The Legal Dance Between States and FERC in Pipeline Approvals
MDN has enthusiastically covered the story of Millennium Pipeline’s challenge of the New York Dept. of Environmental Conservation’s (DEC) refusal to (so far) grant a federal Clean Water Act stream crossing permit for a short, 7.8-mile pipeline from Millennium to natgas-fired electric plant currently under construction in Orange County, NY. States are given a year to respond to a request for such a permit, and the DEC was long past that date. So Millennium took the DEC to court–the U.S. Court of Appeals for the District of Columbia Circuit. In June the court dismissed the lawsuit by Millennium, which at first blush may seem like a blow. But it was the reasoning and opinion of the judges in dismissing the case that will change everything in New York. The judges said there is no case because if, as Millennium says, the DEC is denying the water permits, the Federal Energy Regulatory Commission (FERC) itself has the power to jump back in and simply override NY DEC and issue the permits (see DC Court Tells Millennium FERC Can Override NY DEC Pipeline Delay). Millennium took the judge’s advice and filed a request with FERC to do just that (see Showdown: Millennium Asks FERC for Permission to Ignore NY DEC). We’re now waiting the outcome of that request. Actually, the DEC said it has until the end of this month, August, to deliver the permit–so perhaps they will do it to avoid losing their power. How does these matters get resolved between states and FERC? Why do the Appeals Courts get involved when there is a dispute? Does the state have more than just a rubber-stamp approval role when it comes to issuing stream crossing permits? A well-written article from an energy attorney explains the process (something we found very helpful in our own understanding of how these things work)…
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The Oil and Gas Industry Labor-Management Committee, led by the American Petroleum Institute (API) and North America’s Building Trades Unions, released a study this week on union pipeline employment across the county. The study outlines the many (many!) different types of jobs involved in building pipelines. You may think it’s just welders and their assistants. No way. It’s FAR more than that. Skilled tradespeople that work on pipelines include: boilermaker, carpenter, electrician, instrumentation technician, insulator, ironworker, construction laborer, millwright, operator, painter, scaffold builder, welder, and plumber, pipefitter, and steamfitter. Of special interest, however, are four occupations that traditionally play central roles in pipeline crews. Three are among the trades listed above: operators (i.e. operating engineers), construction laborers, and plumbers/pipefitters/steamfitters. The fourth is “drivers,” the occupation responsible for moving people and equipment around and between job sites. Now that the Federal Energy Regulatory Commission (FERC) has a quorum, pipeline projects will start getting approved and all of the jobs above, in the Marcellus/Utica, will pick up. Below is a copy of the full report, titled “Skilled Trades Employment in the Pipeline Industry: 2006-2015″…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH Utica permits resume rise in July; Shell cracker plant’s reach impacting OH; NJ tries to screw-up oil trains shipments with onerous bill; teaching old Dog Anadarko Basin some new shale tricks; the Permian Basin will provide oil “indefinitely”; Weather Channel founder says there is no man-made global warming; Deloitte predicts pause in growth of demand for natgas in US; Henry Hub emerges as global natgas benchmark price; Waste Management opens 100th natgas fueling station; Trump looking for new head for EIA; UK begins fracking its first shale well; and more!
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 
Pipelines make a HUGE difference in the price drillers can get for their gas. When more pipelines get built to haul gas out of an over-saturated/producing area, like the Marcellus/Utica, the higher the price drillers can get for their gas. It’s simple Economics 101. Right now we have too much supply and not enough demand. When pipelines start flowing our gas to other markets, it the over-supply goes to places where there’s not enough supply and prices go up. This is not just theory. It’s fact. Our favorite government agency, the U.S. Energy Information Administration, has done an analysis of the price fetched for Marcellus/Utica gas for the first seven months of 2017 versus the same period in 2016. Extra/new pipeline capacity has come online in the first half of 2017. The EIA found that in the first seven months of 2016, our gas averaged a sale price of $0.76 below the benchmark Henry Hub price. In the first seven months of 2017, our gas averaged a sale price of $0.53 below the Henry Hub. The gap is narrowing year over year. That 53 cent price is a 30% improvement over last year. So yes, pipelines make a HUGE difference in the price of natural gas!…
Once upon a time it was a given that local officials (state, county, township) would obey federal laws. It’s what responsible adults do. You obey the law, even if you don’t agree with or like the law. If you don’t like the law, you work to get it changed. Ignoring the laws you don’t like is a prescription for anarchy and the end of civilized rule (a descent into tyranny). When local officials, like those in Pittsylvania County, VA willingly, enthusiastically obey the law these days (as it relates to federally-approved pipelines), it’s the exception rather than the rule. It’s noteworthy. Such is the post-Obama world we now live in. Don’t like a law? Ignore it. Break it. Subvert it. But not in Pittsylvania. Tuesday night the Pittsylvania County Board of Supervisors discussed the legal “wrangling” over easements and eminent domain for Mountain Valley Pipeline, a $3.5 billion, 303-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County. The Board was in agreement: this pipeline is a GOOD thing, and easements for it in Pittsylvania are bound and governed by federal law–not local or state laws. Residents and their representatives on the county board are not free to violate those laws. What breath of fresh Virginia mountain air!…
A brand new wireline oilfield service company called Reach Wireline has attracted an investment from private equity company Hastings Equity Partners. Reach Wireline, which is headquartered in Fort Worth, TX, either already has, or soon plans to have, operations in the DJ, Permian and Marcellus Shale plays, according to the company’s website. A wireline is a cable used to lower or retrieve equipment or measurement devices into a well for the purposes of well intervention, reservoir evaluation, and pipe recovery. Reach’s claim to fame is that it offers “leading edge greaseless cable.” The press release does not say how much money Reach received. Hastings Equity Partners focuses on investing in lower middle market energy services and equipment companies in the U.S. Hastings formed their “Hastings Equity Fund III” in 2014 with $172 million of commitments. Since that time Hastings has invested in a number of companies. Reach is the latest…
Constant frivolous lawsuits against legal, legitimate businesses performing a valuable service for society is having a corrosive effect on our legal system. That’s the thought that hit MDN as we read, yet again, about lawsuits and actions against pipelines in Virginia and West Virginia. In Virginia, radicals from the Blue Ridge Environmental Defense League are pressuring the state Attorney General to get involved to try and stop Dominion’s Atlantic Coast Pipeline–a $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. In West Virginia, the Sierra Club and several other far-out-on-the-left fringe groups are suing the state Dept. of Environmental Protection for having the audacity to evaluate and then approve the Mountain Valley Pipeline project there. Mountain Valley is a $3.5 billion, 303-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County. This ongoing barrage of lawsuits and actions are meant to delay these projects–to give antis more time to whip up opposition and to figure out how to legally (or illegally) stop them. Yes, antis often engage in illegal activities when they disagree with a lawful activity, like building a pipeline. All of these legal machinations tie up our courts and, in our opinion, corrode our legal institutions, causing irreparable harm to pipeline companies. It’s time to fight back and hold these groups (and individuals) accountable. Make them PAY (money) for their strategy of delay. Only when we hold people accountable for their actions will this mess stop…
Energy Transfer Partners (part of Energy Transfer Equity) is the company that built the Dakota Access Pipeline (now flowing, thankfully). They are also the pipeline company building both the Rover Pipeline in Ohio and Michigan, and the Mariner East 2 natural gas liquids pipeline from eastern Ohio across Pennsylvania to the Philadelphia area. Big company, big projects. ETP recently sold off 32% of the Rover project to Blackstone for $1.57 billion (see 
Nuverra Environmental Solutions (formerly Heckmann) is one of the largest companies in the United States that handles transportation and disposal of shale drilling wastewater and leftover rock and dirt from drilling. The company has major operations in the Marcellus/Utica region. In January 2016, the company, going through tough economic times, was de-listed from the New York Stock Exchange (see 
In 2012, Sunoco inked a deal with The Carlyle Group to form a joint venture to keep Philadelphia’s historic refinery operating (see 
Necessity is the mother of invention. Over the past year or so we’ve chronicled the dramatic increase in the amount of sand used in fracking. Recently we told you that Chesapeake Energy drilled what we believe to be the highest-producing Marcellus well (so far), with an initial production of 61 million cubic feet per day of gas (see 
It’s not often these days we come across a story that mentions a new lease signed, and the amount of money paid as a signing bonus. Such is the case in Ohio County, WV. The Wheeling Park High School has just signed a lease with Southwestern Energy for $3,500 per acre for 66 acres–giving the school district $231,000 of newly found revenue, thanks to the Marcellus/Utica industry. No drilling equipment will be placed on or near school property. When the drilling eventually happens UNDER the school, and the wells begin to flow, Wheeling Park High School will then get more revenue–18% royalties on all gas produced…
According to the Wall Street Journal, private equity firm Blackstone Group has invested $7 billion in U.S. natural gas. The way the Journal puts it, Blackstone is “betting” $7 billion, implying it’s a risky roll of the dice. A seriously big chunk of that investment was the recent announcement that Blackstone has bought part ownership of Rover Pipeline for $1.57 billion (see 
Huntley & Huntley has plans to drill shale wells in Upper Burrell Township (Westmoreland County), PA. As MDN reported in June, a landowner in Upper Burrell filed an appeal against Upper Burrell’s zoning ordinance that allows drilling in rural, agricultural districts (see