Marcellus & Utica Shale Story Links: Wed, Mar 18, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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The Real Story of Why Forced Pooling Bill Failed in WV
Yesterday MDN reported a story that (so far) few others have bothered to report: West Virginia’s House Bill (HB) 2688 failed to gain passage at literally the eleventh hour–one hour before the annual 60-day session ended (see Republicans (!) Help Defeat WV Forced Pooling at 11th Hour). We believed, and repeated, the reporting we saw on the final vote–that Republicans were largely responsible for the last minute defeat of the bill. That was inaccurate. We were contacted yesterday by Ron Hayhurst, head of the West Virginia Royalty Owners Association, who was himself very much a part of brokering what he believes is the best possible bill (HB2688) to protect mineral rights owners in the Mountain State. Ron told us the last minute change in the House vote had nothing to do with Republicans defecting–and he is right. Although House Del. Pat McGeehan (a Republican) voted “no” both times, he was not the hero of the day, as reported in some media accounts. The truth is this: WV Democrats got their knickers in a twist over losing several other votes last Saturday and they decided to punish the Republicans by denying them passage of this bill. The original House vote was 60-40 in favor of HB2688. The final vote was 49-49 tie (with 2 people missing in action for the final vote). Of the 11 who changed their votes (names below) from “yes” the first time to “no” the second time–all 11 were Democrats. There were two Republicans who changed from an original “no” to vote “yes”–but it wasn’t enough to eke out a win. Hayhurst says when forced pooling is passed (a question of when, not if) the bill may not be as favorable to mineral rights owners as this one was…
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What’s Wrong with the Employment Picture in the Marcellus? Ageism.
This is not an easy story to write. It’s about employment in the Marcellus Shale industry–and about age discrimination. Until late last year, by all accounts the Marcellus Shale industry was, from a jobs perspective, going great guns. Yes, sometimes it was/is necessary to import workers from other states to handle specialized jobs. But increasingly the jobs have been going to local workers and not out-of-staters. Yesterday we received a heartfelt letter (below) from an MDN subscriber. This gentleman is a mechanical engineer with degrees from Penn State and Lafayette College. He has loads of experience in a variety of areas–engineering, contracting, even running a small business. He wants to get involved with the greatest industry on the planet–the Marcellus Shale energy industry. He can paper every room in his house with the number of resumes and job applications he’s filled out. He’s applied for everything from technician to field hand to roustabout (he’s physically fit). In the last five years that he’s been trying, he hasn’t been called for a single interview. Not one. He’s now 52 years old. We don’t like calling attention to stories like this one, but MDN doesn’t shy away from sharing the “bad news” about our beloved industry along with the overwhelming good news…
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Important & Overlooked Details on PA Gov Wolf’s Severance Tax
More details continue to come out about PA Gov. Tom Wolf’s Marcellus-killing severance tax. For example, did you know that towns and counties that previously received money from the impact fee will continue to get money under this tax–but that the amount they get will be capped? Under the existing impact fee the more drilling in an area the more money that area receives to compensate for the drilling (roads that need repairing, beefing up first responders, etc.). No more. Under Wolf’s plan, there is an upper limit on how much money he’s willing to give those locations that actually see drilling. The rest, you see, must go to pay off campaign debts to teachers unions. Another fatal flaw in Wolf’s severance tax: He calculates the tax based on $2.97 per thousand cubic feet sale price, regardless of what the actual sale price is. Do you know what the sale price for natural gas at the Leidy hub was on March 13th? It was $1.435/Mcf–about half of what Wolf is using as the standard rate. That means the effective tax rate for drillers selling gas for $1.435 is twice what it is for drillers selling at Wolf’s magical $2.97. What do you think drillers in northeast PA (near the Leidy hub) will do? That’s right. Shut in their wells and lay down their rigs…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Pennsylvania | Pike County | Regulation | Statewide PA | Wayne County
PA Gov Tom Wolf Supports DRBC Moratorium on Marcellus Drilling
As we’ve stated a number of times, newly-elected PA Gov. Tom Wolf is a major disappointment–a man out of his depth in attempting to run an entire state. Now comes word that Wolf supports the Delaware River Basin Commission’s (DRBC) anti-drilling policies that prevent drilling in his own state. We previously told you Wolf had employed the former anti-drilling head of the DRBC as a member of his transition team (see PA Gov-Elect Wolf Transition Team Includes DRBC’s Carol Collier). Two weeks ago, Wolf proposed increasing the DRBC’s budget by 73%, while states like New York and New Jersey continue to refuse paying their fair share (see PA Gov Wolf Increases DRBC Funding by 73% to 3/4 Million Bucks). Now he adds insult to injury by saying he supports the drilling ban in Wayne and Pike counties in his own state…
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Economic Impact | Energy Services | Industrywide Issues | Lancaster County | Lebanon County | Pennsylvania | Pipelines | Research | Statewide PA | Transco | Williams
Atlantic Sunrise Will Pump $1.6B into Economy, Create 8K Jobs
Williams pushed out a new economic analysis of their Atlantic Sunrise pipeline project yesterday. The project, if built, will cost $2.1 billion and consist of compression and looping of the Transco Leidy Line in Pennsylvania along with a greenfield pipeline segment, called the Central Penn Line, connecting the northeastern Marcellus producing region to the Transco mainline near Station 195 in southeastern Pennsylvania. Additional existing Transco facilities are being added or modified to allow gas to flow bi-directionally. The preliminary project design includes 178 miles of new greenfield pipe (Central Penn North & Central Penn South), two pipeline loops totaling about 12 miles (Chapman Loop, Unity Loop), 2.5 miles of existing pipeline replacement, two new compressor facilities in PA, and other facility additions or modifications in five states (PA, MD, VA, NC, SC). There’s been some push back by small groups of anti-drillers in places like Lebanon County and Lancaster County (PA) where a phony Indian tribe claims the pipeline will run through ancient burial grounds (see Convicted Lancaster Protesters Taunt Williams After Court Date). Meanwhile, the adults at Williams continue to make progress. The analysis they released yesterday shows the Atlantic Sunrise project will pump $1.6 billion into the economies of the states where it’s built, and create 8,000 jobs…
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Is Natgas a Good Long-Term Fuel to Fire Electric Plants?
Last week MDN told you the Union of So-Called Concerned Scientists had issued a “report” (rather unscientific, written by someone with a political science degree) to say even though Obama’s war on coal has been successful, it’s having the unintended consequence of electric generation power plants switching from coal to natural gas to fire them. UCS and other so-called green groups irrationally hate fossil fuels and want the switching to be from coal to so-called renewables, like solar and wind. So in an effort to besmirch and call into doubt the long-term viability of natural gas as a fuel source to generate electricity, UCS issued a report saying using natural gas to power electric plants is a “gamble” (see UCS “Report” Says Using Natural Gas for Electric Generation Big Gamble). The theory is that natural gas will run out in a few years, or become obscenely expensive, and all of those natgas-fired electric plants will mean super high electric rates. The problem with such “reports” is something called reality. We just noticed a press release from Midland Cogeneration Venture (MCV), the country’s largest natural-gas fired combined heat and electrical power generating plant, located in Michigan. The release was to commemorate an important milestone for MCV–the plant has been up and operating and supplying enough electricity for one million homes PLUS electricity and steam for major industry facilities, for the last 25 years…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Industrywide Issues | Pipelines
Eureka Hunter Pipeline Volume Continues to Expand, now 623 Mmcf/d
Every few months Eureka Hunter, the midstream subsidiary of Magnum Hunter Resources, issues a press release to update investors on their progress toward filling their WV/OH pipeline system with natural gas. Eventually they hope to flow 1 billion cubic feet per day through the system. Last September Eureka reported they were up to an average 307 million cubic feet per day (see Magnum Hunter’s Pipeline System Boosts Volumes in OH/WV). In January they were up to 400 Mmcf/d and expecting to hit 500 Mmcf/d by the end of that month (see Eureka Hunter Nears 1/2 Billion Cubic Feet per Day in WV/OH). As of last Friday, Eureka has hit north of 623 Mmcf/d on their path to a billion cubic feet…
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Marcellus & Utica Shale Story Links: Tue, Mar 17, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Republicans (!) Help Defeat WV Forced Pooling at 11th Hour
In a stunning upset at the eleventh hour, WV House Bill (HB) 2688, a bill that allows forced pooling (and a bill that seemed assured of passage just last Friday) died in a rare tied vote. On Friday, we told you HB2688 was all but a done deal (see Looks Like Forced Pooling is, After 5 Years, Coming to WV). So what happened? As predicted, the bill went to the WV Senate where it was passed on a vote of 24-10. The House had previously passed it on a vote of 60-40, but the bill had amendments that took it back to the House for final passage on the very last day of the regular session (Saturday). The last vote on the bill ended up in a rare tie of 49-49. When a vote on a bill ends in a tie, it doesn’t pass. And there it ended. Why did the vote swing from a comfortable margin the first time it passed in the House to a tie the second time? It largely appears to be the efforts of House member Pat McGeehan, a Republican, who calls forced pooling “legal plundering”…
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Rice Energy Pays St Clairsville, OH $8,700/Acre Signing Bonus
In March 2014, St. Clairsville (Belmont County), OH put out a request for bids on 195 acres of city-owned land. The request for proposal (RFP) came and went with no bids (see St Clairsville RFP to Lease 195 Utica Acres Comes & Goes, No Bids). But don’t let that fool you. Drillers were keenly interested in leasing the property. The initial RFP served a legal purpose. After the period for bids closed, the real negotiations began. St. Clairsville was looking for $7,300 per acre signing bonus and 20% royalties. They got an even better deal. In January, Rice Energy handed St. Clairsville with a check for $1,479,251.84 to lease 170 out of the 195 acres–or $8,700 per acre as a signing bonus…
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Ohio 4Q14 Natgas Production Up 25% Over 3Q14, Up 281% Over 4Q13
We didn’t mean to ignore it, but somehow we let slide the fact that Ohio recently (end of February) released their now quarterly production numbers. We have the full list below, embedded as a spreadsheet. The really good news: Ohio’s natural gas production from shale (almost all Utica Shale) rose 25% in a single quarter over the previous third quarter. It rose an amazing 281% over fourth quarter of 2013. Oil and gas together rose 15% from 3Q14 to 4Q14. Here’s the details…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | Luzerne County | Pennsylvania | Pipelines | Regulation | Statewide PA | Transco | Williams
Dela. Riverkeeper Halts Transco Pipeline Upgrade with Lawsuit
Someone needs to sue THE Delaware Riverkeeper (Maya van Rossum) the way that organization is suing legitimate and legal companies to block legitimate and legal activity in the Marcellus Shale. Delaware Riverkeeper apparently has endless bags of money, made available to them by the Park Foundation, Heinz Endowments and other anti-drilling “non-profit” groups, to file endless frivolous lawsuits. The latest is particularly insidious. Williams has just received approval from the Federal Energy Regulatory Commission (FERC) to build a few loops–extra lengths of pipeline immediately next to existing pipeline–for the Transco Pipeline in northeast PA and in NJ (see FERC Approves Williams Leidy Southeast Project in PA/NJ). Part of the requirement by FERC is that Williams cannot cut down trees between April and October–a full seven months–to avoid “harming” the endangered Indiana bat that may (or may not) roost in those trees…
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Anti-Drilling/Fossil Fuel | Butler County | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Regulation | Rex Energy
Dela. RiverKeeper, Clean Air Council Cost Middlesex Residents $35K+
THE Delaware Riverkeeper (Maya van Rossum) and the Clean Air Council, both located in the orbit of Philadelphia, have gone all the way to the opposite side of the state to meddle and cause mischief (see Martian Chronicles: Delaware River Basin Shifts to Western PA?). They’ve not only delayed legal and legitimate Marcellus drilling on the other side of the state, now they’ve cost the taxpayers in Middlesex Township (Butler County), PA over $35,000 in legal fees–and the costs keep mounting. Thank you Delaware Riverkeeper and Clean Air Council with your frivolous meddling! Those groups, in league with “four residents” are challenging the right of Middlesex to allow Rex Energy to drill several Marcellus Shale wells on a pad in a rural area that’s 3/4 of a mile away from the Mars School (see Rex Drilling Operation Near Mars School Put on Hold). Their meddling is costing real money–not only for Rex Energy, but also for the taxpayers of Middlesex who are nothing more than collateral damage for Riverkeeper and the Clean Air Council in their war on fossil fuels…
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Kentucky Fracking One Step Closer: Commission Considers 1st Permit
In January, MDN told you that shale drilling/fracking may soon come to Kentucky (see Fracking on the Way in the Bluegrass State? Quite Possibly). Several weeks ago the Kentucky Oil and Gas Conservation Commission, a group that “rarely meets” (last meeting was in 2006) held a meeting to consider granting Kentucky’s very first deep horizontal natural gas drilling permit. The company applying for the permit is Horizontal Technology Energy Company, a subsidiary of Pittsburgh-based EQT. Horizontal Technology wants to drill a well in the Rogersville Shale in the eastern part of the state. No word yet on the result of that meeting…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA
Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners
In December MDN told you about a settlement between “several thousand” Pennsylvania landowners and Chesapeake over the royalty issue–Chessy deducting post-production payments by pipeline companies in what some call a scam that leaves landowners signed with Chesapeake receiving royalty checks that are pennies on the dollar compared to what they should receive. The new settlement for those “several thousand” would be 2/3 of $11 million, after the lawyers get their 1/3 cut (see Chesapeake & PA Landowners Settle Royalty Lawsuit…Again). However, not all PA landowners leased with Chesapeake are happy about it. Two other, separate lawsuits against Chesapeake are proceeding and, according to attorneys, the settlement will not affect these separate lawsuits which are proceeding, unless the leases have a “market enhancement” clause…
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Yesterday MDN reported a story that (so far) few others have bothered to report: West Virginia’s House Bill (HB) 2688 failed to gain passage at literally the eleventh hour–one hour before the annual 60-day session ended (see 
This is not an easy story to write. It’s about employment in the Marcellus Shale industry–and about age discrimination. Until late last year, by all accounts the Marcellus Shale industry was, from a jobs perspective, going great guns. Yes, sometimes it was/is necessary to import workers from other states to handle specialized jobs. But increasingly the jobs have been going to local workers and not out-of-staters. Yesterday we received a heartfelt letter (below) from an MDN subscriber. This gentleman is a mechanical engineer with degrees from Penn State and Lafayette College. He has loads of experience in a variety of areas–engineering, contracting, even running a small business. He wants to get involved with the greatest industry on the planet–the Marcellus Shale energy industry. He can paper every room in his house with the number of resumes and job applications he’s filled out. He’s applied for everything from technician to field hand to roustabout (he’s physically fit). In the last five years that he’s been trying, he hasn’t been called for a single interview. Not one. He’s now 52 years old. We don’t like calling attention to stories like this one, but MDN doesn’t shy away from sharing the “bad news” about our beloved industry along with the overwhelming good news…
In a stunning upset at the eleventh hour, WV House Bill (HB) 2688, a bill that allows forced pooling (and a bill that seemed assured of passage just last Friday) died in a rare tied vote. On Friday, we told you HB2688 was all but a done deal (see 
THE Delaware Riverkeeper (Maya van Rossum) and the Clean Air Council, both located in the orbit of Philadelphia, have gone all the way to the opposite side of the state to meddle and cause mischief (see