PA PUC Hands ME2 Pipeline Rare Defeat re SWPA Valve Station
Sunoco Logistics has been slapped down in a ruling by the Pennsylvania Public Utility Service (PUC) with respect to a valve station, part of the Mariner East 2 (ME2) pipeline project. In March, MDN told you about an attempt by liberal anti-pipeliners in West Goshen (Chester County) to block the ME2 project (see West Goshen’s Last Stand to Stop Mariner East 2 Pipeline). West Goshen signaled it would deny Sunoco a zoning permit to build a valve station for the pipeline. Sunoco politely, but firmly, told West Goshen the pipeline doesn’t need a permit from the town because it’s a state-permitted project. Sunoco said it would move forward at the appropriate time with a valve station installation. In early July, West Goshen tried again, by filing a 135-page petition with the PUC, asking the PUC for an emergency order to stop construction of the new valve station that Sunoco was set to begin work on at any time (see West Goshen Pulls Legal Stunt in Attempt to Stop ME2 Pipeline). But the PUC responded “no thanks” to West Gosehn, they appealed the PUC decision to an administrative law judge who promptly put a temporary halt on building a new valve station (see Judge Temporarily Stops ME2 Valve Station in West Goshen). The whole issue revolves around which side of the road to build the valve station. West Goshen wants it built next to an existing, Mariner East 1 valve station, but Sunoco wants to build the new station across the street, citing safety concerns. After reviewing the judge’s order, the PUC has now flipped and supports the judge. In a decision issued last Thursday, the PUC told Sunoco they will need to honor an agreement previously made with West Goshen to build the valve station on the ME1 site…
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For some reason Tom Wolf has successfully cultivated a public persona of a genteel, non-partisan businessman–from the very beginning of his race for the governor’s chair even through today. We weren’t fooled, but many were. He’s proven to be just what we thought he was: a vicious partisan liberal, a spoiled rich kid who grew up to be a spoiled rich adult. Someone who throws a fit when he doesn’t get his own way. The severance tax is a perfect example. From his first day in office, Wolf lobbied hard for a severance tax. Such a tax was thought to be an easy way to pour billions of dollars into “education.” It was Wolf’s quid pro quo with Philadelphia teacher’s unions. They voted him into office, and he would repay them with big money–getting it from an “easy mark”–the Marcellus industry. Turns out the industry wasn’t such an easy mark after all. It has been a long, bloody fight, but the fight (for this year) is now over and Wolf has lost, third year in a row, to get a severance tax passed. His anger bubbled over last week and Wolf revealed his true character. When asked about the budget process, Wolf’s office issued this statement about House Republicans, attributed to Wolf: their opposition to a severance tax “has revealed the worst of Harrisburg.” In other words, Wolf just called House Republicans, his principled opponents, “the worst of Harrisburg.” His comment is the political equivalent of a five year-old stomping his feet and throwing himself on the floor when he doesn’t get his own way. Thank God for House Republicans who held the line against this insane severance tax, and shame on Senate Republicans who turned traitor. Hopefully they’ve learned a lesson from their courageous House colleagues about holding the line…
Last week the University of Pennsylvania published “Pennsylvania’s Gas Decade,” a study looking at the impact of the Marcellus Shale on the state’s utility customers over a ten-year period, from 2007-2016 (full copy below). The study shows that on average, PA customers now pay 40% less for natural gas than they did ten years ago. The study also shows electricity customers are paying less–thanks to the Marcellus. Before Marcellus drilling began, PA produced 1% of the nation’s natural gas supplies. Today? PA produces 16% of our country’s natgas supplies. Thank you Marcellus! The study’s author predicts the trend toward lower natgas prices for PA residents will reverse–eventually. Why? The Federal Energy Regulatory Commission has approved a staggering 53 interstate pipeline projects that cross PA (more than twice that of any other state). Once/if those projects are built, more gas will flow out of the state, meaning prices for gas will rise. Hey, drillers aren’t sticking around in PA just to break even or lose money. They are in the state to make money, and part of making money is getting the gas to other markets. In the meantime, before the plethora of pipelines are built, PA residents should enjoy the low prices they’re paying…
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 along with electric grid operators, are not (see 
Events related (or of interest) to the Marcellus and Utica Shale, primarily pro-drilling events.
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Plant manager hired for Tenaska SWPA electric plant; FirstEnergy dumping coal & nukes regardless of what govt does; latest CNG station opens in Beaver County, PA; PA House hearing on DRBC frack ban tomorrow; Haynesville production through the roof; the Clean Power Plan is irrelevant; US gas exporters rush to sell LNG to China; and more!
The U.S. District Court in Akron, OH has just made a major ruling that affects all Utica landowners and drillers. In 2015, the Ohio Supreme Court accepted a case that will sound familiar to readers of MDN. The case, known as Lutz v. Chesapeake Appalachia, is about whether or not drillers (Chesapeake in this case) are allowed to deduct certain post-production costs from landowner royalty checks. The Ohio Supremes were asked to decide whether Ohio follows the “at the well” rule, which permits the deduction of post-production costs, or if the state follows the “marketable product” rule, which limits the deduction of post-production costs under certain circumstances. The Supremes came down off Mount Olympus in November 2016 to render their verdict (see 
Yesterday one of the biggest Marcellus/Utica drillers, EQT, issued their third quarter 2017 update. EQT will soon be THE biggest Marcellus/Utica driller, indeed the biggest shale gas producer in the United States (surpassing Chesapeake Energy), once a deal to buy Rice Energy consummates later this year. But what about just EQT in 3Q17? The company reports making a profit of $23.3 million during the quarter, versus losing $8 million in the same quarter last year. EQT produced 205.1 billion cubic feet equivalent (Bcfe) of natural gas during the quarter–which works out to be 2.3 Bcfe per day. Here are some interesting stats from the update: Since EQT began drilling shale wells, they have drilled (called “spud” in the industry) 1,288 shale wells. Of those wells drilled, 1,060 are online, making the company money. Below we have the full update, a copy of the transcript from the analyst phone call, the latest slide deck loaded with charts and graphs, and a bit of amusing analysis about the update/phone call…
Yesterday EQT provided an update for both its drilling and midstream operations. On the midstream side, EQT had an interesting comment about it’s biggest project on the books–the Mountain Valley Pipeline (MVP). MVP is a $3.5 billion, 303-mile natural gas pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The Federal Energy Regulatory Commission (FERC) issued a final approval for the project two weeks ago (see 
Mountaineer NGL Storage wants to build a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see 
Yesterday MDN brought you the exciting news that Marcellus shale gas molecules have been/are finding their way all the way to Nova Scotia, Canada (see 
This is the perfect illustration of how parts of state government, like the so-called Environmental Justice division of the Pennsylvania Dept. of Environmental Protection (DEP), get co-opted by Big Green groups. In 2015 then-Secretary of the DEP, John Quigley, “reactivated” the Office of Environmental Justice at the DEP to give poor folks and minorities an important new weapon to oppose shale drilling (see 
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 
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