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Thursday, September 21, 2017

Ohio EPA Still Going After Energy Transfer Over Rover Pipeline

From NGI:
The Ohio Environmental Protection Agency (Ohio EPA) still wants Rover Pipeline LLC to submit a stormwater permit application and pay $2.3 million in fines, and the regulator has asked the state attorney general (AG) to assist in enforcement, Director Craig Butler said Wednesday. 
Butler said during a conference call with media that he sent a letter Wednesday to Ohio AG Mike DeWine asking for help in pursuing a stormwater permit from Rover. But with Rover and Ohio EPA at an impasse in negotiations, the dispute could end up in court, he said. 
While Rover has completed Ohio EPA’s clean-up requirements following a drilling fluids spill earlier this year, the state regulator still wants the pipeline to apply for a National Pollutant Discharge Elimination System (NPDES) stormwater permit, part of a series of unilateral orders issued in July. 
Ohio EPA took the "unfortunate, unprecedented step" to issue those unilateral orders after the agency and Rover could not agree on a consent order to resolve numerous alleged environmental violations occurring during the project's construction, which began earlier this year. 
As for the proposed $2.3 million fine, that total includes about $2 million in civil penalties, with the rest covering Ohio EPA's monitoring, oversight and emergency response costs, Butler said.
Read the whole article by clicking here.

We received an email containing the following statement in response to Butler's comments from Craig Stevens, spokesperson for the Grow America’s Infrastructure Now (GAIN) Coalition:
“Regulations are put into place to create a predicable set of rules for companies to follow; and the Rover Pipeline project has been planned, vetted, and approved after an exhaustive regulatory process that has lasted more than three years. Stakeholders should want to see the safe, successful completion of the Rover Pipeline. Bullying industry through the media is not the way to achieve that goal.”

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How Much Rover Volume is Taken From Other Pipelines?

From BTU Analytics:
It has been a bumpy ride, but the Northeast has finally begun flows on the first major greenfield project to come to market in almost a decade – Energy Transfer’s Rover. This begins a major shift in Marcellus and Utica production dynamics, with implications for the future of Dominion South and Henry Hub pricing– but what is changing in the here and now? 
Rover received a notice-to-proceed yesterday for horizontal directional drilling activity which will bring critical capacity to market (we expect a November start-up for the next tranche of Rover capacity), as of today, Rover is receiving volumes only at two points along the Cadiz lateral: MarkWest’s Cadiz processing plant and the Ohio River System. Today we’ll take a granular approach and look at receipts only around those two points. We can see in the graphic below, which compares Rover receipts from the Ohio River system with declines seen on other pipelines, that while Rover has been flowing full at its current 700 MMcf/d capacity, that gas is coming at the expense of other pipes, mainly TETCO. 
So now we can answer one of the market’s big questions: how much new production will come online with Rover? To date, we have seen about 150 MMcf/d of new production directly attributable to Rover, which is in-line with our Northeast production forecasts.
But what about the other end of Rover? Where is that 700 MMcf/d of gas actually going? Currently, almost all of Rover’s volumes are being delivered to ANR, but again, a good amount Rover volumes are displacing volumes from other pipes. Rover deliveries are displacing REX deliveries to ANR. Because of this displacement, REX deliveries to ANR are moving southbound and more gas is moving further west on REX.
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Wednesday, September 20, 2017

Local First Responders Say Oil & Gas Companies Keeping Them ‘Well-Informed’

by Jackie Stewart, Energy in Depth

For years, Energy In Depth has reported on how Ohio anti-fracking activists have tried to slow down first responders with added bureaucracy and misinformation campaigns based on dubious assumptions regarding regulatory exemptions. Meanwhile, Ohio oil and gas operators continue to lead in terms of streamlining information access for first responders with aggressive training and communication strategies. Those efforts are paying off, as first responders are reporting,
“[T]he companies will email us weekly updates of what’s going on in their company and locations. That way, in the event that something’s going on, we’ll have up-to-date information. They usually keep us pretty well informed.”
This first-hand report from Cumberland Trail Assistant Fire Chief Tim Hall is yet another example of how out-of-state Keep It In the Ground activists are misrepresenting the reality of what actually is occurring in oil and natural gas producing states. In fact, training and communication between the oil and gas industry and Ohio first responders has been ongoing for years and comes at no cost to the public, thanks to a bi-yearly fire academy hosted by the Ohio Oil and Gas Energy Education Program (OOGEEP). Last year marked the 15th anniversary of free training for firefighters, and to date the program has trained more than 1,400 first responders who have participated in the Responding to Oilfield Emergencies workshops. In fact, almost all of the volunteer fire departments across the state have participated in the free training.
The free fire academy training is vital, especially when you consider that more than 70 percent of Ohio’s fire departments are volunteer. The reason that the fire academy is free is because the Ohio Revised Code 1510 requires all oil and natural gas producers in the state to pay five cents per gross barrel of crude oil (including condensate) and a half cent per gross Mcf (thousand cubic feet) of natural gas. This is just one tax  paid by oil and gas operators, the most significant being ad valorem or property taxes paid on production, which have yielded (to date) more than $45 million and also directly support local communities.
Here’s what some of Ohio’s first responders are saying about the free fire academy,
“It’s very pertinent to our area. We go out and fight these fires, and it’s very enlightening. … There’s so many gas well simulators. It’s probably one of the best in the Midwest.”
In addition to the training with OOGEEP, individual companies are continuing to reach out to local first responders for live exercises as well. Numerous upstream and midstream companies host live exercises at no cost to first responders and provide extensive hands-on training. More importantly, the exercises provide an open line of communication between local communities and companies who operate in their backyards.
Ironically enough, the Ohio Environmental Council has stated,
“Emergency responders have a huge responsibility to the public, and carry this responsibility bravely despite the risks. We should be striving to make their jobs easier, not putting barriers between them and the information they need to protect themselves and us.”
We agree! Which is exactly why Ohio’s oil and natural gas industry continues take steps to ensure that shale development can occur while protecting the health and safety of our people and our environment — and do so without creating unnecessary bureaucratic red tape.

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Oil and Gas Industry Looking to Settle Down After Being Shaken by Hurricanes

From Forbes:
The approach of the final quarter of 2017 seems an opportune time to check on the state of the U.S. oil and gas industry, and its outlook for the remainder of the year. While Hurricanes Harvey and Irma definitely caused significant disruptions in the nation's oil and gasoline delivery systems, the reality is that those disruptions will be rapidly resolved and the storms really will not make any lasting impact on the global oil and gas markets. 
This year has been amazingly stable overall, especially when compared with the rampant instability during 2015 and 2016, and the various determining factors would appear to indicate that the industry is in for a good deal more stability ― some would call it stagnation ― for the year's final 100 days. 
Corporate Processes Continue to Prevail 
As I've discussed a couple of times since June, so much of this seeming stability is in fact dictated by the nature of internal budgeting processes, especially within the mid-size-to-large corporate independent producers that dominate drilling markets in the United States. These big producers set their budgets for the second half of the year back in April and May, with an expectation of West Texas Intermediate (WTI) crude prices hovering within a range of $44 to $48 per barrel, and a natural gas price of ~$3.00/mmbtu.

Because these dominant companies began executing on those second-half budgets on July 1, the overall rig count initially stagnated for a few weeks, and it has now slowly fallen by ~25 rigs over the last five weeks. A variety of factors have combined to move the crude trading range up slightly, to a range of about $47 to $50/bbl, but that's not enough of an increase to create momentum within these companies to significantly increase their capital budgets for the remainder of the year.
Read the rest of this article by clicking here.

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Communities Are Preparing for Impact of Shell Cracker Plant

From Business Journal Daily:
Royal Dutch Shell’s decision to build a $6 billion ethane cracker plant less than 20 miles from here should have an impact that reverberates all across western Pennsylvania, and the commonwealth wants to be prepared. 
“We need to make sure we have property that’s prepared for development,” said Dennis Davin, secretary of community and economic development for Pennsylvania. “The issue we’ve always faced is that companies that want to come here don’t want to wait two years before property is developed.” 
The solution was to infuse the commonwealth’s Business In Our Sites program with $75 million that would be used to fund economic development agencies and developers so they could prepare sites for new business. 
“That money is paid back once something lands on that site,” Davin said.
Read more by clicking here.

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House Vote Blocks Funding for Obama-Era Methane Pollution Rule

From The Hill:
Lawmakers voted Wednesday to block implementation of a key Environmental Protection Agency (EPA) pollution rule. 
The House voted 218-195 to strip funding for an Obama-era EPA effort to limit methane emissions from new oil and gas drilling sites. Eleven Republicans voted against the amendment, and 3 Democrats voted to block funding for the regulation. 
“This rule is currently facing litigation and uncertainty, and Congress must act to block this job-killing regulation estimated to cost the U.S. economy $530 million annually,” Rep. Markwayne Mullin (R-Okla.) said during debate on the measure last week. 
“Methane emissions from oil and natural gas have significantly declined in recent decades without multiple, overlapping federal regulations, and this is no exception.”
The rest of the article can be read by clicking here.

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Antero Resources Facing Lawsuits Over Post-Royalty Deductions

From MDN:
Lawsuits filed against Antero Resources in both Ohio and West Virginia seek class action status. Both lawsuits make similar claims: Namely that Antero has improperly deducted post-production expenses from royalty checks (not allowed under lease terms), and that Antero has avoided, with creative accounting, paying royalties on natural gas liquids (NGLs) produced. The OH lawsuit was first filed in January of this year, followed by a lawsuit filed in WV in May. We have copies of both complaints below, so you can read the language for yourself. In the case of the OH lawsuit, Antero filed a motion to dismiss. The landowners amended the complaint and Antero dropped their motion to dismiss. The OH lawsuit, and as near as we can tell, the WV lawsuit, are both moving forward. Here’s our summary of both lawsuits–the MDN Cliffs Notes version…
Click here to view the rest of the article on MDN.

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After Short-Seller Bashes Shale Companies, Harold Hamm Strikes Back

From CNBC:
Continental Resources Chairman and CEO Harold Hamm on Thursday fired back at renowned short-seller Jim Chanos after he revealed he is betting that shares of Hamm's Oklahoma-based drilling company will fall. 
"Well, first of all, I can say almost, who is this guy?" Hamm told CNBC's "Squawk on the Street." 

Hamm speculated that Chanos — who is known for shorting stocks, or betting that their price will decline — got caught on the wrong side of the trade and is trying to mitigate the damage by talking down shale oil drillers.

Company executives are held to a higher standard of honesty by the Securities and Exchange Commission than short-sellers like Chanos, Hamm claimed. 
"For anyone to even put forth the suggestion that we haven't had great expansion and wealth creation in this industry with horizontal drilling and all the technology that's come about the last 10 years, I mean, it's totally ridiculous for anybody to make those types of statements," he said.
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