The U.S. Court of Appeals for the District of Columbia Circuit has upheld a ruling by the U.S. District Court for the District of Columbia that found the Commodity Futures Trading Commission (CFTC) did not act illegally in promulgating Dodd-Frank regulations. The Investment Company Institute and the U.S. Chamber of Commerce brought the action against the CFTC, arguing that the adopted regulations applying to derivatives trading were unlawfully adopted and invalid. The district court “granted summary judgment in favor of the Commission. Because we agree with the district court that the Commission did not act unlawfully in promulgating the regulations, we affirm,” ruled the appeals court. Specifically, the two groups challenged a rule that would subject registered investment companies (RIC) engaged in derivatives trading to many of the Dodd-Frank requirements. Prior to 2003, RICs engaged in rare derivatives trading activities, but that has since changed, according to the CFTC. It is the agency’s latest legal victory with respect to its Dodd-Frank regulation of the $300 trillion.
Maryland’s Department of Environment (MDE) and Department of Natural Resources released a draft report describing best practices for drilling and production that should be required if horizontal drilling and hydraulic fracturing of natural gas wells is permitted in the state’s portion of the Marcellus Shale, which is confined to its two westernmost counties. The draft report, which was prepared in consultation with the state’s Marcellus Shale Safe Drilling Initiative Advisory Commission, includes recommendations to protect public health and safety, natural resources and the environment. “The most innovative recommendation…is to use comprehensive planning for foreseeable gas development activities in an area rather than considering each well individually,” said the report. Comments on the draft report, which are due by Aug. 9, can be submitted by e-mail to Marcellus.Advisory@maryland.gov, or by mail to Brigid E. Kenney, senior policy adviser, Maryland Department of the Environment, 1800 Washington Blvd., Baltimore, MD 21230. When the report is final, the best practices would be incorporated into new regulations to apply to shale gas development if it is permitted in Maryland.
Up to 40 Bcf/d of firm capacity contracts on pipelines is expected to expire by 2015, which would affect most pipelines that transport natural gas to the Northeast, according to Skipping Stone. “We are coming up on a big renewal” deadline because most of the contracts for firm transport and storage services were negotiated in 1995-1996, said President Greg Lander. When shippers subscribed to the firm capacity it was for a term of 20 years, but this time there will be “term shortening” for three to five years and “some price pressure because the basis has been crushed.” He sees prices falling 10-30% through 2016. Pipelines most affected by the expirations are Tennessee Gas Pipeline, Transcontinental Gas Pipe Line, Texas Eastern Gas Transmission, Columbia Gas and Columbia Gulf.
House Texas Republican Ted Poe and Ralph Hall are pushing legislation that would transfer authority to approve liquefied natural gas (LNG) exports from the Department of Energy (DOE) to the Federal Energy Regulatory Commission. The measure (HR 2471) seeks to amend the Department of Energy Organization Act of 1977, which grants the department the power over LNG exports. There are approximately 18 export applications still pending at the department, according to Poe.
Eclipse Resources I LP has more than doubled its holdings in the Utica Shale in an $800 million-plus deal to acquire Oxford Oil Co. LLC, and with it 184,000 net acres and 13.8 Bcfe of proved developed producing reserves. The transaction, funded in part by private equity partner EnCap Investments, creates subsidiary Eclipse Resources-Ohio, LLC. More than 50 Oxford employees are joining the company. Eclipse prior to the deal owned about 90,000 net acres across the Appalachian Basin, including 41,000 in Ohio’s Belmont, Guernsey, Monroe and Noble counties. Oxford’s acquisition gives Eclipse a total of 90,000 net acres in those counties.
Crestwood Niobrara LLC agreed to pay $108 million for a 50% stake in Jackalope Gas Gathering Services LLC from RKI Exploration & Production LLC, parent Crestwood Midstream Partners LP said. The deal is expected to close during the third quarter, subject to customary approvals. The other 50% interest in Jackalope is owned by Access Midstream Partners LP, which would continue to provide field operations and construction management. Crestwood is assuming the commercial development role for the joint venture.
A decision written by West Virginia Supreme Court of Appeals Justice Menis Ketchum has reversed the Circuit Court of Preston County‘s conclusion that a deed conveying “the surface only” also conveyed an interest in all oil and natural gas under the tract of land. When used as a term of conveyance, the word surface “is not presumptively ambiguous and does have a definite and certain meaning,” the decision stated. The case “has great significance to the interpretation of many land titles in West Virginia,” according to Ketchum’s 49-page decision. The case revolved around the interpretation of a 1907 deed for a 225-acre tract in Preston County, WV (Faith United Methodist Church and Cemetery of Terra Alta, West Virginia et al vs. Marvin D. Morgan, No. 12-0080). The court held “that the word ‘surface,’ when used as an instrument of conveyance, generally means the exposed area of land, improvements on the land, and any part of the underground actually used by a surface owner as an adjunct to surface use (for example, medium for the roots of growing plants, groundwater, water wells, roads, basements, or construction footings).”
A decision by the Ohio Department of Natural Resources (ODNR) that D&L Energy Inc. cannot keep its injection well permits and must properly dispose stored material has been upheld by the Ohio Oil and Gas Commission. ODNR permanently revoked the operating permits for D&L and Hardrock Excavating LLC in February after employees were seen dumping oilfield waste into a storm drain in Youngstown that empties into the Mahoning River (see NGI, Feb. 11). D&L appealed the decision. D&L can appeal the commission’s decision, which an attorney representing the company had called “a gross violation of due process” (see NGI, April 4).
Intermountain Gas Co. told Idaho state regulators that it should be able to serve the natural gas needs of the southern part of the state without any significant new capital projects during the next five years. The Idaho Public Utilities Commission (PUC) is taking public comments on the five-year plan through July 8. The company faces a reduced rate of growth in the midst of a continued economic downturn in the region. PUC requires integrated resource plans (IRP) to be updated every two years; Intermountain’s outlines how the utility will meet its demand from 285,000 residential and commercial customers and where it will acquire gas supplies.
California regulators approved a 50% increase in the working capacity of one of the state’s largest merchant-based underground natural gas storage facilities, Wild Goose Storage LLC, which is about 50 miles north of Sacramento. The California Public Utilities Commission (CPUC) unanimously agreed that Wild Goose can expand its working capacity from 50 Bcf to 75 Bcf, the third expansion since it was opened as the state’s first competitive storage facility in 1999. At that time, Wild Goose had a total capacity of 14 Bcf. Wild Goose is interconnected with two major gas transmission pipelines of San Francisco-based combination utility Pacific Gas and Electric Co. (PG&E), which operates its own network of underground storage facilities in Northern California, totaling more than 100 Bcf of working capacity. In recent years, Wild Goose has been joined by three other private gas storage operators — Lodi Gas Storage, Gill Ranch Storage and Central Valley Storage (see NGI, Oct. 19, 2009) — totaling more than 65 Bcf of underground storage capacity.
By 2016, the world will get more of its electricity from renewables — hydro, wind, solar, etc. — than from natural gas, according to the International Energy Agency‘s (IEA) “Medium-Term Renewable Energy Market Report.” But in the Americas, particularly the United States, natural gas is still in the lead. Renewable power is expected to increase by 40% in the next five years. Renewables are now the fastest-growing power generation sector and will make up almost a quarter of the global power mix by 2018, up from an estimated 20% in 2011. However, renewables faced strong competition from other energy sources in some markets, for instance, natural gas in the United States, IEA said. In fact, in the Americas, new renewable generation is expected to be second to fossil fuels (largely natural gas-fueled), but still accounts for more than 40% of the increase in gross generation, according to IEA.
Williams Partners is planning to make some major repairs following an explosion and fire June 13 at its Geismar, LA, olefins plant that killed two people and injured more than 70 others (see NGI, June 17). The piping, heat exchangers and reboilers in the area just adjacent to the propylene fractionator were seriously damaged and may need to be replaced. Sections of the electrical cable trays in the elevated portions of a pipe rack adjacent to the fractionator tower sustained enough damage that some wiring and cable also will need to be replaced. A 50-foot section of the plant pipe rack containing portions of the plant steam system, pipeline ethane feed vaporization systems and fuel-gas conditioning equipment sustained damage that will require replacing support structures and piping.
Summit Midstream Partners LLC is expanding its crude oil and water gathering system in North Dakota’s Williams and Divide counties. The revamped Divide gathering system now under construction would be capable of handling up to 45,000 b/d of crude oil and 45,000 b/d of water. Total capital expenditures are about $60 million. The expansion is expected to be put in service in phases between 4Q2013 and 1Q2014.
Russia’s Gazprom and Japan Far East Gas Co. Ltd. have signed a memorandum of understanding for the Vladivostok-LNG project that outlines their cooperation on the Russian liquefaction and export project and arrangements for marketing liquefied natural gas (LNG) output in Japan. LNG from Russia is viewed as competition to efforts in Alaska to develop a natural gas pipeline that would serve the Asian market.
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