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NewsLetters

Expo/Industry events for the next few months

DUG Eagle Ford
August 29-31, 2017
San Antonio, TX
https://www.hartenergyconferences.com/dug-eagle-ford 

Shale Insight
September 27-28, 2017
David Lawrence Center
Pittsburgh, PA
http://shaleinsight.com/ 

West Virginia Energy Expo
October 4, 2017
Morgantown, WV
http://www.wvenergyexpo.com/  

Utica Summit
October 11, 2017
Walsh University
North Canton, OH
http://www.uticasummit.com/  

Midstream PA 2017
October 19, 2017
Penn Stater Conference Center
State College, PA
http://midstreampa.com/ 

For other events visit http://www.shaledirectories.com/site/oil-and-gas-expo-information.html

Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, Bakken and Niobrara Shale Plays 

Federal Judge Gives Atlantic Sunrise Pipeline Approval on Properties.  A federal judge Wednesday gave Transco possession of five remaining properties in Lancaster County, Pa., including a right of way through land owned by a Catholic order of nuns near Columbia for the Atlantic Sunrise pipeline.

Judge Jeffrey Schmehl granted the pipeline giant’s motion to condemn the rights-of-way on five properties and gave it immediate possession of the land.

Transco’s owner, Tulsa, Okla.-based Williams Partners, wants a 50-foot-wide pipeline right-of-way through 35 miles of Lancaster County, Kallanish Energy reports.

A spokesman for Williams Partners, owner of Transco, said the Adorers of the Blood of Christ would not be required to immediately remove a chapel the nuns allowed to be built in a cornfield in the right-of-way in protest.

But the chapel “will eventually have to be relocated prior to pipeline construction,” spokesman Chris Stockton told Lancaster Online

"Oh my. I am very disappointed," Sister Bernice Klostermann told Lancaster Online when informed of the decision Wednesday evening. "I can't say anything now because I'm just in shock."

Still pending in U.S. District Court in Reading, Pa., is the nuns' lawsuit against Transco and the Federal Energy Regulatory Commission on grounds that the pipeline would violate their civil rights under the Religious Freedom Restoration Act.

"We appreciate the effort of the court to evaluate this issue and reach a timely decision," Stockton said, in a statement. "The orders awarding possession of the five remaining properties means we can begin timely construction of this important energy infrastructure project, pending receipt of the last remaining state and federal clearances expected in the coming weeks."

Atlantic Sunrise will flow 1.7 billion cubic feet per day of Marcellus Shale play natural gas from northeast Pennsylvania, to markets in the Mid-Atlantic and southeastern U.S.

The preliminary project design includes roughly 183 miles of new greenfield pipe, two pipeline loops totaling about 12 miles, 2-1/2 miles of existing line replacement, two new compressor stations in Pennsylvania, along with facility additions or modifications in Pennsylvania, Maryland, Virginia, and North and South Carolina.

The line connects with the existing Transco mainline in southeast Pennsylvania.

FERC Wants More Info from Rover.  The Federal Energy Regulatory Commission wants more information from the troubled Rover Pipeline on horizontal directional drilling (HDD) along the pipeline route in Ohio and nearby states, Kallanish Energy reports.

In a letter dated Tuesday, the federal agency told Energy Transfer Partners recommendations offered on nine completed HDD sites by a third-party company, Oklahoma-based J.D. Hair & Associates, should be incorporated at those sites.

FERC also wants assurances of the HDD procedures to be followed before it allows the final drilling under streams and highways along the route.

The agency outlined its position in a 48-page letter.

Those problems have been corrected or are in the process of being remediated, Texas-based Energy Transfer Partners (ETP) said in a FERC filing on Aug. 4.

Bloomberg also reported the Rover Pipeline has resulted in more environmental violations than any other interstate pipeline in the last two years, with numerous violations in Ohio, West Virginia and Michigan.

The pipeline has received 104 noncompliance incident reports from FERC, Bloomberg reported.

Last Friday, ETP had asked FERC to allow the company to begin limited commercial operations on the pipeline by Aug. 31. That request covers about 213 miles of the main pipeline and two laterals, including a 190.9-mile segment from Carroll County in eastern Ohio to Defiance in northwest Ohio.

The company has said Phase 1B from Seneca to Cadiz in eastern Ohio could be done in about 25 days. Phase 2 from Defiance north into Michigan and Ontario will not be fully constructed until late November or early December, and the company expects full commercial operations to begin in January.

The 711-mile pipeline will carry natural gas from the Marcellus and Utica shales to the Midwest, Canada and the Gulf Coast. The $4.2 billion pipeline would move up to 3.25 billion cubic feet per day.

MDN’s 8 Commandments for Rover to Start Horizontal Drilling.  Rover is a $3.7 billion, 711-mile natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. While Phase 1A of the pipeline is essentially done and ready to begin service by the end of this month other important parts of the pipeline are not done. 

If Rover wants the entire pipeline to be up and running by the end of the year, they must restart underground horizontal directional drilling (HDD) in various locations where it is now stopped. In Ohio, Rover experienced a series of mishaps, the most serious of which spilled 2 million gallons of non-toxic drilling mud in a swamp near the Tuscarawas River back in April. An investigation by the Ohio Environmental Protection Agency (OEPA) found the presence of diesel fuel in the drilling mud, which means the mud wasn’t so non-toxic after all. Rover believes sabotage may have been the cause. Since April, FERC has blocked all new underground HDD for the Rover project. Rover has asked (begged, pleaded) FERC, several times, for permission to restart the HDD work–at least in a few select locations. In July FERC gave Rover an initial to do list to get back in its good graces, but still would not lift the ban on HDD. FERC has finally responded with a list of eight (big) things Rover must do before HDD drilling can restart. We call them FERC’s Eight Commandments.  

ETP Sues Greenpeace and Other Anti’s.  Energy Transfer Partners LP has sued Greenpeace International, Earth First! and other groups, accusing them of inciting terrorist acts and vandalism to generate publicity and raise money for their causes while hampering the Dakota Access pipeline majority owner’s ability to raise money for projects.  

Energy Transfer is the second company in the last year to attack Greenpeace and its allies in court for engaging in what they claim is a racketeering scheme far beyond ordinary environmental advocacy. Resolute Forest Products Inc. made similar allegations over Greenpeace’s campaign against logging in a May 2016 RICO lawsuit. Both companies are represented by Kasowitz Benson Torres LLP, a New York-based law firm whose managing partner Marc Kasowitz is President Trump’s attorney.

Construction of the Dakota Access Pipeline, running from western North Dakota to southern Illinois, sparked months of protests last year, with clashes between environmentalists and police drawing international attention. The pipeline went into service June 1, following the construction of a final link under a part of Lake Oahe, near the Standing Rock Indian Reservation.

Locally, Energy Transfer Partners’ Sunoco Pipeline subsidiary is building the Mariner East project along a 350-mile route across Pennsylvania to deliver Marcellus Shale gas liquids by pipeline to Marcus Hook.

In the lawsuit, Energy Transfer says Greenpeace led a corrupt environmentalist organization, an enterprise that “cynically planted radical, violent eco-terrorists on the ground amongst the protesters, and directly funded their operations and publicly urged their supporters to do the same.”

Negative publicity generated by the demonstrations caused Energy Transfer to lose “many hundreds of millions of dollars” and damaged its ability to raise money from capital markets, according to the complaint, filed Tuesday in Bismark, N.D. Energy Transfer is seeking unspecified money damages, which would be tripled under U.S. racketeering laws; a court order barring the groups from further protests; and an order for the groups to return money to donors.

“Under the `Greenpeace Model,’ raising money and the network’s profile is the primary objective, not saving the environment,” Energy Transfer said. “’Issues are selected according to which ones will generate maximum publicity and donations, irrespective of the environmental merits.” 

The environmentalists’ campaigns are based on fabricated evidence and witness accounts to deceive the public, Energy Transfer said.

Among the other groups being sued by Energy Transfer is BankTrack, a Dutch not-for-profit group that raises money for non-governmental organizations.

The Dakota Access pipeline project spurred legal challenges from Native American tribes, principally the Standing Rock Sioux, objecting to the pipeline’s path across man-made Lake Oahe. Energy Transfer intervened in that action on the side of the U.S. Army Corps of Engineers.

In June, a Washington federal court judge, having rejected earlier entreaties to block the project, said the Army Corps hadn’t adequately considered the impacts of a potential spill from the line on fishing, hunting and “environmental justice, or the degree to which the pipeline’s effects are likely to be highly controversial,” and ordered it to reconsider those factors.

The Resolute Forest lawsuit is still pending in U.S. court in San Francisco.

PTTGC Cracker Could Be Getting Closer to Final Go Ahead.  There are developments regarding property surrounding the possible ethane cracker plant that may be built in Belmont County, OH.

Several residents of Dilles Bottom are reportedly already signing purchase option agreements.

According to sources, many houses in the lower part of Dilles Bottom are already empty, with owners having sold and moved out.
In at least one case, homeowners are already building a new home in another part of the county.

"PTTGC America has not yet made a final decision on the project in Ohio," said Dan Williamson, spokesman for PTTGC America. "However, the company has offered purchase option agreements to owners of all Dilles Bottom properties that are near the project footprint."

Williamson says it's unknown if PTT Global will exercise those options, but they are in place.

He says they've offered good faith agreements to each property owner who has signed a purchase option agreement.

There's no assurance that the cracker will be built there, just that they'll have the necessary land if it is.

"I think it's another sign that the company continues its due diligence, one step at a time," noted Mark Thomas, Belmont County Commission president.

Williamson said the first six checks were already mailed to property owners, with others expected to follow.

"So those receiving them will keep that money, whether or not PTTGC American ever buys their properties," Williamson said.

"It can be interpreted, if you will, as a continual positive sign that we are slowly making our way to what is again a positive decision," said Commissioner Mark Thomas.

Constitution Pipeline Loses this Round.  The Federal Energy Regulatory Commission finally regained its quorum after an unexpectedly long, six-month regulatory paralysis that had slowed down progress on an estimated $50-plus billion of new projects pending approval, as well as important FERC policy issues. However, those investors who are expecting that the Commission, where the majority of members are new appointees, will now put in motion several natural gas and crude oil pipeline projects that have stalled or been postponed or cancelled for regulatory reasons may end up disappointed.

The common misconception is that FERC is the primary cause of regulatory challenges for new oil and gas infrastructure projects. While the FERC approval process can indeed be tedious, regulatory impasses often develop at the state or even local levels where the FERC does not have jurisdiction.

Constitution Pipeline project is one of several recent examples where natural gas projects ran into regulatory roadblocks not because of FERC. Last week, a federal Court of Appeals rejected a lawsuit from the owners of Constitution that challenged the decision by New York State’s Department of Environmental Conservation last year to not grant the project a water-quality permit.

The appeal was filed in May 2016 with the United States Court of Appeals for the Second Circuit and contended, among other things, that the refusal was “arbitrary and capricious” and “constitutes an impermissible challenge to the Federal Energy Regulatory Commission’s Certificate of Public Convenience and Necessity which was issued to the company in December 2014.”

In its press release, Williams Companies (WMB), the operator, commented on behalf of the project sponsors who also include Cabot Oil & Gas (COG), Piedmont Natural Gas (PNY) and WGL Holdings (WGL):

  • Upon its review of the evidence, we believe the court will agree that this permit denial was arbitrary and unjustified and improperly relies on the same failed arguments that the NYSDEC made during the FERC certificate proceeding regarding the pipeline route and stream crossings. The NYSDEC’s allegation that it did not receive the necessary information is inaccurate as demonstrated by extensive and comprehensive technical materials submitted by Constitution for the record. We believe this allegation was intended to distract stakeholders from the application of a fair technical and regulatory review of the merits of Constitution’s application for a water quality certification. We are ultimately seeking to have the court overturn this veiled attempt by the state to usurp the federal government’s authority and essentially 'veto' a FERC-certificated energy infrastructure project.

Following a review that lasted over a year, the three-judge panel ruled in favor of New York State, concluding that:

  • the NYSDEP is responsible for evaluating the environmental impacts of a proposed pipeline on New York waterbodies in light of the state's water quality standards.
  • [The court] defer to NYSDEC's expertise as to the significance of the information requested from Constitution, given the record evidence supporting the relevance of that information to NYSDEC's certification determination.

The decision effectively upholds the authority of states to reject projects that impact state environmental standards.

Ironically, the relatively short (125-miles) Constitution Pipeline project was envisioned to increase the use of relatively environmentally-friendly natural gas produced from the prolific Marcellus shale deposits in northeastern Pennsylvania in southern New York and select areas of New England. The decision by the Court of Appeals effectively moves the project into the “highly improbable and, in any event, distant” category.

The greatest impact from the decision is on Cabot Oil & Gas, both in the form of the likely write-off of the equity investment in the project and the loss of hope that Constitution would ultimately expand the company’s access to strategically attractive markets.

Oil Demand Keeps Rising.  Total petroleum deliveries in July increased 4.9% from July 2016, according to the American Petroleum Institute.

Those deliveries averaged nearly 20.7 million barrels per day MMBPD and were the highest July deliveries since 2007, Kallanish Energy reports.

Total domestic petroleum deliveries, a measure of U.S. petroleum demand, increased 1.6% from June 2017. Year-to-date, total domestic petroleum deliveries increased 1.3% compared to the same period in 2016.

“Strong demand for petroleum is a good sign for the economy, which grew for the 98th consecutive month,” said API director of Statistics Hazem Arafa, in a statement.

Gasoline deliveries increased from the prior month and the prior year to reach an all-time high in July, API said.

Total motor gasoline deliveries, a measure of consumer gasoline demand, increased 1% from July 2016, to average nearly 9.7 MMBPD.

Compared to June, total motor gasoline deliveries increased 0.8%. Year-to-date, total motor gasoline deliveries dropped 1% compared to the same period in 2016, to the second highest year-to-date level at 9.2 MMBPD.

API said U.S. crude oil production continued to rise and was above 9 MMBPD for the sixth consecutive month. It was the highest July domestic crude production in 45 years since 1972, at 9.4 MMBPD. That is up 8.6% from July 2016.

Colorado AG and Regulators Stand Firm Against the Anti’s.  Colorado’s oil and natural gas regulations have been under assault for years by national environmental activist groups. It started with local oil and gas bans, followed by statewide ballot initiatives, and then anti-industry bills in the state Legislature.

The activists have also used litigation to support their campaign, and in March, the Colorado Court of Appeals handed them a partial win. In a 2–1 decision, the court ordered regulators to reconsider an activist proposal to indefinitely ban drilling statewide. The ruling generated significant headlines, mostly because the activists used a group of children to serve as the public face of the lawsuit.

In May, Colorado Attorney General Cynthia Coffman (R) filed an appeal, and it was the right call. Her action was unanimously supported by the Colorado Oil and Gas Conservation Commission (COGCC), a bipartisan panel that includes senior energy and public health regulators from the Hickenlooper administration. Even Boulder’s Democratic District Attorney, Stan Garnett, called for the case — Martinez v. COGCC — to be appealed to the Colorado Supreme Court.

In her appeal, Coffman said the Martinez decision — if left unchallenged — could lead to “rules that would entirely prohibit oil and gas-related activity.” Moreover, the ruling could overturn “comprehensive rules that make Colorado a nationwide leader in oil and gas regulation,” Coffman said.

State business leaders supported Coffman’s move, because the appeals court ruling would set a “perilous precedent” for regulation across all industries, not just oil and gas, said Mike Kopp, President and CEO of Colorado Concern, in an article for Western Wire. “[E]very industry in Colorado should now be concerned that economic and property rights considerations have been dangerously superseded. This is a grave threat to Colorado’s economy, the rights of property owners, critically important state revenue and the future of the nation’s energy renaissance,” Kopp added.

Time will tell what the state’s highest court decides. But in the meantime, let’s drop the pretense that a group of children brought this case. Because the children — as sympathetic as they may be — aren’t calling the shots. If you want to know who’s really in charge, check out the lawyers, who have a long history of working with fringe out-of-state activist groups.

Thankfully, Coffman and the COGCC have seen through this latest deception and will take this case to the state’s highest court. They are standing firm against activists who have no interest in oil and gas regulations, just oil and gas bans.

U.S. Ethane Going to India’s Petrochemical Industry.  Reliance Industries will import 1.6 million tons of ethane from the US in the current fiscal to replace natural gas and naphtha as feedstock at its petrochemical plants, a senior company official said today.

Use of ethane, a natural gas component that is expected to be produced in large volumes in North America after the shale gas revolution, will reduce company's petrochemicals feedstock cost by about 30 per cent, RIL COO for Petrochemicals Business Vipul Shah told reporters here.

The company has begun receiving consignment or cargo of ethane from US. Very Large Ethane Carriers (VLECs) are used to transport liquefied ethane from the US to the Gujarat Chemical Port Terminal Company Ltd terminal at Dahej, Gujarat.

"RIL has become the biggest importer of ethane from USA in 2017," he said, adding that using ethane would increase its petrochemicals operating profit by USD 300 million a year.

The company has contracted ethane supplies for more than 20 years from US, said Amit Mehta, head of gas business at RIL.

RIL uses 2.5 million tons a year of naphtha as feedstock in petrochemical crackers and ethane would reduce its use by 500,000 tons, which can be exported.

Ethane will be used as feedstock for RIL's crackers in Dahej and Hazira in Gujarat and Nagothane in Maharashtra. RIL sees 200,000 tons per annum increase in ethylene output from these crackers from ethane use.

Shah said the company has invested USD 1.6 billion in ethane business so far which include ships, pipeline and port infrastructure.

The investment, he said, can be recovered in less than four years.

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Permits

PA Permits August 17, to August 24, 2017

           County                                  Township                                          E&P Companies

  1. Greene                                         Morris                                                 EQT
  2. Lycoming                                     McIntyre                                             ARD Operating
  3. Lycoming                                     McIntyre                                             ARD Operating
  4. Washington                                Amwell                                               Range
  5. Washington                                Independence                                  Range

OH Permits for week August 19, 2017

            County                                   Township                                          E&P Companies

  1. Guernsey                                    Millwood                                            Eclipse
  2. Guernsey                                    Millwood                                            Eclipse
  3. Guernsey                                    Millwood                                            Eclipse
  4. Guernsey                                    Millwood                                            Eclipse
  5. Jefferson                                     Cross Creek                                      Ascent

Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149

Midstream PA