According to recent press reports, President Judge Joseph F. Kameen of the Pike County (Pennsylvania) Court of Common Pleas has granted an injunction to prevent protestors from interfering with the construction of a gas pipeline in northeastern Pennsylvania. The proponent of the project, Tennessee Gas Pipeline, L.L.C., received a certificate of public convenience and necessity from the Federal Energy Regulatory Commission to build the pipeline last year, and the line is projected to be in service by November 1, 2013.
The Marcellus shale play reached a production rate of more than 7 billion cubic feet per day, making it the largest gas-producing play in the United States, IHS reports. This is despite the fact that due to low natural gas prices, the number of active drilling rigs in the Marcellus shale play declined by one-third to approximately 80 rigs during 2012. However, the Marcellus still has more gas-directed rigs running than any other play in the United States. The most active counties in the Marcellus shale play were Bradford, Lycoming, Susquehanna, Tioga and Washington.
A coalition of environmental and community groups plan to ask the United States Environmental Protection Agency to investigate and audit Ohio’s regulatory program of deep injection wells. The Center for Health, Environment & Justice, and other groups, are encouraging the federal government to consider suspending the Ohio Department of Natural Resources’ authority to oversee deep injection of wastewater from oil and gas drilling.
Reflecting the development of barge transport for moving fluids from natural gas exploration and production activities, GreenHunter Water, LLC recently bought a 10.8 acre barging terminal facility in Wheeling, West Virginia. The terminal facility was previously used as a gasoline storage facility and will be converted into a water treatment, recycling, and condensate-handling logistics terminal. The facility is scheduled to begin operation in the third quarter of this year. The price for the barge facility was $750,000, and is touted as being the first of its kind in the country. GreenHunter Water is a subsidiary of GreenHunter Energy, Inc., a water resource, waste management and environmental services company.
On March 11, 2013, Pennsylvania State Representative Mike Reese introduced legislation that would require a new disclosure statement in easements for certain natural gas pipelines. The legislation, House Bill No. 904, specifically provides that “[a]ny easement agreement for a natural gas pipeline, other than a natural gas pipeline operated by a public utility regulated by the commission and used to provide retail natural gas service to end-use customers, entered into or otherwise obtained after the effective date of this section shall include a disclosure statement identifying the natural gas pipeline’s potential impact radius and potential impact circle.” The terms “potential impact radius” and “potential impact circle” are defined by referencing the definitions already established in the minimum federal safety standards for gas pipeline facilities.
In what appears to be a first in Pennsylvania, on March 11, 2013, Forward Township in Allegheny County enacted an ordinance specifically targeting and extensively regulating both transmission and gathering pipelines. While the ordinance is technically not a zoning ordinance, it imposes an approval process similar to a conditional use whereby an application is reviewed by the Township Planning Commission and approved by the Board of Supervisors, which may place any conditions or restrictions on the permit that the Board determines is necessary for the public health and safety. In addition to a detailed application, the ordinance requires an application fee of $3,000 per mile of pipeline proposed (up to $15,000) and, upon approval by the Board, a performance bond of $25,000 per mile of pipeline. The operator must also provide the Township with an escrow or letter of credit in the amount of $50,000 for the closure and abandonment of the pipeline for any restoration of the property, air or environment where the pipeline is located. The ordinance probably is preempted by a number of state and Federal statutes.
The Ohio Department of Natural Resources posted revised maps last week, indicating that drilling opportunities for oil and natural gas may extend further west and south than initially expected. Information gleaned from wells drilled last year, as well as samplings from test wells, indicate a new potential “hot spot” for production on the border between Marion and Wyandot counties. The revised maps also indicate that production may be greater than expected in Hancock, Hardin, Wyandot and Seneca counties.
On March 8, 2013, Pennsylvania State Representative Greg Vitali (D-Delaware County) introduced legislation, House Bill 950, to permanently ban Marcellus Shale leasing on “lands owned and managed by the Department of Conservation and Natural Resources” (DCNR). In 2010, then-Governor Ed Rendell imposed by executive order a moratorium on additional leasing of state forests for drilling. Vitali said his legislation is needed because Governor Tom Corbett could lift the Rendell moratorium at any time. According to Vitali’s press release, House Bill 950 would not affect drilling on private land, nor would it prevent drilling on the more than 700,000 acres of state forest already available for drilling.
On March 8, 2013, the Federal Energy Regulatory Commission (FERC) issued an order authorizing Dominion Transmission, Inc.’s requests to build two new pipeline projects in New York and Pennsylvania. The two projects are the Tioga Area Expansion Project, which will include 15 miles of new 24-inch diameter pipeline in Tioga, Greene, Potter, and Clinton Counties, Pennsylvania, as well as Steuben County, New York, and the Sabinsville to Morrisville Project, which will include 3.56-miles of new 24-inch diameter pipeline and additional facilities in Tioga County, Pennsylvania. FERC’s authorization is conditioned upon Dominion placing the projects into service within two years.
The State Journal reported earlier this week that New York Health Commissioner Nirav Shah plans to make a recommendation to Governor Andrew Cuomo “in weeks” on whether the state should approve hydraulic fracturing, despite reports that the Pennsylvania-based Geisinger Health System study is years away from being completed. Governor Cuomo responded by stating, “Nobody ever said that we were waiting for the studies to be finished … The Department of Health was going to be looking at those studies and see if there was anything constructive in those studies.” Cuomo also indicated that the recent legislative effort to pass a two-year moratorium extension will likely fail.
A recent study by the Proceedings of the National Academies of Sciences concluded that Pennsylvania’s waterways show little evidence of damage from chemical spills from oil and gas operations. The Associated Press reports that the study covered almost 5,000 gas drilling sites around the state. The study noted a 5 percent increase in suspended solids downstream of drilling operations, but the study did not determine the source of the increased suspected solids, which are often associated with runoff from development. The study also noted a 10 percent increase in chloride levels downstream from plants accepting wastewater.
Williams and Boardwalk Pipeline Partners announced that they have entered into a letter of intent to form a joint venture to build new pipelines and upgrade existing ones to provide a pathway for natural gas liquids (NGLs) like ethane to move from the Marcellus and Utica shale plays to petrochemical and export facilities in the U.S. Gulf Coast and the Northeast U.S., the Post-Gazette reports. The proposed “Bluegrass Pipeline” would provide producers with 200,000 barrels per day of mixed NGLs take-away capacity in Ohio, West Virginia and Pennsylvania, and such capacity could be increased to 400,000 barrels per day to meet market demand. Williams and Boardwalk hope that by combining new construction with existing pipelines the Bluegrass Pipeline can be placed into service and begin serving customers by the second half of 2015. The plan requires approvals from the companies’ boards and from regulators, which Williams and Boardwalk hope to receive this year.
Governor John Kasich recently proposed an increase in the severance tax rates on the production of oil and gas to 4% for oil and natural gas liquids and 1% for gas. This is up from the current rates of 20 cents per barrel of oil and 3 cents per 1,000 cubic feet of natural gas with no tax on natural-gas liquids. The proposal has sparked a debate in the Ohio legislature. State Treasurer Josh Mandel and Ohio House Speaker William Batchelder have publically opposed the severance tax increase. Batchelder decried the severance tax increase calling it “nonsense” and suggested that it will fail to be put in to law.
The Secretary of the Pennsylvania Public Utility Commission (PUC) published a letter in the March 9, 2013 issue of the Pennsylvania Bulletin containing information on the annual registration requirements for pipeline operators under the Gas and Hazardous Liquids Pipelines Act. The Act, more commonly known as Act 127, provides PUC with the authority to regulate gas and hazardous liquid pipelines that are not operated by public utilities. As explained in the letter, PUC is requiring Act 127 pipeline operators to submit a registration form by March 31, 2013, as well as a $250 annual registration fee. The form is to include information on the total amount of regulated pipeline mileage as of December 31, 2012, which will then be used to determine the amount of user fees that will be assessed for each operator in an invoice that PUC intends to send to each operator later in the year.
The New York State Assembly recently passed legislation to extend the moratorium on high-volume hydraulic fracturing until May 2015, but the measure faces an uncertain future in the state Senate. Supporters of the moratorium, which has been in place since 2008, claim that more time is needed to study the impacts of hydraulic fracturing.
New York missed the February 2013 deadline to release an environmental impact report, which would have provided guidelines for drilling regulations. However, New York Department of Environmental Conservation (DEC) Commissioner Joseph Martens reportedly stated that DEC would issue permits before drafting regulations if the New York State Department of Health deemed hydraulic fracturing to be safe.