The federal government could raise an additional $1.2 billion over the next decade through higher fees and royalties on crude oil and natural gas drillers and revamped oil and gas lease auctions, according to a report from the Congressional Budget Office (CBO). While CBO offered no recommendations, it analyzed several options to increase federal income from oil and gas on federal lands. Those options included increasing production by opening new federal lands; repealing tax preferences for companies producing oil or gas on federal lands; imposing fees on non-producing parcels; increasing the royalty rate for onshore production to 18.75% from the current 12.5%; increasing the royalty rate for offshore leases when oil or gas prices reach certain thresholds, and a series of revisions to the Bureau of Land Management‘s lease auction process. Gross income from onshore oil and gas resources averaged $3 billion annually from 2005 to 2014, and $8 billion came from offshore resources during the same period, CBO said. Last year, the Department of Interior launched a plan to adjust royalty rates on federal lands (see Daily GPI, April 17, 2015).
Police in Holland Township, NJ, arrested resident Lester Kinney Jr. this week and charged him with making terroristic threats and possession of a weapon for an unlawful purpose after an altercation with a PennEast Pipeline Co. LLC crew, the company said on Thursday. The incident occurred on April 19, when Kinney allegedly approached a three-person crew in Holland that had stopped to confirm property information about an authorized survey. Kinney allegedly asked the crew members if they worked for PennEast Pipeline. After the crew answered yes, Kinney “held up the rifle, began waving it in the air, shouted in opposition to the project and vowed that he would prevent it,” the company said. The 118-mile, utility-backed pipeline would deliver Marcellus Shale gas from Northeast Pennsylvania to New Jersey (see Daily GPI, Aug. 12, 2014). Like similar projects in the region, it has faced staunch opposition from residents and local officials, including negative comments filed with the Federal Energy Regulatory Commission, demonstrations and lawsuits.
Thailand’s largest coal producer, Banpu Pcl, has invested $112 million for a 29.4% stake in a joint venture in northeastern Pennsylvania, the Chaffee Corners Joint Exploration Agreement, which is majority owned by Spain’s Repsol SA (see Shale Daily, Dec. 16, 2014). Banpu’s stake gives it 156 Bcf of reserves and about 21 MMcf/d of potential production.
Some criminal charges related to a fatal 2012 offshore oil platform explosion of the Louisiana coast have been thrown out by a federal judge. Two companies — Grand Isle Shipyards Inc. and Wood Group PSN Inc. — that did contract work on the platform had criminal charges related to safety and inspections dismissed, as did two workers, Don Moss of Groves, TX, and Curtis Dantin of Cut-Off, LA. Involuntary manslaughter charges remain against Grand Isle and platform owner Black Elk Energy Offshore Operations LLC. Other charges filed late last year (see Daily GPI, Nov. 20, 2015) also remain.
A leak developed and was fixed over the weekend at a third-party operated oil well on Southern California Gas Co.’s (SoCalGas) shuttered 3,600-acre Aliso Canyon underground natural gas storage field on the northern edge of Los Angeles. The Sempra Energy utility reported the incident to Gov. Jerry Brown‘sOffice of Emergency Services (OEM) Saturday. The well is operated by privately held Crimson Resource Management, a Denver-based producer whose operations are concentrated in California’s San Joaquin Basin. SoCalGas told OEM it was an oil spill involving gas venting. Although small and short in duration, the incident prompted nearby residents to repeat their calls for Aliso Canyon to be permanently shut down (see Daily GPI, Feb. 22).
The Delaware Court of Chancery has granted a motion by The Williams Companies Inc. to expedite litigation it initiated against Energy Transfer Equity LP (ETE), which challenges a private offering of Series A Convertible Preferred Units that ETE disclosed on March 9. Williams sued ETE and CEO Kelcy Warren, in two separate lawsuits, over the matter earlier this month (see Daily GPI, April 6). The litigation against ETE seeks to unwind the private offering. The litigation against Warren, in the district court of Dallas County, TX, is for wrongful interference, through the private offering, with a merger agreement executed in September 2015 (see Daily GPI,Sept. 28, 2015). The Williams board still supports the merger, the company said.
Rapid City, SD-based Black Hills Corp. said its merchant electric generation unit has closed the previously announced sale of a 49.9% interest in its natural gas-fired Colorado IPP LLC for $215 million toAIA Energy North America LLC, an infrastructure investment unit of Argo Infrastructure Partners. Colorado IPP owns and operates the 200 MW combined-cycle gas-fired generation plant in Pueblo, CO, and Black Hills Electric Generation LLC will continue to be the majority owner/operator of the facility, which has a long-term contract to provide power to another Black Hills unit, Black Hills Energy — Colorado Electric. Proceeds from the sale of the minority interest will be used to pay down debt and for general corporate purposes, according to Black Hills.
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