The Federal Energy Regulatory Commission (FERC) said it would comply with an executive order from President Obama, directing it and other independent agencies to gain public input for assessing and streamlining federal regulations. The executive order requires the agencies to develop a plan for periodically reviewing existing regulations and to make those plans public within 120 days. It follows a similar order from Jan. 18 directed at executive agencies.

Shell Canada Ltd. has signed on with a trio of Asian partners to explore developing a liquefied natural gas (LNG) export facility on the western coast of Canada, according to press reports. The group would be the fourth to target the region for LNG exports. Shell is said to be in early talks with China National Petroleum Co., Korea Gas Corp. and Mitsubishi Corp., according to the Calgary Herald. A spokesman characterized the talks as being in early stages and said details were not available. There are at least three other parties working on LNG export from Western Canada.

Pacific Gas and Electric Co. (PG&E) has made a new filing in California Superior Court, Department 7, San Mateo County, indicating that it is not blaming residents and other third-parties for the natural gas transmission line explosion that occurred in San Bruno, CA, last September. “We want it to be crystal clear that no one at PG&E would suggest that the plaintiffs or residents of San Bruno impacted by this accident are somehow at fault for the tragedy,” the utility said. News reports have alleged that language in a July 5 utility filing was intended to implicate the city of San Bruno’s sewer replacement project as the cause of the accident. The language in the filing did not name the city of San Bruno or any third party, PG&E said.

Shell Canada Ltd. is looking for a partner to help develop its gassy Chinook leasehold, 102,000 acres in the Nikanassin Formation, which is a shale play in the Deep Basin of Western Canada. The resource potential of the entire leasehold, which straddles the provinces of Alberta and British Columbia, is estimated at 12 Tcf, with Shell’s estimated recoverable resource at more than 4 Tcf. Shell is producing 35 MMcf/d from the play and has plans to “ramp up to 150 MMcf/d by 2012 and possibly 250 MMcf/d or higher” at some unspecified time. Shell said to date it has invested in infrastructure and facilities that have resulted in operating costs as low as US55 cents/Mcf. Three horizontal wells were drilled into the Nikanassin in the last three months of 2010, “all tied in and initially producing more than 5 MMcf/d.” According to Shell, the estimated value of the JV would be “in the range of US$200 million to $250 million assuming a 40% JV and $1/boe of recoverable resources of 4 Tcf.”

Millennium Pipeline Co. LLC has filed an application seeking authorization from the Federal Energy Regulatory Commission to expand its system by 225,000 Dth/d in New York. The pipeline has proposed the construction of a compressor station, the Minisink Compressor Project, and related facilities in the Town of Minisink in Orange County, NY, which would increase firm deliveries to its interconnection with Algonquin Gas Transmission LLC at Rampo, NY, to 675,000 Dth/d. The project also will permit bidirectional gas flows on Millennium’s system between its existing compressor station at Corning, NY, and the proposed Minisink station. Millennium wants to have the compressor station in service by Nov. 1, 2012.

The U.S. Fish and Wildlife Service (FWS) has opened for public comment until Oct. 11 an evaluation of its draft environmental impact statement for NiSource Inc.‘s Habitat Conservation Plan (HCP), a major step in helping the company obtain a multi-species incidental “take” permit for 10 federally listed species that are found across its 14-state, 17,500-mile natural gas transmission network. Four years ago NiSource began work on the blanket permit, which would allow the gas distribution company to operate and maintain its pipeline system and bypass case-by-case reviews that fall under the Endangered Species Act (see NGI, Nov. 12, 2007). An approved permit would cover a suite of activities that the company uses to maintain and expand its pipelines along rights-of-way.

The Pennsylvania Department of Environmental Protection (DEP) in June issued 262 permits for Marcellus Shale drilling and operators reported drilling 154 wells into the formation. In the first six months of the year the DEP issued 1,629 Marcellus permits and operators reported drilling 808 wells into the formation in Pennsylvania — up from 1,398 permits issues and 711 wells drilled through the first six months of 2010. While Bradford and Washington Counties continue to lead development in the northeastern and southwestern corners of the state, respectively, activity continues to spread from early hot spots into neighboring counties (see NGI, June 20). Lycoming County, just southwest of Bradford, continues to see development at triple its 2010 levels with 186 permits issued and 121 wells drilled through June.

Voters are nearly split about the New York Department of Conservation‘s (DEC) proposed recommendations to allow hydraulic fracturing (hydrofracking) in a portion of the state’s Marcellus Shale, with 45% in support of drilling and 43% opposed, according to a poll of registered voters released by the Siena College Research Institute. The DEC earlier this month published the preliminary draft permit rules for hydrofracking operations, which would impose additional rules on Marcellus operators (see related story). Statewide the voting was almost split but there were differences in the attitudes of voters depending on where they lived. Upstate, 47% favor, 45% oppose hydrofracking while in the downstate suburbs 47% were in favor of hydrofracking while 40% were opposed. In New York City 41% favored the drilling technique while 42% opposed it. By a 54-33% margin, voters surveyed statewide said they were more inclined to trust hydrofracking opponents rather than supporters, a view held by 53% in New York City, 54% in the downstate suburbs and 55% upstate.

Pennsylvania has lost nearly $200 million in state revenue since October 2009 as of last Friday by not imposing a tax on natural gas, according the Drilling Tax Ticker hosted by the Pennsylvania Budget and Policy Center (PBPC). The PBPC Drilling Tax Ticker uses a proposal then-Gov. Ed Rendell made in 2009 — a 4.7 cent/Mcf tax on production plus a 5% tax on the sale price of natural gas. The ticker extrapolates lost revenue using Marcellus Shale and conventional well drilling reports, semi-annual production reports, estimated well depletion rates and the money Henry Hub average price of gas. Skeptics, particularly Gov. Tom Corbett, say the industry carries its weight through other taxes, economic development and job creation (see NGI, May 2).

Companies holding “flexible air permits” granted by the Texas Commission on Environmental Quality (TCEQ) — all 136 of them — have agreed to apply for permits approved by the Environmental Protection Agency (EPA), the federal agency said. EPA told the companies that their state air permits were not in compliance with the federal Clean Air Act and they needed to obtain approved air permits to be in compliance. Texas Attorney General Greg Abbott filed a challenge to the EPA ruling in the U.S. Court of Appeals for the Fifth Circuit in New Orleans on behalf of TCEQ (see NGI, Aug. 2, 2010). Besides the state, a number of industry groups are challenging EPA in court.

Illinois Gov. Pat Quinn has signed legislation to help create the state’s first coal gasification plant, which is expected to reduce carbon emissions and create 1,500 jobs. The $3 billion proposed Chicago Clean Energy project by Leucadia National Corp. would, for the first time in the state, use the advanced “clean” coal process known as gasification, which allows production of substitute natural gas from Illinois coal and petroleum coke without burning them. The enacted legislation requires utilities to purchase the gas produced at the future plant and proportionally allocates the natural gas produced at the facility to the state’s gas utilities. Leucadia now begins a regulatory review that could take several years before the project moves forward.

Gulfport Energy Corp. announced that it has expanded its acreage position in the eastern Ohio portion of the Utica Shale play. The Oklahoma City-based oil and natural gas exploration and production company said it has acquired leases totaling 35,000 gross (17,500 net) acres. The company said it also has commitments which, if they were all acquired, would boost Gulfport’s position to about 110,000 gross (55,000 net) acres. In the coming months the company also plans to consider additional acquisitions, which could give Gulfport a leasehold totaling approximately 130,000 gross (65,000 net) acres in the Utica Shale. Gulfport has said it will serve as operator of its Utica Shale acreage and plans to begin drilling in early 2012.

American Electric Power (AEP) said Thursday it is terminating its agreement with the U.S. Department of Energy (DOE) and placing its plans to advance carbon dioxide (CO2) capture and storage (CCS) technology to a commercial coal-fueled power plant on hold, citing the uncertain status of U.S. climate policy and the continued weak economy. AEP was selected in 2009 by the DOE to receive funding of up to $334 million to pay part of the costs for installation of a commercial-scale CCS system at AEP’s power plant in New Haven, WV. The system was to capture at least 90% of the CO2 from 235 MW of the plant’s 1,300 MW of capacity. The captured CO2 was to be treated and injected about 1.5 miles underground. “We are placing the project on hold until economic and policy conditions create a viable path forward,” said AEP CEO Michael G. Morris….at this time it doesn’t make economic sense to continue work on the commercial-scale CCS project beyond the current engineering phase.”

Expanded use of combined heat and power (CHP) systems, which recover and make use of waste heat from power generation, could be a means of growing demand for Marcellus Shale natural gas, according to the Commonwealth Recycled Energy Economic Development Alliance. “Marcellus Shale natural gas-powered CHP systems are more efficient than conventional electricity generation. They also are the lowest-cost method for reducing carbon emissions because they have longer operating hours throughout the year than solar photovoltaic or wind-powered systems,” said Richard Sweetser, senior advisor with the U.S. Department of Energy‘s Mid-Atlantic Clean Energy Application Center.

Encore Energy Partners LP is to become a wholly owned subsidiary of Vanguard Natural Resources LLC‘s operating company, Vanguard Natural Gas LLC, through a unit-for-unit exchange that would give Vanguard the rest of Encore it doesn’t already own, the companies said. Encore’s public unitholders are to receive 0.75 Vanguard common units in exchange for each Encore common unit they own at closing, representing a premium of 4.4% based on closing prices on March 24, the last trading day prior to Vanguard’s announcement that it intended to acquire the units (see NGI, March 28). The deal “would simplify our commercial activities and organizational structure as well as lower our overall cost of capital,” said Vanguard CEO Scott W. Smith.

Houston-based Dynegy Inc. said it is beginning discussions to line up more than $1.7 billion in financing as part of a new organizational structure separating its natural gas- and coal-fired electric generation assets, said Robert Flexon, who was named CEO in June. In the new organization, one subsidiary (GasCo) would own a portfolio of eight primarily gas-fired intermediate (combined-cycle) and peaking (combustion and steam turbines) power generation facilities located in the West, Midwest and Northeast. The gas plants represent 6,771 MW of the company’s more than 11,600 MW fleet. A second new subsidiary (CoalCo) would own a portfolio of six primarily coal-fired baseload generation plant located in the Midwest, with a collective capacity of 3,132 MW. Dynegy’s remaining assets — the Danskammer and Roseton facilities — could not be part of either GasCo or CoalCo, a company spokesperson said.

The California Energy Commission (CEC) has allocated $29.6 million collectively to seven separate research and demonstration projects aimed at developing cleaner transportation fuels through applications of natural gas and biofuels. These awards complete the first two years of funding under the state’s Alternative and Renewable Fuel and Vehicle Technology Program created by the state legislature under a 2007 law (AB 118). CEC Vice Chairman James Boyd said the grants would infuse $44.5 million into the California renewable energy industry. Compressed natural gas or liquefied natural gas are involved in three of the seven new projects.

Laser Northeast Gathering Co. LLC has broken ground on the New York portion of its proposed gathering system and announced a $60 million expansion of the Marcellus Shale midstream project. The company began building the Pennsylvania portion of its Susquehanna Gathering System in February. The $50 million first phase of the system will run 30 miles from Susquehanna County, PA, to the Millennium interstate pipeline in Broome County, NY, and is expected to come online in the third quarter of the year. The second phase would expand the system to the southwest and southeast. The southwest expansion would connect the new mainline to the interstate Tennessee Gas Pipeline via nine miles of 24-inch diameter pipeline. The southeast expansion would connect the Tennessee Gas Pipeline to producing acreage in Wyoming County via nine miles of 16-inch diameter pipeline. Laser said it has acquired all of the rights-of-way for the second phase and secured the site for a compressor. The expansion would triple the size of the system, adding 1.4 Bcf/d of pipeline capacity.

The City Council of Auburn, NY, has voted to stop accepting wastewater generated from hydraulic fracturing at natural gas wells, ending more than a decade of the practice and eliminating a major source of revenue for the city. City Clerk Debra McCormick told NGI that Mayor Michael Quill and Councilors Gilda Brower and Thomas McNabb voted in favor of the ban at the July 7 city council meeting, which passed by a 3-1 vote with one councilor absent. Councilor Michael Smith was the lone dissenter. The city’s wastewater treatment plant discharges into the Owasco River. The city in Cayuga County had been accepting wastewater from natural gas wells for more than 10 years, which had generated an average of $600,000 a year in revenue for the last three years.

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