• Marcellus & Utica Shale Story Links: Fri, Jun 2, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Rover and other Marcellus/Utica pipelines to the Midwest/Canada; boosting renewable energy sources in NY requires gas too; Blue Mountain lodge gets green light, but won’t build without PennEast Pipeline; PA pipeline fight could upend intl oil flows; new WV budget axes graduated severance tax for natgas; New England turns off its last big coal burning plant; lower 48 states gross natgas output drops; Dakota Access Pipeline now online and pumping; do proposed pipelines get enough review?; BP hits gas off Trinidad; and more! Read More “Marcellus & Utica Shale Story Links: Fri, Jun 2, 2017”

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    Alpha Natural Resources Sells 120 Gas Wells in WV

    On Tuesday Alpha Natural Resources (ANR) announced it was divesting “substantially all of the assets” in two different operations in West Virginia, one of those being a natural gas operation with “120 producing natural gas wells in five counties.” Which got us digging. We recalled that ANR went bankrupt last year and ended up selling 27,400 acres of Marcellus/Utica Shale leases to Vantage Energy for $339.5 million (see Vantage Outbids Rice For Bankrupt Alpha Natural’s 27K Marcellus Acres). That was all of ANR’s Marcellus assets. So what’s with this new deal to sell 120 gas wells in the Mountain State? And which five counties are the wells located in? The announcement didn’t say. So we reached out to ANR and got you some answers…
    Read More “Alpha Natural Resources Sells 120 Gas Wells in WV”

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    Application Filed to Drill/Frack 1st Shale Well in Illinois

    Technically, this is not a Marcellus/Utica story, but it is (and should be) of interest to those of us who concentrate on the Appalachian region. The very first application has been filed in Illinois for a permit to drill and frack a shale well. Woolsey Operating Co., headquartered in Kansas, has filed a high volume horizontal hydraulic fracturing (HVHHF) application with the Illinois Dept. of Natural Resources (DNR). The DNR has assigned the application Review Number HVHHF-000001 — the very first. Which is momentous. We’ve only seen two mainstream news sources (from Illinois) pick up on what is really big news. No national news sources have covered it–yet. The press release from the DNR provides some details, like the location of the proposed well (southern Illinois, in White County). What the announcement and news stories don’t say is which rock layer will the shale well target? MDN found the answer by reviewing the application…
    Read More “Application Filed to Drill/Frack 1st Shale Well in Illinois”

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    PA DEP Green Lights Wastewater Injection Well in Clearfield County

    Here’s one that flew mostly under the radar. The Pennsylvania Dept. of Environmental Protection (DEP) has just granted final approval for the state’s ninth wastewater injection well to begin operation. The DEP approved Sammy-Mar, LLC’s Povlik #1 injection well, located in Huston Township, Clearfield County, more than two years after the federal Environmental Protection Agency had approved it. Huston Township in Clearfield County, unlike Highland Township in Elk County, and Grant Township in Indiana County, did not oppose the well. You may recall the DEP approved injection wells in Elk and Indiana counties in March, and had to sue the towns involved over their illegal home rule laws that sought to keep the wells out (see PA DEP Issues 2 Wastewater Injection Well Permits, Sues 2 Towns). This time around, Huston Twp wisely decided not to attempt regulating what only the state, by law, can regulate. This injection well will be an important new resource for Marcellus drillers to dispose wastewater…
    Read More “PA DEP Green Lights Wastewater Injection Well in Clearfield County”

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    WV Supreme Court: Non-Participating Rights Owner Can’t Stop Lease

    Just yesterday we told you about an important court case that had gone to the West Virginia Supreme Court of Appeals (see WV Rights/Pooling Case May have Big Impact on Shale Industry). In brief, the case was appealed from a lower court where a judge found that a “non-participating” mineral rights owner, someone who owned a quarter of the rights for a property in Marshall County, had the power to object and stop a lease of the property for oil and gas drilling. We thought it strange that the lower court judge would make such a decision, which threatens to up-end thousands of leases in WV that are similar. Little did we know that as we were publishing that story, the WV Supreme Court was rendering its decision. All five justices voted to overturn the lower court ruling and preserve sanity for leases in the Mountain State… Read More “WV Supreme Court: Non-Participating Rights Owner Can’t Stop Lease”

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    Cardinal Midstream Forms New Co. Targeting Utica, Other Plays

    6/2/17 Update: A previous version of this post was incorrect. MDN confused Cardinal Midstream with Cardinal Gas, which led us to create a confusing post. We apologize to both companies–and regret the mistake! Below is a corrected introduction.

    Cardinal Midstream II operates a pipeline gather/processing system in Tioga County, PA. The Tioga system gathers and processes gas from Utica Shale wells in the county (not Marcellus wells, at least not yet). Earlier this week Cardinal announced a new spin-off called Cardinal III, backed with money from EnCap Flatrock Midstream–the same company that has backed Cardinal’s other ventures. The new Cardinal III is getting a $250 million infusion from EnCap to “pursue midstream acquisitions and development opportunities in both conventional and unconventional resource plays across North America.” That means possibly more work in the Marcellus/Utica, but any/all other major plays are also up for grabs. Here’s the announcement… Read More “Cardinal Midstream Forms New Co. Targeting Utica, Other Plays”

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    PA Hearing Board Reduces EQT Fine from $4.5M to $1.1M

    In October 2014, the Pennsylvania Dept. of Environmental Protection (DEP) fined Marcellus driller EQT a whopping $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine is unreasonable and arbitrary. EQT appealed the fine and the case all the way to the PA Supreme Court. In December 2015, the high court handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine (see PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case). The Supreme Court sent the case back to a lower court, PA Commonwealth Court, for follow up work, and in January 2017, a three-judge panel ruled that the method the DEP currently uses to assess fines–by how many days pollution lingers, instead of by how many days the initial release of pollution lasted–is not legal nor common sense (see EQT Wins Court Case Against PA DEP re $4.5M Wastewater Leak Fine). The judges said such a method in fining, “would result in potentially limitless continuing violations.” Under the old way of calculating fines, the DEP was considering upping the fine on EQT to an insane $157 million. Calculating it under the new way will mean a fine of around $120,000. We thought with that ruling it was all done and dusted. Not so. The soap opera continued when the DEP appealed the Commonwealth Court panel’s ruling back up to the PA Supreme Court where the Supremes will consider it all over again (see DEP Appeals $4.5M Wastewater Leak Fine Against EQT to Supremes). Into this mess, let’s now throw in another wrinkle. While the courts have been grappling with issues of procedure and whether or not the DEP can assess fines the way it claims it can (that is, Constitutional issues), at the same time the matter was brought up before the PA Environmental Hearing Board (EHB), a sort of quasi-court set up to hear appeals of decisions made by DEP. The EHB has decided to adjust the fine down significantly–from the DEP’s initial levy of $4.53 million down to $1.1 million. Here was their reasoning… Read More “PA Hearing Board Reduces EQT Fine from $4.5M to $1.1M”

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    Report: Utica Investment has Injected $50 Billion into Ohio!

    A comprehensive study by Cleveland State University researchers shows just how mind-blowing the economic investment in Ohio has been from the Utica Shale. The just-published study, titled “Shale Investment Dashboard in Ohio” (full copy below), finds that between upstream ($39 billion), midstream ($8 billion) and downstream ($3 billion), all related to the Utica Shale, there has been an incredible $50 billion invested in Ohio since Utica drilling began in 2011. It’s really hard to overstate just how big a deal this is. Can you image a $50 billion economic stimulus from the government? No way! It would never happen. And if it did, the money would come out of YOUR pocket–from taxpayers. But this $50 billion ALL came from the private sector. Good ole capitalism. Free enterprise. Private ownership. Private property. Love it! It’s what our great country was built on. Let’s dig into the numbers and relish this fantastic news…
    Read More “Report: Utica Investment has Injected $50 Billion into Ohio!”

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    New USGS Study: Fracking Does Not Contaminate Water Wells

    The U.S. Geological Survey has just done us all a big favor. USGS decided to do some in-the-field research to see if there’s any truth to the wild claims of anti-drillers that fracking somehow leaks up through a mile or more of solid rock to pollute water wells. We’ve heard that bogus claim for years–since shale drilling in the Marcellus began in 2004. Those claims were made popular by the Josh Fox and his fake documentary “Gasland.” So USGS researchers went down to Texas, Louisiana and Arkansas–where there’s a lot of oil and gas drilling–and randomly selected 116 domestic and public-supply water wells located as close as 360 feet to unconventional (i.e. shale) oil and gas wells. The researchers published their findings in a new study/paper in the journal Environmental Science & Technology in a paper titled “Methane and Benzene in Drinking-Water Wells Overlying the Eagle Ford, Fayetteville, and Haynesville Shale Hydrocarbon Production Areas” (full copy below). What did the USGS researchers conclude? “Using chemical, isotopic, gas and groundwater-age tracers to thoroughly evaluate those samples — USGS researchers concluded that low concentrations of methane and benzene detected were likely naturally occurring and not attributable to shale development.” Thank you USGS…
    Read More “New USGS Study: Fracking Does Not Contaminate Water Wells”

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    Trump Decision on Leaving Obama Paris Climate Treaty Due Today

    If you live by the sword, you die by the sword. Put another way, if you commit your country to a “treaty” without getting Senate ratification (an illegal act, which Obama did with the so-called Paris climate treaty), then your successor can uncommit. And that, dear reader, is what we earnestly hope President Trump announces today at 3 pm. We extensively covered the Obama railroading of the horrible Paris agreement–that disadvantages the United States–from the beginning (see Paris Climate Treaty Signed by Obama NOT Binding on U.S.). For a while, it seemed as though Trump, who as candidate spoke against the agreement, would reverse course. If the leaks are accurate, that fear is unfounded. As we previously covered, Big Business (including some Big Oil companies) wants Trump to remain in the Paris deal (see Why does Big Oil Continue to Support Horrible Paris CO2 Treaty?). Our thought on that: Those are the same Big Businesses that supported Hillary Clinton for president. Why would Trump listen to them? He shouldn’t. Trump needs to listen to those of us who put him in office and dump this insidious treaty. The one fact mainstream fake news sources refuse to cover: U.S. carbon dioxide output is falling–without this agreement–due to the use of more natural gas. Why should America pay even MORE taxes–to the rest of the world–as called for in the Paris agreement? We shouldn’t… Read More “Trump Decision on Leaving Obama Paris Climate Treaty Due Today”

  • Marcellus & Utica Shale Story Links: Thu, Jun 1, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Utica Shale well activity as of May 27; Noble Energy closing Southpointe office, 70 losing jobs; will Connecticut change the law to rebrand nuclear as “green energy”?; Williams floats $1.45B in new notes; offshore drillers are the coal miners of 2018; another source of oil starting to get cheap; oil prices on a slippery slope; and more! Read More “Marcellus & Utica Shale Story Links: Thu, Jun 1, 2017”

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    WV Rights/Pooling Case May have Big Impact on Shale Industry

    A court case from Marshall County, WV decided in April 2016 is heading to the WV Supreme Court of Appeals (the state’s highest court). The stakes in Contraguerro v Gastar Exploration could not be higher for the Marcellus industry in the Mountain State. In brief, 70 years ago a 106-acre track of property was sold. The sellers retained a one-quarter “non-participating interest” in the oil and gas rights. That means the buyer got to decide when/if to lease the property for drilling, and if so, has the right to negotiate the price, etc. The remaining one-quarter non-participating interest holders would get royalties, but nothing else. Fast forward several generations and the heirs of the original sellers didn’t even know they owned an interest in the land until contacted by Gastar, which needed a signature in order to send them checks for royalties. The heirs decided to sue to stop the deal, either in a bid to negotiate a better deal or perhaps because they don’t like fossil fuels. Who knows? The case went to the Circuit Court of Marshall County and a judge there found in favor of the heirs–giving them, and by extension any minority rights owner, the power to stop lease deals. An unmitigated mess that threatens many lease deals because divided rights ownership is common in WV. Perhaps this case was part of the motivation to pass a new law this year addressing “co-tenancy” (see Analysis of New WV Bill SB 576 re Co-Tenancy & Joint Development). The co-tenancy law, if passed, means if there are multiple owners for the mineral rights under a property, you would only need a simple majority of those owners to approve a drilling lease. Currently, if one person with a teeny tiny share objects, it stops the process. In the Contraguerro case, although the heirs are owners, they are “non-participating”–so they should not have had a say anyway. However, a lower court judge found otherwise. So the case was appealed and is now before to the WV Supreme Court… Read More “WV Rights/Pooling Case May have Big Impact on Shale Industry”

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    Rover Pipeline Says Part of Phase 1 Will be Delayed Nearly a Month

    Rover is Energy Transfer’s $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. The Federal Energy Regulatory Commission (FERC), charged with overseeing interstate pipeline projects, granted final approval for the project in early February (see ET Rover Pipeline Gets Final Approval by FERC). Since then, the company has aggressively moved forward with construction. Energy Transfer has maintained, from the beginning, it will complete Phase 1 of the project in “July 2017” (usually quoted by Rover ET officials as July 1st), and the rest of the pipeline will be done in “November 2017” (Nov. 1st). Phase 1 will build the pipeline as far west as Defiance, OH. Phase 2 finishes the pipeline–all the way to the Dawn Hub in Canada. Some say the company has moved too quickly, resulting in accidents (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). Rover has put new procedures in place to prevent more accidents like the 2 million gallon drilling mud spill, asking FERC for permission to drill underground in two locations key to completing Phase 1 (see Rover Gets Serious About Mud Spills, Asks FERC for OK to Drill). Yesterday MDN brought you the news that FERC denied permission to begin new underground horizontal drilling (see FERC Responds to Rover Request to Begin Drilling in 2 Locations: NO). So that begs the question: Can Rover keep to its schedule? ET officials are now modifying the date for completion of Phase 1…
    Read More “Rover Pipeline Says Part of Phase 1 Will be Delayed Nearly a Month”

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    Sunoco LP CEO Mike Hennigan Defects to MPLX/MarkWest Energy

    Michael Hennigan

    Mike Hennigan was, until late last year, president and CEO of Sunoco Logistics Partners–builder of the Mariner East pipeline projects and operator of the Marcus Hook refinery near Philadelphia. Sunoco LP has (for years) been a subsidiary of Energy Transfer (ET). Last November, ET announced it was combining two subsidiaries together into one operation–Sunoco LP and Energy Transfer Partners (see ETE Merging Sunoco Logistics and Energy Transfer Partners). Although on paper Sunoco LP swallowed ETP, the new entity retained the ETP name and ETP’s top management. Exactly how Mike fit into the new arrangement we’re not sure. We know his title became president for crude, liquids and refined products. We’re guessing Mike’s new role wasn’t as satisfying as the old role, because he’s jumping ship. Mike is leaving ET and moving to Marathon Petroleum, to become president of subsidiary MPLX. You may recall that MPLX is Marathon’s pipeline subsidiary which, in late 2015, bought out and merged in MarkWest Energy–a huge Marcellus/Utica player in the midstream space (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). So, in a nutshell, Mike Hennigan is leaving Sunoco LP to become the new head of MarkWest Energy…
    Read More “Sunoco LP CEO Mike Hennigan Defects to MPLX/MarkWest Energy”

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    Antis Score Small Victory Against ME2 Pipeline re Eminent Domain

    The radical Philadelphia-based Clean Air Council (CAC) has scored a very small, but notable, victory in it’s battle to block Sunoco Logistic Partners’ from building the Mariner East 2 Pipeline project. Last Thursday a judge with the Philadelphia Court of Common Pleas allowed a case filed by CAC to proceed. The case claims that Sunoco cannot use eminent domain powers granted by the State of Pennsylvania to force its way through properties where the landowner refuses to cooperate, because (CAC claims) the pipeline is technically not an intrastate pipeline (only located in PA), but is instead an interstate pipeline (crossing the border into Ohio). The judge said the case has enough merit that it can go to trial. We call it a small victory because Common Pleas court is the lowest trial court in the state. There are several layers higher where appealed cases are decided. This is more of a statement than a serious threat. But let’s play “what if.” What if CAC wins, and on appeal, wins again?…
    Read More “Antis Score Small Victory Against ME2 Pipeline re Eminent Domain”

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    WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry”

    Last December the West Virginia Supreme Court ruled in a case to disallow Marcellus driller EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” Last week, just five months later, four of five justices (including a newly elected judge) reversed their December decision (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). The lone judge voting against the decision was Robin Jean Davis. Yesterday she released her dissenting opinion. In very strong language, Judge Davis said the court’s other four members “used legal sophistry” to prop up their decision, and that “the majority opinion is simply wrong.” Here’s what else Judge Davis had to say… Read More “WV Supreme Court Justice: EQT Royalty Ruling “Legal Sophistry””