Pipeline that Exploded Last Friday had Corrosion on some Welds

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Westmoreland Pipeline Explosion Spectra-blaze

Photo from Marcellus Drilling News.

A burned out house is surrounded by charred ground and trees following a natural gas explosion at a pipeline complex on Friday, April 29, 2016, in Salem Township, Pa. The explosion caused flames to shoot above nearby treetops in the largely rural area, about 30 miles east of Pittsburgh, and prompted authorities to evacuate businesses nearby. (AP Photo/Keith Srakocic)

A burned out house is surrounded by charred ground and trees following a natural gas explosion at a pipeline complex on Friday, April 29, 2016, in Salem Township, Pa. The explosion caused flames to shoot above nearby treetops in the largely rural area, about 30 miles east of Pittsburgh, and prompted authorities to evacuate businesses nearby. (AP Photo/Keith Srakocic)

The Pittsburgh Post-Gazette ran an excellent article about the Texas Eastern pipeline that blew up one week ago today.  It says that corrosion has been found on two welds near the explosion.  It also says that while corrosion has been found, that isn’t necessarily the reason for the explosion, and that the investigation (which could take years) could determine that there was some other cause for the explosion.

It also goes into some detail about “incidents” on the Texas Eastern pipeline.  Over the 30 year life of the pipeline there have been 62 incidents, ranging from the discovery of leaks to barges and airplanes hitting the pipeline.  Accidents happen, eh?

It’s very interesting that there are two “incidents” per year on the pipeline.  That just underlines the importance of going into a pipeline negotiation with your eyes wide open.  Understand that while the money can be good, there is some risk involved.  The likelihood of an “incident” that will affect you, your loved ones, or your property is low, but if an “incident” happens it’s likely to be life altering.

EQT is Buying West Virginia Leases from Statoil

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Statoil has sold their interest in leases in Wetzel, Tyler, and Harrison counties to EQT.  EQT is one of the few companies that is making money right now, and is increasing its footprint in the Marcellus/Utica sweet spot.  It’s a good move by EQT.

Anyone who had a lease with Statoil in those counties could expect to be dealing with EQT in the future.

As a heads up, EQT’s standard agreement allows EQT to deduct post-production costs from the royalties they pay, so they may try to get away with deducting post-production costs from any leases Statoil may have signed that do not allow for the deduction of post-production costs.  If you find yourself wondering why your royalty check is suddenly much smaller, check the deductions column.

Gas Pipeline Explosion

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A 30-inch gas pipeline exploded in Westmoreland County, PA on Friday.  We’ve been a bit busy around here, so we haven’t been keeping up with the news.

The Pittsburgh Post-Gazette has some good pictures and interviews.  It’s really scary to think what one of these pipelines does when it explodes.  I’ll have one about 200 yards or so from my house in about two years, and I’ll be preparing an escape plan.

The Fire Chief said he parked 1/4 mile away and he couldn’t get out of his truck because of the heat.

We’re big fans of having the pipelines built, as we really need them for continued development in this area.  We also have to be careful about them.  They don’t fail often, but when they do fail it’s spectacular and extremely dangerous.  We have to be prepared, and we have to make sure the companies are doing their work correctly.

Royalty Cases Against Chesapeake and Southwestern

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Some folks are suing Chesapeake and Southwestern for back royalties, among a couple other things.  The other things are not likely to be high-dollar amounts, but the royalties could add up.

There are quite a few cases against Chesapeake for back royalties in other states.  We’ve been surprised that there haven’t been more cases against Chesapeake in West Virginia.  It seems that CHK would have done the same thing to West Virginia royalty owners that they did to Ohio, PA, and Oklahoma royalty owners.

If anybody out there has a case that they’d like to take up against Chesapeake for back royalties, give us a call.  It won’t hurt and could help.  It could help a lot.

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WDTV News: Oil and Gas Attorney Discusses Pipelines with Lewis Co. Commission

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kyleKyle Nuttall attended the Lewis County Commission’s meeting on Monday and spoke about the proposed pipelines that will be going through the County, the Mountain Valley Pipeline and the Atlantic Coast Pipeline.  The short write up in the newspaper only touched on a portion of what he talked about.  He’ll be attending a number of other events in the next few weeks and we’ll post about those events as they happen.

 

Ohio Natural Gas Fired Power Plants

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This article over at Energy In Depth shows that Ohio will eventually be powered entirely by natural gas.  There are seven natural gas-fired power plants either under construction or in the planning stages.  Once they are complete, they will create 6,458 megawatts of electricity, enough for 5.85 million homes.  Ohio has 4.5 million homes.  Ohio will be sharing electricity with surrounding areas through the grid, of course.

West Virginia is a net producer of electricity, but it’s all coal-fired.  We have several gas-fired plants in the works, with one in particular up in Moundsville, WV that will be the first to come online.  Last we heard they were hoping to start construction on it this spring, but that was last fall and there doesn’t seem to be any activity at this time.

Atlantic Coast Pipeline Construction Delayed

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Dominion has announced that it is delaying the start date for construction on the Atlantic Coast Pipeline.  Interestingly, they still plan on putting the pipeline into use at about the same time they had originally planned.  The new target for construction is summer of 2017, with the pipeline slated for first use sometime in 2018.  So what they’ll be doing is running more crews over a shorter period of time.

UPDATE: This article says the ACP will have an 18 month construction period.  If construction starts in the summer of 2017, that’s cutting it pretty close to 2019 before it will be finished.  Work on a pipeline can go awfully fast, but if there are any delays at all they simply won’t be able to finish before 2019.

West Virginia’s Politicians are Looking for Japanese Investments in Natural Gas

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There was a big event a few days ago down in Charleston.  Governor Tomblin and Senator Manchin hosted a bunch of Japanese businessmen, apparently in an attempt to interest Japanese money in investing in West Virginia natural gas.  While it certainly hasn’t been said outright, it seems that Odebrecht’s failure to move forward on the cracker plant has disappointed people.  It’s disappointed us for a while, and we’re excited to see public evidence that people in charge are working to bring in new investment partners.

We really need to make sure that West Virginia takes full advantage of the opportunity that has been presented to it.  We’re shipping natural gas out of the state in its raw form.  We need to be using it here and shipping electricity and plastics out instead.  We can piggy back on natural gas to improve our internet infrastructure, and our tourism.  The big plants and the technology that comes with them will not be content with poor internet, and the people that work in the plants are going to want nice places to live, work, and play.  Investing in the use of natural gas within the state is a great first step.

While this article about Governor Manchin’s trip to Japan which is coming up in a month focused mainly on the automobile parts industry, it’s still heartening to see that the Governor’s office had a talking point that included investment in natural gas.