Marcellus Drilling News

Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | New York | Statewide NY

Victory for NY Landowners in Chesapeake Force Majeure Case
June 15, 2012June 15, 2012

In a major victory for New York landowners, Attorney General Eric Schniederman’s office reached a settlement with Chesapeake Energy to allow 4,400+ landowners with a collective 264,000 acres to renegotiate old gas drilling leases that Chesapeake was attempting to extend using the “force majeure” clause. MDN has followed this story for more than a year (see this MDN story from May 2011 for history and background).

As a brief background, a number of New York landowners—many of them in the Southern Tier area of New York—signed gas drilling leases in 2000 with small drilling companies. The leases had a 10-year term. Most of the landowners got $3 per acre as a signing bonus. Those leases, along with leases signed prior to 2000, were bought by Chesapeake in the mid-2000s. In 2009, Chesapeake sent letters to New York landowners invoking the force majeure clause, which is legalese for “we’re extending the contract term due to extenuating circumstances, which we believe is our right to do.” The extenuating circumstance? The moratorium on high volume hydraulic fracturing that was implemented by then-Gov. David Paterson in 2008.

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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Dueling Rallies in Albany Over Cuomo’s Fracking Plan
June 15, 2012June 15, 2012

Both anti- and pro-drillers staged rallies in Albany, NY yesterday in response to the leaked plan by the Cuomo administration to allow limited hydraulic fracturing of gas wells in five Southern Tier counties.

Perhaps two dozen anti-drilling protestors showed up outside of Gov. Cuomo’s office for their PR appearance before the cameras. An hour later, they went to stand outside of a much a larger crowd of pro-drillers who staged a press conference featuring five town supervisors who were there to say they want drilling in their townships.

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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

NY Gov. Cuomo Speaks Out on Leaked Fracking Plan
June 15, 2012June 15, 2012

Did New York Gov. Andrew Cuomo’s trial balloon plan to allow fracking just burst? Yesterday, the governor was peppered with questions about his unofficially announced plan to allow limited fracking of natural gas wells in five Southern Tier counties and only in communities that want it.

Appearing on an Albany radio program, Gov. Cuomo said:

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Hydraulic Fracturing | Industrywide Issues

Update on NETL Faults & Fracking Study
June 15, 2012June 15, 2012

Earlier this week MDN covered news of a study about to be released by the U.S. Department of Energy’s National Energy Technology Laboratory (NETL) which looks at whether or not fracking fluids can find their way to the surface through faults or cracks (see this MDN story).

Based on the article MDN read, we floated the question, “Are we being set up?” Any time MDN reads about “this is science and incontrovertible and this will settle it once and for all” it sets off red flags—like we’re about to be railroaded.

Fortunately Pam Casey, a reporter with the West Virginia State Journal, read the MDN article and dug deeper. What she found is reassuring:

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Economic Impact | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break
June 15, 2012June 15, 2012

Pennsylvania Gov. Tom Corbett officially launched his public relations effort yesterday to get the PA legislature to pass a package of tax credits for Shell to build an ethane cracker plant in the state. The package of tax credits will amount to $1.7 billion over a 25-year period (up to $66 million per year) and will not begin until 2017 at the earliest.

Three of Corbett’s cabinet secretaries held a forum at the Beaver County community college yesterday, near the location of the proposed plant (in Beaver County), to push for the tax credits. When the new plant is built, it will result in 20,000 new jobs throughout the region.

Corbett is making a push to get the legislature to adopt the package by the end of June, before legislators adjourn for summer recess. But many legislators complain they don’t know enough about the plan (yet) to cast a vote either way. This effort by Corbett and his administration is an attempt to bridge that gap.

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Energy Companies | Industrywide Issues | Litigation | New York | Norse Energy | Statewide NY

Norse Says NY Force Majeure Settlement Doesn’t Apply to Them
June 15, 2012June 15, 2012

MDN reported today that New York Attorney General Eric Schneiderman’s office struck a deal with Chesapeake Energy over the issue of extending landowner leases in New York using the “force majeure” clause in the contract (see this MDN story). Norse Energy issued a press release saying essentially that the deal does not apply to them, and their force majeure claims are still in place until overturned by a court.

Here’s the Norse press release:

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Industrywide Issues | Jobs | Statewide WV | West Virginia

WV Oil & Gas Employment Numbers: Underreported by 14K?
June 15, 2012June 15, 2012

MDN reported two days ago that WorkForce West Virginia reported that direct jobs held by West Virginians in the oil and gas industry in the state had actually decreased from 2010 to 2011 (see this MDN story). We observed the total number of jobs cited, 2,179 in 2011, seemed really low, and perhaps inaccurate. WorkForce WV says that’s the total number of “direct” jobs held by West Virginians so we took them at their word.

But what’s a “direct” as opposed to an “indirect” (but created because of the drilling industry) job? Seems we’ve hit some semantic issues here. According to the Independent Oil and Gas Association of West Virginia, the actual number is something over 16,000 jobs:

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Ohio | Statewide OH

OH State Land – About to be Leased for Drilling?
June 15, 2012June 15, 2012

Ohio Department of Natural Resources (ODNR) officials report their research into how much of the mineral rights the state owns beneath state land in 16 eastern Ohio counties is almost complete. What does that mean? In 2011 the state passed a law allowing the state to lease state-owned land for oil and gas drilling—at least for the portions where they own the rights. It appears that’s now about to happen.

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Energy Companies | Energy Services | Industrywide Issues | Lycoming County | National Fuel | Pennsylvania | Pipelines | Seneca Resources

Trout Run Pipeline Goes Operational, Seneca Wells Connect
June 15, 2012June 15, 2012

National Fuel Gas Midstream’s new Trout Run Gathering System (Lycoming County, PA) came online May 30 and is now delivering natural gas to the Transcontinental Gas Pipe Line (Transco). Because the new pipeline is now operational, Seneca Resources has brought online four new wells. As of a few days ago, the wells were producing a combined 45 million cubic feet of gas per day.

National Fuel Gas’ press release:

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Hydraulic Fracturing | Industrywide Issues | New York | Statewide NY

NY Chefs Form Group to Oppose Fracking
June 15, 2012June 15, 2012

This is interesting—and odd—news: A bunch of chefs in New York City (where else?) have formed a group to support a ban on the fracking that if it happens, will happen four hours from where they live and work. Why? Uh yeah, good question.

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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jun 15, 2012
June 15, 2012June 15, 2012

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:

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About MDN | Hydraulic Fracturing | Industrywide Issues

MDN Attends Screening of ‘Truthland’ Movie
June 14, 2012June 14, 2012

It was MDN’s pleasure to attend a screening of the newly released Truthland movie last evening at the Susquehanna Valley High School in Conklin, NY. Truthland is a short film, about 34 minutes in length, that takes as its mission the debunking of Josh Fox’s well-known movie Gasland.

The star of Truthland is a Pennsylvania woman by the name of Shelly DePue. She and her husband Phil and their children live on a farm in northeastern PA—land that’s been in Phil’s family for the past 120 years. They leased their land for shale gas drilling several years ago, and then along came Gasland with wild claims that fracking is hugely dangerous. The movie raised red flags and questions for Shelly and sent her on a journey to find out the truth (or as it turns out, half- and un-truth) about Gasland. This movie (watch it below) chronicles her quest to get her questions answered.

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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Swift Response to Cuomo’s NY Fracking Plan
June 14, 2012June 14, 2012

As MDN predicted yesterday, the initial reaction of anti-drillers in New York that Gov. Cuomo is considering limited fracking in the state has been negative (see this MDN story). They needn’t worry, and once they figure it out, they’ll be happy with Andy’s latest plan because it gives them an excuse to protest and rabble-rouse at town board meetings for the next two years. The fight is going local in New York.

The Albany Times Union hints that Cuomo’s “announcement” of his plans for fracking—which was leaked to the New York Times yesterday—is a trial balloon to gage public reaction to the idea that he would allow drilling in five (MDN calls it the “Lucky Five”) Southern Tier counties of New York for a couple of years to see how it goes.

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Energy Companies | New York | Norse Energy | Statewide NY

Norse Energy: The Little Driller that Could
June 14, 2012June 14, 2012

You have to admire Norse Energy Corp. (subsidiary of the larger Norwegian company of the same name). They rolled the dice by leasing most of their acreage for shale gas drilling in New York State, thinking there was no way it would take this long (now four years) for New York to begin high volume hydraulic fracturing. But it has taken this long, and Norse has tried to stay alive by selling off various assets, reducing staff, restructuring debt and in general doing whatever it takes to “hang in there.”

Just a few weeks ago Norse announced they were shuttering their Buffalo office and heading back to Houston (see this MDN story).

But the plucky Norse, not ready to throw in the towel quite yet, found encouragement in yesterday’s leaked trial balloon announcement that Gov. Andrew Cuomo may begin to allow very limited fracking soon (see this MDN story).

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Industrywide Issues | Jobs | Pennsylvania | Regulation | Statewide PA

DOL Targets Shale Gas Subcontractors over Pay Practices
June 14, 2012June 14, 2012

The U.S. Department of Labor (DOL) is targeting the shale gas drilling industry in northeastern Pennsylvania for enforcement actions. The specific issue they are targeting is subcontractors who DOL claims are intentionally misclassifying workers as independent contractors (“1099”) instead of as regular employees (“W2”). By doing so, DOL claims employers are skirting tax withholdings and payment of workers’ compensation and workers are denied benefits like paid holidays, family leave and overtime pay.

What evidence of this “widespread problem” has the DOL hot-and-bothered enough to launch a full-out attack on small businesses in PA? A study—with suspect data.

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Hydraulic Fracturing | Industrywide Issues | New York | Pipelines | Statewide NY

The Latest Anti-Drilling Scare Tactic: Radon in Shale Gas
June 14, 2012June 14, 2012

There’s no polite way to say this, so I won’t bother: The nutters are coming out of the woodwork. Damascus Citizens for Sustainability (DCS), NYH2O and 50 “other signatories” have sent a letter to Speaker Quinn of the New York City Council asking the speaker to convene hearings on the issue of radon in natural gas. They are claiming (and this is the nutty part) that Marcellus Shale gas contains radon and that Marcellus gas gets to market so fast the radon doesn’t have time to break down and dissipate. That is, it’s a health risk for New York City residents who use natural gas.

The solution, according to DCS and the others? Don’t use natural gas—at least not the cheap, abundant natural gas that comes from the Marcellus Shale.

Here’s their press release, if you can understand it:

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