Summit Midstream Partners LLC is acquiring midstream gas assets in the Piceance Basin from Encana Oil & Gas (USA) Inc. for $590 million. The assets include about 260 miles of pipeline and 90,000 hp of compression facilities and serve Mamm Creek, Orchard and South Parachute production in the area around Rifle, CO. They are currently transporting about 500 MMcf/d of gas under long-term contracts with multiple producers, according to Summit. Dallas-based Summit, which is privately held, has also committed to build for Encana the midstream infrastructure necessary to support its emerging Niobrara development. The sale of the Piceance Basin assets is subject to regulatory approvals and closing conditions and is expected to close during the current quarter.

There is “no defensible reason” for the Environmental Protection Agency (EPA) to subject natural gas pipelines and storage facilities to regulation of emissions of volatile organic compounds (VOC), said the Interstate Natural Gas Association of America (INGAA) in a letter to EPA. Proposed EPA rules “would have far-reaching impacts on our industry, yet, for natural gas transmission and storage companies, VOC emissions are relatively minimal,” INGAA said. Even the EPA has acknowledged that the VOC content of pipeline-quality gas is “relatively low,” the pipeline group said. “Applying operating standards on interstate natural gas pipeline and storage operations therefore would yield, at best, a very small reduction in VOC emissions. Regulations cannot significantly reduce something [that] is not significant in the first place.” While the impact on VOC emissions would be negligible, “the cost to comply would be very high,” INGAA said.

Enterprise Products Partners LP is holding a binding open season through Nov. 10 for capacity on its proposed pipeline to transport ethane from the Marcellus and Utica shales to the U.S. Gulf Coast. The 1,230-mile pipeline would have an initial capacity of 125,000 b/d, which could be expanded. It would deliver ethane to Enterprise’s natural gas liquids storage complex at Mont Belvieu, TX. Through connections at Mont Belvieu, ethane production from the Marcellus and Utica shales would ultimately have direct or indirect access to every ethylene plant in the United States, according to Enterprise. The pipeline would be expected to begin operation in the first quarter of 2014. For information contact Russ Kovin at rkovin@eprod.com, or (713) 381-7925.

Tulsa-based oil and gas exploration and production company Samson Investment Co. could be in play, according to a recent report by The Wall Street Journal, which cited unnamed sources who said the company is “considering strategic options.” A deal could be worth as much as $10 billion, the paper said. The privately held company was founded in 1971. According to its website, its asset base is 85% natural gas and the company “continues to profit and expand. In the last three years, we have invested more than $4 billion in new drilling and oil and gas property acquisitions. Annually, we plan to spend in excess of $1 billion on capital expenditures. We continue to seek new drilling and acquisition opportunities.” The company did not respond to a request for comment.

A lawsuit filed by Energy Transfer Partners LP against Enterprise Products Partners LP and Enbridge Inc. over an abandoned proposal to construct an oil pipeline from Cushing, OK, to Houston “is about a company…trying to get in the courthouse what it could not achieve in the marketplace,” Enterprise said in a motion for summary judgment. In August Enterprise said it was dropping plans for a 584-mile crude oil pipeline from Cushing it had proposed to develop with Energy Transfer, citing insufficient commercial interest. Energy Transfer claims that Enterprise broke the terms of a joint venture agreement and sent out a news release announcing the dropping of the project without its consent. Enterprise and Enbridge have are now partnering to pursue a similar project. It its motion Enterprise asserts that the partnership with Energy Transfer was never a done deal and that no agreement to undertake a project had been made.

Energy banker First Reserve Corp. has created a joint venture (JV) with Appalachian operator Energy Corp. of America (ECA) initially to build natural gas gathering systems in the Marcellus Shale. Through the JV, in which First Reserve would provide an equity commitment of $100 million from its Energy Infrastructure Fund, the investment firm would own a half stake in two newly constructed gathering systems in Pennsylvania’s Greene and Clearfield counties. The JV would operate under long-term contracts with a fixed take-or-pay structure.

A unit of Boardwalk Pipeline Partners LP plans to build a $90 million gathering system in northeastern Pennsylvania to connect Southwestern Energy Co. wells in the region to the Tennessee Gas Pipeline Co.‘s (TGP) Line 300. The 15-year agreement between the two companies calls for building a new natural gas gathering system in Susquehanna and Lackawanna counties, where Southwestern leases a block of acreage it calls the Price area. The proposed 275,000 Dth/d gathering system would include approximately 26 miles of 12-inch diameter high-pressure pipeline and a low-pressure in-field gathering pipeline, as well as associated compression and dehydration facilities. The companies did not offer a timeline for the project, other than to say it would be “built out over several years.” Southwestern is an active producer in neighboring Bradford County, but only recently began focusing on Susquehanna, spudding 14 wells since July.

The County Commissioners Association of Pennsylvania (CCAP) is supporting a local impact fee on natural gas development but has “strong reservations” about counties being ultimately responsible for its levying and administration. Gov. Tom Corbett has proposed allowing counties to charge a tiered impact fee on shale gas wells (see NGI, Oct. 10). Counties and municipalities would receive 75% of the revenue generated; the state would get the remaining 25%. The 75% share would be further divided among counties (36%), municipalities with drilling activity (37%) and those without (27%). CCAP said counties and municipalities do not currently receive direct revenues from the Marcellus Shale and other gas producers — as they do from other mineral operations — based on a 2002 Pennsylvania Supreme Court decision, Independent Oil and Gas et al. v. Fayette County Board of Assessment Appeals. The ruling exempts oil and gas operations from local property taxes.

A proposed rulemaking to examine Pennsylvania’s regulations regarding licensing requirements for natural gas suppliers (NGS) will be issued for comment by mid January, the Pennsylvania Public Utility Commission (PUC) said. The PUC has traditionally issued licenses to marketing service consultants and nontraditional marketers that have applied for them if they meet financial and technical requirements, despite the fact that such entities are exempt from regulations requiring NGS to obtain a license in order to offer service in the state. That could give those entities “a competitive edge or perceived higher level of credibility,” according to Commissioner Pamela A. Witmer, who said the goal of the review “should be to discontinue the NGS licensing exemption of marketing services consultants and nontraditional marketers and instead require all natural gas aggregators, marketers and brokers to be licensed by the commission in order to offer natural gas supply services to retail customers.” The proposed rulemaking is scheduled to be issued within 90 days, the PUC said.

The Pennsylvania Department of Environmental Protection (DEP) has released for review a technical guidance for single source or “air aggregation” determinations from industrial operations, including the Marcellus Shale with comments through Nov. 21. The guidance takes a literal approach to existing law, which says separate sources of emissions must be “contiguous or adjacent” to be combined. The DEP believes those two words define “the distance or spatial relationships between locations.” DEP Secretary Michael Krancer said some regulators have interpreted the meaning of “contiguous” or “adjacent” properties to mean only that operations on the properties be “interdependent” but that definition isn’t supported by case law or existing regulations. The previous guidance in a December 2010 policy document was rescinded by Gov. Tom Corbett in February (see NGI, March 7). The DEP plans to begin implementing the technical guidance on an interim basis while it collects and considers public comments on the proposed decision.

A group of 10 Republican and three Democratic members of Congress from Pennsylvania is calling on the National Economic Council (NEC) to recognize the economic value of the Marcellus Shale to their state and the potential value of shale gas to the nation — and to leave its regulation to state and local authorities. “The existence of shale gas in the United States, coupled with the technological achievements that have made its production possible, present a tremendous economic opportunity for our nation,” the Pennsylvania delegation said in a letter sent to NEC Director Gene Sperling. “It is our view that the states are in the best position to regulate the activity, given that the types of fracturing operations, local priorities and environmental concerns vary widely among the regions in which hydraulic fracturing is used. The letter was signed by Republicans Mike Kelly, Bill Shuster, Tim Murphy, Todd Platts, Tom Marino, Charlie Dent, Pat Meehan, Joe Pitts, Mike Fitzpatrick and Lou Barletta, and Democrats Tim Holden, Jason Altmire and Mark Critz.

Nicor Inc.‘s Central Valley Gas Storage Project in Northern California will hold an open season before the end of this year, an executive with the project said. Nicor gained state regulators’ approval last year for the underground storage project that will be linked to Pacific Gas and Electric Co. Construction is to be completed in 2012, according to Tim Hermann, vice president for midstream operations. Hermann confirmed that an open season for the 11 Bcf capacity, three- and four-turn storage facility is imminent.

As development in the liquids-rich Eagle Ford Shale of South Texas continues to expand, a task force formed earlier this year to address residents’ and industry’s concerns (see NGI, Aug. 1) last week issued recommendations related to truck traffic and pipeline development. The task force said it supports trucking companies partnering with the Texas Department of Public Safety to develop a program that would alert companies when their drivers receive moving violations or drivers license suspensions. It also supports the creation of road use agreements or trucking plans between operators and local authorities that would require operators to avoid peak traffic hours or when school buses are running. The task force also recommended that operators establish “overnight quiet periods” for trucking activities. The task force said placement of pipelines should avoid steep hillsides and watercourses where feasible and routes should take advantage of road corridors to minimize surface disturbance. When clearing is necessary, the width disturbed should be kept to a minimum and topsoil material should be stockpiled to the side because retaining topsoil for replacement during reclamation can significantly accelerate successful revegetation, the task force said.

Republicans are trying to muster enough votes in the North Carolina House of Representatives to override Democratic Gov. Bev Perdue‘s veto of an energy bill that would allow onshore hydraulic fracturing (fracking) and offshore natural gas drilling to proceed. Perdue vetoed S709 — also known as the Energy Jobs Act — on June 30, declaring it unconstitutional because it called for her to enter into an offshore energy compact with neighboring Virginia and South Carolina (see NGI, July 11). She said that proviso infringed on the powers assigned to the governor. But the Republican-controlled Senate disagreed, and voted 31-17 to override Perdue’s veto on July 13 (see NGI, July 18). Supporters of the bill had just enough votes to clear the three-fifths (60%) threshold needed for a successful override. To become law, S709 must now pass the state House of Representatives, which is also controlled by Republicans, by a three-fifths vote. The bill was ratified 69-42 by the House on June 18. If a similar vote total occurs the override will be successful. Both chambers of the General Assembly will reconvene on Nov. 7.

Freestone Resources Inc. is teaming up with MEA Solutions LLC, a Houston-based oilfield services operator, to create Freestone Water Solutions LLC to provide a “total solution” for water resource management that would include recycling flowback water from hydraulic fracturing operations in the onshore. The joint venture would own and operate water recycling systems, which would use proprietary technology to treat and recycle flowback water, as well as produced water, for subsequent reuse.

Natural gas offers greenhouse gas (GHG) emissions advantages compared with coal-fired power generation, according to a study by Worldwatch Institute and Deutsche Bank Climate Change Advisors. The U.S. Environmental Protection Agency updated its methodology for estimating methane (CH4) emissions from gas systems, but gas-fired generation still releases 47% less GHGs than coal from source to use, the researchers said.

Pennsylvanians are narrowly split on whether the benefits of hydraulic fracturing (fracking) are worth the potential risks, according to the results of a survey by the Mercyhurst Center for Applied Politics (MCAP) at Mercyhurst College in Erie, PA. The opinions uncovered “reflect uncertainty about [fracking] and the state’s regulatory response to the developing shale gas industry,” MCAP researchers said. Of the respondents already aware of fracking, 55% said they favor its use to extract gas from the Marcellus Shale, while 27% oppose it and 18% answered “depends” or “don’t know.” There was far less support for fracking in state forests, with 57% of respondents saying they oppose it. More than half (54%) of respondents said they believe fracking poses “a significant threat” to water resources, but they were split over whether it poses a threat to the environment (43% said it does pose a significant threat; 42% said it does not) or human health (44% said it does pose such a threat; 37% said it does not). Slim pluralities said the potential benefits of fracking outweigh the potential risks.

A proposal in the Pennsylvania General Assembly would establish a mandatory training and certification program for any worker on an unconventional well site in the state. Senate Bill 1285 would establish the Marcellus Shale Industry Job Training and Certification Advisory Board to recommend training and certification requirements for industry employees. The nine-member board would be appointed by the secretary of the Pennsylvania Department of Labor and Industry and would include three representatives from the labor community, three representatives from the natural gas industry, two consumer advocates and the secretary. The bill would require all workers to get certified before being allowed to work at a Marcellus or Utica shale well site, and it would require current workers to get certified within one year.

The Pennsylvania Department of Environmental Protection (DEP) issued 322 Marcellus Shale drilling permits in September, more than in any other month of the year, but operators drilled only 147, down from summer highs. Through the first nine months of 2011, the DEP issued 2,514 permits and operators reported drilling 1,388 wells, up from 2,350 permits issued and 1,099 wells drilled in the first nine months of last year. Chesapeake Energy Corp. led development in the state in September, spudding 21 wells, followed by Anadarko Petroleum Corp. with 17 wells, Talisman Energy Inc. with 14 wells, Shell Western Exploration and Production LP with 13 wells and Williams Production Appalachia LLC with 12 wells. The Ohio Department of Natural Resources (ODNR) issued 17 permits in September for horizontal and vertical wells in the Utica Shale and associated Point Pleasant, down from 22 permits issued in August. Chesapeake lead drilling, permitting and promotional activities in Ohio, but Anadarko is becoming increasingly active, picking up six drilling permits in September.

The shift to natural gas and electricity as replacements for gasoline in transportation would greatly increase natural gas demand, according to Ty Harrison, Societe Generale Energy’s chief strategist, speaking at the LDC Gas Forum: Rockies & West conference in Los Angeles. Harrison cited a number of possible things that could boost demand, and alternative transportation fueling is one of them — whether it is gas used directly as compressed natural gas and liquefied natural gas, or gas used to generate more electricity to power a massive shift to electric vehicles (EV). Harrison said gas certainly could increase demand with a big shift to EVs as is contemplated by some local communities and utilities around the United States and in Europe particularly.

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