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.
The Clarksburg Exponent Telegram reports that CONSOL Energy and Noble Energy are planning projects located in Upshur and Barbour Counties, West Virginia. CONE Gathering, which is a gas pipeline joint venture between the two companies, has secured the right to construct a 24-inch gas pipeline that will run 37 miles through Upshur and Barbour Counties. Construction on the project is expected to being within the next six to nine months, according to a CONSOL Energy spokesperson. CONSOL Energy also plans to drill eight wells in Barbour County, with completion work set to begin in the third quarter of this year.
Last month District Court Judge Irene Keeley, sitting in the Northern District of West Virginia, sought to have the West Virginia Supreme Court of Appeals (WVSCA) rule upon whether West Virginia law permits a natural gas producer to use a surface owner’s property to sink horizontal wells that draw gas from neighboring tracts. The decision in this case will have far reaching economic consequences in West Virginia. Now, the Court is slowing down the process through which the WVSCA may decide the novel issue. According to the San Francisco Chronicle, Judge Keeley has requested the record be supplemented with additional facts before the question is submitted to West Virginia’s highest court. Under this second order, it is unclear when the WVSCA may be called upon to determine this drilling issue.
Maryland recently enacted legislation, Senate Bill 854, which amends Title 14 (Oil and Gas) of the Environment Article, Annotated Code of Maryland, and imposes reclamation and financial assurance requirements. The new legislation adds the requirement of site reclamation as a permit condition, and replaces the existing bonding requirement of $100,000 (single well) or $500,000 (blanket bond) with a minimum bond of $50,000 per well and not less than “the most recent closure cost estimate.” The legislation also requires a permittee to carry a minimum of $1 million in environmental liability insurance, in addition to the existing requirement to maintain general liability insurance. Under this legislation, the Maryland Department of the Environment may establish alternative means to demonstrate financial assurance. The new legislation does not apply to wells that existed on or before October 1, 2013, unless the well is substantially modified after that date.
Although Marcellus Shale is located in western Maryland, no Marcellus Shale well permits have been issued in Maryland. Earlier this year, efforts to ban hydraulic fracturing in Maryland failed in the legislature.
On May 20, 2013, the Town of Canandaigua, New York, adopted a local law to extend by nine months a moratorium on all natural gas exploration and extraction activities within the town. The new local law extends the initial 18-month moratorium passed by the Town Board, which was scheduled to expire on June 22, 2013, until March 22, 2014. The Town Board indicated that the nine-month extension will allow for the development of a local law to permanently ban high volume hydraulic fracturing activities within the town.
A study released by the American Chemistry Council shows that increased supply and affordability of natural gas due to shale development has led to investments, including a new poly-propylene plant in Ohio, as well as increased plastics-additive and polyimide capacities at other plants in the area. The report looked at 97 newly announced projects with a potential total of $71.7 billion in new investment.
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.
According to recent press reports, Millennium Pipeline Company, L.L.C., plans to submit an application to the Federal Energy Regulatory Commission to build a new 60-mile natural gas pipeline in New York to transport gas from the Marcellus Shale. The new pipeline, which would be known as the Upstate Pipeline, would connect with an existing gas transmission line near Cortland, New York, and terminate at another existing gas transmission line near Syracuse, New York.
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.
A recent report from the Ohio Department of Natural Resources has indicated that Chesapeake Energy Corporation was the top producer of both oil and gas in Ohio’s Utica Shale play in 2012. The Ohio Department of Natural Resources indicated that production reports were submitted for 87 wells, of which 53 were drilled by Chesapeake.
Of the 11 companies listed in the shale gas production report, Chesapeake’s closest competitors produced less than one-third of the oil and less than one-tenth of the natural gas than that of Chesapeake. Experts believe that this low number of producers indicates that the Utica play still remains in its early stage of development and, a lack of pipelines and processing plants in eastern Ohio appear to be holding back production at well sites. Look for this to change in 2013 with planned Utica activity by several major oil companies such as BP and Chevron.
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.
The U.S. Coast Guard recently indicated that GreenHunter Water’s plan to transport brine from hydraulic fracturing via barges may undergo heightened scrutiny, with more federal agencies expected to weigh in on the matter. In addition to the Coast Guard, the federal agencies reportedly involved in the project discussions are the U.S. EPA, U.S. Department of Transportation, U.S. Department of Energy, and White House Office of Management and Budget. Although EPA’s involvement was foreseeable, the involvement of these additional agencies comes as a surprise. The project review process could involve public hearings, if they are deemed necessary by the agencies. Additional layers of review will likely delay project approval. Nevertheless, GreenHunter Water hopes to operate the new processing facility associated with the barge transport project later this year.
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.
Managers of FracFocus, the national database containing operator-disclosed information on substances used in hydraulic fracturing fluids, expect to officially launch an updated version on June 1, 2013 to improve the site’s functionality. The new version, referred to as FracFocus 2.0, will reportedly contain several enhancements, including expanded search criteria, upgraded accessibility for state agencies and improved data quality verification. Upgrades to the database became necessary as states began requiring drillers to disclose through FracFocus the chemicals used in their fracking fluid. The enhancements may also address recent criticisms contained in a Harvard Law School study, which concluded that FracFocus contains several flaws that prevent the database from serving as an adequate regulatory compliance tool for disclosure mandates.