The U.S. Department of the Interior Bureau of Land Management (BLM) recently announced that it will revise its draft proposal to regulate fracking on federal lands. According to BLM, approximately 90 percent of wells drilled on federal and Indian lands utilize hydraulic fracking. BLM is seeking to address concerns raised in over 170,000 comments it received in response to its May 2012 proposal. Revisions will reportedly be sent to the Office of Management and Budget next week for review. BLM spokesman Blake Androff reportedly stated that the agency is improving the draft proposal “in order to maximize flexibility, facilitate coordination with state practices and ensure that operators on public lands implement best practices.” BLM expects to release the revisions by March 31, 2013, and will seek comments on the revised proposal.
On January 11, 2013, the Federal Energy Regulatory Commission (FERC) issued an order denying a joint request by three environmental groups to delay the construction of Tennessee Gas Pipeline Company, L.L.C.’s (TGP) Northeast Upgrade Project in Pennsylvania and New Jersey. FERC found that the environmental groups had not shown that they would be irreparably harmed by allowing the Project to go forward, and that the agency had complied with the National Environmental Policy Act in considering the environmental impacts of the Project. According to a January 10, 2013 press release, two of the environmental groups have filed a separate challenge to FERC’s approvals of the Project in the U.S. Court of Appeals for the District of Columbia. Additionally, as noted in a previous post, TGP recently filed a lawsuit in federal court seeking to block an administrative challenge to the Project before Pennsylvania’s Environmental Hearing Board.
After taking his oath as the 51st Auditor General of Pennsylvania on January 15, 2013, Eugene DePasquale announced that one of his “first official duties as auditor general will be to initiate a performance audit of the Pennsylvania Department of Environmental Protection to make sure our constitutional right to pure water is not being compromised by natural gas drilling.” The following day, Mr. DePasquale called and sent a letter to DEP Secretary Michael Krancer to inform him of the performance audit of the years 2009 through 2012 for the DEP’s water programs related to the “adequacy and effectiveness of DEP’s monitoring of water quality as potentially impacted by shale gas development activities, including but not limited to systems and procedures for testing, screening, reporting and response to adverse impact such as contamination.” Mr. DePasquale’s letter also indicated that the performance audit will review the “adequacy and effectiveness of DEP’s monitoring of the handling, treatment, and disposal of waste” from shale gas development activities. The Post-Gazette has more.
WOWKTV.com reports that IGS Energy, an Ohio-based company, will build and operate compressed natural gas fueling stations along Interstate 79 in West Virginia and Pennsylvania. IGS indicates that the $10 million network of CNG fueling stations will have locations in Bridgeport, Charleston and Jane Lew in West Virginia and in Mount Morris in southwestern Pennsylvania.
On January 18, 2013, the Muskingum Watershed Conservancy District (MWCD) announced that it has negotiated a 6,700 acre non-developmental oil and gas lease with Antero Resources. The lease will prohibit drilling or surface development on MWCD property, but will allow Antero to drill under MWCD land from other nearby wells. Financial terms of the lease are still being negotiated. The MWCD staff plans to recommend to the Board of Directors to enter into the lease with Antero at the Board’s February 15, 2013 meeting.
Ohio law allows the citizens of a political subdivision (i.e. town, city, or county) to unite and purchase their natural gas and electricy as a single group. This practice, which is called Governmental Aggregation and regulated by the Public Utilities Commission of Ohio (PUCO), provides an opportunity to solicit the lowest price for the group’s natural gas and electricity requirements.
After receiving certification from PUCO, Trumbull County, Ohio entered into an agreement with Constellation Energy Resources, LLC, an Exelon Corporation company for the supply of natural gas to residential and small business clients at a discounted rate. Per the agreement, such residential and small business customers, who are participating in the Trumbull County natural gas program, will pay a fixed rate of $4.46 per thousand cubic feet (“Mcf”) for all natural gas supply consumption from March 2013 to October 2013, a price which is almost 190% lower than market price in October 2012. After this 8-month period, the price for the natural gas will be determined based on Trumbull County’s choice to secure a new fixed-price rate for the service period from October 2013 to February 2015.
A one-year moratorium on hydraulic fracturing in New Jersey ended yesterday, the Star-Ledger reports. Gas resources are projected to be limited in New Jersey, and a New Jersey Department of Environmental Protection spokesman reported that no applications or interest from exploration and production companies had been received. However, anti-fracking advocates have pushed for New Jersey to extend the moratium.
Last month, the Allegheny County Airport Authority accepted a bid from CNX Gas Company LLC, a subsidiary of CONSOL Energy Inc., to drill for Marcellus gas under the authority’s 9,300 available acres. The Pittsburgh Post-Gazette reports that as the parties continue to negotiate the lease, county officials expect the bonus payment to be between $35 and $40 million. Some estimates value the project at as much as $250 million over the next 30 years. Per Federal Aviation Administration regulations, any gas proceeds must be spent to improve the airport or its properties.
On January 16, 2013, the U.S. Department of the Interior announced that its current Secretary, Ken Salazar, will leave his post in late March. As Secretary, Salazar steered an expansion of renewable energy projects on federal lands, overhauled the regulatory framework for offshore drilling following the 2010 BP spill in the Gulf of Mexico, and restructured the former Minerals Management Service, now the Bureau of Ocean Energy Management, Regulation and Enforcement. Salazar is a former Colorado Attorney General and United States Senator.
The Potter Leader Enterprise reports that REVH20 LLC may soon begin construction of a shale gas wastewater treatment plant in Ulysses Township, Potter County, Pennsylvania. The company has already obtained the necessary permits from the DEP, and will break ground on the plant as soon as the Ulysses Township supervisors approve it. REVH20 expects the plant, which is to be built along Route 49, to bring new jobs to the area.
On January 16, 2013, Governor Earl Ray Tomblin (D) announced the appointment of Harrison County House of Delegate Member Sam Cann, (D), former member of the West Virginia House of Delegates, to fill the vacated Senate seat for the 12th Senatorial District. Cann has been a long time advocate of strategic development of WV natural gas assets for the Mountain State. Charleston Gazette, 2/21/2011. Cann’s ‘natural gas’ resume includes serving as a Past President for the Independent Oil and Gas Association (IOGA) and on the Regional Advisory Board for the Independent Petroleum Association of America (IPAA). Both organizations advocate the safe and efficient development of natural gas exploration and production in the United States, including the shale-rich areas of West Virginia.
The Ohio Department of Natural Resources (ODNR) reports that during the week of January 6 through January 12, 2013, it approved 17 new horizontal well drilling permits regarding the Utica/Point Pleasant Shale, 6 of which were issued to Chesapeake Exploration LLC for its operations in Carroll, Harrison and Jefferson Counties. Through January 12, ODNR has issued 498 horizontal well permits for the Utica/Point Pleasant Shale, 208 horizontal wells have been drilled under such permits, and 48 wells are in production. Carroll County remains at the top of the list for permits issued with 179.
On January 14, 2013, the United States Environmental Protection Agency (EPA) finalized amendments to the National Emissions Standards for Hazardous Air Pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE). In addition to amending several rules governing the operation of emergency engines, EPA’s final rules creates a new subcategory for existing 4-stroke spark ignition RICE with more than 500 horsepower that are area sources and where the engines are located in “remote” areas. This new subcategory covers the type of engines commonly used for natural gas production and transmission.
For engines in remote areas, the rule establishes management practices and associated testing and monitoring requirements. Additionally, for engines in populated areas, operators are required to install catalytic controls, conduct performance tests on the catalyst, and implement certain measures to control the catalyst inlet temperature. The final rule will be effective 60 days after publication in the Federal Register.
UGI Corporation has announced that it has partnered with Tenaska Resources LLC, an affiliate of independent energy company Tenaska, to jointly develop in the Marcellus Shale region, as reported by the Oil & Gas Financial Journal. Starting in late 2013 or early 2014, UGI Energy Services, Inc., will construct approximately 20 miles of new gathering pipelines and related processing facilities for wells that Tenaska intends to drill in Potter County, Pennsylvania. In additional to the gathering system, UGI has invested $25 million for an approximate 19 percent non-operating working interest in acreage that Tenaska operates in Tioga County, Pennsylvania.
NiSource Inc. has voluntarily reimbursed West Virginia state and local authorities for costs incurred by its December 11th pipeline explosion in Sissonville. Although there were no fatalities in the incident, which occurred just outside of Charleston, it damaged homes and part of Interstate 77. Most of the $231,000 given by NiSource will go to the Division of Highways. The incident remains under investigation by the National Transportation Safety Board.