Court Clears Path for Atlantic Sunrise Pipe to Begin Work in PA
Williams and their Atlantic Sunrise Pipeline project are just a few properties away from having easements for all of the properties they need in Pennsylvania, thanks to a judge in the U.S. Middle District of PA and his decision yesterday. Judge Matthew Brann gave Transco Pipeline (the pipeline getting extended with the Atlantic Sunrise project) access to seven hold-out properties in Lebanon, Northumberland, Columbia and Luzerne counties. There are still a couple of holdouts left in Lancaster and Columbia counties, cases which are in a different court. Staking of workspace boundaries will begin in 10 days, on August 14th. Construction, things like clearing and grading the right-of-way, will begin in mid-September. Obviously Williams believes the state DEP is about to grant stream crossing permits for the project, which they still need. The good news is that the courts are backing Atlantic Sunrise, and work on the pipeline will begin in days…
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We suspect Pennsylvania Gov. Tom Wolf (a Democrat) may be smoking some of the state’s medical marijuana–sampling the goods, just to be sure it’s safe, ya know. During an interview with a PA public radio station yesterday, commenting on the horrible budget bill passed by traitorous Senate Republicans, Wolf said, “I believe that the House will support the Marcellus Shale tax as well.” Notice the Freudian slip? Wolf WANTS to target the Marcellus industry. He called it a “Marcellus Shale tax” as opposed to a severance tax. The Dems are attempting to conflate a “Marcellus Shale tax” with things like a “cigarette tax.” Nasty, vile stuff–but if people want it, tax ’em to hell and back. RINOs in the Senate fell for the severance tax trap sprung by Wolf and the Dems. We predict the House will NOT pass the Marcellus tax, Mr. Wolf. We don’t smoke weed–so we have a clear head about these things…
New York’s corrupted Dept. of Environmental Conservation (DEC) is running scared. For 19 months the DEC has intentionally delayed granting a tiny, 9-mile spur Millennium Pipeline wants to build in Orange County, NY the necessary federal 401 stream crossing permit it needs. Millennium took the DEC to federal court, but the court refused to get involved, telling Millennium if the DEC is delaying, the Federal Energy Regulatory Commission (FERC) can jump in and override the DEC (see DC Court Tells Millennium FERC Can Override NY DEC Pipeline Delay). So that’s what Millennium did. They asked FERC to grant the stream crossing permits themselves (see 
In November 2015 MDN reported on a lawsuit filed by GreenHunter Resources (filed in October 2015) against two former GreenHunter employees and a competitor (see 
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Chambersburg, PA natgas utility one of the best in the country; Gov. Wolf says pipelines necessary to “live the life we want”; Gov. Wolf postures and wastes time while DEP permits languish; pipeline vet named as EQT’s new midstream president; residents push back against natgas pipeline in Chesapeake, VA; Caudrilla’s early-hour rig move incenses fooled antis; and more!
Range Resources, the very first driller to sink a Marcellus (back in 2004), released its second quarter 2017 results and held a conference call yesterday to discuss it. Range had a great 2Q17, with record production of close to 2 billion cubic feet per day (up 37% from 2Q16). Range’s Marcellus/Utica gas production was up 9% year over year. Range continues to drill impressive wells. One pad with seven wells drilled in the wet gas Marcellus area saw initial production (IP) rates averaging 29.1 million cubic feet equivalent per day (MMcfe/d), while a set of four wells on another pad in the Marcellus dry gas area say IP rates of 30.0 MMcfe/d. By the end of 2017, Range plans to have drilled and turned in line (TIL) 113 new wells in the Marcellus/Utica, and 56 new wells in the Louisiana Haynesville Shale. Yes, Range continues to ramp up its Haynesville program after buying Memorial Resource for $3.3 billion last year, spending money in Louisiana rather in Pennsylvania–which is a warning to the severance taxers in PA that companies can and will leave the state. On yesterday’s conference call Range CEO Jeff Ventura was asked a question about his views on Marcellus/Utica companies merging, like EQT/Rice. He responded: “If you think about it at a very high level, fewer companies I think in the Basin drilling is probably a positive thing. It’s probably a more pace development, a more prudent and more rational development. So I think that’s a good thing for the macro.” Range CFO Roger Manny hinted that Range may be looking to unload their considerable acreage position in northeastern PA when he responded this way to a question about more asset sales: “So we still have assets in the Mid-Continent that would be deemed non-core. One can make the case that the stuff we have in Northeast Pennsylvania, although it’s high quality, is away from that core blocky stacked pay position we have in the Southwest. So there’s other assets we have that we could sell.” Sounds like Range intends to concentrate on SWPA and LA moving forward…
Dominion Energy released its second quarter 2017 update and held a conference call yesterday to discuss those results. Dominion is a huge producer and transporter of energy with its fingers in a lot pies. Dominion produces 26,200 megawatts of electricity, owns 15,000 miles of natural gas transmission, gathering and storage pipelines, and owns 6,600 miles of electric transmission lines. Dominion operates one of the nation’s largest natural gas storage systems with 1 trillion cubic feet of storage capacity. They also are a local utility company, serving more than 6 million customers. Yeah, big company, big deal. However, our interest in Dominion is fairly narrow: They are building an LNG (liquefied natural gas) export facility along the shoreline of Maryland. The Cove Point LNG facility will export 1.8 billion cubic feet per day (Bcf/d) of Marcellus/Utica Shale gas–to India and Japan. On yesterday’s call, Dominion CEO Tom Farrell said Cove Point is “95% done” and “remains on-time and on-budget” to begin operations by the end of this year. That’s great news! The other thing we closely watch with Dominion is the $5 billion, 594-mile Atlantic Coast Pipeline (ACP)–a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. With respect to ACP, Farrell said they’ve already purchased 84% of the materials needed for the project and that it remains “on-track to start construction later this year.” Farrell said the pipeline should be done in the “second half of 2019.” More good news! Here’s the latest from energy giant Dominion Energy…
Shell officials held the fourth (so far) public meeting in Beaver, PA to talk with local residents about the mammoth, $6 billion ethane cracker plant the company is building in their midst. For the most part, the event was uneventful. More than 150 people came out to hear what the petrochemical giant had to say. A table at the event held polyethylene pellets–the stuff that will be manufactured by the plant. Also on the table were a variety of products made from those pellets, including bottles, food packaging and more. One local resident opposed to the plant told a reporter she had to restrain her potty mouth because Shell officials would not answer her questions from the floor–in front of the crowd. Shell (and others in the o&g industry) have wised up. They post representatives at tables who are happy to answer private questions privately, but they don’t throw open the floor to antis who want to bleat and blat in front of an audience. We think it’s a wise precaution. The woman could get her questions answered, and express her unhappiness–but she wanted to do it in front of a crowd and in front of cameras and microphones. No thanks. Organize your own meeting if you want to do that…
Yesterday both sides were in court in Broome County, NY to put forward their best arguments for why a natural gas transfer station (i.e. virtual pipeline) project in the Town of Fenton, near Binghamton, should (or should not) get built. We’ve covered this story from the beginning–because we like virtual pipelines which get natural gas to customers who aren’t blessed to live near a pipeline, and because we live about 10 miles from the proposed site. NG Advantage wants to build a virtual pipeline operation in a suburb of Binghamton. The location NG picked, after considering up to six other locations in the region, was selected because of it’s proximity to major highways, proximity to the Millennium Pipeline, and availability of high-power electric lines. A virtual pipeline is nothing more than a compressor plant (series of compressor plants) that grabs gas from a pipeline, in this case the Millennium, and compresses it and loads it onto special tractor trailers that then deliver the gas to industrial customers like manufacturing plants, hospitals, and even small regional gas distribution systems servicing residential homes. The location NG selected, in the Town of Fenton (within spitting distance of residential communities Hillcrest and Port Dickinson) was approved by the Town of Fenton after a detailed review. The area NG selected is zoned industrial and is, in fact, a former dump site. However, residents from nearby neighborhoods in Hillcrest and Port Dick were not aware of the project (so they claim) and when construction began to clear the dump site, and residents learned what was going to be built at the site, some of them demanded court action to oppose it. Two court cases have been filed and a local judge has temporarily stopped construction at the site. Yesterday that judge heard arguments for and against. NG Advantage CEO Rico Biasetti was encouraged by the judges questions…
Good news if you’re a welder, or interested in a welding career, and you live in southwestern Pennsylvania. Shell needs you. Shell is in the process of building a massive, $6 billion ethane cracker plant in Beaver County, PA (northwest of Pittsburgh). Cracker plants have lots of pipes that need to be welded as the plant goes up. While these jobs are not long-term, as in “the rest of you career,” they’re long enough, likely lasting several years. Steamfitters Local 449 is right now recruiting new apprentices, offering a free 17-week apprentice training program. Local 449 is holding an open house this Saturday…
For some time now, MDN has had its eye on Mexico. No, not for a vacation (although that would be sweet), but because of the natural gas market, which is undergoing a dramatic change. Mexico passed landmark energy sector structural reform in 2013 and 2014, freeing up Mexico’s oil and gas markets from strict government control. The reforms abolished the state monopolies administered by state-owned companies Pemex and the Federal Electricity Commission with the aim of creating competitive markets in the oil and gas industry AND in the power industry. Why? To attract private investment with the ultimate aim of dramatically improving Mexico’s energy markets. While renewable energy grabbed much of the attention in mainstream media, the core of the energy reform effort lies in the expansion of Mexico’s natural gas market. Not only is power generation heavily focused on increasing capacity through gas-fired combined cycle power plants, but also consumption by industrial users is expected to rise at a steady pace in the coming decades. Mexico is going through a rapid expansion of its natural gas pipeline infrastructure–with a number of projects either under construction or planned. This expansion has opened numerous opportunities for the private sector, with more on the way. So how does Mexico affect the Marcellus/Utica? (1) Some of our gas may end up flowing across the border–eventually. Maybe not today or tomorrow, but there are pipeline projects that already are, or soon will, carry our gas to the Gulf Coast. From there, it’s a short trip over the border. Mexico may become an important future market for our gas. (2) Even if our gas never flows across the border, gas from Texas, Louisiana and Oklahoma will. As that gas goes south, it doesn’t go north to compete with Marcellus/Utica gas and opens up more markets for our gas in the Midwest and South. (3) As more American gas flows south–from whichever source–prices at the Henry Hub (and everywhere else, including the Marcellus/Utica) will go higher. It’s simple economics: less supply, same demand, equal higher prices. Mexico’s natgas market bears watching, and watching closely. How can you keep track of it? The same way we do. NGI (Natural Gas Intelligence) recently introduced a news service that tracks what’s happening in the Mexico natgas market–and for the next few months you can get it for FREE…
A recent ruling from Ohio’s Seventh District Court of Appeals has the potential to affect conventional and unconventional (shale) leases. As with most legal rulings, this one is a bit complex. We’ll do our best to summarize. In Ohio, most oil and gas leases have both a primary term and a secondary term. The primary term is that period of time a driller has to locate and drill for oil or gas–typically five years. The secondary term is that period of time (which can last for decades) under which oil and gas is produced from the well. In most lease contracts, as long as the well is producing in “paying quantities” the lease remains in effect. But when the well does not produce in paying quantities, the lease is terminated and the landowner can seek a new lease. Of course, the definition of “paying quantities” is key. In a previous case, the Ohio Supreme Court defined paying quantities. However, the recent Seventh District Court case, Paulus v. Beck Energy Corp., added to, or should we say “refined” the definition provided by the Supreme Court by providing guidance on what items may be considered when determining paying quantities and lack of production in Ohio…
As MDN has previously reported, Mountaineer XPress Pipeline includes 165 miles of new pipeline with approximately 2.7 billion cubic feet (Bcf) per day of transportation capacity from existing and future points of receipt along or near the Columbia pipeline system–most of it located in West Virginia (see 
For the past few years, MDN has tracked the progress of an LNG export plant planned for the eastern shore of Nova Scotia, the Bear Head LNG project (
In March, MDN told you about a small group of radical protesters who established a protest “camp” on a private farm along the path of the Williams $3 billion, 198-mile Atlantic Sunrise Pipeline in Lancaster County, PA (see