• Other Energy Stories of Interest: Thu, Apr 5, 2018

    The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Lauren Barr Katarski joins Bravo Group’s energy and environmental practice; natgas coming to homes and businesses in Tunkhannock, PA; Permian price differential widening on wave of new crude; CT residents curious about natgas pipeline expansion; US crude production grew 5% in 2017, heading for record in 2018; cyberattack affects at least four pipeline systems; fracking, BREXIT and an oil and gas shale bonanza; and more!
    Read More “Other Energy Stories of Interest: Thu, Apr 5, 2018”

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    PA “Rule of Capture” Case has Power to Limit Marcellus Drilling

    As we indicated in our post yesterday, the Pennsylvania Superior Court has handed down a decision that has the power to greatly restrict, even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well). This is a legal issue–and MDN is not written by a lawyer. Hence our earlier misreading of the importance and facts in the Superior Court decision. The issue, in brief, is that Monday’s court decision disallows using an age-old principle called the rule of capture, which we previously described. The rule of capture works for conventional drilling where underground deposits of oil and gas are in pools and the pool may exist underneath multiple surface property owners. Whoever gets there first and sucks the oil/gas out, wins. That’s the rule of capture in a nutshell. And it makes sense. You can’t be held responsible for oil and gas moving from one place to another as it’s extracted. And who knows how much of the pool is located under your property, or your neighbor’s property? The Superior Court justices ruled that the rule of capture doesn’t work for hydraulic fracturing because gas (and oil) trapped in shale rock does not freely move from one place to another as it does in a pool. The judges say the gas would “stay forever” where it is without fracking. In the case of Briggs v. Southwestern Energy, the Briggs family (in Susquehanna County, PA) alleges that when Southwestern drilled and fracked on the Briggs’ neighbor, the fracking was done close enough to their property that some of the gas located under their property (unleased) was released and extracted through the Southwestern well–a “trepass.” Southwestern countered that IF such a “trespass” took place, it falls under the rule of capture. The ultimate issue boils down to this: How far do fractures extend from a lateral well? An expert energy attorney told MDN off the record that Monday’s decision “could change the entire Pennsylvania shale industry” in two important ways…
    Read More “PA “Rule of Capture” Case has Power to Limit Marcellus Drilling”

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    Shell Ethane Pipeline Hearing Draws Few Supporters, Many Antis

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    Last night the first of three public hearings held by the Pennsylvania Dept. of Environmental Protection for the planned Shell Falcon Ethane Pipeline project was held in Monaca (Beaver County), PA. About 100 people turned up for the hearing, which lasted an hour and a half. No signs allowed. The only people who could speak had to register first. Of the 23 who did speak, 16 of them (including out-of-town movement antis) spoke against the project, while 7 people spoke in favor. The 97-mile Falcon Ethane Pipeline system has two “legs” that will feed Shell’s mighty ethane cracker plant. Shell is not using eminent domain for any of its leases for the pipeline. Every lease is negotiated and signed with individual landowners. Antis, in large part being organized and agitated by radical groups like FracTracker Alliance, are making a concerted effort to block the pipeline, hoping they can in turn stop the multi-billion dollar cracker plant currently under construction by blocking the pipeline that feeds it…
    Read More “Shell Ethane Pipeline Hearing Draws Few Supporters, Many Antis”

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    Atlantic Coast Pipe Wants 150 NC Workers, $25/Hr + Free Training

    Atlantic Coast Pipeline, the $6.5 billion Dominion Energy/Duke Energy pipeline from West Virginia through Virginia and into North Carolina has had a few setbacks, but that isn’t stopping construction on the pipeline–in all three states where it runs. On Monday we reported on the latest setback–news that the Federal Energy Regulatory Commission is refusing to extend tree cutting season for the pipeline (see FERC Won’t Extend Atlantic Coast Pipeline Tree Cutting Deadline). According to Dominion, FERC’s decision will not delay the late 2019 start date for the project. In the meantime, there’s work to be done! One of the places where work needs to get done is North Carolina. We spotted a story from NC that says Dominion and Duke are offering to train “more than 150 people” at Nash Community College, and then put them to work building the pipeline, for $19/hour plus $45/day, which we calculate to be a total compensation package of $24.63 per hour. Details below on how to apply for the jobs and get in on the free college training…
    Read More “Atlantic Coast Pipe Wants 150 NC Workers, $25/Hr + Free Training”

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    VA Tree Sitting Continues in Failed Attempt to Stop MV Pipeline

    Here’s the latest update in the ongoing story of “protesters” who are trying to stop progress in cutting trees for the Mountain Valley Pipeline (MVP), which will run from West Virginia into Virginia. We previously reported on illegal tree-sitters that judges and law enforcement refuse to remove (see WV Judge Refuses to Eject Tree Sitters Blocking Pipeline Work). The latest to join the tree sitting movement is a 61 year-old woman who calls herself “Red” and claims her family has owned land in the area for seven generations. When MVP workers began removing a ladder on the tree where Grandma Red planned to sit, she began screaming like a petulant three year-old child. Her histrionics got them to stop. She subsequently climbed the ladder and is still perched up a tree. The bald truth of the matter is this: Regardless of this nonsensical display by (a) misguided locals like Grandma Red, and (b) movement anti fossil-fuel radicals, MVP is in the process of getting built and will be completed. Tree sitting protesters are not going to stop it. So let’s grab some popcorn and enjoy the show in the meantime!…
    Read More “VA Tree Sitting Continues in Failed Attempt to Stop MV Pipeline”

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    Meaningless Poll Questions Yield Meaningless Results re PA Fracking

    This is how it works in biased, fake news land: You make up unspecific, wide-open questions that nobody really understands, and then biased, liberal media outlets interpret the “data” the way they want–to fit the predetermined media narrative. That’s what has just happened with meaningless poll questions from Franklin & Marshall College with respect to natural gas drilling in PA. We read through the questions they asked and thought, “What do some of these questions even mean?” The average citizen being asked these questions will assume and “read into” the questions what they *think* (but aren’t sure) is being asked, and answer the questions accordingly. In the end, it’s nonsensical. Meaningless. Fake. Then the lib machine kicks in to “report” that PA citizens, while still supporting drilling by a razor thin margin, actually think Marcellus drilling is bad for the environment. The latest media narrative is born: PA citizens are turning against gas drilling…
    Read More “Meaningless Poll Questions Yield Meaningless Results re PA Fracking”

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    WV Royalty Transparency Law Sheds New Light Beginning June

    Back in January MDN told you about West Virginia House Bill (HB) 4270, a bill that provides more transparency for landowners on their royalty statements (see WV Co-Tenancy, Royalty Transparency Bills Make Progress). The good news is that the bill passed and was signed into law by Gov. Jim Justice on March 27th. For far too long royalty statements have been loosey-goosey. Landowners (technically royalty owners) get no specifics on how much gas (or other hydrocarbons) were produced, what deductions were made, and why those deductions were made. HB 4270, which goes into effect on June 8, will fix all that. Here’s more details on what is being called the “Check Stub Bill”…
    Read More “WV Royalty Transparency Law Sheds New Light Beginning June”

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    WV DEP Launches Information Website for Major Pipeline Projects

    You’ve got questions about major pipeline projects planned or under construction in West Virginia? The WV Dept. of Environmental Protection has answers. WVDEP has just launched a website to help residents learn more about five major interstate natural gas pipeline projects: Atlantic Coast Pipeline, Mountain Valley Pipeline, Mountaineer Gas Eastern Panhandle Expansion Project, Mountaineer Xpress Pipeline, and Rover Pipeline. The website includes maps of pipeline routes, a searchable database for information such as inspection and enforcement actions and permit modifications, public hearing transcripts, and news releases. It’s all in there! Head on over to this page to get your questions answered…
    Read More “WV DEP Launches Information Website for Major Pipeline Projects”

  • Other Energy Stories of Interest: Wed, Apr 4, 2018

    The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Six permits awarded in Ohio Utica last week; study verifies Appalachia’s petechem advantage; Freeport, PA voting on XTO wells this month; merger forms largest Permian shale driller; western natgas markets whacked by other regions; American concerns over energy near record lows; Baker Hughes considers selling gas metering biz; big US money behind Canadian pipeline protests; Cuadrilla completes drilling UK’s first shale well; and more!
    Read More “Other Energy Stories of Interest: Wed, Apr 4, 2018”

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    New Details Emerge on Cabot’s Shale Plans in Central Ohio

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    Cabot Oil & Gas director of external affairs, George Stark, recently spoke to the Ashland Times-Gazette about the company’s plans to drill test wells in and around Ashland County, OH. As MDN previously reported, Cabot is sniffing around central Ohio, looking for “what’s next” after the Marcellus Shale. Last December we told you that Cabot has leased acreage in Ashland County (see Cabot O&G Considers Drilling in Ashland County, OH). Two weeks ago we told you that Cabot has filed for its first permit to drill a test well (see Cabot Files for Permit to Drill Below the Utica in Ashland, OH). Stark revealed, in his interview, that Cabot geologists “see something in Ohio” and that Cabot “wants to go touch it.” What, exactly, does Cabot want to touch? We originally thought it was the Utica, but Stark told MDN no, it’s not the Utica–but a layer “lower than the Utica.” However, Stark won’t say specifically which layer or layers. We now think we know. We also learn (from the article) that Cabot has acreage not only in Ashland, but in four neighboring counties too…
    Read More “New Details Emerge on Cabot’s Shale Plans in Central Ohio”

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    PA Superior Court Overturns “Rule of Capture” for Marcellus Well

    STOP PRESS: Shortly after this post was published, a MDN reader (an energy attorney) called us to alert us that our initial take on this case is not right. The case is NOT about a company stretching a lateral too far so that it trespasses under an adjoining property. Instead, the case is about the “zone of fracking”–that is, that fracking, by its nature, creates cracks that may open up and drain some of the gas under a neighboring property–even though the fracking was done properly within the boundaries of the leased property. The case (ominously) says that fracking itself can cause a trespass. Our attorney friend said this case has the potential to negatively affect Marcellus drilling in PA–in a BIG way. We will write another post on this issue tomorrow. In the meantime, just be aware that our initial take below is not correct. – Jim Willis, Editor

    The Pennsylvania Superior Court handed down an important decision yesterday that impacts both Marcellus landowners and drillers. The decision removes “rule of capture” as a way for shale drillers to drill under adjoining neighbors who haven’t specifically leased their property for drilling. The rule of capture came about with conventional (vertical only) drilling, cases in which a pool of oil or natural gas exists that runs underneath the property owned by multiple surface owners (see the image to the left). The rule of capture principle says “the first person to capture a natural resource owns that resource.” If you put a well or two or three on your property to extract the oil/gas, if it flows from the neighbor’s side to your side and up the well, it’s yours. Same for your neighbor. He/she can grab the oil and gas under your property if the pool exists under both. The principle originated in England (it’s a very old principle). However, Southwestern Energy tried to use the rule of capture principle to drill under property not leased for drilling that sits next to property that is leased–claiming the rule of capture. The molecules in shale are a whole other story than molecules sitting in a common pool. That’s what the Superiors ruled. Southwestern (and by extension, other Marcellus drillers) can’t simply extend a lateral well a few hundred feet under an un-leased neighbor, which certainly makes sense to us…
    Read More “PA Superior Court Overturns “Rule of Capture” for Marcellus Well”

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    Cyber Attack Hits Pipeline Computer System, Rover Pipe Affected

    We’ve read warnings about the potential for cyber (computer) attacks on the U.S. energy industry for several months. We understand how such an attack might affect a nuclear plant, or perhaps the electric grid. Screw up the computers managing and running a nuke plant or a significant portion of the electric grid and you have a class-one serious situation on your hands. However, we didn’t really think about pipelines. Did you know that pipeline networks, like electric grids, are monitored and controlled by computers and those computers can be compromised? We have to admit it was not on our radar screen. But that has now happened–and it affects not only pipeline systems in other parts of the country, but right here in the Marcellus/Utica. Energy Transfer Partners uses a third party service called Energy Services Group to manage all of its pipelines–a massive nationwide network. Energy Services provides EDI (electronic data interchange) services that reportedly cut costs and increases the speed with which companies exchange documents that used to be paper-based. Documents like those used in buying and selling natural gas at various trading hubs along major pipelines. On Monday, Energy Services was attacked electronically, knocking the service out of commission until further notice. Note that gas flowing through pipelines has not been affected. The affected computers don’t turn valves on and off. However, the ability to know who’s gas is flowing through the pipeline (who bought and who sold) has been slowed–on all of ET’s pipelines, including the newly-minted Rover Pipeline…
    Read More “Cyber Attack Hits Pipeline Computer System, Rover Pipe Affected”

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    Blue Ridge Mountain Res. Jazzed by Utica Wells in Washington, OH

    Blue Ridge Mountain Resources is jazzed about a pair of Utica wells originally drilled in 2014, but completed this past December, located in Washington County, OH. Blue Ridge is the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017 (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). Blue Ridge is 100% focused on the Marcellus and Utica Shale plays. The company’s current production is 100 million cubic feet equivalent per day (MMcfe/d). They own 119,000 acres of leases with huge potential–96% of their acreage is not yet developed (i.e. undrilled). In 2014 Magnum Hunter drilled two Utica wells in Washington County, OH but never completed them. In December Blue Ridge completed those wells. The early production results from the two wells is very encouraging and has allowed Blue Ridge to “de-risk” 6,700 surrounding acres that will support another 40-50 new wells. Translation: Washington County landowners signed with Blue Ridge can expect drilling activity soon…
    Read More “Blue Ridge Mountain Res. Jazzed by Utica Wells in Washington, OH”

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    Offer to Relocate Families Near ME2 Sinkholes; ME1 Down Until May?

    Sinkhole in Chester County, PA

    Sunoco Logistics Partners (aka Energy Transfer Parnters) has had its challenges in constructing the twin Mariner East 2 (ME2) pipelines across Pennsylvania. In March, MDN told you that underground horizontal directional drilling (HDD) work in Chester County had led to a third sinkhole developing in that area (see 3rd Sinkhole Appears Near ME2 Construction in Chester County, PA). For most of its length, ME2 is being built next to the existing ME1 (Mariner East 1), a liquids pipeline originally built in 1931. The third sinkhole in Chester County exposed a portion of ME1, leading to the state Public Utility Commission “temporarily” shutting down ME1 on March 7 (see PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole). ME1 would be, according to Sunoco, out of commission for “10 to 14 days.” Nearly a month later it’s still not running and until the state Dept. of Environmental Protection gets solid answers about the sinkholes, it won’t restart. It now looks like ME1 won’t be operational again until May. ME1’s closure has put several shippers, primarily Range Resources, in a bind (see Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown). Sunoco needs to conduct geotechnical studies near the sinkholes to get answers that will allow it to resume work. So, Sunoco has offered to temporarily relocate five families living near the three sinkholes–for up to six weeks–while it conducts tests of the area…
    Read More “Offer to Relocate Families Near ME2 Sinkholes; ME1 Down Until May?”

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    Ascent Resources Marcellus Exits Chapter 11 Bankruptcy

    In February, MDN brought you the news that Ascent Resources Marcellus, a company founded by Aubrey McClendon after he left Chesapeake Energy, had filed for Chapter 11 bankruptcy (see Ascent Resources’ Marcellus Unit Files for Chapter 11 Bankruptcy). Ascent Marcellus is one of several companies using the Ascent name. The Ascent Marcellus piece of the pie owns 43,000 of leases and has drilled some 547 wells in West Virginia. Big operation. The good news (if there’s ever good news in bankruptcy), is that 75% of the debtholders signed onto a prepackaged bankruptcy plan. The plan worked. On March 30 Ascent announced it has officially emerged from bankruptcy with a new board of directors and the same management team as before…
    Read More “Ascent Resources Marcellus Exits Chapter 11 Bankruptcy”

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    Will Trade War with China Affect $83.7B Investment in WV Shale?

    Chinese moo goo gai pan

    Last November President Trump and assorted state officials, including West Virginia State Commerce Secretary Woody Thrasher, visited China as part of a trade delegation. On that trip, China agreed to invest a total of $250 billion in American (mostly energy) projects, $83.7B of which (a full third!) will go to investments in West Virginia (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). It was all sunshine and flowers and butterflies. But now there’s a big, black cloud on the horizon (perhaps we always knew it was too good to be true). Following a seven month investigation into Chinese theft of American intellectual property, last week President Trump told the U.S. trade representative to levy tariffs on $50 billion worth of Chinese imports. China is threatening to impose tariffs on U.S. products in return. A good, old-fashioned trade war. The question has been raised, What about that promised $250 billion of Chinese investment in Uncle Sam? Will China move forward with those investments, or perhaps withhold them? According to one global energy expert, “The Chinese are going to see these things [the promised investments] as bargaining chips.” Which points out the problem with relying on an enemy’s investments…
    Read More “Will Trade War with China Affect $83.7B Investment in WV Shale?”