The Akron Beacon Journal has profiled the proposed Bluegrass Pipeline, a proposed pipeline that would deliver gas from the Utica and Marcellus gas fields to processing facilities on the gulf coast. The pipeline would be constructed by Williams and Pipeline Partners under a partnership known as Bluegrass Pipeline, LLC. If approved by federal regulators, it would pass through Ohio and Kentucky to reach parts of Pennsylvania and West Virginia. Producers hope the pipeline will help alleviate infrastructure constraints that are limiting production in the Utica and Marcellus gas regions.
A bill was recently introduced in the Pennsylvania House of Representatives that would require use of closed containment or loop systems for all non-freshwater associated with drilling and hydraulic fracturing. Introduced by Representative Karen Boback, who represents parts of Luzerne, Wyoming, and Columbia counties, House Bill 1546 would prohibit the use of open impoundments to store “any produced liquids, treated water, hydraulic fracturing fluid or industrial wastes,” and would mandate the use of “closed containment system” or “closed loop system,” as defined in the bill. “Closed containment system” is defined as “closed noncorrosive tanks or containers” for storing the fluids described above, while “closed loop system” means “a series of interconnected, enclosed noncorrosive storage tanks or containers” that can help maximize the amount of drilling fluid that can be reused and recycled in the hydraulic fracturing process. Rep. Boback acknowledged that the bill is aimed at a minority of operators who still use open impoundments to store the described fluids.
As indicated in a recent press release, NiSource Midstream Services has initiated service on the Big Pine Gathering System in Southwestern Pennsylvania. The system, which spans 57 miles in total length, will transport natural gas from Marcellus Shale production to three different transmission lines.
On June 13, 2013, Constitution Pipeline Company, LLC filed an application with the Federal Energy Regulatory Commission to construct a 122-mile interstate transmission line from Susquehanna County, Pennsylvania, to Schoharie County, New York. The line, if approved, would transport approximately 650,000 dekatherms per day of natural gas, enough to supply 3 million homes. Reuters reports that the project is expected to cost $683M.
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 Pittsburgh Post Gazette is reporting that Governor Tom Corbett has forced Richard J. Allan, Pennsylvania’s Secretary of the Department of Conservation and Natural Resources, to resign. Effective immediately, Ellen Ferretti, Deputy Secretary for Parks and Forestry, will serve as the acting secretary. The reason for the resignation is unknown at this time.
Columbia Gas of Pennsylvania recently filed a lawsuit against the Borough of State College and Borough Manager Tom Fountaine after the borough refused to issue a right-of-way permit that would have extended a natural gas pipeline. Plans to convert Penn State’s West Campus steam plant from coal to natural gas require the extension. Statecollege.com and The Centre Daily Times report that council members passed a resolution instructing Mr. Fountaine not to approve the permit in April. The pipeline would run under several borough streets, including Bellaire Avenue, University Drive, Prospect Avenue and South Burrowes Street. Penn State and Columbia are reportedly working together to re-evaluate alternatives that would re-route the pipeline, which could take several weeks.
On May 29th, KDKA reported that Pennsylvania State Rep. Jesse White (D-Cecil) may have anonymously attacked local bloggers who supported the oil and gas industry. Specifically, it alleged that Mr. White may have used various aliases to anonymously criticize industry supporters. Energy In Depth traced the internet protocol (IP) addresses related to the anonymous posts and confirmed the posts were made by Representative White. The Pittsburgh Post-Gazette reports that after initially denying the accusations, Mr. White released a statement through the House Democratic caucus in which he acknowledged making the posts and apologized to two people.
The Pittsburgh Presbytery recently ended a yearlong moratorium on shale gas leasing and development on church property, the Pittsburgh Post-Gazette reports. Despite the recommendation of a special Presbytery shale gas task force, which favored extending the ban for another year, 230 voting members decided against renewing the year-old ban on shale gas development.
The Presbytery also approved allowing negotiation of a lease with Shell Oil and Gas Co. for a 32-inch gas pipeline across the Crestfield Camp & Conference Center, a 226-acre property near Slippery Rock, Pennsylvania. The proposed pipeline would be located on a corner of the property away from Slippery Rock Creek, camp buildings and activity areas.
NPR reports that two producers and the Department of Conservation and Natural Resources (DCNR) are negotiating the right to access sub-surface gas deposits in the Loyalsock State Forest. The Loyalsock State Forest consists of about 100,000 acres and stretches across Bradford, Lycoming, and Sullivan counties and sits above deposits of the Marcellus Shale. Anadarko and Southwestern Energy Company own the sub-surface mineral rights under about 18,000 acres where the DCNR owns the surface. There is an additional 7,000 acres in the Loyalsock State Park where the producers appear to own both the surface and sub-surface rights. The ongoing negotiations between the producers and the DCNR have riled environmentalists seeking the preservation of the special plants, endangered birds and animals that reside in the area. With heightened pressure on DCNR to respond, a public meeting on the drilling in Loyalsock will be scheduled for June.
On May 16th, Pennsylvania House Bill 1414 was referred to the Environmental Resources and Energy House Committee. If passed into law, the bill would require Pennsylvania oil and gas operators to share certain information concerning production, wells and royalties with lessors. The bill would require operators to include the following, among other items, on a check stub or on an attachment accompanying a royalty payment: (i) the name and/or number of the lease, property, unit or well for which the payment is being made; (ii) the month and the year of production; (iii) the total barrels of crude oil or total Mcf of gas sold; (iv) the price received per barrel or Mcf; (v) the total amount of severance and other production taxes and other permitted deductions; (vi) the net value of total sales from property, less taxes and deductions; (vii) the interest owner’s interest in production; (viii) the interest owner’s share of the total value of sales prior to deduction of taxes and other expenses; and (ix) interest owner’s share of sale value less the interest owner’s share of taxes and deductions.
On May 11, 2013, the Pennsylvania Fish and Boat Commission (PFBC) published notice in the Pennsylvania Bulletin of its proposed changes to its list of Wild Trout Streams. The proposed changes would add 47 stream sections and remove 3 stream sections from the list. The PFBC also published notice of its proposed changes to its Class A Wild Trout Streams, which would add 17 stream sections to that list. Both proposed changes will be considered by the PFBC at its next meeting on July 15 and 16, 2013. In the meantime, the public may submit comments to the PFBC within the next 30 days (by June 10, 2013).
On Friday, May 10, 2013, Columbia Gas Transmission, LLC (Columbia Gas) submitted applications to the Federal Energy Regulatory Commission (FERC) for the issuance of certificates of public convenience and necessity for a pair of natural gas pipeline projects in the Appalachian basin. The first project, the Smithfield III Expansion, would include the construction of a new compressor station in Washington County, Pennsylvania, as well as the installation of additional compressor units, new station piping, control systems, and other facilities at existing compressor stations and other sites in Pennsylvania and West Virginia. The second project, the Line 1570, would involve replacing and expanding certain existing pipeline facilities in Greene County and Washington County, Pennsylvania, as well as replacing and expanding certain facilities at an existing compressor station in Greene County, Pennsylvania. According to Columbia Gas, these two projects will allow the company to expand its gas service to customers in markets in the southwest.
By April 15th, local governments in Pennsylvania were required to complete paperwork related to how the shale gas well fee money was spent in 2012. However, millions of the money distributed under Act 13 remains unaccounted for because local governments were confused about how the forms were to be completed, NPR reports. A Public Utility Commission (PUC) spokesperson pointed out that it may be hard to track down and verify all the information, because under the law, the PUC does not have the authority to audit local governments. Next year, the PUC plans to switch from paper to electronic reporting to improve the reporting process.
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.