WV Shale Industry Pushes Back Against Severance Tax Increase

What is it about teachers’ unions that makes them so greedy for other people’s money? We’ve told you, for years, about the quest by Pennsylvania’s teachers’ unions (most of them in the Philadelphia area) who want to raid the coffers of Marcellus drillers via a confiscatory severance tax slapped on top of an existing impact tax slapped on top of corporate income taxes. You can never have too many taxes in education-land. That’s the only way they get paid. In West Virginia it’s the same routine. WV already has a severance tax, a nosebleed-high severance tax of 5% (one of the highest in the country). And yet teachers want to increase it–so they can grab that money for moi (see WV Teachers Get Greedy, Want to Boost Already-High Severance Tax). Ever-vigilant, the shale industry is pushing back against the money-grabbers. At a recent “interim meeting” of the WV legislature, Anne Blakenship, executive director of the West Virginia Oil and Natural Gas Association (WVONGA), told legislators that the oil and gas industry is not asking for a reduction in the severance tax, but they ARE asking that the rate not go up. Phil Reale from the West Virginia Independent Oil and Gas Association (WV IOGA) said, “We certainly don’t want to be taxed more.” Let’s hope lawmakers were listening and not looking at their smart phones…
Continue reading

WV Consumers Saved $4B Over 10 Years Thx to M-U Shale

Although the push is on to get Marcellus/Utica molecules to new markets where they can fetch higher prices, there is a group who has benefited in a major way from an abundance of cheap, clean-burning shale gas. That would be the residents and businesses located in West Virginia. Industry group Consumer Energy Alliance (CEA) has just published a new report that reveals WV residents and businesses have saved a cumulative $4 billion from 2006-2016 as a result of the decreasing price of natural gas in the state. You may recall not long ago CEA published a similar study for Pennsylvania (see PA Consumers Save $30B Over 10 Years Thx to Marcellus Shale). Yes, PA’s numbers were much bigger than WV’s, but PA has more population (12.8 million in PA vs. 1.8 million in WV), therefore more chances for savings. And PA has more natgas in the ground than WV. But still, $4 billion in savings is nothing to sneeze at! That’s $4 billion in money in people’s pockets that didn’t come from other people’s pockets (via taxes) and got spent on goods and services with a beneficial ripple effect throughout the economy. Here’s the CEA report on the great news that West Virginian’s hit the $4 billion lottery in shale…
Continue reading

Responding to Sore Loser Antis re Shale Court Cases

Blond Boy Crying

Ever notice how antis get all hot and bothered when they lose a court case? They holler and scream and rant and rave. Some even lay down and roll on the floor like two-year-olds. The refrain is always the same: “The court sided with the natural gas industry!” But that claim is not true. The editorial writers at the Charleston (WV) Gazette-Mail recently penned an editorial that, in so many words, tells antis to grow up. They do an excellent job of pointing out the courts are not siding with the industry, they’re siding with the law. Which is a strange and unfamiliar concept for many snowflake antis who were never told “NO” by their parents…
Continue reading

Southwestern Sells Fayetteville Shale, Now Focused 100% on M-U

Some exciting news to share. Southwestern Energy, headquartered in Texas, has cut a deal to sell all of their Fayetteville Shale (Arkansas) assets to Flywheel Energy for $1.865 billion in cash. The sale makes Southwestern a pure play, 100% focused driller on the Marcellus/Utica region (i.e. Appalachia). What will Southwestern do with an extra $1.865 billion? According to their announcement: (1) Spend $900 million of it on retiring IOUs (“notes”) previously issued. That is, debt retirement. (2) Buy back up to $200 million in outstanding shares of stock. (3) Spend $600 million of it over the next two years (2019 & 2020) on more Marcellus/Utica drilling. But not just any M-U drilling. Southwestern owns acreage in both northeastern PA and the northern panhandle of WV (with a some acreage in Washington County, PA). According to Southwestern’s announcement, the extra $600 million will go to drilling in the company’s “liquids-rich Appalachia assets.” Northeastern PA is dry dry dry–no liquids. WV landowners brace yourselves–Southwestern will soon bring an extra $600 million (over half a billion dollars) worth of drilling to your area. If you’re signed with Southwestern and haven’t yet seen drilling, you now stand a much better chance! Here’s the exciting news, along with extra resources we’ve located to better help you understand the news…
Continue reading

WV’s Acting Secretary of Commerce is MIA – Hurting Investment?

In an act still befuddling for us, West Virginia Gov. Jim Justice fired Commerce Secretary Woody Thrasher in June (see WV Commerce Secretary Who Brokered $83B China Deal…Fired). Thrasher took over as Commerce Secretary in January 2017 as part of the new Gov. Jim Justice Administration. Thrasher is “the guy” most responsible for putting together the massive $83.7 billion deal signed by China last November to invest in WV shale and petrochemicals (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). It was the relationships established by Thrasher that led to that deal. So what happened to Thrasher? Why was he fired? It has nothing to do with the China deal. Anyway, Justice appointed W. Clayton Burch as Acting Secretary of Commerce. According to attendees at the recent West Virginia Chamber of Commerce Annual Meeting and Business Summit, nobody has seen Burch. Or at least, almost nobody. The head of the Chamber had face-to-face meeting with him once. Business leaders and legislators in WV are grumbling that they haven’t seen or heard from Burch since his appointment 80 days ago. It’s pretty obvious he’s just filling in until Justice gets off his derriere and appoints a new, permanent Secretary. The concern is that important projects, like the $83.7 billion deal with China, are suffering. Who will invest in WV if there’s no one to make decisions and propel projects forward?…
Continue reading

MVP 2nd Big Win This Wk – 4th Circuit Lifts Stay of Water Permit

As we reported yesterday, EQT Midstream’s Mountain Valley Pipeline (MVP) got some excellent news–that the Federal Energy Regulatory Commission had lifted a stop-work order on the project (see FERC Lifts Mountain Valley Pipe Stop-Work Order, Rehiring). However, two clouds remain over the project, both created by the Fourth District U.S. Circuit Court of Appeals in response to lawsuits from the Sierra Club. One of those clouds is from the Fourth Circuit overturning permits issued by the U.S. Forest Service and Bureau of Land Management that allows MVP to cross 3.5 miles of Jefferson National Forest in West Virginia and Virginia (see Court Cancels Permits for Mountain Valley Pipe on Fed Land). EQT is working on resolving the issue so that USFS and BLM can reissue permits that will pass muster with the court. The other cloud appeared when the Sierra Club convinced the Fourth Circuit to suspend a permit issued by the U.S. Army Corps of Engineers that allows MVP to construct the pipeline across streams and rivers in the West Virginia. The Clubbers got the court to suspend stream and river crossings based on a technicality–that MVP could not, in the case of four river crossings, get the work done within the 72 hour period stipulated by the permit. Therefore the court suspended work at all 591 stream/river crossings the pipeline traverses in WV (see Sierra Club Succeeds in Delaying MVP Project in WV via Court Order). In early July, the Army Corps reworked and reinstated the permit as it applies to the four river crossings in question (see Army Corps Engrs Reinstates MVP Permits for 4 WV River Crossings). The good news is that the Fourth Circuit has granted a motion by the Army Corps to reinstate its permits for all stream/river crossings for MVP. Sunlight is breaking through!…
Continue reading

FERC Approves Mountaineer XPress Pipe Rate Increase

We spotted a story that contains information we don’t fully understand. Columbia Gas Transmission is currently building the Mountaineer XPress Pipeline, a $2 billion, 170-mile pipeline that will flow 2.7 billion cubic feet (Bcf) per day of natural gas from existing and future points of receipt along or near the Columbia pipeline system–most of it located in West Virginia (see Details on Columbia Pipeline Mountaineer XPress Pipeline Project). At 2.7 Bcf/d, Mountaineer XPress is the second largest (by volume) new pipeline project for the Marcellus/Utica region–second only to Rover’s 3.25 Bcf/d pipeline. It is a big and important project. When Columbia (aka TransCanada) filed the original application, approved by the Federal Energy Regulatory Commission, they sought permission to charge $9.827 per dekatherm (one dekatherm is equivalent to one thousand cubic feet, or 1 Mcf) to flow gas along the pipeline. Put another way, shippers without a contract who want to ship along the pipeline will pay $9.83/Mcf to ship gas. Since gas typically fetches less than $3/Mcf, how can you make any money? That’s what we can’t figure out. Perhaps one of our sharp MDN readers can enlighten us? MDN Note: We have THE BEST readers! Dmitry Brown, a Senior Analyst with UGI Energy Services, wrote to clear up our confusion. The prices are per month, not per day. Shippers on MXP were expecting to pay $9.827/Mcf/month, or $ 0.32/Mcf/day. Columbia recently filed a request with FERC to increase the charge from $9.83/Mcf to a whopping $14.66/Mcf! The reason, according to Columbia, is that project costs have ballooned from $2 billion to $3 billion, “related to contractor labor costs, inspection costs, and outside services costs that substantially exceeded the contingency established for such charges.” Last Friday FERC approved the 49% increase. Now shippers will have to pay $14.663/Mcf/month, or $0.48/Mcf/day. Quite an increase…
Continue reading

China Official Says $83.7B Deal with WV Still On, Some Progress

Some encouraging words, but also some outright lies, coming from Ling Wen, president of China Energy Investment about China’s planned investment in West Virginia. Wen addressed reporters yesterday in Hong Kong, and some of the conversation turned to China Energy Investment’s 20-year deal 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). Months ago we speculated that the impending trade war with China might put that investment on hold, a fear that was confirmed in June. Chinese officials were supposed to attend the Northeast U.S. Petrochemical Construction Conference in Pittsburgh to announce the first round of investments in WV. However, Brian Anderson, director of the West Virginia University Energy Institute, said given the trade war with China, the officials elected to stay home instead. Anderson said at that time, “The pending trade war has put this project in jeopardy” (see Trade War Puts $83.7 Billion Chinese Investment in WV on Hold). But a few weeks later Anderson changed his tune. He told a reporter, “In terms of the development process, we continue to move forward…We’re even working on the next potential visits by officials and team members, so it’s not just the high-level executives, but development teams” (see $83.7B Chinese Investment in WV Shale & Petchem Still Alive?). Yesterday Ling Wen said even though there is an ongoing trade war between China and the U.S., the WV deal is still on. That’s good news. Wen also said that media reports that China cancelled trips “was not true.” That’s an outright lie. They did cancel trips in June…
Continue reading

WV Teachers Get Greedy, Want to Boost Already-High Severance Tax

We’ve written, forever, about the quest by Pennsylvania’s teacher’s unions (most of them in the Philadelphia area) who want to raid the coffers of Marcellus drillers via a confiscatory severance tax slapped on top of an existing impact tax slapped on top of corporate income taxes. You can never have too many taxes in education-land. That’s the only way they get paid. Neighboring states like Ohio and West Virginia already have a severance tax. It’s hard comparing apples to apples, but essentially PA drillers pay a bit more than OH drillers, but a whole lot less than WV drillers. The severance tax in OH is 1.25%. In WV the severance tax is a whopping 5%. And yet, amazingly, the teacher’s unions in WV are now clamoring to boost the severance tax even more! They want to boost the tax by 2.5% to 7.5%–which would kill the Marcellus/Utica industry in the state. It would be a death sentence. The West Virginia Oil and Natural Gas Association (WVONGA) is on the case, pushing back against this lunacy…
Continue reading

FERC Lets MVP Restart Work on 25% of Pipe; MVP Lays off ‘Thousands’

The Federal Energy Regulatory Commission (FERC) has had a change of heart–sort of–with respect to their stop-work order issued to Mountain Valley Pipeline (MVP). We previously told you that on August 3, FERC told MVP to stop all construction prompted by an order from the U.S. Court of Appeals for the Fourth Circuit vacating permits issued for the project as it crosses 3.5 miles of Jefferson National Forest in West Virginia and Virginia (see FERC Shuts Down ALL Work on Mountain Valley Pipeline in WV, VA). In a letter to FERC this past Tuesday, MVP asked FERC to reconsider and allow them to restart construction for at least part of the pipeline. FERC agreed and partially lifted the stop-work order a day later, on Wednesday. The new order allows MVP to work on the project for 77 of its 303 miles–about 25%. However, in a sad announcement, MVP said because so much of the project remains (for now) idled, it is laying off 50% of the workers who had been working on it. It’s estimated that around 6,000 people are employed directly or indirectly on the project, which means “thousands” (perhaps as many as 3,000 people) are now out of work–thanks to the Sierra Club and their lawsuit. Hey, how many jobs has the Sierra Club created? What’s that? NONE?! And how many jobs has the Sierra Club destroyed? We’d estimate it to be in the tens of thousands. MVP also announced that due to the ongoing work stoppage and delays, the project completion and in-service date has now slipped to the end of next year–an additional nine months. It’s a sad day indeed…
Continue reading

Atlantic Coast Pipeline Asks FERC to Lift Stop-Work Order

Borrowing a chapter from EQT and their Mountain Valley Pipeline project, Dominion Energy has asked the Federal Energy Regulatory Commission (FERC) to lift a stop-work order for its 600+ mile Atlantic Coast Pipeline (ACP) project. On Tuesday MVP sent a letter to FERC requesting the agency lift it’s stop-work order for them (see Mountain Valley Pipe Asks FERC to Lift Stop Work Order). A day later, yesterday, ACP did the same thing. Last week a federal court pulled permits for approximately 100 miles (of 600 miles) for ACP in response to a frivolous lawsuit filed by the anti-American Sierra Club (see FERC Shuts Down ALL Work on Atlantic Coast Pipeline). The Clubbers convinced the Fourth Circuit Court of Appeals to overturn permits granted by the U.S. Fish and Wildlife Service and the U.S. National Park Service, granted to ACP to cross the Blue Ridge Parkway. The court, in rolling back ACP’s permits, told FERC they should shut down work on the entire project until this matter is resolved. Last Friday FERC did just that. Yesterday Dominion politely asked FERC to ignore the court and lift the ban for those portions not part of the actual court order. Dominion got some moral support from West Virginia’s congressional delegation in their effort. Senators Joe Manchin and Shelley Moore Capito, along with Rep. David McKinley wrote a letter to FERC asking the agency to lift the stop-work order for both ACP and MVP…
Continue reading

WV Supreme Court Crisis – House Votes to Impeach Sitting Judges

What in the world is going on in West Virginia? Last Friday in our “best of the rest” list of energy stories, we ran a brief piece about a WV House panel voting to impeach the remaining four (of five) sitting WV Supreme Court justices, claiming the justices had abused taxpayer funds (see Energy Stories of Interest: Fri, Aug 10, 2018). We didn’t think much of it at the time, partially because it was a CNN story–a known source of fake news. Yet the news, in this case, was not fake. On Monday the full WV House voted to impeach all of the sitting justices. One them (a Democrat) promptly resigned her position so that Gov. Jim Justice could not replace her with his own pick. Instead, her office will go on the ballot this November. The Wall Street Journal ran an article yesterday outlining in more detail what the alleged charges are (bordering on embezzlement), and speculating on what happens now. We’re interested in this story because earlier this year it was this group of justices that reversed itself in a highly unusual practice to allow EQT to deduct post-production expenses from flat rate leases (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). That sparked a rebellion in the WV legislature which led to a new law reversing the Supreme Court’s ruling (see WV Gov Justice Signs Bill to Guarantee 12.5% Minimum Royalty). There are other oil and gas cases that may be impacted by a wholesale change in the court as well. Here’s the latest on this developing situation in WV…
Continue reading

WV DEP Proposes Changes in Pipeline Stream Crossing Permit

West Virginia has just published a draft revision for terms and conditions under which the state will issue a “Section 401” water permit for federally approved pipeline projects. Under the federal Clean Water Act (CWA), the federal government delegates some of the responsibility in approving a pipeline project to the individual states. It’s a small but important part of the regulatory pie. Under Section 401 of the CWA, states get one year to review a pipeline project–to evaluate where that project will cross streams and rivers. If the state doesn’t like something about the plan, they tell the pipeline company and the plan gets revised. That’s how it’s supposed to work. Instead, some states (like New York) are abusing Section 401 and simply refusing to issue the permit, effectively killing entire pipeline projects. That’s not the intent of the regulation, something Congress is now looking to fix. We can’t have tinhorn dictators like Andrew Cuomo telling other states (like Pennsylvania) that you can no longer build pipelines into or through a neighboring state. That’s why approval of interstate pipeline projects resides at the federal level and not the state level–to prevent one state holding another hostage. WV has had some issues of their own with respect to Section 401 approvals (see WVDEP Reverses, Waives Water Permit for Mountain Valley Pipeline). Perhaps because of previous problems, like the issue with MVP, the WV Dept. of Environmental Protection has just floated proposed changes to the criteria they use in awarding a Section 401 permit…
Continue reading

Federal Court Stops Works on Some (All?) of Atlantic Coast Pipe

In a pattern that has become obvious, and disturbing, the radicalized Sierra Club has once again prevailed in shutting down work on a second mammoth pipeline project–Dominion’s Atlantic Coast Pipeline (ACP)–by concentrating their legal arguments at one small, specific point of the project. This happened with Mountain Valley Pipeline (MVP). As we reported yesterday, the Federal Energy Regulatory Commission (FERC) told MVP to stop work on the entire project, at least for now (see FERC Shuts Down ALL Work on Mountain Valley Pipeline in WV, VA). The Sierra Club convinced the without-experience-in-the-oil-and-gas-industry judges of the federal Fourth Circuit Court of Appeals to overturn permits granted by the U.S. Forest Service (USFS) and Bureau of Land Management (BLM) to build MVP across 3.5 miles of Jefferson National Forest, on the border of WV and VA. This time, with ACP, the Sierra Club convinced the Fourth Circuit to overturn permits granted by the U.S. Fish and Wildlife Service (FWS) and the U.S. National Park Service (NPS) granted to ACP to cross the Blue Ridge Parkway. However, the rolled-back permits affect more of ACP than MVP–about 100 miles of work out of 600+ miles. The court, in rolling back ACP’s permits all but told FERC they need to shut down work on the entire project until this matter is resolved. The court can’t order FERC to do so, but they strongly cautioned FERC that they should do so. Since FERC stopped work on MVP, it stands to reason they will do it with ACP too. So lightening has now struck twice, and it’s not good. Dominion maintains they will continue to build ACP except for those areas where the Fourth Circuit has rolled back permits. In other words, they’ll keep building it in North Carolina and some locations in WV. All eyes are now on FERC. We hate to say this, but our guess is that FERC will shut down the entire ACP project, for now. It’s virtually the same scenario as MVP which FERC elected to shut down. Why would this project be any different?…
Continue reading

FERC Shuts Down ALL Work on Mountain Valley Pipeline in WV, VA

The radical Sierra Club can claim a new temporary victory in its war to stop a major natural gas pipeline. We previously told you the Clubbers, who use money from donors to weaponize our own court system against us, convinced the U.S. Court of Appeals for the Fourth Circuit to overturn permits issued by the U.S. Forest Service (USFS) and Bureau of Land Management (BLM) that allows EQT Midstream’s 303-mile Mountain Valley Pipeline to cross 3.5 miles of Jefferson National Forest in West Virginia and Virginia (see Court Cancels Permits for Mountain Valley Pipe on Fed Land). The court says USFS and BLM didn’t come to the right conclusion about sedimentation and erosion impacts of MVP. The judges (who don’t know a thing about these issues) say USFS and BLM’s contention that impacts can be adequately mitigated is in error. Because the project is stopped at that one tiny 3.5-mile location, on Friday the Federal Energy Regulatory Commission (FERC) issued a stop work order for the entire project. At least for now. In the stop work order, FERC indicates they think the USFS and BLM will soon reissue the permits overturned by the Fourth Circuit, and when that happens, work on the rest of the project will resume. But FERC can’t predict when that will happen, so in the meantime, all work (except to stabilize certain areas to protect against erosion) must stop. What gripes us is that Sierra Club radicals were able to shut down an entire project by concentrating on a technicality at one, small point. What a disgusting, anti-American organization. MVP issued a statement this morning to say the the pipeline will get built, and will likely keep its schedule of going online in the first quarter of 2019…
Continue reading

WV’s Top Brass Meeting with Chinese Next Week re $83.7B Deal

A little over two weeks ago MDN wrote a post speculating about whether or not China’s deal to invest $83.7 billion in West Virginia shale and petrochemicals is now dead, given the current “trade war” with China (see $83.7B Chinese Investment in WV Shale & Petchem Still Alive?). In June, Chinese officials were supposed to attend the Northeast U.S. Petrochemical Construction Conference in Pittsburgh to announce the first round of investments in WV. However, Brian Anderson, director of the West Virginia University Energy Institute, said given the trade war now on with China, the officials elected to stay home instead. Anderson said, “The pending trade war has put this project in jeopardy” (see Trade War Puts $83.7 Billion Chinese Investment in WV on Hold). But a few weeks later Anderson appeared to change his tune. He told a reporter, “In terms of the development process, we continue to move forward…We’re even working on the next potential visits by officials and team members, so it’s not just the high-level executives, but development teams” (see $83.7B Chinese Investment in WV Shale & Petchem Still Alive?). Now comes word that next week, on Aug. 9, both WV Congressman David McKinley and WV Gov. Jim Justice will meet with Chinese officials “to discuss the future of the investment deal.” No word on whether that meeting is in WV or in China. McKinley would not comment on specifics about the meeting, but he did say he thinks the $83.7 billion Chinese investment is still on track and will happen…
Continue reading