Two bills aimed at expanding natural gas infrastructure to rural and under-served areas in the state were passed by the Pennsylvania Senate on Wednesday. The legislation originated after realizing that a large part of Pennsylvania is not served by natural gas, even though the state hosts one of the largest natural gas deposits in the world. Senate Bill 738 would require natural gas utility companies to submit a three-year plan to the Public Utility Commission outlining plans for expansion. The bill will also allow for the accelerated expansion of projects at the request of residential, commercial, or industrial entities, and provide a cost-spreading plan for customers. Senate Bill 739 would amend the state’s Alternative Energy Investment Act and provide $20M for grants to schools, hospitals, and small business for access to natural gas. Such grants could provide up to half of the cost of a project. The bills will move to the Pennsylvania House of Representatives for further consideration.
Natural gas producers will pay $202.47 million in Marcellus Shale impact fees from 2012 activity, according to a June 13, 2013 Pennsylvania PUC press release. The Pittsburgh Post-Gazette reports that the number is down less than 1 percent from the $204.2 million collected from 2011 activity. Bradford County will collect the largest portion of the fees ($7.3 million) and Washington County will collect the second largest ($4.7 million). Chesapeake Appalachia paid the largest portion of the fees ($27.4 million), followed by Range Resources (nearly $24 million). The 2012 fees will be allocated as follows: county and local governments directly affected by drilling will receive $102.68 million, state agencies impacted by drilling will receive $28 million, and the Marcellus Legacy Fund will receive $71.79 million. Following the PUC’s release, Marcellus Shale Coalition CEO Kathryn Z. Klaber issued a press release, stating that the “[w]hile the impact fee represents a new and substantial revenue stream for local and state government agencies, the natural gas industry has also generated more than $1.8 billion in tax revenues since 2006 and has invested more than $500 million in road and infrastructure improvements, while contributing hundreds of thousands of dollars for emergency response training and other community-based programing.”
The Pennsylvania Independent Oil & Gas Association (PIOGA) appointed Joyce Turkaly as Director of Natural Gas Market Development, which is a newly created position. With this new position, PIOGA seeks to expand the use of Pennsylvania-produced natural gas in such applications as “natural gas vehicles and the fueling infrastructure; electric generation, replacing coal and fuel oil; industry and manufacturing; commercial applications including office buildings, health care and educational facilities, and apartment buildings; cogeneration; and natural gas liquids.”
On May 22, 2013, the Marcellus Shale Coalition (MSC) released a guidance document entitled Recommended Practices: Pipeline Boring. Pipeline boring, also called horizontal directional drilling, is used when trenching is impractical or impossible, such as beneath highways, railroads, and bodies of water. In addition to providing best practices for planning and construction, the document guides operators through dealing with the inadvertent return of drilling fluid and necessary corrective actions. This document is the seventh in a series of guidance documents developed by MSC’s various subject-specific committees.
West Virginia Governor Earl Ray Tomblin and the West Virginia Oil and Natural Gas Association, both enthusiastic advocates for utilizing natural gas produced from the Appalachian basin to fuel natural gas vehicles (NGVs), sponsored the 2013 Appalachian Basin NGV Expo and Conference this past week in Charleston, West Virginia. The conference agenda included discussions on the economic and environmental benefits of converting to NGVs, converting existing fleet vehicles into NGVs, and how to expand the NGV market. The conference featured speakers from Appalachian Basin natural gas producers, including Chesapeake Energy and CONSOL Energy, and fleet vehicle operators who are transitioning their gasoline and diesel vehicles to compressed natural gas, including Waste Management, which has more than 1,000 natural gas-powered trucks, and school bus manufacturer Blue Bird Body Company. The public had the opportunity to browse an exhibit hall that displayed various NGVs, including the world’s first natural gas-powered chopper.
The U.S. Senate Energy and Natural Resources Committee is hosting a series of three “public listening sessions” to gather information from stakeholders with an interest in federal policy concerning natural gas issues. The first session, held in a roundtable format, occurred on May 14 and addressed Infrastructure, Transportation, Research and Innovation. The remaining two sessions are scheduled for May 21 (to address Domestic Supply and Exports), and May 23 (to address Shale Development—Environmental Protection and Best Practices). A complete list of witnesses, which include natural gas producers, distributors, utilities, environmental groups, regulators, consumers and exporters can be found on the U. S. Senate Comiittee on Energy & Natural Resources website.
At its annual shareholder meeting today, Consol Energy announced that it intends to pursue – and focus on – additional drilling in the Appalachian Gas Fields. Financing for that drilling, the company indicated, may come from selling off and/or restructuring other pieces of its energy portfolio. The Post-Gazette has more on the company’s plans here.
An energy company’s proposal to expand its use caverns left behind from a century of salt mining in New York’s Finger Lakes Region for the storage of natural gas has drawn the ire of several community members that oppose the plans. The company would expand its use of depleted salt caverns in the vicinity of Seneca Lake, one of several narrow lakes in west-central Upstate New York, for the storage of liquid propane and natural gas.
For more than a century, companies have been mining salt beside Seneca Lake by drilling approximately 2,000 feet into a salt formation and injecting water to dissolve the salt. Previous owners used the remaining Seneca Lake caverns to store natural gas for decades. Opponents of the proposal said that an accident at two proposed brine ponds may jeopardize Seneca Lake, which provides drinking water to 100,000 people. Critics of the proposal also pointed to a 2004 explosion at a Texas salt storage facility and a 2012 salt mine collapse in Louisiana.
Akron city council has approved plans for the first natural gas filling station and truck terminal in the city, operated by J Rayl Transport. The company plans to convert their entire truck fleet from diesel to natural gas, or a combination of the two. The company cites the cheaper cost of natural gas, its ready availability and the fact that it is a cleaner burning fuel source as its reasons for the changeover.
On April 1, 2013, Dominion announced that it was submitting an application to the Federal Energy Regulatory Commission (FERC) for a $3.4 billion to $3.8 billion natural gas liquefaction project at its existing Dominion Cove Point LNG Terminal located on the Chesapeake Bay in Lusby, Maryland, the Pittsburgh Post-Gazette reports. Cove Point will serve both the Marcellus and Utica shale plays. Subject to receipt of regulatory approvals, Dominion plans to start construction on the 5.25-MTPA (million tons per annum) facility in 2014 and put the liquefaction facilities in service in 2017.
Kinder Morgan is reportedly eyeing Tuscarawas County for a natural gas processing plant and a fractionation plant. The reports surfaced when EV Energy Partners referenced a “recent announcement” by Kinder Morgan on the two plants. Kinder Morgan has since denied that it made any such announcement. However, other reports revealed that Kinder Morgan was planning to build natural gas processing plants to handle up to 300 million cubic feet of natural gas per day. Industry estimates indicate that there has been $6 billion invested in pipelines in the Utica Shale play to date.
Industry officials announced at a conference in Columbus, Ohio, that a series of infrastructure investments over the next year will begin to unlock access to the Utica Shale play. Projects currently underway by Dominion Transmission Inc. and Enterprise Products Partners LP, will respectively raise the regions capacity to separate valuable ethane from shale gas streams and help to deliver ethane from the Utica and Marcellus shale deposits to petrochemical plants on the Gulf Coast. Marc Halbritter, managing director for commercial midstream operations for Dominion Transmission Inc., believes “these developments will break the bottleneck that has so far held back Utica Shale development,” allowing for growth and expansion of the play. Other major infrastructure additions are also under construction or planned.
The Muskingum Watershed Conservancy District approved a lease with Antero Resources covering 6,500 acres located at Seneca Lake in Guernsey and Noble counties. The district, which stretches from southern Akron to the Ohio River, is now one of the biggest beneficiaries of the Utica Shale as a result of this lease and two prior leases executed in 2011 and 2012. The district has used initial leasing bonuses for debt payment and investments in public access and recreational facility improvement, with plans to utilize further payments for an additional $80 million worth of improvements and deferred maintenance.
On January 16, 2013, Governor Earl Ray Tomblin (D) announced the appointment of Harrison County House of Delegate Member Sam Cann, (D), former member of the West Virginia House of Delegates, to fill the vacated Senate seat for the 12th Senatorial District. Cann has been a long time advocate of strategic development of WV natural gas assets for the Mountain State. Charleston Gazette, 2/21/2011. Cann’s ‘natural gas’ resume includes serving as a Past President for the Independent Oil and Gas Association (IOGA) and on the Regional Advisory Board for the Independent Petroleum Association of America (IPAA). Both organizations advocate the safe and efficient development of natural gas exploration and production in the United States, including the shale-rich areas of West Virginia.
On January 14, 2013, the United States Environmental Protection Agency (EPA) finalized amendments to the National Emissions Standards for Hazardous Air Pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE). In addition to amending several rules governing the operation of emergency engines, EPA’s final rules creates a new subcategory for existing 4-stroke spark ignition RICE with more than 500 horsepower that are area sources and where the engines are located in “remote” areas. This new subcategory covers the type of engines commonly used for natural gas production and transmission.
For engines in remote areas, the rule establishes management practices and associated testing and monitoring requirements. Additionally, for engines in populated areas, operators are required to install catalytic controls, conduct performance tests on the catalyst, and implement certain measures to control the catalyst inlet temperature. The final rule will be effective 60 days after publication in the Federal Register.