West Virginia

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    Twin Eagle Sand Enters Marcellus/Utica with WV Transload Facility

    Twin Eagle Resource Management, headquartered in Houston, TX, bills itself as a provider of wholesale energy and midstream services throughout North America. Twin Eagle also serves the upstream (drilling market) via a number of transloading facilities to ship and store frac sand. Currently Twin has five facilities, serving: Central Eagle Ford (Elmendorf, TX), South Eagle Ford (Laredo, TX), Powder River Basin (Douglas, WY), Permian Basin (Big Spring, TX), and DJ Basin (Evans, CO). You can now add a sixth facility–a frac sand transloading facility in Bridgeport, WV, to service the Marcellus/Utica region. Last week Twin Eagle Sand Logistics (Twin Eagle subsidiary) announced a deal to buy an existing frac sand terminal in Bridgeport from Process Transloading Bridgeport. Terms of the deal were not disclosed. “Transloading” is a simple concept. It means you ship the sand in via railroad, or barge, unload it, store it, and then load it onto trucks which haul it to well pads where it gets used to frack shale wells. Let’s give a hearty welcome to the latest entrant into the Marcellus/Utica supply chain! Here are the particulars of the Bridgeport facility…
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    Texas Private Equity Firm Forms to Invest in Marcellus/Utica

    District 5 Investments, an energy-focused private equity firm based in Texas, has formed a new subsidiary called Pathfinder Resources in order to invest in the Marcellus/Utica region. According to an announcement yesterday, Pathfinder will focus on acquiring “producing and non-producing oil and gas mineral interests, royalty interests and non-operated working interested” across the U.S., but starting first in the Marcellus/Utica. Investment sizes range from $5 million to $35 million. Here’s the latest investor to grab a piece of the Marcellus/Utica pie…
    Read More “Texas Private Equity Firm Forms to Invest in Marcellus/Utica”

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    WV State Agency Rejects Anti Appeal to Stop US Methanol Plant

    Antis in West Virginia who filed an appeal of a permit allowing US Methanol to build a plant in Institute, WV have been rejected by the WV Air Quality Board. Earlier this month US Methanol broke ground in Institute (Kanawha County), WV for its very first methanol production plant (see US Methanol Breaks Ground on First Plant in West Virginia). This is the first of what is rumored to be up to five such methanol plants to be built in the Mountain State by US Methanol. Methanol plants convert natural gas into methanol, used as a chemical feedstock (or raw material) to create other things, like gasoline, antifreeze, plastic bottles–even LED and LCD screens. A number of dignitaries attended the groundbreaking in Institute, including colorful WV Governor Jim Justice. People Concerned, a Big Green group, has painted nightmare scenarios that “if” a 1.2 million gallon methanol holding tank explodes, it’s the end of the world for anyone and everyone in the Institute area. In an unbelievable act of disgust, the attorney for People Concerned “reminded” the Air Quality Board that the location of the US Methanol plant is located next to “a historically black university”–implying there’s something racist about the plant and the so-called safety threats it may hold for black students. Loathsome. Fortunately the Air Quality Board refused the appeal by People Concerned, meaning the plant will continue construction as planned, going online by mid-next year…
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    Time for FERC, Congress to Slap States into Line re Pipe Refusals

    West Virginia Dept. of Environmental Protection’s (WVDEP) capricious decision to yank a permit it previously granted for the Mountain Valley Pipeline is “the last straw” according to the legal beagles at the Blank Rome law firm. Last week WVDEP, under pressure in a lawsuit brought by the radical Sierra Club, decided to revoke a previously granted water crossing permit (see Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit). The corrupt New York Dept. of Environmental Conservation is now making a habit of refusing these types of permits for projects in our beloved home state–so far refusing permits for the Constitution Pipeline, Millennium Pipeline, and Northern Access Pipeline projects. Given this recent activism by state agencies, the lawyers at Blank Rome say it is now time for both the Federal Energy Regulatory Commission (FERC) and Congress to act, to “stem this overreach by States.” In our words, it’s time to slap the states back into line. They lay out a case to do so…
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    OH, WV Landowners Sue Antero re Post-Production Royalty Deductions

    Lawsuits filed against Antero Resources in both Ohio and West Virginia seek class action status. Both lawsuits make similar claims: Namely that Antero has improperly deducted post-production expenses from royalty checks (not allowed under lease terms), and that Antero has avoided, with creative accounting, paying royalties on natural gas liquids (NGLs) produced. The OH lawsuit was first filed in January of this year, followed by a lawsuit filed in WV in May. We have copies of both complaints below, so you can read the language for yourself. In the case of the OH lawsuit, Antero filed a motion to dismiss. The landowners amended the complaint and Antero dropped their motion to dismiss. The OH lawsuit, and as near as we can tell, the WV lawsuit, are both moving forward. Here’s our summary of both lawsuits–the MDN Cliffs Notes version…
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    Lawyers ask US Supreme Court to Hear WV EQT Royalty Case

    WV Supreme Court Justice Beth Walker

    In a decision that thrilled drillers, but angered landowners, the West Virginia Supreme Court decided in May to overturn its own previous decision (from last December) and allow driller EQT to deduct post-production expenses from royalty payments (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). Last December MDN reported on the huge WV Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). Those who won the case say newly elected Supreme Court Justice Elizabeth Walker had conflicts of interest and should not have been allowed to vote to rehear the case in the first place (which she did). On that basis, they tried to avoid the rehearing altogether, but that failed. As it turns out, the lawyers mainly argued over the meaning of three short words: “at the wellhead” (see WV Supreme Court Post-Production Royalty Case Hinges on 3 Words). In the May decision, the justices reversed their earlier decision, voting 4-1 in favor of allowing EQT to deduct “reasonable” post-production expenses. Newly elected Justice Beth Walker, with (according to the other side) conflicts of interest, voted in favor of EQT. On the basis that Walker should not have been part of the process at all, lawyers for the losing landowners have appealed the case all the way to the United States Supreme Court…
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    Jefferson County, WV Hopes Hinge on Gas Pipe Under Potomac River

    Jefferson County, WV has been working for the last 30 years to get natural gas piped into the community. Jefferson is on the cusp of seeing that long-time dream turn into reality–if anti fossil-fuelers in Maryland don’t screw it all up. In April, MDN brought you the news that Columbia Pipeline (now owned by TransCanada) has filed an application with the Federal Energy Regulatory Commission (FERC) to build a 3.5 mile, 8-inch pipeline that will carry natural gas from Pennsylvania to connect the Mountaineer Gas system in the Eastern Panhandle of West Virginia with the Columbia Gas Pipeline in Pennsylvania (see New 3.5 Mile Pipeline Project to Drill Under the Potomac River). The purpose of the Eastern Panhandle Expansion project is to deliver natural gas via local distribution channels (local utility Mountaineer Gas) to a new industrial facility in Berkeley County, WV, scheduled to open this fall, and to provide gas to other local businesses and residents in the Tri-State area. Most of the proposed pipeline crosses through a tiny sliver of Washington County, Maryland. The main “issue” with the project is that the pipeline will be drilled underneath the Potomac River, which serves as the border between WV and MD. That has radical anti-fossil fuelers in an uproar (see Mountaineer Pipeline Under Potomac Latest Focus of Anti Movement). Here’s a look at the faces of those whose lives will be changed for the good by a short, 3.5 mile pipeline under the Potomac, IF…
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    Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit

    In March, the West Virginia Dept. of Environmental Protection (WVDEP) issued a federal water crossing permit for the Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA (see WV DEP Grants Mountain Valley Pipeline Water Crossing Permit). In June, a group of profoundly radical “environmental” organizations (Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network) filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit against the WVDEP for doing their job issuing the permit (see Radicals File Lawsuit Against WV DEP for Approving MV Pipeline). Because of the pressure of that lawsuit, last week the WVDEP caved and reversed their decision, rescinding (called “vacating”) the permit for MVP. The WVDEP says they will now “re-evaluate the complete application to determine whether the state’s certification is in compliance with Section 401 of the federal Clean Water Act.” Another victory for the forces of evil…
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    Ridgetop Capital Raises $200M to Invest in Marcellus/Utica Leases

    Ridgetop Capital Partners, founded in 2007 and headquartered in the Pittsburgh area, is a private institutional investment firm focused mainly on the oil and gas space. That is, they raise money from rich people (and businesses) and invest that money in projects which they closely watch and influence, hoping to make their money back with a generous interest rate. A LOT of private money funds oil and gas development–there is nothing new or novel about Ridgetop. However, what is new and novel is that the company has just closed on another round of fundraising–chasing $200 million through the door–which they will now use to buy natural gas mineral rights (i.e. leases) in the Marcellus/Utica. The company previously invested ~$130 million in our region’s shale, snapping up ownership in over 30,000 acres (most, perhaps all of it, in joint ventures with major M-U drillers). Where will Ridgetop likely invest to buy new acreage? They’ve given us a big clue…
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    WV Surface Owners Win Important Case Against EQT re Drill Pad

    A West Virginia Circuit Court case decided last week (by jury) found in favor of surface owners against a well pad constructed by EQT. The decision has far-reaching implications for not only surface owners and drillers, but mineral rights owners too. From the first time we read about so-called “joint development” legislation being promoted by the drilling industry in WV (back in February), we’ve not been fans (see More on WV’s Push for “Joint Development” Instead of Forced Pooling). In brief, there are a number of existing old leases in WV, signed before shale drilling began, that prevents 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 drilling unit, they can do so without signing a new lease. The proposed joint development law seemed to us to be a way for drillers to avoid negotiating and paying more for new leases–which they should be willing to do! However, the case of Crowder and Wentz v EQT puts joint development in a new light for us. The case appears (to us) to be an abuse of power by surface owners against both drillers and mineral rights owners–by using the current prohibition against joint development. We certainly understand why surface rights owners would resist having a drill pad on their property, however, that’s life. They bought land (or inherited it, etc.) that doesn’t have mineral rights attached. Under existing WV law, a well pad can be drilled, taking 10-15 acres of the surface land (against the surface landowner’s wishes, but with compensation), in order to access the minerals under that specific piece of property. However, the court ruled last week in Crowder and Wentz v EQT that a driller cannot then use that same already-constructed well pad to further drill wells that access minerals under other, adjacent properties. Which in our book makes a strong case for a joint development law, to avoid this kind of misuse by surface landowners…
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    WB XPress Pipeline Gets Important USDA Approval for Natl Forest

    TransCanada’s WP XPress pipeline project has just scored an important permit from the U.S. Dept. of Agriculture (USDA) Forest Service that allows the project to move forward in the Monongahela National Forest. In Jan. 2016, Columbia Pipeline Group (now owned by TransCanada) filed a full, official application with the Federal Energy Regulatory Commission (FERC) for approval of the $850 million WB XPress Project (see Columbia Pipeline Files to Build $850M WB XPress Project in WV/VA). WB XPress consists of two new compressor stations, 26 miles of pipeline replacement located along existing corridors (11.6 miles of it in Monongahela National Forest), 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 system in the region by 1.3 billion cubic feet per day (Bcf/d), linking Marcellus gas supplies to new markets. FERC issued a favorable environmental assessment for the project in March of this year (see FERC Gives Columbia WB XPress Enviro Thumbs Up). While the Forest Service has given its blessing, the project still needs a final approval from FERC before it can begin construction–something TransCanada asked for just last week. Here’s where things stand with the WP XPress project…
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    US Methanol Breaks Ground on First Plant in West Virginia

    US Methanol broke ground yesterday in Institute (Kanawha County), WV for its very first methanol production plant. In August 2016 MDN was the first to share the news that US Methanol is building at least two, rumored up to five, methanol plants in the Mountain State (see Rumor: US Methanol Building 5 Methanol Plants in WV). MDN shared a rumor (based on a reliable source) that until we disclosed it, was not public knowledge: The first methanol plant US Methanol plans to build will be in Institute, WV, and the second in Belle, WV–both in the Charleston region. Methanol plants convert natural gas into methanol, used as a chemical feedstock (or raw material) to create other things, like gasoline, antifreeze, plastic bottles–even LED and LCD screens. A number of dignitaries attended the groundbreaking in Institute, including colorful WV Governor Jim Justice. A really cool factoid: the plant will be constructed from a deconstructed methanol plant from Brazil. Usually it’s the other way around, plants get shipped from the U.S. to other countries. This time a plant is coming “home” to the U.S. The new plant, called Liberty One, will open in mid-2018–supplied with plenty of cheap and abundant Marcellus/Utica shale gas…
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    Doddridge County, WV Tax Base Triples in 7 Yrs Thx to M-U Shale

    Yet another anti-shale argument falls. You read and hear plenty about a community’s tax base (i.e. property values) going down when/if shale drilling and associated infrastructure, like processing plants, come to town. That’s fake news. Here’s real news: In Doddridge County, WV, prior to the shale revolution visiting the county, the total assessed value for all properties in the county added up to $457.5 million. Seven years later, in 2017, with multiple wells drilled and massive new MarkWest natural gas processing plants built, total assessed value for all properties in Doddridge is now $1.4 BILLION. That’s a three-fold increase in seven years! Most of the increase comes from the oil and gas industry. Quite frankly, there’s no end in sight. Values will continue to rise in Doddridge…
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    VA, WV Landowners Sue FERC re Pipelines, Seek to Gut Natural Gas Act

    A group of 57 gentry landowners in Virginia and West Virginia, backed by an out-of-state Big Green group, have just 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. 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 filed yesterday in the U.S. District Court for the District of Columbia (full copy below) claims the landowners’ property is a “taking” not properly compensated under the U.S. Constitution–even though landowners are paid and they can continue to use their land as they see fit, as long as they don’t put a building overtop the pipeline. Here’s the latest on Big Green’s effort to oppose every square inch of new natural gas pipelines anywhere, including in the Marcellus/Utica…
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    WVU Appalachia Ethane Storage Hub Final Report – We Need it Bad

    A research team from West Virginia University spent the past year studying geologic regions in 50 counties in the Marcellus/Utica Shale region to see if our region would support a proposed $10 billion ethane storage hub. The conclusion was delivered last week at a meeting in Southpointe, PA: Heck yeah! Some 100 geologists, chemical engineers, oil and gas people members of academia gathered to hear about the results. WVU researchers released their findings in a published 181-page report titled “A Geologic Study to Determine the Potential to Create an Appalachian Storage Hub for Natural Gas Liquids” (full copy below). Among the study’s findings: A shale ethane storage hub could help create $36 billion in investment and more than 100,000 permanent jobs. It’s HUGE! Our region currently produces three times the amount of ethane that can be used by the mighty Shell ethane cracker, pointing out the need for more cracker plants. Here’s the exciting news that we need an ethane storage hub, and we need it bad…
    Read More “WVU Appalachia Ethane Storage Hub Final Report – We Need it Bad”

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    Fayette County, WV Loses Appeal to Block Injection Well

    An effort by Fayette County, WV to ban injection wells in the county has gone down to a final defeat. In January 2016, three liberal Democrat county commissioners from Fayette County, with the backing and help of the radical WV Mountain Party, voted to ban injection wells in the county (see WV County Officially Bans Injection Wells; Children Brainwashed). The ban was intentionally written so broadly it would also ban the operation of more than 500 vertical oil and gas wells in the county. The next day EQT sued to overturn the ban (see EQT Sues WV County that Banned Injection Wells, Seeks Injunction). One of the chief architects of the ban, from the Mountain Party, admits the ban was intended to stop all oil and gas activity in the county (see Anti Admits Fayette County, WV Ban Aims to Shut Down All O&G Wells). Fearing they would lose the EQT lawsuit, in March 2016 the Fayette commissioners backed away from the position of banning everything to do with drilling in the county. They revised the proposed ban regulation as a tactic to avoid losing their court case (see Fayette WV Commissioners Change Ban to Focus on Injection Wells). It didn’t work. In June 2016, a federal judge tossed out Fayette’s illegal ban (see Federal Judge Rules Fayette County Injection Well Ban Illegal). But that didn’t stop the lib Dems who, with the assistance of the radical Appalachian Mountain Advocates, appeal the federal judge’s decision (see Fayette County, WV Appeals Federal Court Ruling on Injection Well). That appealed case went to the 4th U.S. Circuit Court of Appeals, which has just ruled that Fayette County was out of line (copy of the decision below). Counties can’t make up their own oil and gas regulations–that right is reserved to the state…
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