Statewide WV

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    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”

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    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”

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    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”

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    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”

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    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”

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    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!”

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    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”

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    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”

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    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”

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    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”

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    Baker Hughes Nov Rig Count – US & Marc/Utica Counts Go Down

    The International (non-U.S.) Baker Hughes rig count for November 2017 was 942, down 9 from the 951 counted in October 2017, but up 17 from the 925 counted in November 2016. The U.S. rig count for November 2017 was 911, down 11 from the 922 counted in October 2017, but up 331 from the 580 counted in November 2016. The average Canadian rig count for November 2017 was 204, unchanged from the 204 counted in October 2017, and up 31 from the 173 counted in November 2016. What about rig counts in the Marcellus/Utica? Pennsylvania lost one rig (second month in a row PA has lost a rig), running an average of 31 rigs during October. Ohio gained a rig to run an average of 30 rigs. West Virginia saw the biggest swing–a huge swing–by losing 3 rigs, running an average of 12 rigs last month. So the Marcellus/Utica combined lost 3 rigs last month. Here’s the BH update…
    Read More “Baker Hughes Nov Rig Count – US & Marc/Utica Counts Go Down”

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    Atlantic Coast Pipe Gets Key WV Approval; VA Approval Next Week?

    On Wednesday the West Virginia Department of Environmental Protection (WVDEP) “waived” the state’s authority under the federal Clean Water Act to determine if Atlantic Coast Pipeline (ACP) will harm rivers and streams, instead deferring to the US Army Corps of Engineers’ (USACE) Nationwide permit. The USACE Nationwide permit has the same exact standards as found in the WV version–so there’s no need to duplicate the paperwork. This is not the first time WVDEP has deferred to the USACE’s permit. They did the same exact thing with a water crossing permit for the Mountain Valley Pipeline project in November (see WV DEP Secretary Issues Letter Explaining MV Pipeline Decision). It’s pretty easy for antis to demagogue the issue, saying WV has “given up it’s right to regulate the project.” That is manifestly untrue. As WVDEP pointed out in November with Mountain Valley, and again on Wednesday with Atlantic Coast, “Waiving the 401 individual certification does not indicate that there will be fewer environmental requirements to which the ACP must adhere. The special West Virginia conditions that exist in the US Army Corps of Engineers (USACE) Nationwide permit are designed to mirror what would be in a 401 individual certification issued by West Virginia. Under the Nationwide permit, enforcement would be left to federal agencies and would be limited to stream crossings.” WV’s approval of ACP is a major milestone, but not the only one required…
    Read More “Atlantic Coast Pipe Gets Key WV Approval; VA Approval Next Week?”

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    WVU Gets $1.3M Grant to Research Ways to Use More NatGas In-State

    West Virginia University (WVU) is a research powerhouse. They have lots of researchers doing important work in a variety of disciplines. One of those disciplines is natural gas. WVU founded the Center for Innovation in Gas Research and Utilization (CIGRU) to “conduct transformative, fundamental, research directed at innovative pathways for shale gas utilization and upgrading.” CIGRU, along with two other non-shale related research programs, have just collectively received a $3.9 million Research Challenge Grant from the West Virginia Higher Education Policy Commission. The WVU press release doesn’t say how each of the three different recipients (CIGRU being one of them) got, but we figure they likely divided it evenly, hence our assumption that CIGRU got $1.3 million. And what will CIGRU do with the money? Figure out ways to keep more of the Marcellus/Utica gas coming out of West Virginia’s rocks in the state–used by residents and businesses who reside in WV. They want to grow the “downstream” sector of end users of natural gas and other byproducts from shale drilling…
    Read More “WVU Gets $1.3M Grant to Research Ways to Use More NatGas In-State”

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    WV Gov Justice Says China Investment Specifics are “Confidential”

    We are STILL shaking our head in disbelief at the news from early November that China has signed a “memorandum of understanding” (MOU) to invest $83.7 billion (with a “b”) in a single U.S. state–West Virginia (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). Since the signing ceremony in China, part of President Trump’s Asian trade mission, we have not had many specifics about where, when and how that money will get spent in the Mountain State. We have read rumors that a pair of natural gas-fired electric plants may be among the first projects, and that some of those billions may help fund a natural gas liquids (ethane) storage hub, and maybe even a cracker plant (see More on that Massive $83.7B Chinese Investment in WV Shale/Petchem). But since that time, very few details have been shared. During a press conference yesterday WV Gov. Jim Justice talked about the deal. Perhaps responding to those who still disbelieve, Justice said the Chinese are “deathly serious” about the deal and investing in WV. He even said they may invest more than the promised $83.7 billion! Justice also said he can’t reveal details about where/when/how the money will get invested because of a “confidentiality agreement,” which we find rather odd. We understand not tipping your hand too early with specifics, but this situation of a virtual information blackout about where a single penny of the money will get spent smacks of China’s well-earned reputation for secrecy. It’s unfortunate we don’t know more about the deal and what will get funded. It leads some to maintain a healthy skepticism that the promised funds will indeed get invested in WV…
    Read More “WV Gov Justice Says China Investment Specifics are “Confidential””

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    Cool Charts: Top 20 Marcellus Drillers, Top 20 Utica Drillers, More

    Important Correction: Although the data, charts and graphs shared by MDN below did not originate with MDN, we should have noticed a glaring error. Production numbers for Antero Resources for the Marcellus were not included! (Antero numbers in the Utica were included.) Antero’s drilling and production is prolific in the Marcellus–easily putting Antero in the top 3 or 4 for production in the Marcellus. We regret the error in not noticing and calling attention to this whopping oversight sooner. – Jim Willis, 12/14/17

    Hart Energy publishes an excellent magazine called Exploration & Production (E&P). A recent article published on the E&P website reports on rising production of natural gas in both the Marcellus and Utica Shale plays. As MDN has continued to report month after month with the release of each monthly EIA Drilling Productivity Report, our region consistently hits new production records (see EIA Nov ’17 Drilling Report: Record-Breaking Year-End on the Way). The E&P article recounts some of those EIA record-breaking stats, and then inserts a series of charts that we found extremely interesting and useful–because they convey so much information in a visual, fast way. Below are those charts. When you look at the Top 20 Marcellus Operators by production, you will immediately notice that the three largest producers (Chesapeake, Cabot Oil & Gas, and Southwestern Energy) take up nearly half the pie–and those three have wells almost exclusively in the northeastern part of Pennsylvania (Chessy and Southwestern have some wells in other parts of the state). What’s even more mind blowing: Cabot’s massive production at #2 in the Marcellus (just barely behind Chesapeake) all comes from a single, northeastern county: Susquehanna County, PA. Enjoy this visual feast…
    Read More “Cool Charts: Top 20 Marcellus Drillers, Top 20 Utica Drillers, More”

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    U.S. Supreme Court Rejects Appeal of WV EQT Royalty Case

    The United States Supreme Court has refused to hear an appeal of an important West Virginia case, which means the current ruling stands that allows EQT and other drillers to deduct “reasonable” post-production expenses from landowner royalty checks. It is a victory for drillers and a blow to some landowners. How did we get here? A brief history: Last December MDN reported on the huge WV Supreme Court decision against 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). In February this year, 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). In May the WV Supreme Court ruled on the reheard case, overturning its previous decision from last December. The court ruled to allow EQT to deduct “reasonable” post-production expenses (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). Those who won the original case (and lost the reheard 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. Newly elected Justice Walker, with (according to the losing side) conflicts of interest, voted in favor of EQT. On the basis that Walker should not have been part of the process at all, the case was appealed to the U.S. Supreme Court in September (see Lawyers ask US Supreme Court to Hear WV EQT Royalty Case). On Monday, with no explanation, the Supremes denied the request for an appeal…
    Read More “U.S. Supreme Court Rejects Appeal of WV EQT Royalty Case”