Statewide WV

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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…
    Read More “Time for FERC, Congress to Slap States into Line re Pipe Refusals”

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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…
    Read More “OH, WV Landowners Sue Antero re Post-Production Royalty Deductions”

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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…
    Read More “Lawyers ask US Supreme Court to Hear WV EQT Royalty Case”

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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…
    Read More “Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit”

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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…
    Read More “Ridgetop Capital Raises $200M to Invest in Marcellus/Utica Leases”

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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…
    Read More “WV Surface Owners Win Important Case Against EQT re Drill Pad”

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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…
    Read More “WB XPress Pipeline Gets Important USDA Approval for Natl Forest”

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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…
    Read More “VA, WV Landowners Sue FERC re Pipelines, Seek to Gut Natural Gas Act”

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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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    Midstreamer E2 Energy Gets Major Investment from Tailwater Capital

    E2 Energy Services, which operates numerous natural gas processing facilities in the Marcellus/Utica, has just recapitalized “through an equity commitment from Tailwater Capital.” MDN first heard of E2 back in October 2014 when EnLink Midstream transferred ownership (“dropped down”) its investment in E2 Appalachian Compression, LLC and E2 Energy Services, LLC from one EnLink corporate entity to another (see EnLink Midstream’s Primary Focus in the Marcellus/Utica is…). EnLink, at least in 2014, owned a majority interest in E2–so we consider E2 a subsidiary of EnLink. Now comes word that a private equity investment company, Tailwater Capital, has committed a big slug of money, although we are not given the amount. When a company like E2 “recapitalizes” that typically means the company is swapping debt (bonds and notes) for equity (stocks). The announcement from E2 does not share the exact nature of the recapitalization. Below is the announcement, along with a list of E2’s assets and operations in the Marcellus/Utica region…
    Read More “Midstreamer E2 Energy Gets Major Investment from Tailwater Capital”

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    Sale of Cabot’s WV-OH-VA Assets to Carbon NG Closing Sept 29

    Exactly one week ago MDN brought you the exclusive news of WHO is selling a bunch of conventional wells and leases (and pipelines) located in West Virginia, Ohio and Virginia to Carbon Natural Resources (see Carbon Natural Gas Buys Cabot’s Conventional Wells in WV-OH-VA). MDN was the only news source to identify Cabot Oil & Gas as the seller. The press release from Carbon Natural refused to identify the seller. Another news source has finally stepped forward to confirm what you read here a week ago. Argus Media has done some of their own sleuthing and found via pipeline filings with the Federal Energy Regulatory Commission, that indeed Cabot is the seller. Argus also includes some facts not in the original release–that the sale includes 780,000 acres of leases. Yikes! That’s more than 3/4 of a million acres! But just a reminder–it’s conventional (not shale) acreage. At least as far as we can tell. Finally, another new tidbit from Argus: the deal is expected to close on September 29th…
    Read More “Sale of Cabot’s WV-OH-VA Assets to Carbon NG Closing Sept 29”

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    WVU Study: How CNG/LNG Vehicles Can Lower Methane Emissions

    Researchers at West Virginia University have just published a new study that looks at how to reduce methane emissions from LNG (liquefied natural gas) and CNG (compressed natural gas) fleet vehicles in coming years. Today’s heavy-duty natural gas fueled fleet is less than two percent of the total fleet. However, in the next 20 years, the heavy-duty truck fleet is expected to undergo a massive change–to as much as 50% of those vehicles powered by natural gas. That is a HUGE number! And potentially a huge new market for Marcellus/Utica gas! Natgas has a lot of advantages over diesel fuel, but folks are concerned over the mythical global warming potential of methane leaking into the atmosphere. Hence this study which looks at ways to prevent that…
    Read More “WVU Study: How CNG/LNG Vehicles Can Lower Methane Emissions”

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    Using FOIA, Antis Discover 2 Minor Infractions by Rover in WV

    Anti-fossil fuel activists attempting to stop the unstoppable Rover Pipeline are doing their best to smear and prejudice people against the project. Rover has had its share of problems. We’ve chronicled those problems–like leaking 2 million gallons of drilling mud in Ohio when performing underground horizontal directional drilling (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). The company also had problems with water filling up trenches dug for the pipeline when severe rain hit (see OEPA & Rover at Odds Over Storm Water Runoff, “Fine” Now $714K). Rover also had problems in West Virginia. The WV Dept. of Environmental Protection to stop work in two of four counties after storm water runoff/erosion issues there (see WV DEP Orders Rover to Stop Pipe Construction in 2 of 4 Counties). The stop work order was lifted after a few weeks. Antis, using the Freedom of Information Act, have “discovered” that Rover was cited for similar issues in two other counties. However, WVDEP and Rover worked it out and resolved those issues…
    Read More “Using FOIA, Antis Discover 2 Minor Infractions by Rover in WV”

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    WV Legislature Panel on NatGas Dev Meets Tuesday, Forced Pooling?

    The West Virginia Legislature has appointed a new Joint Committee on Natural Gas Development, composed of Senators and Delegates, to put their collective heads together to see how they can encourage more oil and gas development in the Mountain State. The committee will meet tomorrow for the first time. The effort is being supported by the West Virginia Oil and Natural Gas Association (WVONGA). In general, it certainly seems like a good idea–WV needs more drilling. However, WVONGA plans to use the committee as a platform to push its “modernized mineral efficiency laws”–i.e. forced pooling lite. As we reported last week, WVONGA is making an all-out push for new forced pooling laws in 2018 (see WVONGA Makes Plans to Push Forced Pooling Lite in 2018). There are two components to WVONG’s agenda: (1) Co-tenancy. The concept of co-tenancy means if a majority of mineral rights owners of a property (75%) want to lease the property for drilling, they can–even if a small 25% minority doesn’t want to lease. This helps overcome an urgent problem in WV where sometimes not all mineral rights owners can be found–or where someone with a sliver of the rights wants to blackmail (our word) the other rights owners for a larger share of the profits. (2) Joint development. This is the one we have a problem with. Currently there are a number of existing old leases, 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 that they want to combine into a 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. Although the topics of co-tenancy and joint development are sure to be raised tomorrow, the committee will look at more than just those issues. They will also consider how to attract more downstream (petrochemical) investment in the state…
    Read More “WV Legislature Panel on NatGas Dev Meets Tuesday, Forced Pooling?”

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    Carbon Natural Gas Buys Cabot’s Conventional Wells in WV-OH-VA

    Carbon Natural Gas Company, through its affiliate Carbon Appalachian Company, teased in a press release issued yesterday that the company has just completed the acquisition of “natural gas producing properties and related facilities” located “predominantly in the State of West Virginia” for $21.5 million. The release does not identify the seller–but MDN believes we know who it is: Cabot Oil & Gas. We supply our evidence below. Carbon Natural Gas is an independent oil and gas exploration and production company (i.e. “driller”) that owns, operates and develops oil and gas properties in the Appalachian, Illinois and Ventura Basin areas of the U.S. Most of the wells they own and operate are conventional. However, in April the company began dipping its toe into unconventional shale as well (see Carbon Natural Gas Targets Chattanooga Shale in TN). The April announcement said the company had formed a subsidiary called Carbon Appalachian Company, with backing from two unnamed institutional investors. The new venture has access to a whopping $100 million to get them going, with $20 million of that going to the purchase of “natural gas producing properties and related facilities” located in Tennessee. It is the shale-focused subsidiary Carbon Appalachian that closed on this new $21.5 million transaction of gas wells and a pipeline system located mostly in WV. So are the assets they just bought shale-related?…
    Read More “Carbon Natural Gas Buys Cabot’s Conventional Wells in WV-OH-VA”

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    Mountain Valley Pipe Pushes Back Against ‘Emasculate FERC’ Lawsuit

    Mountain Valley Pipeline (MVP) is not taking a ludicrous, outrageous lawsuit by anti-pipeline residents from West Virginia and Virginia lying down. They are fighting mad as recent court filings show. MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. A lawsuit was filed in federal court at the end of July to block the MVP project (see New Lawsuit Against Mountain Valley Pipe Seeks to Emasculate FERC). The lawsuit, filed in U.S. District Court in Roanoke, VA, seeks to block the Federal Energy Regulatory Commission (FERC) from doing its job by issuing a certificate to approve MVP. The plaintiffs claim FERC would be violating the U.S. Constitution by approving a private project that “takes” private land without just compensation. The plaintiffs maintain that according to the Constitution, land can only be taken for “public use” and that the pipeline is for private use, not for the public good. That’s the claim. As we said at the time, “If these virulent antis win this case, it would emasculate FERC–take away its authority to approve major interstate pipeline projects.” MVP in a court filing last Friday (full copy below) said pretty much the same thing. MVP says in their filing the lawsuit asks the court to invalidate the Natural Gas Act–the law of the land–which would have the effect of stopping all pipeline projects being built. The outcome of this lawsuit is already preordained. The lawsuit will get tossed. The only question is, how fast?…
    Read More “Mountain Valley Pipe Pushes Back Against ‘Emasculate FERC’ Lawsuit”