The first assessment of oil and gas reserves in the Utica Shale play by the US Geological Survey indicates that extraction of the reserves would take approximately 110,000 wells in the gas window and another 17,500 wells in the oil window. To date, about 144 horizontal wells have been drilled in Ohio, which is where the richest reserves are located. By comparison, about 26,000 wells have been drilled so far in the overlying Marcellus Shale formation, which is generally considered to be about two to three years ahead of the Utica in terms of development. The “sweet spot” of what the USGS refers to in its assessment lies almost entirely in Ohio and covers about 2.1 million acres in the east-central part of the state. Click here to read the USGS Assessment.
Marathon Petroleum Corporation announced Tuesday, October 9, 2012, that they plan to build a truck-to-barge loading facility in Wellsville, Ohio, to expedite the taking of hydrocarbon liquids oil produced in the Utica Shale play to Catlettsburg, Kentucky, for refining.
Marathon signed a letter of intent with Harvest Pipeline Company on September 27, 2012, agreeing to jointly develop infrastructure that will facilitate the transportation of hydrocarbon liquids production from the Utica Shale play in eastern Ohio and western Pennsylvania. The project will provide 24,000 barrels per day of truck-unloading capacity and a terminal that can load up to 50,000 barrels per day of oil onto barges at the Ohio River in Wellsville. The proposed project includes modifications to Marathon`s existing Wellsville river terminal to accommodate the additional volume for loading onto barges, and a new truck rack to be built on property leased by Harvest Pipeline next to the Marathon facility. The project is anticipated to be complete in late 2013. Continue reading…
The Indigenous Mineral Resources Incentives Development Act was signed into law by Pennsylvania Govenor Tom Corbett on October 9, 2012. The law allows the Pennsylvania Department of General Services to execute leases for the mining and removal of coal, oil, natural gas and other mineral resources underlying property owned by the state and the State System of Higher Education. The Pennsylvania Senate Republicans have a news release with an overview of the law and a description of how the lease profits are to be divided. The Marcellus Shale Coalition has a statement regarding the newly signed law. The Philadelphia Inquirer has more on the passage of the Act by the Pennsylvania Legislature in late September.
Marathon Petroleum Corporation and Harvest Pipeline Company on Tuesday announced a letter of intent between the companies to jointly develop infrastructure on the Ohio River to allow transport of hydrocarbon liquids produced from the Utica Shale. The project is anticipated to include a truck unloading facility and a barge loading terminal in Wellsville, WV, that will enable liquid hydrocarbons produced in the region to be shipped to Marathon’s refinery in Catlettsburg, KY. The improvements are expected to be finished in late 2013. Marathon also recently completed an expansion of its unloading facilities at its Canton, OH, refinery. The State Journal has more.
Virginia is the latest state to join a multi-state initiative to convert government vehicle fleets to run on compressed natural gas (CNG). Virginia Governor Bob McDonnell announced on October 2, 2012 that he is now allied with the governors of 21 other states, including West Virginia, Ohio, and Pennsylvania, in an effort to equip the state fleet with CNG-powered vehicles. The participating states have signed a memorandum of understanding (MOU) designed to aggregate annual state vehicle procurements, and have sent automakers a request for proposals on vehicle purchase options. In conjunction with the MOU, state government leaders continue to examine how best to develop a refueling infrastructure that will support CNG-powered fleets. Companies across the Marcellus and Utica Shale region are responding to the increasing demand for a CNG refueling infrastructure.
On October 4, 2012, the U.S. Geological Survey (“USGS”) released the first assessment of shale gas resources in the Utica. The assessment covered areas in Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia. The estimate of undiscovered oil ranges from 590 million barrels to 1.39 billion barrels, natural gas ranges from 21 to 61 trillion cubic feet, and the estimate of natural gas liquids ranges from 4 to 16 million barrels (95 percent to 5 percent probability, respectively).
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The Pennsylvania Department of Environmental Protection has provided E&P companies with information regarding a new requirement in Act 13 that unconventional well permit applicants submit a spill containment plan. According to the information from DEP, well permit applications submitted on or after October 14, 2012, must include a “Master Containment Plan.” The Master Containment Plan must be included in the first permit application made to each DEP regional office after that date. The information from DEP is available at its Act 13 Frequently Asked Questions page.
Babst Calland has more information in a recently posted Administrative Watch.
On Oct. 1, the Yellow Springs Village Council voted 3-2 to adopt a Community Bill of Rights ordinance banning shale gas drilling and related activities in the village. Yellow Springs is the first municipality in the state of Ohio to enact a local Bill of Rights and protect those rights by prohibiting shale gas drilling and fracing and the ensuing injection wells. However, such ordinance may not be enforceable and could face a court challenge since the local legislation would be preempted by state law under Ohio Rev. Code 1509.03. Continue reading…
The first major assessment of the valuation of Ohio’s Utica Shale draws near as EV Energy Partners LP and its parent company, EnerVest LP, announced last week that recently de-risked Utica Shale holdings situated in the heart of the liquids-rich region are to be primed for sale before the end 2012. Previous transactions in the Utica region occurred before widespread drilling began and were highlighted by the hope the play promised. However, this transaction will be the first market test of the Utica Shale after the play has seen more than a year of drilling; at last demarcating the play’s potential with hard facts. Continue reading…
Utica East Ohio Midstream has begun site preparation for a shale gas collection and processing plant, according to Cleveland.com. The site, located on 117 acres south of Hanoverton, Columbiana County, will be the home of the $400 million plant, which is estimated to have an initial capacity of 600 million cubic feet per day. The first phase of the plant is to be operational by May of 2013.
The Muskingum Watershed Conservancy District (“MWCD”) announced the authorization of short-term sales of water to the oil and gas industry. The authorization of water sales is limited to Clendening Lake in Harrison County and Piedmont Lake in Belmont County, and can occur only during the fall and winter months when the lake levels are in “drawdown stage” – the release of more than 6 billion gallons of water as part of flood reduction operations. The MWCD authorized the water sales to provide a convenient source of water for companies planning to drill in the area and to reduce truck traffic, thereby reducing damage to township roads. Read more ›
The Pittsburgh Business Times reports that Chesapeake Energy Corp. is in talks with Giant Eagle concerning a possible joint venture which would involve the installation of compressed nature gas (CNG) refueling facilities at Giant Eagle’s GetGo gas stations. Norman Herrera, Chesapeake’s director of market development, told the Business Times that Chesapeake may be involved as an investor in the infrastructure, and may also play a role in arranging agreements with local fleets to convert to CNG and commit to refueling at GetGos.
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On September 25, 2012, the West Virginia Supreme Court heard oral arguments for the case of Martin, et al. v. Hamblet, Docket No. 11-1157. The issue in this case is whether a surface owner is vested with the right to an administrative hearing on and subsequent appeal of a drilling permit for a shallow horizontal well. Currently, the West Virginia statutes provide such rights to coal owners, coal lessees and coal operators only. Under West Virginia law, surface owners may submit written comments in the drilling permit application process in regards to shallow wells and may recover for certain damages to the surface estate. Under current case law, they only have a right to an administrative hearing on and subsequent appeal of a drilling permit for a deep well subject to statutory pooling.
The Hamblet surface owner’s arguments rely on the due process and equal protection clauses of the West Virginia and United States Constitutions and a controversial West Virginia Supreme Court precedent, while the OOG and gas operator are arguing for the court to apply the plain meaning interpretation of the existing statutes.
A Supreme Court decision in favor of the Hamblet surface owner may blur the distinction between shallow and deep wells and exponentially increase a surface owner’s role in the permitting process.
In July 2011, PIOGA filed a motion in the U.S. District Court for the Western District of Pennsylvania seeking to hold the United States Forest Service in contempt of court for allegedly failing to adhere to the Court’s December 2009 preliminary injunction order in the Minard Run, et al. v. United States Forest Service, et al. litigation. That order prevented the Forest Service from requiring mineral owners to prepare a NEPA document before the development of oil and gas rights in the Allegheny Forest. It also required the parties to revert to a drilling proposal process that they had used from 1980 until the litigation began in 2009.
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Tags: Cracker plant,
Energy law,
Environmental law,
Fracking,
Gas drilling,
Natural gas,
Natural resources,
PA Act 13,
Pennsylvania,
Pipeline construction,
Shale gas,
Utica Shale
Cecil Township, Robinson Township, Peters Township, and Mt. Pleasant Township, all in Washington County, and South Fayette Township, Allegheny County together filed a complaint in Commonwealth Court [add link to Complaint] arguing that Act 13 is unconstitutional. Chief among the issues raised by the municipalities is the explicit requirement that local ordinances “allow for the reasonable development of oil and gas resources”.
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