The Pennsylvania House and Senate have announced new chairs for the state House and Senate Environmental Resources and Energy Committees. Rep. Ron Miller (R-York) will replace Rep. Scott Hutchinson as the majority chairman of the House Environmental Resources and Energy Committee, and Sen. Gene Yaw (R-23) will replace Sen. Mary Jo White as the majority chairman of the Senate Environmental Resources and Energy Committee. The committees focus on bills, polices and issues dealing with energy resources and development, including regulations, conservation, strategic reserves and standards, and public lands. The Post-Gazette has more.
At its December 20, 2012, public meeting, the Pennsylvania Public Utility Commission (PUC) clarified sections of its implementation of Chapter 23 (“Unconventional Gas Well Fee”) of Act 13 of 2012 (Act 13) in response to a Petition for Amendment and Clarification of the PUC’s Implementation Order pertaining to Act 13. By a vote of 5-0, the PUC ordered that setting a conductor pipe constitutes “spudding” for purposes of triggering the well impact fee, that the impact fee for a plugged well ceases for the calendar year following the plugging of the well, and that the approved budget reports for local governments receiving impact fee payments must be filed with the PUC on or before March 31 each year (with budget reports for both 2011 and 2012 due to the PUC by March 31, 2012). Additionally, the PUC addressed in its Order the assessment of impact fees for wells that are reclassified from horizontal wells to vertical wells, as well as addressed the issue of which producer is responsible for payment of an impact fee when the interest in a well is transferred from one producer to another producer.
On December 20, 2012, Dominion and Caiman Energy announced they are forming a $1.5 billion joint venture to provide midstream services to natural gas producers operating in the Utica shale in Ohio and portions of Pennsylvania. The infrastructure to be developed and the services that will offered include gathering, processing, and fractionation, which are critical to meet the demands of increased production in the Utica. Dominion is also contributing its Natrium Extraction Plant and related facilities that are already under construction in Marshall County, West Virginia.
The United States Chamber of Commerce’s Institute for 21st Century Energy recently issued an IHS report regarding entitled “America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy” as reported by The Republic. The report, which can be downloaded here, indicates that the natural gas industry has created more than 11,800 jobs in West Virginia and has generated approximately $283 million in tax revenue in 2012. The report further indicates that shale-gas development could produce more than 29,000 jobs in West Virginia by 2020 and more than 58,000 jobs by 2035. The revenues generated by shale-gas are estimated to be around $25 billion between 2012 and 2035.
EQT Corporation announced today that it will sell its distribution subsidiary Equitable Gas Company, LLC, to Peoples Natural Gas for $720 million, subject to adjustment. EQT CEO David Porges said in a company press release that the sale will allow EQT to focus on its production and midstream business segments. In the deal, EQT also will receive about 200 miles of transmission lines and four storage pools. Meanwhile, the transaction will make Peoples the largest gas utility and one of only two in the Pittsburgh area. View the Peoples press release on the transaction. The Tribune-Review has more on the sale.
The Associated Press is reporting that the United States Department of Labor has awarded back pay totaling $187,165 to sixty-nine employees of Groundwater and Environmental Services, Inc. The DOL, as part of an ongoing enforcement effort that has recently focused on the oil and gas industry, determined that GES violated the Fair Labor Standards Act when it misclassified certain employees, thereby improperly denying them overtime pay when they worked in excess of forty hours per week. The DOL also determined that GES failed to keep accurate records of hours worked by those employees, also a violation of the FLSA. GES claimed that the employees – many of whom are junior environmental scientists and junior baseline samplers based in Cranberry, Pennsylvania or Fairmont, West Virginia – were exempt from the FLSA’s overtime requirements on the grounds that they are professionals. The DOL disagreed, determining that the employees did not fall under the FLSA’s professional exemption because they are not required to have advanced knowledge to perform their jobs.
Encouraging well results have fueled the creation of 38,830 jobs in Ohio since the beginning of 2012, and studies have indicated another 100,000 jobs could be produced by 2020. Labor income from jobs created directly and indirectly from the development of the Utica Shale in Ohio is estimated to reach $9.2 billion in 2020, a 3.8 percent increase to wage earning potential and salaries across the state. According to the Ohio Chamber of Commerce, such an influx in jobs and wage earning potential could provide the resources going forward for Ohio to reinvest in its infrastructure, schools and other areas of need.
As explained in the December edition of the PIOGA Press, President Obama’s reelection has set the stage for a series of regulatory actions by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). The most significant actions involve two rulemaking proceedings that could substantially overhaul the current federal safety standards for natural gas and hazardous liquid pipelines.
The Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency responsible for ensuring the safety of our nation’s gas pipelines, has given transmission line operators until March 15, 2013, to determine whether they have sufficient records to confirm the maximum allowable operating pressure (MAOP) for segments located in densely populated and other high consequence areas. PHMSA imposed that deadline to comply with a mandate in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, the most recent reauthorization of the federal pipeline safety laws. More information on PHMSA’s MAOP verification requirements is available in the latest edition of the PBA Environmental & Energy Law Section Newsletter.
Stat Oil ASA, Norway’s largest oil and gas producer, has acquired approximately 70,000 acres of shale gas acreage in Marcellus states, including West Virginia, Pennsylvania and Ohio, for $590 million according to Fox Business News. With the finalization of this acquisition, Stat Oil ASA now operates production wells in all major shale plays across the U.S. Stat Oil ASA originally entered the Marcellus Shale play through a 2008 partnership with Chesapeake (CHK) which includes a significant interest (32.5%) in Chesapeake leases held in the Northern Panhandle of West Virginia.
Williams announced late on Tuesday that it closed on its public offering of 46,500,000 shares of common stock priced at $31 each and that underwriters elected to exercise in full their option to purchase an additional 6,975,000 shares of the company’s common stock. According to Tulsa World, Williams will use the net profit to purchase a 25 percent interest in Oklahoma City-based Access Midstream Partners, L.P and a 50 percent interest in Access Midstream Partners GP. Global Infrastructure Partners LP is the other primary stakeholder in the Access deal. Access owns and operates pipeline and processing assets in shale formations such as the Marcellus, Utica, Eagle Ford, Haynesville, Mississippi Lime and Granite Wash.
Drilling companies have made inquiries to the United States Coast Guard to clarify whether bulk transport of hydraulic fracturing wastewater is permitted on rivers and lakes. Industry officials say this is the cheapest, safest way to transport wastewater. Environmentalists, however, cite concerns over a shipping accident that could cause widespread pollution of rivers, lakes and potentially drinking water.
Some companies have already invested in barge transloading facilities along the Ohio River, such as GreenHunter Water, LLC’s facility in New Matamoras, Ohio. The Coast Guard plans to publish its proposal on transporting wastewater in the Federal Register.
Two recent gas pipeline accidents in West Virginia have brought greater attention to pipeline safety issues in that state. On December 11, 2012, a natural gas transmission line near Sissonville ruptured, causing a fire that burned a portion of an interstate highway and damaged several homes. Preliminary reports from the National Transportation Safety Board, the federal agency leading the accident investigation, indicate that the ruptured portion of the line had external corrosion, that no alarms sounded in the pipeline control room at the time of the explosion, and that the pipeline operator was not able to stop the flow of gas to the line for more than an hour. On December 18, 2012, a pipeline construction worker was killed in a separate accident in Bethany. According to preliminary reports in the Charleston Gazette, the worker was struck in his vehicle with a section of pipe that was being moved with heavy machinery just prior to its installation.
BP has announced plans to expand existing infrastructure in northeast Ohio to accommodate increased natural gas production in the area, as well as exploring partnerships with midstream processing plants in Trumbull County. Such plants are already under construction in Mahoning and Columbiana counties. BP has leased more than 84,000 mineral acres in the area and are expected to have invested $100 million in Trubull County drilling by next year.
MarkWest Energy Partners announced that it has commenced operations in its Mobley Gas Processing Plant in Wetzel County, West Virginia, according to Energy Business Review. The plant is the first of three gas processing plants in the U. S. planned by MarkWest, with the second facility to likely be completed in the first quarter of 2013, and the third to be completed in the fourth quarter of 2013. The first plant, capable of processing 200 million cubic feet of gas per day, is currently operating at 60% capacity, and is expected to reach its full capacity soon to accommodate the drilling success in the Marcellus Shale. The three plants are expected to have a capacity of 520 million cubic feet per of gas per day after completion.