EQT now requires its contractors to join ISNetWorld (ISN), a platform that gathers, organizes, and verifies pre-qualification safety data and other information. EQT will continue to make safety requirements and approvals in-house utilizing ISN data, but the requirement will streamline the verification of safety data and ensure that contractors supply up to date information. Currently 61% of EQT’s contractors are ISN members.
Pennant Midstream, a joint venture between NiSource Midstream Services and Hilcorp Energy Co., will build a processing facility and a new pipeline as part of its $300 million project to serve the Utica and Marcellus shale plays in Ohio and Pennsylvania. The pipeline will move natural gas to a cryogenic natural gas processing plant, located near Youngstown in Mahoning County, which should be in service by the end of the year. According to NiSource Midstream Chief Operating Officer, Chad Zamarin, gas will start flowing through the first section of the pipeline within the next few weeks and the project will be finished by the second quarter of 2014.
Ohio governor John Kasich revised his proposed drilling tax after it has been rejected by the Ohio legislature. The new proposal would increase the proposed tax of 4% to 4.5% and direct 25% of the revenue generated by the tax to 33 Appalachian counties. The remainder would go toward funding state income tax decreases. The new proposal is likely to face continued resistence from industry groups.
Lawyers for parties challenging local gas drilling bans enacted in two upstate towns filed briefs on May 31, 2013 asking the New York Court of Appeals to review recent intermediate appellate court decisions. Permission to review the decisions is required from the Court of Appeals since the intermediate court unanimously upheld the right of municipalities to ban drilling via local laws and zoning ordinances. In 2012, the Court of Appeals granted 6.4 percent of requests for permission to appeal, and 7.4 percent of such requests in 2011.
According to recent reports, the Inspector General (IG) has informed officials at the United States Environmental Protection Agency (U.S. EPA) that an investigation will be conducted in connection with the agency’s efforts to reduce methane emissions from natural gas distribution lines. The IG investigation, coming on the heels of a recent report criticizing U.S. EPA’s methods for determining natural gas sector emissions, could help to clarify the extent of the agency’s authority to regulate methane emissions from distribution lines.
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.”
Last week, in Good Will Hunting Club, Inc. v. Range Resources-Appalachia, LLC, the U.S. District Court for the Middle District of Pennsylvania held that a landowner (Good Will) was bound by a five-year extension clause in an oil and gas lease that it signed with Range Resources because drilling commenced within the initial term of the lease. The court concluded that staking a drill site, obtaining permits, obtaining easements, clearing timber, and beginning construction of a well pad clearly constituted commencement of drilling operations even though no drill bit had touched the ground. Good Will argued that the five-year extension clause was unenforceable because Good Will was not aware of the clause. However, the lease had been negotiated on behalf of Good Will by a consultant who had authority to execute the lease on Good Will’s behalf and the Court concluded that the consultant “had actual authority to negotiate the Lease… and it [was therefore] his understanding of the terms of the Lease that bind[s] Good Will.”
In Summit Petroleum Corp. v. US EPA, 690 F.3d 733 (6th Cir. 2012), the U.S. Court of Appeals for the Sixth Circuit overturned the US EPA’s finding that a natural gas sweetening plant and approximately 100 gas wells scattered across a 43-square-mile area in Michigan should be treated as a single source for purposes of Title V of the Federal Clean Air Act. The case turned on whether the plant, wells, flares and pipelines were located on “adjacent properties” for purposes of the Title V permitting program, which requires the aggregation of individual sources in making major source determinations if certain requirements are met. In a split decision, the Sixth Circuit applied the plain meaning of the term “adjacent” and rejected the US EPA’s longstanding reliance on functional relatedness in conducting an adjacency analysis.
Read about this development and more in the Babst Calland Report. Access the Report’s executive summary here. Request a copy here.
Speakers at a recent conference in Columbus, Ohio expect the Utica and Marcellus shale fields to become the most prolific source of natural-gas liquids in the world. While there is plenty of oil and gas in the ground, producers are restrained by the current infrastructure in eastern Ohio and western Pennsylvania. The construction of multiple cracker facilities for processing natural-gas liquids, and pipelines to transport gas and oil, is needed in order for the region to reach its full potential. Industry spokesmen say that there is potential for the play to produce 500,000 barrels per day of natural-gas liquids by 2018.
On May 29, 2013, WV Governor Ray Tomblin announced the establishment of the Appalachian Petroleum Technology Training Center, which will include joint programs hosted by West Virginia Northern Community College and Pierpont Community and Technical College and is supported in part by the oil and gas industry. Students will have the opportunity to earn a two-year associate degree or a one-year certificate program in the field of petroleum technology through the program, which opens next fall. The Center will have hands-on facilities, including indoor and outdoor drilling simulation laboratories. Corky Demarco, Executive Director for the West Virginia Oil and Natural Gas Association, noted that “Having business and industry involved in the curriculum and facility planning gives us confidence that graduates will have the skills and hands-on training needed for industry careers.”
New York Governor Andrew Cuomo recently stated that he would make a decision on whether to lift the state moratorium on hydraulic fracturing before the 2014 election. Cuomo said that the results of a review of potential health effects from hydraulic fracturing by the state health commissioner, Dr. Nivah Shah, should be ready within several weeks. “I expected it to be concluded already,” Cuomo said. “It’s not in the distant future. But it’s not done yet.”
Over this past week (May 28th through 31st), a review team assembled by the State Review of Oil & Natural Gas Environmental Regulations (“STRONGER”) has conducted an in-state review of Pennsylvania’s Oil and Gas Regulatory Program. The six person review team consisted of representatives from other state regulatory entities, the oil and gas industry, and public interest organizations. Pennsylvania’s program has been reviewed four times since 1990, the last being in 2010. Following the in-state review, the STRONGER review team members will complete a written report that will be published on STRONGER’s website. The written report must follow the established guidelines developed by STRONGER and adopted by the Interstate Oil and Gas Compact Commission.
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.
Residents in the Muskingham Watershed Conservancy District are likely to see reduced property assessments as a result of recent shale leasing and water sales. The Muskingham Watershed Conservancy District stretches across eighteen Ohio counties and roughly 500,000 property owners pay a $12 annual assessment. The District has entered into significant lease agreements and water sales agreements in recent months resulting in signing bonuses of over $77 million. Officials from the district are meeting tomorrow about the possibility of reducing the annual assessment.
Yesterday, the Sixth Circuit Court of Appeals ruled on a case of first impression involving Ohio’s four-year statute of limitations on lawsuits arising from miscalculation of royalty payments in oil and gas leases. It had been successfully argued in the U.S. District Court that any miscalculation occurring after an initial miscalculated payment was part of a “continuing violation” and that the limitations period ran from the date of the initial miscalculation. On appeal, the Sixth Circuit reversed the U.S. District Court and ruled that Ohio law dictates that the royalty payment provision in the oil and gas lease at issue be treated as a divisible contractual obligation. Because the contractual obligations were determined to be divisible, each alleged miscalculation triggers a new four-year limitations period. Thus, any alleged miscalculated payment which occurred during the four years prior to the lawsuit could be included in a claim for breach of the oil and gas lease.