PA Budget Almost Done, Tone-Deaf Gov. Wolf Still Wants Sev Tax
The Pennsylvania legislature has spoken. The PA Senate and House have now sent all three budget-related bills to liberal Gov. Tom Wolf for his signature. In the end, severance tax proponents, including traitorous Republicans in the Senate (and House), could not ramrod through a new, punishing tax on the Marcellus industry–on top of the many taxes the industry already pays. RINOsaur Gene DiGirolamo could not get his 3.2% severance tax bill passed in time for this year’s budget–but it hangs out there like a zombie, not quite ready to die, just yet (see An Honest Discussion about PA’s Proposed Severance Tax). And even though the nosebleed-high spending plan for this year’s budget is now fully “funded” by hackery like borrowing against future tobacco settlements, and expanded gambling, Gov. Wolf still won’t let a severance tax go. Why? Because his political future, getting reelected next year, depends on it. Without a severance tax Wolf is toast politically (among his rabid base), and he knows it. So Wolf, tone-deaf as ever, keeps on harping to pass a severance tax–even though it’s not needed for this year’s budget. Fortunately it appears there are now fewer swamp dwellers in Harrisburg willing to back Wolf’s request…
Read More “PA Budget Almost Done, Tone-Deaf Gov. Wolf Still Wants Sev Tax”
It’s not supposed to work this way. Wednesday evening a “public meeting” was held in Albany, NY to share details about construction of a “state-of-the-art, locally-sourced mini-power grid” that will connect to the statewide electric grid but will also be able to operate independently, to power the Empire State Plaza in Albany–a complex of buildings in downtown Albany housing much of New York State government (see 
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Pipeline projects open new opportunities for Range Resources; Marcus Hook upgrades boost tax bill by $4.8M; Marcellus drilling literally saved family farms in Bradford; Talen Energy says makes sense to stay in Allentown; local town in Virginia grants permit for Dominion compressor expansion; oil & gas megadeals taper off in shale; and more!
In late September MDN connected the dots and was the first to tell you that Blue Ridge Mountain Resources, the renamed Magnum Hunter Resources, had sold its ownership stake in Eureka Midstream (formerly Eureka Resources) to South Korean conglomerate SK Group (see 
Last week NEXUS Pipeline notified the Federal Energy Regulatory Commission (FERC) they had begun construction on the $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. We purposely held off on sharing this exciting news until we could tell you where construction has begun. Each week NEXUS, like other interstate pipelines answering to FERC, provides a weekly update on construction and other project activities. We have a copy of that report (below). What does it show? Preliminary activities are taking place to move equipment, put up signage, and begin to work in “Spread 1”–meaning somewhere within Columbia, Stark, Summit, and Wayne counties in Ohio. Similar work is happening in “Spread 4”–meaning counties in Michigan. Initial site preparation is already happening at three of the four planned compressor stations. Here’s what we have been able to piece together about the initial construction work done on NEXUS…
Range Resources released its third quarter financial and operational update earlier this week. Range is one of the premier drillers in the Marcellus (and Utica) shale region. In fact, Range drilled the very first Marcellus well back in 2004. The Range update is full of interesting details. First and foremost, the company turned a profit of $112 million in 3Q17, contrasted to losing $361 million in the same period last year. That’s nearly half a billion dollar swing in one year. Impressive. Also impressive is that Range’s total production came a whisker away from 2 billion cubic feet equivalent per day–which is up 32% over the same period last year. During 3Q17 two Marcellus “super-rich” pads were brought on line. The wells on those pads had an average per well 24-hour initial production (IP) rate of 41.3 million cubic feet equivalent (Mmcfe) per day. Impressive. As part of the update, Range held a call with financial analysts to discuss company performance. As these types of calls usually do, this one had a Q&A at the end. One analyst asked if Range would be willing to sell some of it’s non-core assets in southwest PA. Range CEO Jeff Ventura said yes, the company would consider such a move, under the right kind of terms. Here’s the full update from Range…
While Pennsylvania legislators and PA Gov. Tom Wolf work to finish up the four-month-late state budget, the issue of whether or not to enact a severance tax to help pay for Harrisburg’s wild overspending is still alive. We think it’s mostly dead, but the severance tax keeps coming back to life like a zombie in a B horror flick. The latest incarnation comes from a Republican in Name Only (RINO), Gene DiGirolamo, a Philadelphia area member of the PA House. As we previously reported, DiGirolamo’s House Bill (HB) 1401 would slap a 3.2% severance tax on top of the existing impact tax, which is the equivalent of a 5%+ severance tax already (see 
Several weeks ago U.S. Energy Secretary Rick Perry sent a letter to the Federal Energy Regulatory Commission (FERC) directing the agency to complete action on a “grid resiliency” pricing rule within 60 days. The proposed rule Perry proffered to FERC would put in place regulations that favor electric generating plants powered by coal and nuclear. That is, it would allow unprofitable ventures to pass along new costs, making them profitable–in the name of protecting the electric grid. The theory Perry (and by extension President Trump) subscribe to is that if the free market drives out coal and nuke plants, the electric grid would be “vulnerable” to far fewer sources to power it. If coal and nukes are all but gone, and all of sudden there’s a natural gas shortage, or prices spike for natural gas, it would endanger the electric supply in this country. On one side of the argument are those who believe the free market sometimes needs a helping hand (via regulation), and on the other those who believe the free market will sort it all out and we are not vulnerable. It’s no surprise that the coal and nuclear lobbies are celebrating Perry’s action, and the oil & gas lobby is not. The largest grid operator in the U.S. is PJM Interconnection, which covers all or parts of DE, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV, and Washington, DC. The head of PJM has weighed in on the resiliency debate. He told FERC that Perry’s plan to prop up coal and nuclear is not necessary–that PJM is just fine without it…
It seems like since Donald Trump was elected, the far-left loons of the Democrat Party have become unhinged. Nowhere is that more apparent than New York State, with it’s corrupt governor, Andrew Cuomo. When it comes to oversight of the nation’s electric grid, and interstate pipeline infrastructure, the law is clear: The federal government, specifically the Federal Energy Regulatory Commission, is numero uno. Individual states cannot just willy-nilly decide they will horn in on how energy companies are incentivized–and they cannot use regulations to change the nature of power generation within their borders, because of the interconnected nature of electric power. Yet that is precisely what the lawless Cuomo is attempting to do in the Empire State. Via the NY Public Service Commission, Cuomo has set up a program called the Zero Emissions Credits (ZEC) program to subsidize nuclear power at the expense of fossil fuels, like natural gas. He’s trying to make it uncompetitive and expensive for natural gas to generate electricity in the state. An industry group sued to overturn ZEC, but a liberal judge for the US District Court for southern New York stuck up for Cuomo’s cockamamie plan (no surprise there). The case has been appealed and the Natural Gas Supply Association and American Petroleum Institute filed a friend-of-the-court brief supporting the appeal against ZEC. It’s a loooong brief–40 pages. We have it below…
Researchers at Northwestern University have just published a new study called, “Characterization of Marcellus Shale Fracture Properties through Size Effect Tests and Computations” (full copy below). The study runs 33 pages and is highly technical. The premise of the study is to use a new/different method of testing on Marcellus Shale rock in order to more accurately describe how the rocks behave under certain conditions. We’re not scientists and don’t know whether there are important insights in this research which can help drillers, but we suspect there may be, which is why we pass it along. Any time we see hard science relating to the Marcellus that’s not colored by a fractivist agenda, we think it’s worth highlighting. Below is the abstract, followed by a full copy of the study, for our drilling engineer readers…
Platts held their Appalachian Oil and Gas Conference in Pittsburgh earlier this week. One of the more interesting comments at the event came from Alan Farquharson, senior vice president of Range Resources. Farquharson gave an interview to a Platts reporter and said natural gas production in the Marcellus/Utica can’t continue its rapid increase indefinitely. Farquharson said drillers are going to hit “sweet spot exhaustion,” by which he means they will soon run out of Tier 1 locations to drill, requiring they branch into Tier 2 and Tier 3. As they drill in those other locations, well production will decrease, and along with it regional output will decrease. Range was the very first driller to sink a Marcellus well, back in 2004, so they know a thing or two about the play. When Range talks, everyone listens. Here’s more of Farquharson’s provocative comments from earlier this week…
Two weeks ago MDN brought you analysis from RBN Energy that hints at least some Marcellus/Utica gas molecules are flowing all the way to Cheniere Energy’s Sabine Pass LNG export facility (see