Pennsylvania, Ohio and West Virginia Can Support Several Large Cracker Plants

At the recent Utica Summit II, Cleveland State University economist Iryna Lendel stated that the three states’ shale is producing large amounts of liquid ethane — enough to support a multitude of processing plants.

To date, at least four of the cracker plants (turning ethane into ethylene, a key ingredient in making plastic) have been proposed in Ohio, West Virginia and western Pennsylvania.

Depending on the size, cracker plants can cost between $1 and $7 billion and can take several years worth of construction.

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First Long-Term Comprehensive Field Study of Natural Gas Underway

West Virginia University, along with other researchers such as The Ohio State University and industrial partners have engaged with the U.S. Department of Energy (“DOE”) in a five-year, $11 million agreement to create and manage the Marcellus Shale Energy and Environmental Laboratory.

The DOE’s National Energy Technology Laboratory and Northeast Natural Energy (“NNE”), a private oil and natural gas company, will develop research techniques and objectives headquartered at NNE’s field site at Morgantown Industrial Park.

The group of geoscientists, hydrologists, engineers, ecologists, social scientists and public health professionals will address baseline measurements, subsurface development and environmental monitoring with unconventional resource development.

According to the Independent Herald, “The Marcellus Shale Energy and Environment Laboratory will allow the team to address critical gaps of knowledge of the characterization, basic subsurface science, and completion and stimulation strategies that enable more efficient resource recovery from fewer wells with reduced environmental impact. The primary objectives of the project include providing a long-term research site with an existing well and documented production and environment baseline from two previously completed wells.”

Click here to read the entire article.

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Latest Aboveground Storage Tank Act Developments: Interpretive Rule Adopted and Comments Filed on Draft Emergency Rule

On October 21, 2014, the West Virginia Department of Environmental Protection (“WVDEP”) filed with the West Virginia Secretary of State its finalized Interpretive Rule outlining mechanisms for compliance with the imminent deadlines under the Aboveground Storage Tank Act (the “AST Act”), W. Va. Code §§ 22-30-1
et seq., for (1) spill prevention response planning and (2) initial inspection and certification. See 47 C.S.R. 62. The effective date of the Interpretive Rule is November 20, 2014. A copy of the final Interpretive Rule is available for download.

The final Interpretive Rule is very similar to the proposed version of the rule filed on September 9, 2014 for initial public review and comment. The rule’s basic structure and approach are unchanged: the final rule retains the proposed three-tiered approach to categorization of 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. Level 1 ASTs are those ASTs determined by WVDEP to have the highest risk of harm to public health or the environment due to their size, location or contents, and therefore these ASTs are subject to the more rigorous requirements of the AST Act for (1) the submittal of Spill Prevention Response (“SPR”) Plans by December 3, 2014 and (2) the inspection and certification of the tanks by January 1, 2015. Because Level 2 ASTs and Level 3 ASTs have been determined to have a reduced potential to harm public health or the environment, the Interpretive Rule establishes alternative options for compliance with these requirements for owners of these tanks.

The agency did make certain changes to the final Interpretive Rule that are worth noting, however.

Click here to read the entire article.


Although the AST Act, enacted this spring, is comprehensive in its scope, many of the key details of the new regulatory program for ASTs were left to the rulemaking process. This webinar walks viewers through the current status of the rulemaking process and what to expect in the coming months.

Click here to watch our webinar.

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Pennsylvania Contributes to a Large Portion of the Nation’s Gas Supply

Not only does Pennsylvania produce 20 percent of the national gas supply, but the Commonwealth also saw record production for the first six months of 2014 – an increase of 14 percent from the last six months of 2013.

According to David Spigelmyer, president of the Marcellus Shale Coalition, unconventional wells produced one-quarter of Pennsylvania’s gas supply in 2008. Now, they’re producing 20 percent of the national supply.

Most of the gas produced came from Susquehanna County, Pennsylvania.

Click here to read the Pittsburgh Business Times article.


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Monroe County, Ohio Lands Ethane Cracker Plant

Appalachian Resins, Inc. was slated to build the billion-dollar ethane cracker plant in West Virginia. Now, the company crossed the Ohio River and has leased land in Salem Township for the highly sought after plant that benefits the oil and gas industry.

Once completed, 18,000 barrels of ethane would be processed per day.

Click here for the entire Columbus Business First article.

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Dominion Cove Point Gets Federal Approval for LNG Terminal

The $3.8 billion Cove Point terminal in Maryland will be the nearest export location for the Marcellus Shale.

This authorization will allow Dominion to transport up to 860,000 dekatherms per day of natural gas from existing pipeline interconnects of the Cove Point pipeline to the Cove Point terminal and export up to 5.75 million metric tons of LNG per year.  By June 2017, Dominion expects to begin services at the liquefaction facilities and the related Virginia facilities in March 2017.

Click here to read the entire article.

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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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