While Marcellus Shale gas continues to be developed in the area, West Virginia is also experiencing a Utica Shale boom in its northern counties. According to Natural Gas Intelligence, multiple operators are investing more capital and manpower into developing Utica Shale wells in Tyler, Marshall, Wood and Wetzel Counties. Several operators are in varying stages of permitting, drilling, and testing deep wells straddling the Ohio-West Virginia Utica boundaries. Additionally, initial data suggests that Utica Shale core dry gas shows significant promise for gas development in the state.
On Thursday, a group of Pennsylvania state legislators, led by Sen. Vincent Hughes (D-Philadelphia), unveiled a proposal that would impose a 5% severance tax on drillers operating in Pennsylvania’s Marcellus Shale industry. According to the legislators, this severance tax would net $720 million for Pennsylvania during the 2014-2015 budget year and be used for environmental protection, economic development, job training initiatives and education. Senator Hughes hopes that some of the revenue received from the severance tax would prevent the state from having to lease public land for gas drilling and exploration. Under the proposal, the severance tax would be levied in addition to the Act 13 well fees already imposed upon the natural gas drillers. Senator Hughes said that the severance tax and well fees together would generate $937 million for Pennsylvania in the 2014-2015 fiscal year. Senator Hughes’s proposal is one of numerous proposals recently introduced in the state legislature aimed at implementing a severance tax on the Marcellus Shale industry. Additionally, all four major candidates in the Democratic gubernatorial primary have also proposed a natural gas severance tax.
As reported by the Pittsburgh Business Times, the Allegheny County Council voted to approve a non-surface lease and drilling plan with Range Resources under Deer Lakes Park. Allegheny County Executive Rich Fitzgerald said that the plan would provide for environmental protection of the park while bringing in much needed revenue to the county. Despite the County Executive’s endorsement, the vote was heavily opposed by some members of the public in attendance at the hearing.
As reported in the Spirit of Jefferson newspaper, Senate Bill 474, introduced in the West Virginia Senate on Monday, February 3, would amend W. Va. Code § 22-15-8 to allow commercial waste facilities to accept drill cuttings and associated hydraulic fracturing waste above and beyond their monthly tonnage waste limits without a public approval process, provided that the drilling waste is placed in a separate cell dedicated solely to the disposal of such waste. Normally, commercial waste facilities must go through an approval process, including public hearings, to accept solid waste beyond their usual monthly tonnage limits (usually 10,000 or 30,000 tons). The bill, which was drafted by the West Virginia Department of Environmental Protection, must gain approval from the Senate Government Organizations Committee and the Senate Judiciary Committee before taking affect. A public hearing was held in regard to the bill on Monday, February 17 at 5 p.m. in Charleston.
As reported by The Intelligencer, MarkWest Energy and Kinder Morgan Inc. are planning to convert 1,000 miles of pipeline connecting Pennsylvania and Louisiana to allow Marcellus and Utica Shale gas to be transported to the Gulf Coast. The project is estimated to have an initial capacity to ship 150,000 barrels of natural gas liquids per day, with potential expansion to 400,000 barrels per day. The conversion is expected to be complete by 2016.
WVU’s Health and Safety Extension Division has announced the opening of a new Oil and Gas Training and Assistance Center to provide training and credentials to WV employees working in the oil and gas field. The training center utilizes the knowledge of local experts to offer current and prospective oil and gas employees training on various safety topics. Courses anticipated to be offered by the Training Center include fall protection, transportation safety, confined space safety, and a PEC/SafeLandUSA Basic Awareness Orientation course. Once an individual completes a training course, the Training Center can then provide valuable credentials to the current and prospective employees, including registration in an online database accessible by employers. Costs of the courses vary by topic.
The Marcellus Shale Coalition (MSC) announced that it has updated its recommended practices to include the Drilling and Completions phases of natural gas exploration. These recommendations cover a wide range of topics with regard to bringing a well into production, including regulatory planning and well flowback. The MSC had previously released seven additional sets of guidelines that cover site planning, motor vehicles, water pipelines, and more. The addition of the Drilling and Completions documents will help exploration and production companies in the region carry out their business in a safe, responsible manner, according the MSC.
On September 26, 2013, in the case of Thornsbury v. Cabot Oil & Gas Corporation (2013 W. Va. LEXIS 958), the Supreme Court of Appeals of West Virginia ruled that, although an oil and gas lease to Cabot affecting surface lands owned by Thornsbury contained road provisions, a subsequent 2006 right-of-way contract controlled the design and use of the well access road on the land. The Supreme Court Opinion reversed a prior decision of the McDowell County Circuit Court granting summary judgment to Cabot, further holding that genuine issues of material fact remain as to the possible breach of the 2006 contract, and remanded the case for further proceedings.
WFMJ reports that State Sen. Jim Ferlo (D-Allegheny) announced that he will introduce Senate Bill 1100 next week, which will place a moratorium on new permits for hydraulic fracturing. The bill, known as the Natural Gas Drilling Moratorium Act, will also seek to create a commission to analyze the agricultural, economic, environmental and social effect of Marcellus Shale drilling. WESA indicates that such a commission would be comprised of seven individuals from various backgrounds, including a nonprofit environmental organization, an academic institution, the oil and gas industry, a geologist, a medical or public health expert, the Pennsylvania Secretary of Environmental Protection and the Pennsylvania Secretary of Conservation and Natural Resources. The bill would halt any new permits for natural gas drilling. StateImpact reports that the bill does not provide a time limit on the proposed moratorium.
Reuters.com reports that there was a recent explosion and fire at a well site in Doddridge County, West Virginia. Kathy Cosco, a spokeswoman for the West Virginia DEP, indicated that the containment system around the well site properly prevented storage tank fluids from escaping the well site. The West Virginia DEP and the federal Occupational Safety and Health Administration are investigating the incident.
A bill was recently introduced in the Pennsylvania House of Representatives that would require use of closed containment or loop systems for all non-freshwater associated with drilling and hydraulic fracturing. Introduced by Representative Karen Boback, who represents parts of Luzerne, Wyoming, and Columbia counties, House Bill 1546 would prohibit the use of open impoundments to store “any produced liquids, treated water, hydraulic fracturing fluid or industrial wastes,” and would mandate the use of “closed containment system” or “closed loop system,” as defined in the bill. “Closed containment system” is defined as “closed noncorrosive tanks or containers” for storing the fluids described above, while “closed loop system” means “a series of interconnected, enclosed noncorrosive storage tanks or containers” that can help maximize the amount of drilling fluid that can be reused and recycled in the hydraulic fracturing process. Rep. Boback acknowledged that the bill is aimed at a minority of operators who still use open impoundments to store the described fluids.
The Ohio Supreme Court accepted jurisdiction over the closely watched “home rule” case State ex rel. Morrison v. Beck Energy Corp. At issue are the state laws which give the Ohio Department of Natural Resources sole and exclusive authority to regulate oil and gas permitting, stimulation, production and completion over local ordinances to the contrary. Initially a trial court in Summit County determined that the City of Monroe Falls had the right to enforce its own application and permit requirements for oil and gas wells. The court of appeals disagreed and ruled that only ODNR had such powers. The Ohio Supreme Court is poised to make the final determination in a ruling that can be expected in the next year.
The Exponent Telegram reports a moratorium on floodplain oil and gas drilling permits in Doddridge County, WV has been lifted. The Doddridge County Commission voted 2-1 on June 4, 2013 to lift the moratorium, which had been in place since December 18, 2012.
The Clarksburg Exponent Telegram reports that CONSOL Energy and Noble Energy are planning projects located in Upshur and Barbour Counties, West Virginia. CONE Gathering, which is a gas pipeline joint venture between the two companies, has secured the right to construct a 24-inch gas pipeline that will run 37 miles through Upshur and Barbour Counties. Construction on the project is expected to being within the next six to nine months, according to a CONSOL Energy spokesperson. CONSOL Energy also plans to drill eight wells in Barbour County, with completion work set to begin in the third quarter of this year.
Last month District Court Judge Irene Keeley, sitting in the Northern District of West Virginia, sought to have the West Virginia Supreme Court of Appeals (WVSCA) rule upon whether West Virginia law permits a natural gas producer to use a surface owner’s property to sink horizontal wells that draw gas from neighboring tracts. The decision in this case will have far reaching economic consequences in West Virginia. Now, the Court is slowing down the process through which the WVSCA may decide the novel issue. According to the San Francisco Chronicle, Judge Keeley has requested the record be supplemented with additional facts before the question is submitted to West Virginia’s highest court. Under this second order, it is unclear when the WVSCA may be called upon to determine this drilling issue.