motion to dismiss the case. They have a strong argument. Why dismiss? Because the gentry landowners filing the lawsuit have ignored United State laws, which specifically state that (a) ONLY FERC has jurisdiction over the projects and decisions about whether or not they can get built, (b) if a supposedly aggrieved party disagrees with FERC’s decisions, they must first file for a rehearing, and if FERC still refuses, then (c) the supposedly aggrieved party can file a lawsuit ONLY with the U.S. Court of Appeals for the District of Columbia. The suers (Bold Alliance) did file for a rehearing and FERC has not yet ruled on the rehearing. Bold Alliance tried to sidestep the law by moving forward with a lawsuit prematurely. However, the really big no-no is that they filed in U.S. District Court for DC, NOT the Court of Appeals for DC. Big difference. We see no other choice for the judges in U.S. District Court but to dismiss the case since Bold Alliance should not have brought the case in their court in the first place…
    Read More “Dominion, MVP File to Dismiss VA-WV Lawsuit Against Pipe Projects”

  • | | | | | | | | |

    Atlantic Coast Pipe Asks FERC to Begin Tree Cutting in WV, VA, NC

    Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project recently asked the Federal Energy Regulatory Commission (FERC) for permission to begin clearing trees along the path of the pipeline in all three states where the pipeline will run: West Virginia, Virginia, and North Carolina. FERC approved the project in October (see FERC Approves Atlantic Coast, Mountain Valley Pipeline Projects). However, two of the three states–Virginia and North Carolina–have not yet given final water crossing permits for the project (see Atlantic Coast Pipeline Delayed in Virginia by Water Board Vote and NC Plays “Death by a Thousand Questions” with Atlantic Coast Pipe). ACP isn’t letting state agencies put a damper on the project. Just a few weeks ago ACP announced it had signed contracts with four labor unions to do the construction work, and had filed eminent domain lawsuits against holdout landowners who have refused to negotiate leases (see Atlantic Coast Pipe Gets Ready to Build: Union Help, Eminent Domain). And now ACP is asking FERC for permission to begin clearing trees, giving antis apoplexy…
    Read More “Atlantic Coast Pipe Asks FERC to Begin Tree Cutting in WV, VA, NC”

  • | | |

    Ridgetop Energy Services Expands Again – in Southern Marcellus

    Ridgetop Energy Services, headquartered in Canonsburg, PA, was started in early 2016 by Ridgetop Capital Partners. Ridgetop Capital is an energy and real estate investment firm. Since 2007, Ridgetop Capital has purchased 30,000 acres in the PA, WV and OH, and has invested $130 million in the region (often partnering with big drillers like EQT, Antero, Chesapeake, Range Resources and others). In addition to investing in acreage, Ridgetop also wanted in on some of the drilling action, so the company formed Ridgetop Energy Services in 2016 to buy up service companies that work in the shale space. In June, Ridgetop Energy bought Keystone Wireline (see Ridgetop Energy Services Buys Keystone Wireline Inc.). Ridgetop Energy is expanding again–by purchasing “two service rigs and a swabbing unit stationed in northern West Virginia” from C&J Energy Services…
    Read More “Ridgetop Energy Services Expands Again – in Southern Marcellus”

  • | | | | | | |

    Big Changes Coming in Randolph County, WV with Atlantic Coast Pipe

    Randolph County, WV is about to see some big changes in the coming months. Why? In “early spring” somewhere around 400-1,200 workers will descend on Randolph as work begins to build the mighty $5 billion Atlantic Coast Pipeline (ACP) being built by Dominion Energy. Members of the Rotary Club of Elkins heard a presentation earlier this week about what to expect when the pipeliners come a callin’. Some of those impacts include: higher traffic levels, more business for restaurants and convenience stores, an uptick in business at local laundromats, and higher occupancy for hotels and apartment buildings. According to Denise Campbell, community liaison for the ACP, “There’s a lot of opportunity.” Here’s a recap of Campbell’s comments to the Rotarians…
    Read More “Big Changes Coming in Randolph County, WV with Atlantic Coast Pipe”

  • | | | |

    Wheeling, WV High School Leased for Shale Drilling, $6K/Acre

    Deals to lease land for Marcellus and Utica Shale drilling happen on a regular basis–even today. Perhaps not as much as several years ago when large deals cut by landowner groups were headline news. But lease deals still happen–you just don’t hear about them because they are private deals (deal terms are not recorded at the county clerk’s office). However, every now and again a public entity–a town or school–will lease land for shale drilling. And that IS a matter of public record. When we spot such deals, we like to bring you the details. Such a deal was cut on Monday, by the Ohio County Board of Education. The Board of Ed signed a deal with American Petroleum Partners (from Pittsburgh) to lease the 66 acre Wheeling Park High School campus for shale drilling–under (not on) the campus. Which is so cool for a number of reasons. First of all, the deal includes a $6,000 per acre signing bonus, and if/when the gas begins to flow, an 18% royalty. Second of all, it’s a school! How many times have we read about nutjob anti parents with their knickers in a twist over putting a shale well more than a half mile away from a school, like we heard about endlessly from those in the Mars School District (Butler County). It was a long, hard fight, but we eventually won (see Martian Victory! 2 Wells Near Mars School Nearly Done Drilling). The antis claimed drilling near schools would harm the crumb-crunchers. We see the result of that lie. We’ve pointed out, many times, that a school near MDN HQ, located in northeastern PA (Elk Lake), leased their property for drilling and has reaped enormous financial rewards (see Elk Lake School LOVES Their 2 Marcellus Shale Wells & Gas Heat). We’ve seen the Elk Lake school building and the nearby wellhead. No negative effects on the chil’ren. And now the very smart members of the Ohio County Board of Ed and the kids at Wheeling Park High will enjoy the same financial rewards…
    Read More “Wheeling, WV High School Leased for Shale Drilling, $6K/Acre”

  • | | | | |

    Antero Agrees to Add Monitoring Near New Frack Waste Landfill

    By our reckoning, Antero Resources’ $275 million wastewater recycling facility in Doddridge County, WV is now operational (see Antero’s $275M WV Wastewater Recycling Facility Ready to Launch). In 2015 Antero hired Veolia Water Technologies Inc. to build a new shale wastewater recycling facility in Doddridge County (see Antero Building New 60K Bbl Wastewater Recycling Facility in WV). The facility, called the Clearwater Facility, can process up to 60,000 barrels of wastewater per day, separating water, salt and radioactive particles. The salt can be sold to municipalities for use as road salt–but frankly there’s not enough of a market to sell it all. And not all of it will be of sufficient quality to be sold that way. So Antero also spent $20 million to build a landfill next to the plant for the salt (see Update on Antero’s $275M Wastewater Facility in WV). In a move we were previously unaware of, a pair of Big Green groups–West Virginia Rivers Coalition and the West Virginia Highlands Conservancy–made a fuss about the landfill. They filed an appeal with the West Virginia Environmental Quality Board back in May challenging the permit allowing the landfill to get built. Antero has just settled the matter by signing an agreement to conduct additional surface water monitoring at and near the landfill site…
    Read More “Antero Agrees to Add Monitoring Near New Frack Waste Landfill”

  • | | |

    WV Rolls Out the Red Carpet – Welcomes China Trade Delegation

    red carpet

    Every time we write about the China deal to invest an amazing $83.7 billion (!) in West Virginia, we still shake our head in disbelief. Pinch us–it seems too good to be true! We suppose if half that amount, even a quarter of that amount, ends up getting invested, it’s still an unbelievable bonanza for the Mountain State. We first brought you the news in early November that the Trump Administration, in cooperation with the WV Gov. Jim Justice Administration, had brokered and signed a deal for China to invest $83.7 billion in WV’s shale and petrochemical industries (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). Since that initial deal was signed (in China) delegations of Chinese representatives have been visiting WV, no doubt assessing just where and how much they will spend. Last week such a delegation visited WV on a four-day “relationship building” mission. West Virginians are hospitable people (that’s been our experience)–and they turned on the charm last week. You might say WV rolled out the Red Carpet for the Red Chinese…
    Read More “WV Rolls Out the Red Carpet – Welcomes China Trade Delegation”

  • | | | | | | | | |

    Leach XPress Starting Up Jan 1 – Marc/Utica Gas Heading to the Gulf!

    Last week Columbia Pipeline Group (now part of TransCanada) filed a request with the Federal Energy Regulatory Commission (FERC) to begin service on their Leach XPress pipeline. This is BIG and important news. In August 2014, MDN told you that Columbia Pipeline Group decided to move forward with investing $1.75 billion dollars for two new projects: Leach XPress and Rayne XPress (see Columbia Gas: $1.75B for 2 Projects to Send Marcellus Gas to Gulf). The Leach XPress project involves building ~160 miles of natural gas pipeline and compression facilities in southeastern Ohio and West Virginia’s northern panhandle, flowing 1.5 billion cubic feet (Bcf) of gas all the way to Leach, Kentucky (hence the name). Rayne XPress works hand in glove with Leach. There is an existing natgas pipeline from Leach, KY all the way to the Louisiana Gulf Coast, called Rayne. The pipeline is named for the location it flows to: Rayne, Louisiana. The Rayne Xpress project beefs up the Rayne pipeline with new compressor stations to add an additional 1 Bcf per day of capacity–Marcellus and Utica Shale gas capacity that will flow to the Gulf Coast. Rayne went online in early November (see FERC Clears 1 Bcf/d Rayne Xpress Pipe to Begin Service). When Leach goes online Jan. 1, 2018 (yes, we expect FERC will approve it), Marcellus/Utica gas will begin flowing along the combined pipelines all the way to the Gulf. That’s big news!…
    Read More “Leach XPress Starting Up Jan 1 – Marc/Utica Gas Heading to the Gulf!”

  • | | | |

    IOGA WV Gets it Right on Co-Tenancy & Joint Development

    For some time we’ve reported on the effort to pass new legislation in West Virginia on co-tenancy and joint development (see WVONGA Makes Plans to Push Forced Pooling Lite in 2018). These two concepts together somewhat replace what the oil and gas industry once wanted in WV–a forced pooling law. The West Virginia Oil and Natural Gas Association (WVONGA) has been the driving force behind the effort to adopt co-tenancy and joint development. MDN has been right up front about our views: co-tenancy is fair and reasonable, joint development is not. WVONGA continues to push for both. However, WVONGA is not the only oil and gas trade association in the Mountain State. WV also has the Independent Oil & Gas Association of West Virginia (or IOGA WV), which broke off from WVONGA in 1959. We were delighted to spot an article that reports IOGA WV is pushing for co-tenancy, but NOT for joint development. IOGA of WV recognizes joint development for what it is–an attempt to allow drillers to use old leases for shale drilling without having to negotiate new terms (i.e. pay more to rights owners). Kudos to IOGA WV for getting it right. What, precisely, is co-tenancy and joint development? Glad you asked…
    Read More “IOGA WV Gets it Right on Co-Tenancy & Joint Development”

  • | | |

    EQT Bd Member Continues to Stir Controversy in WV Gov Office Role

    Bray Cary

    This is a story that won’t go away. Last week MDN told you about the kerfuffle over EQT board member Bray Cary and his work as an unpaid, “informal” adviser to WV Gov. Jim Justice (see EQT Board Member Unofficial Adviser to WV Gov Justice and More on EQT Board Member Serving in WV Gov’s Office). Cary has his own “swipe card” giving him 24/7 access to the Capitol. Cary has been “taking part in policy-oriented meetings.” He’s not on the payroll and he doesn’t answer to anyone. He’s also not subject to the state Ethics Act. Because Cary sits on the EQT board, and EQT has big assets in WV, critics see a conflict of interest. In our own simple words, Bray Cary has become a problem for EQT–a problem that needs to get fixed, fast. He either needs to end his role as unpaid adviser to West Virginia Gov. Jim Justice, or resign from EQT’s board of directors. Continuing to function in both roles is clearly a distraction EQT doesn’t need–and doesn’t want…
    Read More “EQT Bd Member Continues to Stir Controversy in WV Gov Office Role”

  • | | |

    WV O&G Property Tax Revenue $96M in 2017, Down $38M from 2016

    The West Virginia Oil & Natural Gas Association (WVONGA) issued a press release yesterday (that MDN didn’t receive) to tout the fact that property tax revenue on WV oil and natural gas production will provide “just over $96 million” to fund local school systems and vital community services. That is certainly cool and worth calling attention to. However, the WVONGA press release failed to point out that property tax revenue for local schools from o&g property taxes is going down by $38 million in 2017–because of the formula used to calculate those taxes. In Wetzel County, for example, Wetzel County Schools project a loss of $8.6 million in property tax revenue from oil and natural gas production for the 2017 tax year as compared to 2016. WV uses a formula based on production and pricing from the period two years prior to the current year. So property taxes from o&g are calculated on how much production, and the price received, during 2015–right at the bottom of the market. Which is why when production and prices are up now, tax revenues are down. Still, $96 million is nothing to sneeze at. Here’s the WVONGA press release, along with the rest of the story…
    Read More “WV O&G Property Tax Revenue $96M in 2017, Down $38M from 2016”

  • | | |

    More on EQT Board Member Serving in WV Gov’s Office

    Yesterday MDN told you about EQT board member Bray Cary and his work as an unpaid, “informal” adviser to WV Gov. Jim Justice (see EQT Board Member Unofficial Adviser to WV Gov Justice). WV media continues to track (hound) this story. The bone of contention is that Cary, who is a long-time WV resident (lives in Charleston) appears to have unfettered access to Justice. Cary has his own “swipe card” giving him 24/7 access to the Capitol. Cary has been “taking part in policy-oriented meetings.” He’s not on the payroll and he doesn’t answer to anyone. He’s also not subject to the state Ethics Act. And because Cary sits on the EQT board, and EQT has big assets in WV (and a big interest in pushing for a forced pooling law), critics see a conflict of interest. But is there? Yes, Cary sits on the EQT board, but that’s just one small piece of Cary’s background and active life. Cary is “best known for his former role as an executive with West Virginia Media.” He’s a player. He’s connected. An important guy. And Gov. Jim Justice wants to bend his ear on occasion, to get Cary’s advice and feedback. The real issue is not will/does Cary’s presence give EQT some sort of unfair advantage in the highest levels of WV state government. The real issue is the *appearance* of a conflict of interest–whether there actually is one or not…
    Read More “More on EQT Board Member Serving in WV Gov’s Office”