West Virginia House Approves Fair Pooling Bill

The West Virginia Fair Pooling bill, which we first described last week, has been approved in the West Virginia House of Delegates by a vote of 60-40.  In order to become law, the bill must be approved by the State Senate before March 14, when the legislative session ends.  Governor Tomblin of West Virginia must then sign the bill in order for it to become law.

Gastar Successfully Defeats Twin Litigation Cases in Pennsylvania and West Virginia

Judge David W. Hummel, Jr. of Marshall County, West Virginia has dismissed the second in a pair of lawsuits aimed to restrict operator Gastar Exploration, Inc.’s ability to hydraulically fracture several wells in Marshall County, West Virginia.  According to the Order entered by Judge Hummel in December, on April 22, 2014 Eagle Natrium, LLC, a wholly owned subsidiary of Axiall Corporation, filed suit against Gastar seeking a preliminary injunction to keep Gastar from hydraulically fracturing wells located under Eagle’s lands in Marshall County, West Virginia, due to the threat of irreparable damage to existing salt wells and operations.  Judge Hummel denied Eagle’s request for a preliminary injunction and dismissed the Case (Civil Action No. 14-C-179), noting that the issue had already been resolved by a Pennsylvania court, and that a party cannot seek relief for the same problem in multiple courts without some intervening change in circumstance.

Magnum Hunter’s West Virginia “Monster Well” the Largest Utica Well Drilled to Date

As reported by Columbus Business First and NGI’s Shale Daily, Magnum Hunter Resources Corporation’s first Utica well in West Virginia has reported production of 46.5 million cubic feet of natural gas per day, thereby rendering the Stewart Winland 1300U well in Tyler County the biggest Utica well drilled to date.  The well has a true vertical depth of 10,825 feet, and is only the second Utica well that has been drilled in West Virginia.  Magnum Hunter’s CEO Gary Evans said, this well “represents the greatest flow rate and one of the highest sustained flowing casing pressures of any Utica well drilled in the entire play of Ohio and West Virginia [and] is one of the highest flow rate gas wells ever reported in any shale play located in the U.S.”  The well is positioned in the far southeastern part of the play, and indicates a highly productive area of dry gas Utica in West Virginia. Three additional wells on the Stewart Winland pad have been completed and are expected to be put into production in the coming weeks.

West Virginia Officials Seeking Bids to Drill Under Ohio River

As reported by the West Virginia Press Association, the West Virginia Division of Natural Resources (“DNR”) is seeking bids for natural gas drilling on state-owned land under the Ohio River. A legal notice published on Friday, August 22 indicates that the DNR intends to grant leasing rights to drill under the river in Marshall, Wetzel and Pleasants counties. The notice further states that applications to bid on these rights must be submitted by the September 11 deadline.

Dominion Seeks to Expand its Transmission Line Capacity in the Appalachian Region

Dominion has asked the Federal Energy Regulatory Commission (FERC) to approve two transmission line projects that would increase Dominion’s ability to transport natural gas supplies to market from various regions.  According to the Akron Beacon Journal, the two projects are designed to anticipate and meet the growing natural gas needs of customers while ensuring safe, reliable, and affordable means of transporting natural gas from the Appalachian Basin to market.  The first project, the “New Market” project, would improve National Grid’s access to natural gas supplies to meet the growing need of its subsidiaries, Niagara Mohawk and Brooklyn Union, for additional natural gas supplies.  The second project, the Clarington Project, would expand Dominion’s transport capabilities from the growing Utica and Marcellus Shale states of Ohio and West Virginia to markets outside the Appalachian Basin.  Each of the projects, if approved by FERC, would begin construction in late summer/early fall 2015 and would be placed into service in fall of 2016.

West Virginia Seeing Increased Utica Well Development in 2014

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.

Pa. Senators Propose New Natural Gas Tax

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.

Allegheny County Council Approves Drilling Under Deer Lakes Park

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.

Proposed Bill to Allow Unlimited Drilling Waste in West Virginia Landfills

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.

MarkWest Energy and Kinder Morgan Inc. Plan to Transport Marcellus and Utica Shale Gas to Gulf Coast

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.