Statewide WV

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    WV Sens. Capito & Manchin Introduce 2 More Ethane Storage Hub Bills

    Senator Shelly Moore Capito

    In May, both West Virginia U.S. Senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat), along with Ohio Sen. Rob Portman, introduced and co-sponsored a bill to study if and how an ethane storage hub can be constructed in the Marcellus/Utica region (see WV/OH Senators Intro Bill to Study Appalachian Ethane Storage Hub). Apparently the issue is more important that just a single bill. Yesterday Sens. Capito and Manchin introduced/sponsored another new bill. Called the “Capitalizing American Storage Potential (CASP) Act,” this new bill would make a regional ethane storage hub (the one envisioned for West Virginia) eligible for the Department of Energy’s Title XVII loan guarantee program. According to the Dept. of Energy website, Title XVII “provides broad authority for the Department to guarantee loans that support early commercial use of advanced technologies, if there is reasonable prospect of repayment by the borrower.” In other words, if the federal government guarantees a loan, lenders are more likely to make said loans at more favorable interest rates. Such a loan is “another tool that the Department will use to promote commercial use of innovative technologies” and is targeted for commercial operations only–not for use in energy research. If the bill passes, it will make building the ethane storage hub that much more attractive. In addition to the Title XVII bill, Sen. Capito also introduced a bill to hack through the red tape and streamline an approval process for the storage hub…
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    Radicals File Lawsuit Against WV DEP for Approving MV Pipeline

    A group of profoundly radical “environmental” organizations filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit last Friday against the West Virginia Dept. of Environmental Protection–for doing their job. Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network has sued the DEP because the department had the audacity to conduct a very thorough review, and then issue a stream and water-crossing permit (demanded under federal law) for the Mountain Valley Pipeline (MVP). MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners. This is now SOP–standard operating procedure–for Big Green groups with deep pockets. Sue and keep suing in an attempt to slow and eventually kill off any project that remotely involves fossil fuels. Yes, they are RADICAL, they are EXTREME, waaaaaay outside the mainstream of American society. And they MUST BE STOPPED. When will someone launch weekly lawsuits against these Big Green organizations? Here’s the latest maddening development…
    Read More “Radicals File Lawsuit Against WV DEP for Approving MV Pipeline”

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    WV Drillers & Landowners Want New Law re Post-Production Issue

    Earlier this week MDN reported on the recent West Virginia Supreme Court decision to reverse it’s earlier decision and allow EQT (and by extension, other drillers) to deduct some post-production expenses from royalties paid to landowners (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). The Leggett v. EQT case turned on the meaning of three short words: “at the wellhead” (see WV Supreme Court Post-Production Royalty Case Hinges on 3 Words). This latest final final decision must be the…well…final decision, right? Not so fast. There is another Supreme Court case from 2006, Tawney v. Columbia Natural Resources, which also dealt with post-production expenses and found drillers do not have the right to deduct them from royalties. But there are differences. “Leggett deals with the statute on royalties, while Tawney is about lease contracts.” It’s a pretty safe bet that a new case will be filed challenging Tawney in light of the Leggett decision. All of this back and forth in the courts is unsettling for both drillers and landowners. Both sides are in agreement about one thing: They both want the WV legislature to pass a new law clarifying the issue of post-production deductions…
    Read More “WV Drillers & Landowners Want New Law re Post-Production Issue”

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    Alpha Natural Resources Sells 120 Gas Wells in WV

    On Tuesday Alpha Natural Resources (ANR) announced it was divesting “substantially all of the assets” in two different operations in West Virginia, one of those being a natural gas operation with “120 producing natural gas wells in five counties.” Which got us digging. We recalled that ANR went bankrupt last year and ended up selling 27,400 acres of Marcellus/Utica Shale leases to Vantage Energy for $339.5 million (see Vantage Outbids Rice For Bankrupt Alpha Natural’s 27K Marcellus Acres). That was all of ANR’s Marcellus assets. So what’s with this new deal to sell 120 gas wells in the Mountain State? And which five counties are the wells located in? The announcement didn’t say. So we reached out to ANR and got you some answers…
    Read More “Alpha Natural Resources Sells 120 Gas Wells in WV”

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    WV Supreme Court: Non-Participating Rights Owner Can’t Stop Lease

    Just yesterday we told you about an important court case that had gone to the West Virginia Supreme Court of Appeals (see WV Rights/Pooling Case May have Big Impact on Shale Industry). In brief, the case was appealed from a lower court where a judge found that a “non-participating” mineral rights owner, someone who owned a quarter of the rights for a property in Marshall County, had the power to object and stop a lease of the property for oil and gas drilling. We thought it strange that the lower court judge would make such a decision, which threatens to up-end thousands of leases in WV that are similar. Little did we know that as we were publishing that story, the WV Supreme Court was rendering its decision. All five justices voted to overturn the lower court ruling and preserve sanity for leases in the Mountain State… Read More “WV Supreme Court: Non-Participating Rights Owner Can’t Stop Lease”

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    WV Rights/Pooling Case May have Big Impact on Shale Industry

    A court case from Marshall County, WV decided in April 2016 is heading to the WV Supreme Court of Appeals (the state’s highest court). The stakes in Contraguerro v Gastar Exploration could not be higher for the Marcellus industry in the Mountain State. In brief, 70 years ago a 106-acre track of property was sold. The sellers retained a one-quarter “non-participating interest” in the oil and gas rights. That means the buyer got to decide when/if to lease the property for drilling, and if so, has the right to negotiate the price, etc. The remaining one-quarter non-participating interest holders would get royalties, but nothing else. Fast forward several generations and the heirs of the original sellers didn’t even know they owned an interest in the land until contacted by Gastar, which needed a signature in order to send them checks for royalties. The heirs decided to sue to stop the deal, either in a bid to negotiate a better deal or perhaps because they don’t like fossil fuels. Who knows? The case went to the Circuit Court of Marshall County and a judge there found in favor of the heirs–giving them, and by extension any minority rights owner, the power to stop lease deals. An unmitigated mess that threatens many lease deals because divided rights ownership is common in WV. Perhaps this case was part of the motivation to pass a new law this year addressing “co-tenancy” (see Analysis of New WV Bill SB 576 re Co-Tenancy & Joint Development). The co-tenancy law, if passed, means if there are multiple owners for the mineral rights under a property, you would only need a simple majority of those owners to approve a drilling lease. Currently, if one person with a teeny tiny share objects, it stops the process. In the Contraguerro case, although the heirs are owners, they are “non-participating”–so they should not have had a say anyway. However, a lower court judge found otherwise. So the case was appealed and is now before to the WV Supreme Court… Read More “WV Rights/Pooling Case May have Big Impact on Shale Industry”

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    WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry”

    Last December the West Virginia Supreme Court ruled in a case to disallow Marcellus driller 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.” Last week, just five months later, four of five justices (including a newly elected judge) reversed their December decision (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). The lone judge voting against the decision was Robin Jean Davis. Yesterday she released her dissenting opinion. In very strong language, Judge Davis said the court’s other four members “used legal sophistry” to prop up their decision, and that “the majority opinion is simply wrong.” Here’s what else Judge Davis had to say… Read More “WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry””

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    WV Supreme Court Reverses Itself, Post-Production Deductions OK

    In a decision that will thrill drillers, but anger landowners, the West Virginia Supreme Court decided last week to overturn its own previous decision (from just last December) and allow driller EQT to deduct post-production expenses from royalty payments. Last December MDN reported on the huge West Virginia 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 D. Walker has 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, and lawyers were in court arguing the case earlier this month. 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). On Friday, the justices reversed their earlier decision, voting 4-1 in favor of allowing EQT to deduct “reasonable” post-production expenses (copy of the decision below). Newly elected Justice Beth Walker, with (according to the other side) conflicts of interest, voted in favor of EQT. This has BIG implications for landowners and drillers in the Mountain State… Read More “WV Supreme Court Reverses Itself, Post-Production Deductions OK”

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    Fake Harvard Study Generates Fake News re NatGas Storage in M-U

    Here we go again. A new “study” published today by Harvard University researchers supposedly indicates that Pennsylvania, Ohio, and West Virginia are loaded with underground natural gas storage sites that may leak like the Aliso Canyon debacle in California. The new study published in the journal Environmental Research Letters, titled “A national assessment of underground natural gas storage: identifying wells with designs likely vulnerable to a single-point-of-failure” (full copy below), says there are 14,138 active underground storage (UGS) wells in 317 locations/facilities in the U.S. The study identifies 2,715 active UGS wells across 160 facilities that, like the failed well at Aliso Canyon, were not originally designed for gas storage. (Gasp) Even worse: The majority (88%) of these repurposed wells are located in OH, MI, PA, NY, and WV. (Double gasp) Here’s the thing: Aliso Canyon was one facility that had a catastrophic failure (a failure which, by the way, hurt no one–it just released some extra methane into the air). While it may be interesting and useful to know (for accident prevention) that there are other facilities constructed years ago, like Aliso Canyon, that were later repurposed to be used for underground storage–each and every location is different, with unique characteristics. No two storage sites are the same geologically. It does not follow, as implied in the report, that because Aliso Canyon leaked, that these other “similar” facilities will eventually fail and leak. However, our main objection to this research–and why we call it fake research–is that the researchers never bothered to go into the field and take air samples to see if there is any ACTUAL leaking going on at any of these thousands of other sites! Fake mainstream news sources are just now picking up on the story and running it. Nothing sells newspapers (or grabs online eyeballs) like fear. And hey, it serves the mainstream narrative that fossil fuels are the ultimate evil. Here’s the kicker: This latest “research” was funded, in large part, by the virulent anti-fossil fuel Heinz Foundation and The Nature Conservancy. That tells you all you need to know about this latest bought-and-paid-for “research” study with a Harvard label slapped on it…
    Read More “Fake Harvard Study Generates Fake News re NatGas Storage in M-U”

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    Marcellus DUCs Lay Golden Eggs for Northeast Drillers

    We’ve written a number of times about DUCs–otherwise known as drilled-but-uncompleted wells. When a shale driller drills a new well, it doesn’t always happen all in one go. You first drill the hole down, and then curve the drillbit and drill the horizontal portion–called the lateral. Then you pull the drill bit out of the ground and (at some point) the fracking process begins. Fracking doesn’t always happen right away. Sometimes wells are initially drilled but not fracked–essentially putting them in inventory to be fracked later. Those wells are DUCs. Since a lot of the cost to develop the well has already been spent in preparing the site and drilling the hole, to come along at a later time and frack is much “cheaper” if you (as a driller) want to bump up your production. Price of gas low right now? Drill the initial hole, mothball the project, and come back later when the price of gas goes up and finish it off and hook it up to production. The DUC inventory is a closely watched number. Analysts at Platts have been watching and have noticed something interesting. In most shale plays–particularly oil plays like the Permian in Texas–drillers are sinking initial holes as fast as they can and the DUC inventory numbers are going up up up. The Permian has seen 476 new DUCs added since January! But in the Marcellus, only 3 new DUCs have been added since last December. Which is “puzzling.” What does it mean?…
    Read More “Marcellus DUCs Lay Golden Eggs for Northeast Drillers”

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    Poll: Majority of Voters in VA, WV, NC Support Atlantic Coast Pipe

    Leftist anti-fossil fuelers are only too happy to poll anything and everything–except for what really matters. How do the VOTERS in Virginia, West Virginia and North Carolina feel about the Atlantic Coast Pipeline (ACP)? ACP is Dominion Energy’s $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. The Consumer Energy Alliance (CEA), the “voice of the energy consumer,” set out to answer the question: How do voters feel about ACP? In a poll commissioned by ACP, a majority of voters in all three states support the project–by an overwhelming majority. ACP hired Hickman Analytics Inc., a “Democratic-leaning,” Maryland-based firm to do the polling. Harrison Hickman, founder of the firm, said, “By any measure, whether it’s a policy matter or a voting matter, the pipeline has widespread support.” That’s something you won’t read in most news outlets. Here’s the results of the poll… Read More “Poll: Majority of Voters in VA, WV, NC Support Atlantic Coast Pipe”

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    Energy Cos. Hedge Bets in WV Senate Race, Donate to Both Sides

    Something we find distasteful, but a fact of political life, is that the energy industry is playing both sides of the isle when it comes to making campaign contributions in West Virginia’s U.S. Senate race. Up for reelection next year (2018) is Sen. Joe Manchin, a former WV governor. Manchin, a so-called moderate Democrat, ran to fill the seat of Robert Byrd when he passed away while in office, in 2010. Manchin ran again two years later for a full term, in 2012. When it came down to voting based on principle or party regarding the issue of overturning a midnight-before-he-left-office-Obama-onerous-methane-regulation, Manchin chose party (see Methane Repeal Fails in Senate as McConnell Falls a Vote Shy). To be fair, three traitorous Republicans abandoned us too–John “crazy” McCain, Lindsey “Grahamnesty” Graham (disgusting man), and Susan “spineless” Collins. However, Manchin could have changed the vote–and he chose to sell out. He’s not on our favorite list. But, the oil and gas industry can’t seem to give him money fast enough in his reelection bid. On the other hand, some in the industry are also giving money to his main Republican rival (Evan Jenkins) in what will be a hotly contested seat. Some are giving money to both candidates, presumably to curry favor with the winner. We find the practice revolting. Choose a candidate and back him (or her). Let the chips fall where they may… Read More “Energy Cos. Hedge Bets in WV Senate Race, Donate to Both Sides”

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    Dominion Contacting First Responders re Atlantic Coast Pipeline

    Atlantic Coast Pipeline (ACP), Dominion Energy’s $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina, has begun an outreach program with Local Emergency Planning Committees in several West Virginia counties. The pipeline is not yet fully approved by the Federal Energy Regulatory Commission (FERC). Dominion expects that approval sometime this fall (see Dominion CEO Says Atlantic Coast Pipeline is Full Speed Ahead). However, Dominion and ACP would not be wasting their time and the time of local first responders with meetings, if they didn’t believe the project is already in the bag. So we take these meetings as a good sign that ACP is on the way… Read More “Dominion Contacting First Responders re Atlantic Coast Pipeline”

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    2017 Shale Gas Innovation Contest Winners Share $60K in Prizes

    Envelope please! (No, this is not Warren Beatty, we have the correct envelope!) Each year the Ben Franklin Shale Gas Innovation & Commercialization Center (SGICC) runs a contest and awards a $20,000 prize to three companies ($60,000 purse) for the “best shale energy-oriented innovations, new product ideas, or service concepts that are either in the development stage or recently launched” in the Marcellus Shale. This year’s winners were recently announced: Frontier Natural Resources, Inc. won for commercializing the first small scale LNG facility in Pennsylvania, using natural gas from an adjacent gathering and compression facility. PetroMar Technologies, Inc. won for commercializing FracView™, a low-cost borehole imaging tool that takes high resolution pictures, even through drilling mud. And Sensor Networks, Inc. won for its product line of permanently installed battery powered ultrasonic sensors, providing remote, wireless data collection of critical pipe infrastructure wall thickness. Here’s the deets… Read More “2017 Shale Gas Innovation Contest Winners Share $60K in Prizes”

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    WV/OH Senators Intro Bill to Study Appalachian Ethane Storage Hub

    Sen. Shelley Moore Capito

    Both West Virginia U.S. Senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat), along with Ohio Sen. Rob Portman, have introduced and co-sponsored a bill to study if and how an ethane storage hub can be constructed in the Marcellus/Utica region. According to Brian Anderson, director of WVU’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. We need that ethane here, in our area. Others have also taken up the cause, making the point that West Virginia, Ohio, Pennsylvania and Kentucky need to band together to build such a project (see WV, OH, PA, KY Should Cooperate on $10B NGL Storage Hub). You mean, set aside competition between states and cooperate? Yes! Why? Such a project will cost an estimated $10 billion–far more than a single ethane cracker project. No one state can do it on its own. And that’s where this new bill comes in. The bill proposes a study be done by the Departments of Energy and Commerce within the next two years to analyze potential locations based on favorable geology, the economic feasibility and benefits of the project, infrastructure, and proximity to production sites and potential industrial consumers…
    Read More “WV/OH Senators Intro Bill to Study Appalachian Ethane Storage Hub”

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    IOGAWV Opposed to Tiered Severance Tax – Proposal Now Dead?

    The West Virginia legislature only meets for 60 calendar days each year and move quickly when the do meet. Unless the governor calls for a special session. Which has happened–to consider and pass a budget for the state. During the regular session earlier this year, newly-minted Gov. Jim Justice wanted and got a bill, Senate Bill (SB) 415 (full copy below) that tiers the severance tax on natural gas and oil. Justice would keep the existing 5% severance tax on oil and gas as the bottom tier–to be assessed if the “annualized gross value of natural gas per MCF” is $3 or lower. When the annualized value goes to $3.01, the tax goes to 5.5%. At $3.51, it goes to 6%. And so on to $9/Mcf when the tax would be 10%. It’s a crazy idea and frankly, we’re surprised a Republican governor that supports the shale industry wants it. Other o&g states are looking at lowering their severance taxes, not raising them. At any rate, the Independent Oil & Gas Association of West Virginia (IOGAWV) is strongly opposed to the plan. From what we can tell, as of a few days ago, the tiered severance tax for natural gas/oil plan has been withdrawn. Which is good news for both drillers and landowners…
    Read More “IOGAWV Opposed to Tiered Severance Tax – Proposal Now Dead?”