The Scranton Times-Tribune is reporting that Houston-based Tennessee Gas Pipeline Company, LLC, has filed a federal-court complaint seeking to block attempts by two environmental groups to interfere with the operator’s Northeast Upgrade Project. Specifically, Tennessee Gas seeks to preclude the Pennsylvania Environmental Hearing Board from considering petitions and an appeal filed by the Delaware River Network and the Responsible Drilling Alliance. Tennessee Gas seeks to prevent the groups from delaying construction of the 41-mile pipeline project, which would travel across New Jersey and Northeast Pennsylvania. It argues that, because the Federal Energy Regulatory Commission approved construction of the pipeline, the EHB is preempted from taking any action on the petitions and appeal, which are scheduled to be argued before the EHB on Jan. 14, 2013. Pursuant to its contractual obligations, Tennessee Gas must complete the project by Nov. 1, 2013.
The Post-Gazette reports that the U.S. Energy Information Administration (EIA) released a Short-Term Energy Outlook in which the EIA predicts that the Henry Hub natural gas spot price will average $3.74 per million British thermal units (MMBtu) in 2013 and $3.90 per MMBtu in 2014. The price averaged $4.00 per MMBtu in 2011 and $2.75 per MMBtu in 2012. On the other hand, according to the Washington Post, natural gas prices fell this week after the Energy Department reported that natural gas production rose to a record 73.54 trillion cubic feet a day in October.
The Kanawha County Commission is accepting bids for the development of a compressed natural gas (CNG) fueling port to service the County’s CNG-powered Chevrolet Tahoe and future CNG-powered fleet vehicles, reports the Charleston Gazette. Kanawha County Commission President Kent Carper stated that he would like “a good portion of the fleet to go toward natural gas.” Local government and business leaders in Kanawha County created the “Kanawha Converts” consortium in January 2012 to work on initiatives to convert local fleets to CNG in order to take advantage of the economic and environmental benefits offered by the cheaper and cleaner-burning fuel.
An anticipated decision by the U.S. Coast Guard will determine when oil and gas producers can start transporting “frack water” by barge through West Virginia for treatment. “Frack water” is water containing chemicals used by oil and gas production companies in the hydraulic fracturing process. According to the West Virginia State Journal, if the Coast Guard designates the “frack water” as a hazardous material, then additional regulation and safety measures will be required before barge transportation can begin. As treatment of “frack water” occurs in centrally-located facilities, oil and gas operators must ship the frack water for treatment. Barge transportation has been identified as a cost-effective method to get the frack water to treatment facilities.
After being lobbied by the Laborers International Union, the Jefferson County commissioners signed a road use maintenance agreement (RUMA) with Enterprise Liquids Pipeline that requires contractors to pay prevailing wages to repair county and township roads used during the construction of a pipeline across the county. County Engineer James Branagan indicated that, pursuant to a recent Ohio attorney general opinion addressing counties entering into RUMAs with oil and gas companies, the prevailing wage requirement will be included in all Jefferson County RUMAs. The RUMA with Enterprise Liquids Pipeline includes a $221,000 bond and requires the company to upgrade county and township roads prior to construction or make repairs after the works is completed.
The Charleston Daily Mail reports that U.S. Senator Jay Rockefeller (D-WV) will be holding a field hearing in Charleston, West Virginia, on pipeline safety. The date for the hearing entitled, “Pipeline Safety: An On-the-Ground Look at Safeguarding the Public,” is currently set for Monday, January 28th. It will focus on the recent gas pipeline accident in Sissonville, West Virginia, and the U.S. Department of Transportation’s implementation of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, the most recent reauthorization of the nation’s pipeline safety laws. Senator Rockefeller is Chairman of the Senate Committee on Science, Commerce, and Transportation. Additional details can be found in his press release from earlier today.
John Holko, president of Lenape Resources, recently filed suit against the New York State Department of Environmental Conservation and the town of Avon, NY (Livingston County), seeking $50 million in damages for lost business since the town enacted a drilling ban last summer. Lenape Resources has acquired drilling rights on over 100,000 acres in various towns in New York. Like many operators, Mr. Holko must determine if it is economically viable to pursue further drilling in New York in light of local drilling bans and proposed state regulations. Governor Cuomo has said that towns and cities should have a say in a decision about whether to allow drilling within their boundaries. The public comment period for the proposed regulations ends next week, but some public interest groups want additional time to comment.
The West Virginia Record reports that a lawsuit has been filed against Reserve Oil & Gas, Inc. claiming an alleged trespass. The plaintiffs, Sandra Bishop, Kathy Fannin, Connie McDaniel, Steve Fannin, Donna Lilly and Debra O’Dell, filed a complaint on December 10, 2012 in Kanawha Circuit Court at case number 12-C-2426, alleging that Reserve installed a pipeline on their property without permission. As a result of the alleged actions, the plaintiffs are seeking punitive damages on top of compensatory damages. Read more about the lawsuit here.
The formation of an Ohio commission responsible for developing rules for leasing park and forest mineral rights has been delayed for more than a year. A state law designated a November 2011 deadline for Governor Kasich to appoint the five-member Oil and Gas Leasing Commission to facilitate the leasing of state-owned mineral rights to the highest bidders. The commission was to draft rules for leasing by June of 2012. The governor’s office says the delay was necessary to find good commissioners and that an announcement would be made soon. A recent analysis indicates that state-held mineral rights could fetch up to $183 million in lease-signing bonuses.
On Friday, the Circuit Court for Prince George’s County, Maryland, ruled that Dominion has the right to export liquefied natural gas (“LNG”) from its Cove Point terminal in Calvert County, Maryland. The Sierra Club and the Maryland Conservation Council sued Dominion last year, arguing that a 2005 agreement with Dominion prohibited exports from the Cove Point LNG import terminal. Platts reports that Circuit Court concluded that there is no provision in the 2005 agreement that explicitly prohibits the use of the facility from exporting LNG, and therefore, Dominion has the right to use the facility to export LNG. The State Journal reports that the facility was historically used for imports, but Dominion has since proposed to reconfigure the facility for liquefaction and exports as shale gas continues to boom.
On January 3, 2013, Minard Run Oil Company (Minard Run), which is based in Bradford, Pennsylvania, announced that it has acquired more than 400 natural gas wells, 56,130 acres of oil and gas leasehold rights, and approximately 195 miles of field production pipelines and other facilities in Central New York from Chesapeake Appalachia LLC, an affiliate of Chesapeake Energy Corporation. Minard Run said that it intends to expand its operations in the Finger Lakes region by developing the newly-acquired oil and gas leasehold rights and by pursuing additional property acquisition opportunities.
Yesterday, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released an update on its progress in implementing the requirements of the Pipeline Safety, Regulatory Certainty, and Job Creation Act, the most recent reauthorization of the federal pipeline safety laws. President Obama signed that legislation one year ago, and PHMSA has since taken a number of actions to comply with its provisions, including initiating reforms to its administrative enforcement process, completing several congressionally-mandated studies, and issuing advisory bulletins on safety-related issues.
The New York Times recently uncovered an eight-page New York Health Department analysis which concluded in early 2012 that fracking could be conducted in a safe manner in New York. The analysis states, “the Department expects that human chemical exposures during [high-volume hydraulic fracturing] operations will be prevented or reduced below levels of significant health concern.” The analysis also states that too many assumptions would need to be made and too many variables exist to project the probability of various hazards. The analysis is a summary of research conducted by the state and other parties, and concludes that fracking can be done safely within the regulatory system that the state has developed over the past several years.
On December 28, 2012, Crestwood Marcellus Midstream LLC (CMM) completed the $95 million acquisition of four natural gas compression and dehydration stations from Enerven Compression LLC (Enerven). Crestwood Midstream Partners LP, the operator and 35% owner of CMM, first announced the deal on November 26, 2012. The acquired stations are connected to CMM’s low pressure gathering systems in Harrison County, West Virginia and serve the Marcellus Shale development of Antero Resources Appalachian Corp. (Antero), CMM’s largest producer in the region. The current capacity of the compressor stations is approximately 300 million cubic feet per day (MMcf/d), which is fully utilized by Antero’s Marcellus Shale production. As part of the deal, Enerven agreed to complete station expansions and unit replacements to support additional Antero production requirements. CMM will retain Enerven’s Marcellus operations personnel to support its gathering and compression business in the area.
The Ohio Department of Natural Resources (ODNR) reports that during the week of December 23 through December 29, it approved 4 new horizontal well drilling permits regarding the Utica/Point Pleasant Shale, all of which were issued to Mountaineer Keystone, LLC for operations in Portage County. ODNR issued 14 permits for horizontal wells in Portage County in 2012. Through December 29, the ODNR has issued 485 horizontal well permits, and 199 horizontal wells were drilled under such permits, 45 of which are in production.