At the Well Weekly (v.12.14.2018)


Oil + Gas Update - PADEP Proposes O+G Emission Regs, EPA Proposes Revised WOTUS Definition, and PennEast and Mariner East Get Wins.


Since our last report, oil prices climbed slightly alongside a flat rig count while natural gas prices dropped to around $4/MMBtu amidst reports of forthcoming mild temperatures. In pipeline news, PennEast received an important order confirming its right to immediate possession of easements along the pipeline route, an ALJ denied the petition to stop the operation of Sunoco's Mariner East lines, and Mountain Valley reported that its project should be about 70% complete by the end of the year despite a number of recent regulatory and litigation challenges. On the regulatory scene, PADEP discussed proposed regulations governing emissions from existing oil and gas sources while the Army Corps and EPA issued a revised rule designed to limit waters and wetlands subject to federal jurisdiction. In Appalachia court news, courts in Ohio have been active, tackling cases involving arbitration, royalty interests, and pipeline condemnation authority. In other news, the "strip-and-gore" doctrine made an appearance in a dispute over mineral rights in Texas while the Eighth Circuit confirmed that landowners failed to plead a fraud claim against Dakota Access.


Here's your week in review...


Rig Counts, Spot Prices + Oil Prices


  • Rigs: National (-1071); Marcellus (-56); Utica/Point Pleasant (+17)


  • Brent Crude: +$61.07/bbl


  • West Texas Intermediate: +$52.29/bbl


  • NYMEX: January 2019 Contract @ -$4.136/MMBtu.


  • Spot Prices: Henry Hub (-$4.20/MMBtu); Dominion South (-$3.97/MMBtu); Tenn. Zone 4 (-$3.99/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 pipeline projects in Appalachia:


  • Atlantic Coast (W. Va. to Va. and NC): The Fourth Circuit revoked additional ACP permits (see more below).


  • Atlantic Sunrise (Northeastern PA to SE Pennsylvania): Nothing new to report.


  • Constitution (Northeastern PA to NY). Nothing new to report.


  • Leidy South - Benton Loop Expansion (PA): Williams held a town hall with a small number of people about the project expansion located in Jordan Township just south of Sullivan County, PA.


  • Mariner East (Western PA to Eastern PA): An administrative law judge denied a petition for emergency relief filed by residents in Delaware and Chester Counties in Pennsylvania requesting a shut down of the pipelines for public safety reasons, holding that the the challengers didn't meet their heavy burden of proving the pipeline is unsafe. PUC expresses concerns about corrosion throughout Mariner East I.


  • Mountain Valley Pipeline (Northern WV to Southern Va. and NC): Mountain Valley Pipeline should be about 70% complete by the end of 2018 despite regulatory and litigation challenges. Meanwhile, six environmental groups are seeking to intervene in FERC proceedings regarding Mountain Valley Pipeline’s Southgate project. Also, Virginia’s State Water Control Board voted to consider revoking a water certification issued to Mountain Valley Pipeline conditioned on “reasonable assurance” that streams and rivers would not be contaminated.


  • NEXUS (Ohio to Michigan): The Sixth Circuit affirmed an order granting condemnation authority and injunctive relief to Nexus Gas Transmission LLC to access properties in Ohio and proceed with pipeline construction (see below for more).


  • PennEast (PA to Central Jersey): A federal judge in New Jersey granted an application filed by PennEast Pipeline Co. for orders of condemnation and injunctive relief to allow the immediate possession of rights-of-way along the pipeline route (see below for more).


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


Headlines & Holdings - Appalachia


  • DEP's Proposed Air Regulations for Existing Oil and Gas Sources. DEP’s Air Quality Technical Advisory Committee met on December 13, 2018, to discuss proposed regulations of air emissions from existing oil and gas sources. The draft regulations may be accessed here.


  • ALJ Denies Emergency Petition to Stop Mariner East Operations. The ALJ in the Mariner East PUC proceeding denied the petition for emergency relief filed by residents in Delaware and Chester Counties in Pennsylvania requesting a shutdown of the pipelines for public safety reasons, holding that the challengers didn't meet their heavy burden of proving the pipeline is unsafe. The PUC will review the ALJ’s decision. Flynn et al. v. Sunoco Pipeline, C-2018-3006116 (Pa. PUC) (pending).


  • Federal Court in NJ Confirms PennEast Condemnation Authority. A federal judge in New Jersey granted an application filed by PennEast Pipeline Co. for orders of condemnation and injunctive relief to allow the immediate possession of rights-of-way along the pipeline route in advance of paying just compensation to landowners. In re PennEast Pipeline Company, --- F. Supp. 3d ---, No. CV 18-1585, 2018 WL 6584894 (D.N.J. Dec. 14, 2018).