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    Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.

    A second corporate raider is now making trouble for EQT and its planned purchase of/merger with with Rice Energy. In June, EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks after the announced merger, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Instead of buying Rice, Jana is demanding that EQT split itself into two companies–upstream (drilling) and midstream (pipelines). Jana is now joined by a second group, a group that holds 4% of EQT’s outstanding stock–D.E. Shaw Group. Shaw is headed up by former Elliott Management head and corporate raider Quentin Koffey. As a reminder, raiders buy enough stock to get themselves a seat or two on the board of directors, so they can force a company to sell assets and fire people to drive up the price of the stock, lining their pockets because the raiders then sell the stock after the price goes up, moving on to the next target. Disgusting. And now Shaw, perhaps in league with Jana, is ganging up on EQT. So it’s no surprise that EQT has had to respond by issuing a statement that they’ve “accelerated” the timeline to explore the issue both Jana and Shaw are demanding–that the company split itself in two–upstream (drilling) and midstream (pipelines). That will, according to the money-grubbing raiders, “unlock shareholder value” (i.e. make them rich). Below we have EQT’s announcement, which came a day before Shaw sent the company a letter and a presentation (also below) that supposedly outlines how splitting EQT in two is best for everyone. At least Shaw is not demanding EQT pull out of the Rice Energy deal, as Jana is doing…
    Read More “Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.”

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    PA Court Case May Create Loophole for Landowners to Bust Old Leases

    According to expert analysis by the legal beagles at the Blank Rome law firm, a recent decision by the Superior Court of Pennsylvania disregards established precedent law and has created a new law in PA, possibly “leaving lessees [drillers] in limbo, possibly giving unscrupulous lessors [landowners] a unilateral tool to terminate oil and gas leases, and ultimately harming both lessors and lessees in the process.” In Montgomery v. R. Oil & Gas Enterprises, two (out of three) judges ruled that oil and gas leases could be severed (terminated) both “vertically” and “horizontally” by unilateral actions of the landowner. In this case “vertical” means shale or other rock layers under the ground, and “horizontal” means surface ownership. As with most things legal, this is a complicated case with a lot of history we won’t attempt to recount it chapter and verse. If we can boil it all down, the judges found that a landowner who had purchased a piece of property with an old lease that contained terms for shallow rock layers and deeper rock layers, could, unilaterally, terminate one aspect of that lease (in this case the shallow layer portion of the lease) while keeping the other aspect of the lease intact (the deeper layers, already drilled and producing). The Blank Rome analysis below does a deep dive into the case, frankly ripping the decision to shreds, and postulates the theory that it may lead to cases in which a landowner with a decades-old lease in which the shallow layers are held by production can separate and convey the deeper layers to a family member or family trust, and then terminate the deeper layer lease, re-releasing it to a different driller…
    Read More “PA Court Case May Create Loophole for Landowners to Bust Old Leases”

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    PA House Should Nuke Anti-Landowner Section 1610 of Budget Bill

    In July when the Pennsylvania Senate passed their awful budget bill that includes a variety of new taxes, including a new severance tax on the Marcellus industry, they also slipped in Section 1610 which changes established lease law with respect to oil and gas wells that no longer produce anything (see PA Senate Slips Anti-Landowner Measure into State Budget Bill). Under existing law, when an oil or gas well stops producing–and the landowner quits getting royalty checks–the lease is considered terminated. Done. Finished. Under new Section 1610, drillers can resurrect those dead leases under a couple of conditions. If the landowner doesn’t officially state “your lease is now dead since you’re not producing anything” a driller can quick-like-a-bunny restart production at the well and send the landowner a royalty check, re-starting (or continuing) the existing lease with its existing terms. Or if the driller sends a notice to the landowner stating its intention to drill a new well on the property, and if the landowner doesn’t object (within a 3-month time limit), the driller is free to begin drilling a NEW well, under the OLD lease terms. Section 1610 really stinks, in our humble opinion. It means a driller can drill a new shale well after an old conventional/vertical well quits producing–without having to sign a new lease or pay a new bonus or negotiate a new royalty rate. An editorial in the profoundly anti-drilling (and far-left) Scranton Times-Tribune encourages the House to nuke the Section 1610 provision. This is one of those rare (perhaps first time!) cases when MDN agrees with the lefty libs at the Times-Tribune…
    Read More “PA House Should Nuke Anti-Landowner Section 1610 of Budget Bill”

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    Big Green Begs FERC to Delay Construction of Atlantic Sunrise Pipe

    Last week the Pennsylvania Dept. of Environmental Protection (DEP) issued the final permit needed by Williams to begin construction on Atlantic Sunrise, a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County (see PA Issues Final Permit for Atlantic Sunrise, Construction Sept 20). The only thing left before Williams fires up the bulldozers and backhoes and begins to dig is for the Federal Energy Regulatory Commission (FERC), which has already fully approved the project, to issue a “you can begin building” order. Last week Williams said they hope/plan to receive that order imminently, and begin construction next week, on Sept. 20th. However, the radicals at the Sierra Club and a bunch of other loony leftist “environmental” organizations are riding in to ruin the day. They’ve filed an urgent request with FERC to delay issuing the order to begin building. Why? Because these cancerous groups previously filed a lawsuit in federal court that seeks to have FERC reverse their decision to approve the project. The first step in the process when radical groups challenge a FERC order is for FERC itself to reconsider whether or not to rehear arguments against a project. FERC did delay, using something called a “tolling order.” Because of the tolling order delay, the radicals could not (as they wanted all along) appeal the case to the liberal D.C. Court of Appeals, the next step in the process. The radicals say the now-appealed case before the 2nd Circuit hasn’t had enough time, therefore FERC should delay an order to allow construction to begin for Atlantic Sunrise…
    Read More “Big Green Begs FERC to Delay Construction of Atlantic Sunrise Pipe”

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    Pinelands Commission Approves Pipeline Thru NJ Scrub Pines

    Click for larger version of map

    Anti-fossil fuel radicals behaved badly, as they usually do, at yesterday’s New Jersey Pinelands Commission meeting. Using “whistles, cowbells and shouts,” and holding “Pinocchio noses to their faces,” radical antis from groups like the Sierra Club tried to bully commissioners into denying approval of a $130 million, 28-mile natural gas pipeline proposed by New Jersey Natural Gas (NJNG) to connect NJNG’s distribution system serving customers in Ocean, Burlington and Monmouth counties (in NJ) and the interstate pipeline system adjacent to the New Jersey Turnpike. Spoiled, rotten-acting children grow up to be spoiled, rotten-acting adults. Ever notice that truism? The pipeline runs through 12 miles of scrub pines that are “protected” in NJ. The “Southern Reliability Link” pipeline project, as it is called, is meant to provide a backup for hundreds of thousands of NJ residents who lost access to natural gas following Super Storm Sandy. Such reliability makes no difference to radicals (many of them out-of-state) who irrationally hate all fossil fuels. The Sierra Club sued to stop the project. The courts ruled that the Commission would need to hold a full vote on whether to approve it, so the Commission held a public hearing in July (see Antis Oppose Tiny Pipeline Thru Scrub Pines in N NJ at Hearing). Yesterday the full Commission voted, 8 to 4 (with 1 abstention), to approve the Southern Reliability Link. Finally! Of course the radicals say they will now launch yet another frivolous lawsuit to try and stop it, claiming the Commission “ignored the law” in approving the project. No, Sierra Club, YOU are the ones who continually ignore the law…
    Read More “Pinelands Commission Approves Pipeline Thru NJ Scrub Pines”

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    UGI Adds Marcellus Gas Service to Town Between Scranton, W-B

    It is a story we see happening more and more frequently–local distribution companies (LDCs, your local gas & electric company) are adding new customers in places previously not served by natural gas lines–because of the presence of the abundant, cheap, and clean-burning Marcellus Shale. The latest such story we noticed of this type comes from the Scranton/Wilkes-Barre area. If you ever whiz through Scranton, and then Wilkes-Barre, motoring down Interstate 81 (as we’ve done hundreds of times over the years), one of the townships you pass through without knowing it is Dupont (in Luzerne County)–quite close to the regional airport in Avoca, not far from Montage Mountain ski resort, and a whisker away from Moosic. Utility giant UGI has begun a program to install natural gas pipelines to 123 homes in Dupont, to provide Marcellus Shale gas to those homes…
    Read More “UGI Adds Marcellus Gas Service to Town Between Scranton, W-B”

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    VA Pipeline Rally: Protesters Say Global Warming Causes Hurricanes

    Earlier this year a poll of Virginians found 62% of them support building the Mountain Valley Pipeline (MVP) project in the state (see New Poll: 62% of Virginians Support Mountain Valley Pipeline). 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, will be built by EQT, NextEra Energy and several other partners including WGL. Even though the vast majority of Virginians want the pipeline, there are always a few, typically from Big Green groups like the Sierra Club, who oppose it. Opponents of MVP, and another project, Dominion’s Atlantic Coast Pipeline, held rallies on Wednesday at seven Virginia Dept. of Environmental Quality locations scattered across the state. About 50 people gathered at the Roanoke location. The rally was instructive. Given the safety record of pipelines, we always wonder what excuses these people can possibly have to oppose these projects? The answer always comes back to one, core motivation: they irrationally hate all fossil fuels. We know! You’re tired of us repeating this like a broken record. But it’s so true, as was perfectly illustrated at the Roanoke rally…
    Read More “VA Pipeline Rally: Protesters Say Global Warming Causes Hurricanes”

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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”

  • Liberal Short Seller Says Shale Oil & Gas on “Road to Ruin”

    Ever notice how liberal mainstream news organizations, like CNBC, call someone “renowned” when they echo the media narrative of the day? Such is the case with an investor, Jim Chanos, who is betting against the shale industry by short selling–taking stock positions that bet stock prices for shale companies will go DOWN. So this big-time investor bets against shale, then gives a talk at a big-time financial industry conference in New York to trash talk the shale industry, hoping he can create a run (down) against the stocks he’s bet against. Anyone else see a huge conflict of interest here? And then lib-central CNBC comes along to give this guy a megaphone to spew his trash talk of the shale industry. Welcome to Wonderland, Alice. A day after CNBC ran their segment on Chanos trash talking shale, Harold Hamm, CEO of Continental Resources (great guy) showed up on CNBC asking, “Who is this guy?” One of the stocks Chanos focused on trash talking was Hamm’s company. Hamm’s point was/is “renowed” investor Chanos is a nobody, at least nobody most folks have ever heard of. Hamm rips him a new one, revealing that Chanos made big bets the price of shale stocks (particular that of Continental) would go down, and when they didn’t, Chanos scrambled to try and talk them down…
    Read More “Liberal Short Seller Says Shale Oil & Gas on “Road to Ruin””

  • Marcellus & Utica Shale Story Links: Fri, Sep 15, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Rover Pipeline sends more Marcellus/Utica shale gas west; Maryland antis hold public meeting to trash talk short pipeline under Potomac River; LNG exports picking up post-Hurricane Harvey; Sabal Trail pipeline operated safely through Hurricane Irma; Texas frac sand in demand; House votes to block funding for Obama EPA methane rule; we’re hitting the “golden age” of natgas; Canadians strike back against U.S. shale; and more!
    Read More “Marcellus & Utica Shale Story Links: Fri, Sep 15, 2017”

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    Governors from PA-NY-DE Vote to Ban Fracking in Dela. River Basin

    Well they did it. Yesterday at a regularly scheduled meeting of the Delaware River Basin Commission (DRBC), representatives for the five voting members voted to begin the process of formalizing a permanent ban on fracking in the Delaware River Basin. It wasn’t unexpected, but it was hotly contested–by both sides in the debate. As we’ve previously chronicled, the DRBC is composed of five voting members: the governors of Pennsylvania, New York, Delaware, New Jersey, along with the U.S. Army Corps of Engineers. The governors all sent people to represent them at the meeting, with clear instructions. The three Democrat governors–Tom Wolf (PA), Andrew Cuomo (NY), and John Carney (DE) all voted in favor of a resolution to take the next step in the process of a permanent ban, voting to adopt a draft resolution MDN previously shared (see DRBC Votes Tomorrow on Permanent Frack Ban Resolution). Gov. Chris Christie’s (NJ) rep abstained from the vote, and the Army Corps, which answers to the White House, voted NO. Steven Tambini, DRBC’s executive director, has clearly lost control of the organization. Or perhaps he never had control to begin with. Tambini urged critics to “withhold judgment” until they see the regulations that Big Green groups cook up. Big Green groups like THE Delaware Riverkeeper (aka Maya van Rossum) should be elated–but they still had sourpusses on. They didn’t like language in the resolution that would allow frack wastewater to be hauled/disposed of inside their precious Delaware River Basin playground. Meanwhile, landowners in Wayne and Pike counties in PA are getting the royal shaft–they will never be able to lease their land for drilling. In 2015 PA Gov. Wolf offered to help those landowners, in return for a political quid pro quo–support his severance tax plan (see PA Gov Wolf Offered Deal in ’15 to Open Dela. River Basin Drilling). The landowners did not support Wolf’s loony severance tax plan, so now it’s payback. Wolf is going to strip their property rights away…
    Read More “Governors from PA-NY-DE Vote to Ban Fracking in Dela. River Basin”

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    PA House Holds the Line – Passes Budget with No Severance Tax

    Three cheers for Pennsylvania House Republicans. Hip hip, hooray! House Republicans did the near impossible–they held the line against a cockamamie plan to raise all sorts of taxes, including slapping a severance tax on the Marcellus gas industry (on top of the existing impact tax). You may recall our story about a group of hardworking Republican House members who, during the recent recess, did a masterful forensic accounting job of locating existing money sitting idle in a variety of programs and departments–money that can used to plug a deficit in the budget this year (see PA House Introduces Balanced Budget with NO Severance Tax). House members pulled a rabbit out of the hat by finding $2.4 billion in money laying around, unused in various accounts, that they plan to reallocate to the state budget. Yesterday the House voted. As always, battle plans never survive first contact with the enemy. The final version of the House budget plan passed yesterday includes a $1 billion loan from money the state is set to get in the future from the long-ago tobacco company settlement, an expansion of casino-style gambling, and “hundreds of millions” from the money House members found laying around, unused. The key is that there are no new taxes in the House budget plan. No severance tax. No gross receipts tax (on telephone, electricity and natural gas). Read my lips: No New Taxes. They did it! And they are to be applauded for it. Now the plan goes to the Senate where its future is less than certain. Gov. Wolf immediately blasted the House plan because it doesn’t include any new taxes…
    Read More “PA House Holds the Line – Passes Budget with No Severance Tax”

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    Senators Try to Remove Sev. Tax Stain by Chiding Wolf re DRB Vote

    Following yesterday’s vote by the Delaware River Basin Commission (DRBC) to take the first step in a permanent ban on fracking in the Delaware River Basin (DRB), reaction from those who support drilling was swift. The American Petroleum Institute issued a statement saying, among other things, that the DRBC’s intention to permanently ban fracking in the DRB is “bad public policy.” More than a few Pennsylvania legislators took issue with PA Gov. Wolf’s vote to endorse a permanent frack ban. Three ranking State Senators–Senate President Pro Tempore Joe Scarnati, Senate Majority Leader Jake Corman, and Senate Environmental Resources and Energy Chair Gene Yaw, ripped into Wolf with a joint press release yesterday, saying they “strongly objected” to Wolf’s vote. The three said a permanent ban on natural gas drilling in the Delaware River Basin is “arbitrary, short-sighted and a blow to economic development, job-creation and landowner’s rights.” We appreciate their support. However, those same three Senators recently sold out the gas industry when they voted for a severance tax. They were part of the high-tax cabal that made the job of the House that much harder (thank God the House passed a no-severance-tax budget yesterday, see today’s companion story). While we appreciate the Senators’ support on the DRB frack ban issue, their bloviating against Wolf on the frack ban vote doesn’t remove the stain of their betrayal of the gas industry in voting for the severance tax. All three Senators need to go at the next primary…
    Read More “Senators Try to Remove Sev. Tax Stain by Chiding Wolf re DRB Vote”

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    Rover Pipeline Still Battling Ohio EPA, Asks FERC to Lift HDD Ban

    Rover project map – click for larger version

    Rover Pipeline–$3.7 billion, 711-mile natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada–starting flowing natural gas through a portion of the pipeline on Sept. 1st (see Big Portion of Rover Pipeline Now Up & Running – Thru Most of Ohio). Since then, Phase 1A of the pipeline has steadily increased its throughput and now flows over 700 million cubic feet per day (MMcf/d) of yummy Utica/Marcellus Shale gas to Defiance, OH. However, it could flow more, if the Federal Energy Regulatory Commission (FERC) would lift its considerable boot off Rover’s neck and let them finish Phase 1B–pipeline work in eastern Ohio to feed more gas to the main part of the pipeline. The problem is that Rover had early missteps, the most serious of which spilled 2 million gallons of non-toxic drilling mud in a swamp near the Tuscarawas River back in April (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). An investigation by the Ohio Environmental Protection Agency (OEPA) found the presence of diesel fuel in the drilling mud, which means the mud wasn’t so non-toxic after all (see OH EPA Says Diesel Fuel Found in Rover 2M Gal Drilling Mud Spill). Rover believes sabotage may have been the cause (see ET Says Accident or Anti Sabotage Caused Diesel in Rover Mud Leaks). Since April, FERC has blocked all new underground HDD work for the Rover project. Rover has asked (begged, pleaded) FERC, several times, for permission to restart the HDD work–at least in a few select locations. In August, FERC issued eight conditions before they would agree to lifting the HDD ban (see FERC Issues Rover 8 Commandments to Restart Horizontal Drilling). Rover says they have met all of those conditions. However, the OEPA says they have not, and is asking FERC to continue blocking HDD activity until they (OEPA) are satisfied. Rover fired off a letter to FERC that says OEPA’s public statements are opposite of their private statements with Rover. In other words, OEPA is lying. Who will FERC listen to?…
    Read More “Rover Pipeline Still Battling Ohio EPA, Asks FERC to Lift HDD Ban”

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    Monroeville, PA Passes Restrictive Seismic Testing Ordinance

    Monroeville, PA (Allegheny County, suburb of Pittsburgh) voted last night to restrict seismic testing within municipal boundaries–a move meant to restrict future shale well drilling in the area by Huntley & Huntley. In a July story, MDN brought you the news that Cougar Land Services, a subcontractor working with Huntley & Huntley, is planning to conduct seismic testing in two rural areas of the municipality, including “small portions” of Monroeville’s northernmost and southernmost tips (see H&H: Seismic Testing Coming to Monroeville, Not to Oakmont). Monroeville Council voted in early August to publish a draft of its new seismic testing ordinance for 30 days of public comment, prelude to a final vote (see Monroeville, PA Close to Passing Restrictive Seismic Testing Ord.). The restrictions are meant to hassle anyone wanting to conduct seismic testing, i.e. Huntley & Huntley. Which is kind of sad, as H&H is headquartered in Monroeville. Kind of like spitting in the company’s face. Last night Monroeville hawked up a huge wad of phlegm and let a big one fly in the face of H&H. Not to worry. If the ordinance “is outside the state parameters,” H&H intends to sue. Just to add insult to injury and let the Marcellus industry know how unwelcome they truly are, the council also voted to put a new ordinance on the agenda that pretty much blocks all Marcellus Shale drilling throughout the municipality…
    Read More “Monroeville, PA Passes Restrictive Seismic Testing Ordinance”

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    Mountaineer NGL Storage Project Delayed Until 2018

    Mountaineer NGL Storage wants to build a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see New Company Announces Open Season for NGL Storage in Ohio Utica). As we reported in April, the company need customers to sign up to use the facility–a minimum of 1 million barrels of storage would get it going (see More Clarity on Status of Mountaineer NGL Storage Facility in OH). Mountaineer still needs to build a 3.25 million barrel brine pond, used to pump out the stored NGLs. Mountaineer is waiting for a clearance from the Ohio Dept. of Natural Resources to build the pond, which (in June) we said would likely to take “a few more months.” Strike that. The CEO of the project recently said he now does not expect to get those permits until “first or second quarter of next year.” He hastens to add that’s no problem, because his two biggest potential customers–the Shell ethane cracker in Beaver County, PA and the closer-by PTT Global Chemical cracker in Belmont County, OH, won’t be ready to start using ethane until 2020 at the earliest…
    Read More “Mountaineer NGL Storage Project Delayed Until 2018”