As announced in today’s Federal Register, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has released a new draft of its proposed Integrity Verification Process (IVP) for gas transmission lines and extended the period for submitting public comments on the proposal from September 9, 2013, to October 7, 2013. PHMSA revised its original version of the draft IVP in response to comments received from various stakeholders at an August 7, 2013 public workshop. While still in the early stages of development, the IVP is part of PHMSA’s efforts to comply with a mandate in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, the most recent reauthorization of the federal pipeline safety laws, and to address the recommendations issued by the National Transportation Safety Board following its investigation of a September 2010 natural gas transmission line failure in San Bruno, California.
The Ohio Department of Natural Resources released the latest update to permitting, drilling and production activitity in the Utica shale play in Ohio. As of September 7, 542 Utica wells have been drilled with 152 of them being in production. Ohio has approved 882 Utica shale permits.
On September 6, 2013, the New York State Department of Environmental Conservation’s Deputy Commissioner for Administration told a legislative committee there is no timeframe for a decision on whether to lift a state moratorium on hydraulic fracturing. In testimony before the State Assembly Environmental Conservation Committee, Anne Reynolds said that the DEC is in the midst of reviewing more than 100,000 public comments submitted on the agency’s 2011 draft environmental review of hydraulic fracturing in the Marcellus Shale. Reynolds also told the committee that she did not have any information on the status of the state Department of Health’s review of the public health effects of hydraulic fracturing, which Governor Cuomo has said must be completed before a decision on whether to lift the moratorium is made.
The Pittsburgh Business Times recently reported that Giant Eagle and Peoples Natural Gas have partnered to open a compressed natural gas filling station at the GetGo station in Cranberry Township on Route 228. According to the article, Giant Eagle expects to begin selling CNG at between $1.90 and $2.00 per gallon.
Last week, global research firm IHS released a report regarding the economic impact of U.S. unconventional oil and gas production, Bloomberg reported. According to the IHS report entitled America’s New Energy Future: The Unconventional Oil and Gas Revolution and the Economy – Volume 3: A Manufacturing Renaissance, in 2012, unconventional oil and gas activity increased disposable income by an average of $1,200 per U.S. household. This study examined the full energy value chain (upstream, midstream and downstream energy and energy-related chemicals) and the overall contributions on the manufacturing sector and U.S. economy. Based on this examination, U.S. oil and natural gas production has supported 2.1 million jobs and has added nearly $75 billion in federal and state revenues.
William Kinney of the Twinsburg-based Summit Petroleum Inc. was the winner of the 2013 Oilfield Patriot Award given by the Ohio Oil and Gas Association. The award recognizes individuals who “protect, promote and advance the common interests” of Ohio’s crude oil and natural gas industry. Kinney describes the award as the high point in his career because it is awarded by his peers in the industry. Kinney is a former president of OOGA and founded Summit Petroleum in 1984. He continues to expect that shale energy develop will provide an economic boost to Ohio and will contribute to job growth.
On September 4, 2013, in the case of Whiteman v. Chesapeake Appalachia, L. L. C. (2013 U.S. App. LEXIS 18359 (4th Cir. W. va. 2013)), the United States Court of Appeals for the Fourth Circuit upheld a District Court ruling from the Northern District of West Virginia regarding claims of trespass against Chesapeake Appalachia, L. L. C. brought by the surface owners of a 101 acre parcel in Wetzel County. The Fourth Circuit Opinion, written by Judge Faber, concluded that the District Court properly granted summary judgment to Chesapeake. The Opinion specifically stated “that creating drill waste pits was reasonably necessary for recovery of natural gas and did not impose a substantial burden on the [Plaintiffs] surface property, that creation of the pits was consistent with Chesapeake’s rights under its lease, was a practice common to natural gas wells in West Virginia, and consistent with requirements of applicable rules and regulations for the protection of the environment.”
On August 29, 2013, the New York Court of Appeals announced that it has granted appeals to review two cases which upheld local natural gas drilling bans in the upstate towns of Dryden and Middlefield. The lower court decisions, both of which were issued on May 2, 2013, held that the New York Oil, Gas, and Solution Mining Law does not preempt a municipality’s authority to enact a zoning ordinance that prohibits drilling within its jurisdiction. Over the past few years, more than 50 municipalities in New York have banned gas drilling. A spokesman for the Court of Appeals told the Associated Press that the cases will likely be heard and decided in Spring 2014.
As previously reported on the Babst Calland Shale Energy Law Blog, the Pennsylvania Environmental Quality Board considered and approved the Pennsylvania Department of Environmental Protection’s (“PADEP”) proposed regulations regarding Subchapter C to Chapter 78 of Pennsylvania’s oil and gas regulations by a vote of 16 to 2 at its August 27, 2013 meeting. The proposed rulemaking will next be reviewed by the Commonwealth’s Attorney General’s Office and the Office of General Counsel. Following this review, the proposed rulemaking will be published in the Pennsylvania Bulletin for public review and comment. PADEP has recommended a 60-day public comment period and at least six public hearings to be held at various locations across the Commonwealth.
Consol Energy, Inc., the local energy company that was granted a lease covering the Allegheny County Airport Authority’s nearly 9,300 acres in Moon and Findlay Townships, announced preliminary plans to drill 47 horizontal wells from six well pads, with production expected to occur in 2015. Along with Allegheny County and Airport Authority officials, Consol unveiled the plans on Tuesday. The six well pads are on or near the borders of the Pittsburgh International Airport, and plans could include additional wells in the future into the Upper Devonian Shale, a formation above the targeted Marcellus Shale formation. Consol reported the price tag for the 47 wells could reach $500 million.
Consol was granted the lease earlier in 2013 after Allegheny County council approved the terms of the lease, which included a $50 million bonus payment and 18% royalty. Early estimates indicate the royalties to the county could reach as high as $450 million over 20 years. Airport and county officials are hopeful that, in addition to the direct monetary benefits from the natural gas wells, companies in the area, especially aviation-based employers, will see an increase in business.
Following the announcement, Consol held an open meeting where concerned citizens had the opportunity to voice concerns, ask questions, and see the initial plans. With the proposed wells, plans also include 17 miles of gas pipeline, 12 miles of water lines, and three water impoundments, each of which will be utilized to store fresh water as well as flowback water, as necessary.
Additionally, the Tribune-Review reports that Consol will purchase approximately 300 million gallons of water from the Moon Township Municipal Authority and the Findlay Township Municipal Authority between 2015 and 2018. Consol will be the largest customers for both municipal authorities.
The Bureau of Land Management’s revised proposal to regulate hydraulic fracturing on federal lands remains controversial, inviting more than 600,000 comments from 250 public interest groups calling for stricter regulations, as well as strong opposition from industry groups such as the American Petroleum Institute and the Western Energy Alliance. BLM released the revised proposal in May. The deadline for public comment, which was extended once, passed last Friday, August 23rd. BLM will review the comments before publishing a final rule. BLM holds 700 million acres of federal mineral estate and 56 million acres of Indian mineral estate.
The Pittsburgh Post-Gazette reports that Shell Chemical, a division of Royal Dutch Shell, has begun to solicit ethane commitments from Marcellus Shale operators for its proposed Beaver County, Pennsylvania cracker plant. The company has already secured commitments from CONSOL Energy Inc., Noble Energy Inc., Seneca Resources Corp. and Hilcorp Energy Co. Shell has indicated that the response from bidders will help to determine whether it will build the first world-scale cracker plant in the Marcellus region. The bidding period will last two months.
The Wheeling Planning Commission has approved plans of GreenHunter Resources, Inc. for a water recycling and barging facility to be constructed in Wheeling, WV. The $1.7 million construction project, as reported by the Pittsburgh Business Times, is GreenHunter’s latest solution for dealing with production water resulting from hydraulic fracturing activities in West Virginia. The facility will treat production water to be re-used by companies, with any remaining water transported by barge to disposal wells. GreenHunter estimates that every 10,000 barrel barge load can remove 100 trucks from the water transportation process.
A report created by the West Virginia Department of Environmental Protection’s Office of Oil and Gas, which was anticipated pursuant to previous studies conducted by the DEP, indicates that no new rules are necessary to protect West Virginia’s air quality from natural gas drilling, reports The Sacramento Bee. The report stated that based upon air quality monitoring data there were no indications of a public health emergency or threat because of hydraulic fracturing. The results of the study were presented to West Virginia State Lawmakers on Tuesday during an interim committee meeting.
This week, the Pittsburgh Business Times published a ranking of the largest law firm energy practices in the Pittsburgh region. Among the 31 law firms listed, Babst Calland, with 70 lawyers serving the energy industry, ranked first among all firms practicing energy law. Serving a majority of E&P and Midstream operators in one or more legal practice areas, Babst Calland’s energy practice has grown six-fold during the past few years, including full-service offices in Pennsylvania, Ohio and West Virginia.
To view a copy of the full listing, click here https://www.bizjournals.com/pittsburgh/subscriber-only/2013/08/16/Largest-region-law-firm-energy-practices.html.
The Pittsburgh Business Times publishes weekly lists, which are compiled annually in the Book of Lists and recognized by readers as reliable and reputable sources of business information.