SHALE INSIGHT 2014 Deemed a Success

Recently, the SHALE INSIGHT conference was held in Pittsburgh and drew nearly 2,000 attendees including industry executives, policymakers and technical experts.

Presenters included prominent personalities such as:
–  Former Pennsylvania Governor Tom Ridge
–  Current Governor Tom Corbett
–  Marcellus Shale Coalition president Dave Spigelmyer
–  Randy Cleveland, president of XTO Energy
–  Stephen Moore, chief economist for the Heritage Foundation
–  Allegheny County Executive Rich Fitzgerald
–  EQT President and CEO David Porges
–  Frank Semple, chairman, president and CEO of MarkWest Energy Partners
–  Kazuyuki Onose, senior vice president at Sumitomo Corp. of Americas
–  Bruce McKay, managing director for federal affairs at Dominion
–  James Balaschak, a principal with Deloitte LLP’s energy and resource practice
–  Michael Krancer, former secretary of the Pennsylvania Department of Transportation

What was the takeaway?

Click here to read how shale may be transforming the economy.

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West Virginia Aboveground Storage Tank Act Interpretive Rule Filed and Emergency Rule Out for Comment

The Aboveground Storage Tank Act was enacted in response to the January 9, 2014 spill that contaminated the Elk River water supply and affected a nine-county area in West Virginia.  Since passage of the AST Act, the West Virginia Department of Environmental Protection has been developing rules to implement the Act.  On September 9, WVDEP filed an Interpretive Rule to provide guidance on compliance with the December 3, 2014 spill prevention response plan and January 1, 2015 tank inspection and certification deadlines.

WVDEP followed up on September 18, 2014 with a 79-page draft emergency rule designed to implement the broader AST Act and establish regulatory requirements following the January 1, 2015 tank inspection and certification deadline.  The draft emergency rule will have significant adverse impacts on virtually all industries throughout West Virginia, but perhaps no industry will be negatively impacted more than the oil and gas industry.  On October 1, WVDEP reported that over 45,000 ASTs had been registered or were in the registration process. Significantly, approximately 5.7 percent of those ASTs are located in a zone of critical concern, thereby triggering categorization as Level 1 ASTs, the high risk category under both rules.

Click here to read about the Interpretive Rule.

Click here to read about the Emergency Rule.

If you have any questions, please contact Mark D. Clark or M. Katherine Crockett.

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Utica Shale Starting to Look A Lot Like The Eagle Ford

According to the U.S. Department of Energy, the first 20 months of production in the Utica Shale is very close to the highly producing Eagle Ford Shale. And, Utica Shale production is slightly more than Haynesville shale in Louisiana.

How much natural gas is produced per day?

Click here to read the entire article.

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Reviewing the Pa. Commonwealth Court Act 13 Ruling

On July 17, 2014, the Commonwealth Court of Pennsylvania ruled on the issues regarding Act 13 that the Pennsylvania Supreme Court had remanded to it in the Supreme Court’s December 2013 decision. The Commonwealth Court held constitutional Act 13 provisions providing (1) notice requirements related to spills should be made to public drinking water systems, without the same notice requirement for private drinking water systems [Section 3218.1], (2) physician non-disclosure requirements, prohibiting healthcare professionals from disclosing to others regarding the composition and quantities of hydro fracturing constituents [Section 3222.1], and (3) granting certain natural gas transport, storage, or sale corporations the power of eminent domain [Section 3241(a)].

However, the Commonwealth Court determined that Section 3305, which provided the Pennsylvania Utility Commission (“PUC”) with the ability to review zoning ordinances for compliance with Pennsylvania law and to withhold distribution of impact fee funds to communities with noncompliant ordinances, was unconstitutional. As a result of the Supreme Court decision to strike down portions of Act 13, the Commonwealth Court found that municipal ordinances related to drilling remain under the jurisdiction of the respective county Courts of Common Pleas, and that Section 3305 was not severable from the remainder of Act 13.

The PUC has appealed the ruling on Section 3305 to the Pennsylvania Supreme Court.

Click here to read the Commonwealth Court decision.

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Aboveground Storage Tank Act Interpretive Rule Filed

On September 9, 2014, the West Virginia Department of Environmental Protection (“DEP”) filed a proposed interpretive rule (the “Interpretive Rule”) with the West Virginia Secretary of State’s office implementing, in part, the recent Aboveground Storage Tank Act (the “AST Act”), which was enacted in response to the January 9, 2014 event that contaminated the water supply of approximately 300,000 West Virginia residents across nine counties.  An interpretive rule is defined under the West Virginia Administrative Procedures Act as a rule that “is intended by the agency to provide information or guidance to the public regarding the agency’s interpretation, policy or opinions upon the law enforced or administered by it . . . .”  W. Va. Code § 29A-1-2(c).  The Interpretive Rule, 47 C.S.R. 62, will be subject to a public comment period of 30 days, closing on October 9, 2014 at 8:30 p.m.  A public hearing will be held on October 9, 2014 at 6:30 p.m. at DEP’s headquarters in Charleston, West Virginia.

The Interpretive Rule is available for download from the Secretary of State’s website.    The Interpretive Rule is intended to establish a risk-based regulatory approach and creates three “levels” of aboveground storage tanks (“ASTs”) based on their potential harm to health and the environment, and establishes options for compliance with certain requirements of the AST Act based on these levels.  Importantly, the Interpretive Rule focuses only on the statutory requirements for (a) the submittal of a spill prevention response plan (“SPR Plan”), and (b) the inspection and certification of tanks.  The Interpretive Rule does not address registration, and therefore the requirement to submit a registration for all ASTs as defined in W. Va. Code § 22-30-3(1) by October 1, 2014 remains unchanged.[2]

Click here for a brief summary of the Interpretive Rule, and so we urge you to review the entire document to determine how it impacts your business.

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A Look Ahead – What’s Next for the Oil and Gas Industry in 2014

With fewer than 125 days left in 2014, we find ourselves looking at What’s Next for the oil & gas industry in the Marcellus and Utica Shale Plays for the remainder of 2014. It has been an eventful year and with just four months until 2015, we look forward and identify key events and issues that are top of mind.

2014 Events
A wide range of upcoming events have programs and topics relevant to E&P, midstream, field services and downstream markets. Annual meetings, summits, roundtables and conferences provide valuable opportunities to learn from and connect with industry leaders. Click here to see the entire list.

2014-2015 Legislative Issues
Those with interests in the Marcellus and Utica Shales will be actively monitoring the rulemaking process in the remainder of 2014, while preparing legislative initiatives and agendas for 2015. We take a look at prominent issues in Pennsylvania, West Virginia and Ohio that will be at the forefront. Click here to read the entire article.


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How Local Drilling Regulations May Impede Business Development in WV

Recently, Scott Rotruck and Joseph V. Schaeffer addressed local drilling regulations and the impact on West Virginia business development for West Virginia Executive magazine. 

As governor, Senator Joe Manchin famously declared West Virginia to be “Open for Business.” Whether motivated by environmental or other concerns, however, some groups believe that, when it comes to the natural gas industry, West Virginia should be anything but. Forsaking the traditional avenue to policy change through Charleston, these groups have turned to local government to advocate additional regulation, moratoria, and even bans. Use of this tactic to oppose natural gas development is hardly unique to West Virginia. Numerous local governments throughout Pennsylvania, Colorado, and Ohio have sought to regulate, suspend, or ban natural gas development within their jurisdictions.

Local government regulation of natural gas development raises an important question, though. Is it legal? The answer to this question naturally is of great interest to the natural gas industry. However, the answer also should interest the business community, generally. Businesses considering a capital investment project, such as the development of a Marcellus Shale well, expect (if not demand) stability and predictability. Ambiguous or inconsistent rules and regulations reduce stability and predictability, increase risk, and diminish a project’s attractiveness. Additionally, any rule that permits local government to regulate, suspend, or ban natural gas development would apply equally to almost any other industry.

Click here to read the entire article.


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Sunoco’s Natural Gas Liquids Pipeline Delayed?

Legal challenges could hinder progress on the pipeline moving natural gas liquids from the Marcellus Shale in western Pennsylvania to Marcus Hook.

Read the entire NPR article here.

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Observations of the Sixth Annual Developing Unconventional Gas Conference

Article by Scott Rotruck, Director of Energy & Transportation Services

Scott Rotruck

Scott Rotruck

I had the great learning experience of attending The Sixth Annual Developing Unconventional Gas Conference, known as DUG East, last month.

The conference is based around the sharing of ideas, performance updates, and networking across the supply chain of the Marcellus and Utica shales. DUG East brought the best and brightest corporate leadership together to update the 3,200 attendees on the innovation, continuous improvement, and execution of business plans in the 95,000 square mile Marcellus Shale and in its older, deeper and at 170,000 square miles, even geographically larger, Utica Shale.

William Gladstone, four-time Prime Minister of England, once observed all you needed to know about a country was whether people were trying to get into or out of it. Therefore, applying a similar metric to U.S. shale plays provides a powerful affirmation that the best and brightest minds in energy see the long-term opportunities as being very abundant.

The following are several personal takeaways from the conference… the entire article here.

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Gov. Corbett Issues Executive Order Modifying Rules Covering Restricted Drilling in State Parks and Forests

Pennsylvania’s Governor Tom Corbett has issued an executive order allowing additional gas leasing in state parks and forests – so long as it does not result in “additional long-term surface disturbance.” The Department of Conservation and Natural Resources, which controls the property, will determine if the mineral rights are available for exploration.

Related to this announcement, Gov. Corbett’s proposed budget includes $75 million in new revenue from additional leases of state-owned mineral rights.

Click here to read the Governor’s complete announcement.

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