At the Well Weekly (v.11.15.2019)


Oil + Gas Update - PEDF 2.0: New Lawsuit Questions PA DCNR's Authority to Lease the Commonwealth's Oil and Gas.


The rig count dropped again since our last report amidst record production levels and sluggish natural gas prices. In pipeline news, PennEast plans to seek SCOTUS following after the Third Circuit's decision to curtail the company's authority under the Natural Gas Act to condemn state-owned property; MVP project sponsors capped their investment in the embattled pipeline; and the FBI is investigating Governor Wolf's administration regarding permit application approvals for Mariner East pipelines. In Appalachia court news, an environmental group challenged PA DCNR's authority to lease state-owned oil and gas rights, the Commonwealth Court rejected a challenge under the PA Environmental Rights Amendment to a local ordinance creating a natural resource development zone, and that same court held that state senators lacked standing to force PADEP to promulgate certain water quality regulations.


Here's your week in review...


Rig Counts, Spot Prices + Oil Prices


  • Rigs: National (-806); Marcellus (-37); Utica/Point Pleasant (+13)


  • Brent Crude: +$63.30/bbl


  • West Texas Intermediate: +$57.72/bbl


  • NYMEX: December 2019 @ -$2.600/MMBtu.


  • Spot Prices: Henry Hub (+$2.62/MMBtu); Dominion South (+$2.14/MMBtu); Tenn. Zone 4 (+$2.05/MMBtu)


("+" or "-" or blank denotes increase, decrease, or flat. )



WOPL - Appalachia


In our new section, WOPL ("waiting on pipelines"), we provide the latest news on the status of various pipeline projects in Appalachia:


  • Adelphia Project (Greater Philadelphia Region): Nothing new to report.


  • Atlantic Coast (W. Va. to Va. and NC): Atlantic Coast Pipeline officials are optimistic that natural gas pipeline construction could resume in summer 2020.


  • Atlantic Sunrise (Northeastern PA to SE Pennsylvania): FERC plans to release an environmental assessment in early February for separate pipeline expansion projects sponsored by National Fuel Gas and Transco’s Leidy South, both of which would connect Marcellus and Utica gas with Transcontinental customers in the Northeast and mid-Atlantic.


  • Constitution (Northeastern PA to NY): FERC denied requests from environmental groups for rehearings regarding two-year extensions to for a pair of pipeline projects. (See below for more details.)


  • Empire Pipeline (NY to PA): Nothing new to report.


  • Leidy South - Benton Loop Expansion (PA): Nothing new to report.


  • Mariner East (Western PA to Eastern PA): The FBI is investigating the circumstances surrounding Governor Wolf/PADEP's permit application approvals for Mariner East pipelines.


  • Mountaineer XPress (WV): Nothing new to report.


  • Mountain Valley Pipeline (Northern WV to Southern Va. and NC): ConEd capped its investment in the embattled MVP project at $530 million. State police officers subdued a protester of Mountain Valley Pipeline in the halls of the courthouse moments after another protestor received his conviction for assaulting two MVP construction workers.


  • NEXUS (Ohio to Michigan): Nothing new to report.


  • NFG FM100 Project (NC PA to Transco): Nothing new to report.


  • Northeast Supply Enhancement Project (NJ/NY): Nothing new to report.


  • Northern Access (NW PA to Western NY): Nothing new to report.


  • PennEast (PA to Central Jersey): The Third Circuit denied a request from PennEast to rehear the decision denying the pipeline company's authority to condemn state-owned property. The company says it will appeal to the United States Supreme Court.


  • Regional Energy Access (NE PA to PA/NJ): Nothing new to report.


  • Revolution Pipeline (PA): Nothing new to report.


  • Rover (OH, WV, PA to Michigan): Nothing new to report.


  • TransCanada Eastern Panhandle Project (PA to WV): Nothing new to report.

Headlines & Holdings - Appalachia


  • Federal Court in West Virginia Tackles Dispute over Deep vs. Shallow Rights. A federal court in West Virginia concluded that an assignment of wells targeting formations above the Marcellus conveyed shallow rights only and rejected arguments that the grantor’s title to deep and shallow rights merged, holding instead that the deep rights passed to the current owner separately. Mountaineer Minerals, LLC v. Antero Resources Corp., --- F. Supp. 3d ---, No. 1:16CV28, 2019 WL 5727589 (N.D.W. Va., Nov. 5, 2019).


  • New Lawsuit Challenges Constitutionality of PA DCNR's Forest Management Plan. The Pennsylvania Environmental Defense Foundation (“PEDF”) is challenging the Department of Conservation of Natural Resources’ forest management plan that now requires DCNR to balance the economic benefits of oil and gas development with forest preservation, arguing among other things, that DCNR has no authority to lease state forests for oil and natural gas development for the economic benefit of the Commonwealth. PEDF v. DCNR, No. 609 MD 2019 (Pa. Cmwlth.) (pending).


  • FERC Denies Rehearing to Address Climate Change Impacts of Constitution/Iroquois Gas Pipeline Projects. The Federal Energy Regulatory Commission denied requests from environmental groups to reconsider a prior order extending time to complete the construction of two pipeline systems by the end of 2020 based on an alleged failure to consider climate change impacts of the project because the groups never raised the issue until rehearing. Constitution Pipeline Co., LLC Iroquois Gas Transmission Sys., L.P., 169 FERC ¶ 61102, 2019 WL 5862052 (FERC. Nov. 8, 2019).


  • Senators Lack Standing to Have Courts Compel DEP/EQB to Promulgate Water Quality Reg. The Commonwealth Court of Pennsylvania concluded that two state senators lacked standing to compel the Environmental Quality Board of the PA Department of Environmental Protection to propose new water quality regulations regarding manganese as required by new law, holding that the agency’s inaction didn’t affect the senators’ ability to introduce or vote on legislation for purposes of “legislative standing.” Scarnati v. Dep't of Envtl. Prot., No. 186 M.D. 2019, 2019 WL 5876443 (Pa. Cmwlth., Nov. 12, 2019).


  • Commonwealth Court Rejects Environmental Rights Challenge to Local Ordinance Creating Oil and Gas Development Zones. The Commonwealth Court of Pennsylvania rejected a local environmental group’s challenge to an ordinance that authorized oil and gas development in a resource zone, holding (among other things) that the municipality considered the environment when enacting the ordinance, the objectors failed to establish under Article I, sec. 27 of the Pennsylvania Constitution that the ordinance authorizing development unreasonably impairs the environment, and the municipality did not have the authority to go beyond its statutory powers to enact environmental protections left to the PADEP. Protect PT v. Penn Twp. Zoning Hearing Bd., No. 1632 C.D. 2018, 2019 WL 5991755 (Pa. Cmwlth., Nov. 14, 2019).

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