The Commodity Futures Trading Commission (CFTC) has approved final regulations regarding whistleblower incentives and protection, including provisions to pay individuals who provide the Commission with information about Commodity Exchange Act violations as much as 30% of monetary sanctions subsequently collected. The rules, which the CFTC approved by a 4-1 vote, would allow the Commission to award whistleblowers 10-30% of the monetary sanctions collected in either a CFTC-covered judicial action, administrative action or related action. Actions covered by the regulations include only those resulting in successful resolution resulting in monetary sanctions exceeding $1 million, and the Commission would exercise discretion in granting awards based on several criteria, including the significance of the information provided by whistleblowers. The final regulations become effective 60 days after publication in the Federal Register.

The Alaska Department of Natural Resources (DNR) has agreed on a right-of-way for a proposed pipeline to carry natural gas from the North Slope to the state’s Cook Inlet region. The Alaska Gasline Development Corp. (AGDC), a subsidiary of Alaska Housing Finance Corp., is promoting its plan for the 737-mile pipeline to supply the state’s Southcentral region, which many believe will run short of gas supply in a year or two (see NGI, July 11). This is far sooner than a Lower 48 gasline being considered by TransCanada Corp. and ExxonMobil Corp. could be online. The in-state project plan involves transporting gas and natural gas liquids from the North Slope via a 24-inch diameter pipeline, with the intent of supplying gas to Fairbanks and Southcentral. AGDC submitted a right-of-way lease application to the State Pipeline Coordinator’s Office in March.

Japan, the world’s leading importer of liquefied natural gas (LNG), set a record for using LNG to generate electricity during the first five months of the year in the wake of the earthquake and tsunami, which disabled nuclear facilities in the country, the Energy Information Administration (EIA) reported. On average, Japan’s electric power companies used more than 6 Bcf/d to produce electricity during the January-May period, up from less than 5 Bcf/d during the comparable period in 2010, the agency said. Only 19 of Japan’s 54 commercial nuclear facilities — or fewer than 16 gigawatts (GW) out of a total commercial nuclear fleet of about 49 GW — are currently in operation, according to the EIA. As a result, it said LNG consumption at power companies was up 30% in May compared to May 2010. As of April, Japan’s total LNG imports accounted for more than 10 Bcf/d of natural gas supply, most of which is used to power generation, the agency said.

A natural gas processing and fractionation plant, which is being built along the Ohio River in Natrium, WV, to serve producers in the Marcellus and Utica shales, is 90% contracted and should be in service by the end of 2012, Dominion said. Dominion in January optioned land in Natrium to construct the facility to support wet gas production (see NGI, Jan. 17). It exercised its option with PPG Industries to purchase land and locate the plant adjacent to PPG’s Natrium facility in Marshall County, WV. The first phase of the facility would be able to process 200 MMcf/d and fractionate 36,000 b/d of natural gas liquids (NGL). Wet gas from West Virginia and Ohio would be delivered to Dominion’s TL-404 pipeline by Dominion Transmission and Dominion East Ohio. The largest customer to date is Chesapeake Energy Marketing Inc., which has contracted for 100 MMcf/d and has an option for capacity on the second phase.

Southern LNG Co. LLC has asked the Federal Energy Regulatory Commission to vacate part of an order that authorized the second phase of the expansion of the Elba Island liquefied natural gas (LNG) import terminal in Georgia. In a motion seeking to vacate a portion of the September 2007 order approving the project, the El Paso Corp. subsidiary said that BG LNG Services LLC, which was expected to subscribe to the expansion capacity, did not intend to do so, making the expansion was no longer necessary. The second phase of the Elba Island expansion called for the addition of 4.22 Bcf of storage and 495 MMcf/d of deliverability, according to Southern LNG. The first phase, which went into operation in 2010, added 4.22 Bcf of LNG storage and 405 MMcf/d of firm sendout capacity.

The Interior Department’s Bureau of Land Management (BLM) said it generated $49.197 million for leasing rights and rental fees on federal land parcels offered at BLM’s recent quarterly oil and gas lease auction in Cheyenne, WY. It was the largest dollar amount earned in a single sale in recent BLM history in the state. A total of slightly more than 83,038 acres in 74 parcels were sold. This represents all of the acreage offered by the BLM in this sale. BLM said it has sold 764 parcels so far this year, generating more than $174 million in revenue for the federal Treasury. In the latest auction, almost half of the bid and retail receipts will go to the state of Wyoming. Bids ranged from the federally mandated minimum of $2/acre to a high bid of $4,500/acre, and successful bidders paid $145/parcel, one-time administrative fees and a yearly rental of $1.50/acre for the first five years the lease is effective, rising to $2/acre in years six through 10. The Wyoming sale was the 18th that BLM has held so far this year, offering 830 parcels covering more than 605,000 acres in 2011. The next BLM sale is scheduled for Aug. 11 in Denver.

Governors have called on House and Senate appropriators to maintain funding for the Low-Income Home Energy Assistance Program (LIHEAP) in fiscal 2012 at the current level — $5.1 billion. The Obama administration earlier this year proposed cutting the program in half in fiscal 2012, which begins on Oct. 1 (see NGI, Feb. 21). “Reducing funding for LIHEAP to under $2.6 billion would endanger the heating assistance received by [an] additional 3.1 million households nationwide who have been able to receive aid under current funding levels,” according to a bipartisan letter supporting LIHEAP, which was circulated on Capitol Hill by Govs. Deval Patrick (D-MA) and Dennis Daugaard (R-SD). LIHEAP is a block grant program under which the federal government gives states annual funds to help the needy to pay their heating and air conditioning bills. The program currently helps 8.9 million families heat their homes, a 35% hike since 2008. The program also provides cooling assistance to vulnerable populations, such as the elderly.

Pittsburgh-based Consol Energy Corp. plans to dedicate one of its six full-time rigs to the Utica Shale this fall. The Utica is “in many ways the Marcellus all over again,” Consol President Nicholas Deluliis said during a recent earnings call. “A lot of the lessons learned from the Marcellus ramp-up, from a midstream standpoint — processing, permitting, rigs, regulatory, all of that — will be very applicable right across the river with regard to Ohio.” Consol announced its first Utica discovery last November in Belmont County, OH, with a 8,450-foot vertical well that flowed at an initial rate of 1.5 MMcf over 24 hours. Consol chose not to complete the well at the time to avoid “running too soon to the altar,” as Consol CEO Brett Harvey put it, and instead shifted some of its 2011 capital budget toward the Utica (see NGI, Nov. 1, 2010). Consol currently holds 200,000 net acres in Ohio and plans to drill six test Utica test wells this year.

The Pittsburgh City Council has voted 6-3 to add a referendum to the fall ballot that, if approved by voters, would amend the city charter with a ban on all commercial natural gas extraction inside the city limits. The referendum must get by Pittsburgh Mayor Luke Ravenstahl before making it onto the ballot. If the Democratic mayor doesn’t act on the ordinance by Friday (Aug. 11), it would be automatically vetoed. Ravenstahl opposed a previous ban enacted by the council last year, citing the economic benefits of development, but has not yet said whether he plans to sign or veto the recent referendum. The council would need six votes to override a veto. Although the referendum covers all natural gas extraction, except existing wells, the measure is aimed at Marcellus Shale developments. The Pittsburgh City Council banned drilling in the city limits last November, but adding it to the city charter would make it harder to rescind in the future (see NGI, Nov. 22, 2010).

State College, PA-based Rex Energy Corp. acquired 11,000 net acres in the Utica Shale of Carroll County, OH, for an estimated $40 million and plans to continue acquiring acreage in preparation for a drilling program in 2012, the company said (see NGI, May 23). For the remainder of 2011, Rex is focused on its Marcellus Shale assets in southwestern Pennsylvania, where it produced 35.2 MMcfe/d in the second quarter of 2011, an 87% increase year over year. The company plans to drill eight additional wells in Butler County this year — six in the Marcellus, one in the Upper Devonian Shale and one in the Utica Shale. Through its 40% interest in a joint venture operated by Williams Appalachia, Rex also participated in drilling in Westmoreland County, east of Pittsburgh.

Mountainview Energy Ltd. intends to acquire a 20% interest in approximately 67,000 gross acres (about 13,400 net acres) in the Bakken/Three Forks Shale in a stock deal valued at about C$21.5 million. The parcels are located in the Medicine Lake Prospect, which is in Divide County, ND, and Richland, Roosevelt and Sheridan counties, MT. The acquisition will increase Mountainview’s position in the Williston Basin to approximately 25,400 net acres.

Texas’ Second Court of Appeals has upheld a 2009 ruling allowing Range Production Co., a subsidiary of Range Resources, to proceed with natural gas drilling at the Rayzor Ranch development in Denton, TX. Range had sued the project’s developer, Allegiance Hillview LP, for refusing to extend a land-use agreement deadline. Range has three wells at the site, which is permitted for five wells and is now owned by Legend Natural Gas.

Bellevue, WA-based Puget Sound Energy (PSE) is moving ahead with an all-source request for proposals (RFP) for new long-term power supplies to come online over the 2012-2015 period. Natural gas-fired generation is in the mix of bids PSE is seeking, the utility told state regulators in seeking approval for the RFP. PSE asked the Washington Utilities and Transportation Commission (WUTC) for expedited approval of the request so the RFP can be launched by Oct. 1 and initial proposals can be in by Nov. 1. Given weak wholesale gas prices, PSE views the timing as ideal to lock in some low-cost power supplies over the long term.

There is a “HAWK” flying over the Eagle Ford Shale of South Texas, collecting infrared images intended to reveal the release of volatile organic compounds from natural gas production and other industrial facilities. The HAWK infrared camera is aboard a white helicopter with tail number N141LS, the Texas Commission on Environmental Quality said. The camera can also image other hydrocarbon air pollution invisible to the eye. When the camera detects possible hydrocarbon emissions, a technician onboard will note the time and location and other information about the emissions source. Helicopter flights are being conducted over oil and gas production areas in DeWitt, Dimmitt, Webb, Karnes, Live Oak and McMullen counties. The helicopter flights are expected to conclude by Aug. 24.

Nevada’s economy continues to limp along and likely will do so through next year, NV Energy Inc. CEO Michael Yackira told financial analysts on a second quarter conference call. Calling it a challenging quarter made more problematic by milder-than-normal weather and some one-time financial adjustments, he said growth in Nevada is expected to remain flat, although the state’s economy continues to show signs of what he called “stabilization.” At the center of NV Energy’s growth and some of its earnings problem is a new 484 MW natural gas combined-cycle generating plant at its existing Harry Allen site. The plant came online in May, but it is not currently covered in rates and is awaiting the outcome for the utility’s $245 million general rate case, which is expected to be resolved before the end of the year.

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