2019 – The Marcellus In Winter

marcellus shale winter.jpg

To nobody’s surprise, Pennsylvania Governor Tom Wolf began his second term by calling for a mineral extraction tax to be layered upon the State’s local impact fee.  Of course, the Governor never mentioned the impact fee in his budget address, continuing his administration long policy of seeking to portray Pennsylvania as the only state that doesn’t tax the natural gas industry.

When the Governor first took office in 2015, he advocated the extraction tax as a way to pay for Pennsylvania schools. Now, he seeks the extra revenue to pay for Pennsylvania infrastructure.  Should the tax be approved, the connection to the schools would have been more beneficial to the industry (think of the public relations possibilities it would have brought the industry in every part of the State).  The infrastructure tie-in will not be as helpful, but given current economics the industry will fight the tax under any circumstances.

One thing that’s been made clear by a week-long trip to Texas and conversations with top gas company executives is the disconnect between the public’s perception of the financial health of the natural gas industry and its actual financial condition.  A decade of overproduction combined with insufficient pipeline capacity and low gas prices has caused gas company stock prices to plummet.  Now, the future viability of these companies is at risk.  As one executive put it, “we have no choice but to fight the extraction tax.  We don’t generate enough revenue to pay it.”

In a sense they’ve been trapped by their own success.  The Marcellus has yielded far more gas than most thought possible ten years ago.  Improved production techniques have decreased the cost of extraction, leading to overproduction.  Add that to the lack of pipeline capacity, the antiquated Jones Act prohibition against transporting liquid natural gas on the high seas from one American port to another except on American-flagged ships (of which there are none), and the proximity of gas to the oil being produced in the Permian Basin of South Texas (which has actually dropped the marginal cost of natural gas in that region to negative numbers), and you have the dire economic times facing Marcellus gas producers.

Another source of the gas producers’ frustration is the lack of coordination and communication among themselves and with the pipeline companies.  “We’re not the pipes,” said one.  “We don’t like a lot of things they do, and we think they can portray the entire industry in a bad light, but they don’t care about what we say.”

That’s partially true, although some producers do have ownership stakes in some of the pipelines.  As a general rule, residents of the Northeast lump upstream, midstream and downstream together as one industry.  Together they have risen, and together they now are at risk of falling.

Producers have little left in their budgets to expand outreach to places in Pennsylvania that currently don’t “feel” the industry, like Philadelphia and the Southeast.  That’s bad for us all, as the Southeast stands to gain the most from effective, conscientious and environmentally sensitive development of this resource.  We have the train lines, the interstate highways, the Marcus Hook refinery and the Port of Philadelphia pretty much all in the same place.  That we’ve failed to capitalize on this could be the greatest missed opportunity for the Philadelphia region in the last century.

As for pipeline companies, they face years of delay while well-funded and organized environmental groups, and unsympathetic politicians, place roadblock after roadblock in their way.  Some of this, of course, is nobody’s fault but the pipeline companies for their both perceived and not infrequently actual disregard of local law and sensitivities. Overall for the industry in all of its myriad forms, Winter 2019 is not a pretty picture.

Nobody wins under the current scenario.  Environmentalists temporarily will celebrate the problems in the gas industry, but that glee will be short lived.  Despite breathless claims in the press and among certain politicians, those opposing natural gas can provide no alternative.

Ironically, environmentalists may be the salvation of the industry, as they push politicians into unsustainable, ridiculous policies. New York Governor Andrew Cuomo rapidly is running out of options to counter his “No Nukes, No Fracking, No Pipeline” stance. Already Westchester County feels the pinch as its main utility, Consolidated Energy, now prohibits any further growth due to a lack of power supply. New York City soon may face the same fate.  Jeff Bezos had better be sure that Long Island City will have enough power to handle his new Amazon sub-headquarters.  Where will that energy come from?

Under current conditions, many in the industry expect a further wave of consolidation. The fracking industry was created not by the large oil companies but by the smaller independents.  Those smaller companies now may have to sell out.  That will not be good news for the Northeast.

It’s getting more likely that in the future Governor Wolf and his successors will not deal with six or seven producers based in Houston, Dallas or Oklahoma City, each with major Pennsylvania operations.  Instead, he will find himself trying to get the better of two or three companies based in London, the Netherlands or other foreign countries, for whom Pennsylvania is but a blip on their radar screen.

Questions? Let Dan know.

Daniel Markind of Flaster Greenberg

Daniel Markind is a shareholder at Flaster Greenberg PC with over 35 years of experience as a real estate and corporate transactional attorney. He has represented individuals and companies in the energy industry for over 20 years. Dan is a frequent lecturer on Marcellus Shale and other mineral extraction issues and is regularly asked to speak at conferences, in the media and at other venues regarding energy issues and their legal and political implications.

FINAL FOUR PLUS FORTY: Remembering the year an Ivy League school crashed NCAA basketball’s Big Dance

penn basketball
Photo Credit: The Delco Times

THE JOURNEY BEGINS

From the perspective of 2019, it’s nearly unbelievable that Penn, an Ivy League school which doesn’t give athletic scholarships, reached the Final Four of the NCAA Basketball Tournament in 1979.  At the time though, it wasn’t so far-fetched.  In fact, we almost did it the year before.

In 1978 Penn faced Duke in the Sweet 16.  The tournament only had 32 teams that year, and we’d beaten St. Bonaventure in the first round.  Ranked No. 5 in the nation heading into the 1978 tournament, Duke was the clear favorite to win the East Regional.  With eight minutes left however, Penn led 64-56.  If we could hold on, we’d face Villanova for the regional championship.  The Wildcats had edged Penn 69-68 in December so our path to the Final Four was open.

Enter Duke Center Mike Gminski.  He blocked three consecutive Penn shots, and the Blue Devils came back for an 84-80 victory.  Duke would make the NCAA Final, losing to Kentucky.

The Duke game showed we could play with anyone in the country, and we started 1978-79 with that attitude.  Coach Bob Weinhauer had lost three seniors.  All were replaceable, however, even though forward Keven McDonald (a Big Five Hall of Famer) had been the Quakers’ leading scorer and best player.  Stan Greene was a star defender and fellow guard Tom Crowley was a great shooter.

Among the players returning in 1978-79, senior forward Tony Price was the team’s leading rebounder and scorer.  Price’s future seemed to include a potential NBA career (which he would have, although very briefly).  Crowley, who interned that year in Penn’s Sports Information Department, had no doubt that Price could make up the scoring lost with McDonald’s graduation.  He was right.

The most talented of the Quakers may have been senior point guard Bobby Willis.  Willis was an enigma.  Not a great shooter, he was incredibly quick and athletic.  Against Duke Willis had been unstoppable.  It seemed the only person who could stop Willis was Willis.  He would disappear for long stretches and turn into a non-factor.

Two other seniors, forward Tim Smith and center Matt White rounded out the starting five along with junior guard James “Booney” Salters. Only sophomore guard Kenny Hall, freshman forward Vincent Ross and freshman center Tom Leifsen played much off the bench.  Mostly, Weinhauer kept his rotation to eight players.

I would spend a lot of time watching them.  Television wasn’t what it is today, and Penn had one of the few closed circuit television stations among American universities.  I was the sports director at University Television (UTV).  We would record the games and show them later on tape delay.  Our technology was so primitive we had no remote broadcast capability from outside our studio.  Unlike the reporters for the school newspaper The Daily Pennsylvanian, we had no “beat”, so we didn’t interact with the team every day.  In fact, I never even met some of the players, but I traveled to see them in California, New York, North Carolina, Salt Lake City and other places.  It would be quite a ride.

Before the season began, Penn played an exhibition against the national team of Argentina.  Argentine basketball was in its infancy.  It would be two decades before the country would produce players like Manu Ginobili and Luis Scola.  In 1979, a good college program like Penn could handle them easily, and we did.  The most memorable part of the evening came from one of the referees, Hank Nichols.  Our basketball group sat in the front row of the Penn student section, courtesy of a week of camping out at the ticket office.  We easily could talk to the players and the officials, and we did.  During this game one of the Argentines took the ball, did a 360, a pirouette and tangoed across the court.  “Traveling Hank, he’s traveling,” we pleaded.  “That’s not traveling,” Hank yelled back as he ran down the floor, “that’s a great South American move!”  The exhibition wasn’t televised.  Had it been, you’d have seen the entire front row of the Palestra convulsed in laughter.

We enjoyed the refs.  Besides Nichols, our favorites were Mickey Crowley and Larry Lembo.  They were both good officials, but as important they liked what they were doing.  They also enjoyed that we knew who they were.  Nichols, though, was in a class by himself.  Possibly the greatest referee in college basketball history, he worked a slew of ACC Finals and NCAA Final Fours.  Later he became director of basketball officiating for the entire NCAA.

College basketball itself was very different forty years ago.  There was no shot clock and no three point shot.  Very few games were televised.  When tournament time came, often you would play teams the fans knew nothing about.  But that was months in the future.  As autumn 1978 faded, it was time for the season of promise to begin.

CALIFORNIA

Penn started 5-0, beating two good ACC teams, Virginia and Wake Forest, as well as Big 5 rival LaSalle.  Having finished in the final Top 20 of 1977-1978, Penn fans were frustrated that we weren’t ranked.  The Quakers ended the calendar year of 1978 by traveling to the Cabrillo Classic in San Diego to face Iowa.  The Hawkeyes had an excellent team.  That year they would win the Big 10 and reach No. 11 in the rankings.  If we could beat them, a return to the Top 20 likely would follow.

The game was terrific. It seesawed back and forth, finally going two overtimes before we lost 87-84.

The team was spent.  The next night we faced host San Diego State in the consolation game and got blown out.  The Aztecs’ best players, Kim Goetz and Tony Gwynn, tore us apart.  Being California, the San Diego State band brought something I’d never seen before at a basketball game: a full drum set located on the floor of the arena. Try getting away with that at the Palestra.

Looking back on it, there’s an element of sadness in the 1978 Cabrillo Classic.  Both Goetz and Gwynn, who became one of the greatest baseball players in history, died young.  Iowa’s superb point guard Ronnie Lester tore up his knee the next year.  Lester returned to play in the NCAA tournament as the Hawkeyes reached the 1980 Final Four, and even played six seasons in the NBA.  Unfortunately, the person Magic Johnson called the best player he ever played against in college never achieved the greatness that he probably deserved as his body kept failing him.

While Penn left San Diego disappointed, one of the important games of the season actually was played later the same night after our San Diego State defeat.  In Las Vegas, Temple played UNLV in the finals of UNLV’s Christmas tournament.  The Running Rebels had made the Final Four in 1977 and nobody out West thought Temple would give them a challenge.  The game was televised live in Southern California, with Los Angeles Lakers broadcaster Chick Hearn doing the play by play.

Temple took UNLV apart.  Temple’s star guard Ricky Reed controlled UNLV’s press and the Owls won 89-79.  It wasn’t that close.  Hearn was stunned.  You could hear it in his voice.  Suddenly Temple would get the Top 20 ranking that we so coveted and would keep it the rest of the season.

With no games until after New Year’s, it was up to Los Angeles for my first visit there.  This included sleeping out on the streets of Pasadena to await the Tournament of Roses Parade and scalping into the Rose Bowl.  In typical fashion for the wild year of 1979, there was an earthquake in the middle of the football game.

The Rose Queen that year was a stunning California high school girl named Catherine Gilmour.  Resplendent on her float, she was every Ivy League male college student’s California fantasy girl.  She parlayed that into a relatively successful modeling career, married a millionaire restauranteur and had two children.  Then things started going haywire.  She got divorced, met a grifter who fleeced her out of her money, assaulted her, and finally tried to kill her by having an accomplice place a bomb in her car.  Now in her late 50’s, she carries a loaded gun for protection and refused a government offer to go into witness protection.  And you think your life didn’t turn out as planned…

While the Tournament of Roses went forward, the Mummers Parade in Philadelphia had been canceled on New Year’s Day due to inclement weather.  When it stepped off two days later, I got to see two New Year’s Parades.  The contrast in the pictures I took is startling.  California was sunny and warm, but you can sense the lethargy as the Rose Parade streamed by.  The stars on the floats all had perpetual smiles pasted on their faces in a botoxian stupor while they performed the “Rose Parade Wave,” keeping everything still except their hands.  Philly was cloudy and cold, but you can feel the energy pulsating from the Mummers strutting in their garish costumes.  In California the common people line the streets to watch the stars parade by.  In Philly the stars line the streets to watch the common people parade by.

Back to Penn then for the stretch that would define the season.  We now would get our shot at both newly respected Temple and No. 10 Georgetown.  Win one and we could dream.  Win both…

 TEMPLE AND GEORGETOWN

We brushed aside Harvard and Dartmouth in our first Ivy League games, then focused on No. 18 Temple.  Bobby Willis controlled Ricky Reed and the Quakers prevailed 79-74.  Three more victories followed.  On Saturday afternoon January 20 we took a six game winning streak and an 11-2 record into the Palestra to face Georgetown.

This was Hall of Fame coach John Thompson’s first great Georgetown team.  Patrick Ewing, Alonzo Mourning and Dikembe Mutombo were all in the future, but Thompson, who had backed up Bill Russell at center for the Boston Celtics in the 1960s, already had worked miracles.  As a child, Thompson was told he was uneducable.  He earned a Master’s degree.  Now he had taken a 3-23 team to the Top 10 in seven years.

To make that happen, Thompson stressed discipline and teamwork.  He shielded his players from media contact. Later it would be called “Hoya Paranoia.”  I learned my lesson the day before the game.  We took our camera crew to the Hoyas run-through at the Palestra on Friday afternoon.  Thompson watched from the bleachers.  We walked over and I asked for a quick interview.  Nearly all college coaches were happy to do it since it gave them and their programs publicity.  Not Thompson.  He gave me that stern stare which became his trademark, then stood up, leaned down at me from his 6-foot-10 height and in no uncertain terms told me, “We don’t do that here.”  I didn’t try to talk him out of it.

The game was a classic.  In 50 years of watching basketball at the Palestra, it was the loudest crowd I have ever heard.  Unlike Big 5 games back then, which all were played on 33rd Street and for which the tickets were split, the entire crowd was rooting for Penn.  Marv Albert, broadcasting for NBC, couldn’t even hear his broadcast partner sitting right next to him. He kept saying “I don’t know if you can hear me over this crowd.”

Both teams made runs.  Penn led at halftime 32-29, but Georgetown came out flying in the second half to go up by nine. Tony Price and Booney Salters got Penn close again and the game flowed back and forth from there.  In the last four minutes, Georgetown center Tom Scates threw down a monster dunk to take the lead and the Hoyas held on to win, 78-76.

In defeat, Weinhauer was defiant.  “If they’re number 10,” he snorted, “then we’re 10-A.”  The Quakers had lost the game but learned something very important.  We could ball with the best.

THE IVIES

Mid-January through early March in the Ivy League is dominated by trips to places like Hanover, New Haven, Providence, and Ithaca.  Interrupted sporadically by a Big 5 game, Penn’s Ivy League schedule was defined by long bus rides for weekends away and crowds of 1,500 coming to watch another awful Brown team.  In 1979, the Ivy League highlight probably was another great line by Hank Nichols.  During a timeout late in the Princeton game at the Palestra (which like the one at the Tigers’ Jadwin Gym was decided by just one point), Nichols walked over near us.  “Great game isn’t it, Hank?” we said.  “It sure is boys,” he replied.  “I hope we don’t screw it up at the end.”

Like fine wine, Hank Nichols was priceless.

In 1978-79, the Ivy League race was predicted to be a three-team battle between Penn, Princeton (including future Cleveland Cavaliers coach David Blatt) and Columbia (led by Sixers guard World B. Free’s younger relative Ricky Free).  It turned out to be a runaway, as neither Princeton nor Columbia could keep up with the Quakers.  The most interesting part of Ivy League games often was watching Weinhauer’s unusual coaching style.  He almost never called timeouts, not even when the other team was making a big run, and especially not on the road.  “What are [the players] going to tell me, that [they’re] tired?” he responded when I asked him about it. “You run your ass off in practice. You better not be tired.  And do you know what happens when I call time out? The crowd gets louder, the band plays louder, you can’t hear much during the huddle. Just play through it.”

And so they did, with Weinhauer in his trademark crouch watching from the sidelines.  He looked like a baseball catcher giving signals.  Say this about the man, he had great knees.

Having already clinched the Ivy League championship, on February 24 we faced Columbia in New York City.  Three years earlier, both Penn and Columbia had terrific recruiting classes. The rivalry was expected to dominate the late 1970’s. It didn’t happen. Columbia never could put it together, but this was the last shot for their seniors and they were ready.  This game was played with an intensity one hoped the entire series would have had, and the Lions won 74-72.  That’s not what made the night memorable, however.  At halftime, when the public address announcer gave scores from out of town games, he said this: “At halftime in the ACC, the score is Duke 7, North Carolina nothing.”

WHAT???!!!

Are you sure you have the right sport?

Indeed he did.  Carolina coach Dean Smith instructed his team to hold the ball until Duke came out of its zone defense.  After Duke scored on its first possession, Carolina followed Smith’s orders – for twelve minutes!  More than any other game, this one provided the impetus for adding the shot clock to college basketball.

We wrapped up a 21-5 regular season by beating Yale and Brown and then waited for our NCAA matchup.  In 1979 for the first time, the selection committee would seed the teams.  Before, it wasn’t unusual for Top 10 teams to meet in the first round.  It was all luck of the draw.  Also in 1979 the tournament expanded to 40 teams.  The bottom four seeds in each regional would play in the first round, then the remaining 32 would play single elimination.

With our record, having beaten Temple and played Georgetown and Iowa even, we hoped for a No. 5 or No. 6 seed.  We didn’t get it.  Instead, we were seeded 9the in the East!  That meant a play-in game against Iona, with the winner to face top-seeded North Carolina.  Just for good measure, the games would be in Reynolds Coliseum on the campus of North Carolina State in Raleigh, all of ten miles from Chapel Hill.

DOWN TOBACCO ROAD – PART I

Iona was coached by Jim Valvano and led by its center, Jeff Ruland.  He was gawky, white and huge, which hid his enormous talent.  He would go on to be an NBA All-Star, but his knees betrayed him after six years.  In Philadelphia, he is remembered mostly for being the player the Sixers received when they traded away Moses Malone, perhaps the worst trade in the Sixers’ long history of terrible deals.

Valvano was a fresh-faced smooth talking New Yorker making his first big splash as a coach.  Ironically, we would play him on the campus that would make him immortal – N.C. State’s – as the coach of the 1983 Wolfpack, who pulled off one upset after another to win the national championship.

The first half against Iona was the Bobby Willis show.  Playing the way he was capable, Willis propelled Penn into a big lead, then disappeared.  Iona came all the way back.  It took four free throws from backup center Tom Leifsen (who had shot only 42% from the line during the season) to allow Penn to escape with a 73-69 victory.  We were alive to play UNC on Sunday afternoon.

The Carolina game would be played in the same venue that eight years earlier hosted the most excruciating Penn loss ever.  The 1970-71 Quakers had gone 28-0 and been ranked No. 3. To this day it remains the only Big 5 team to complete a regular season unbeaten. The 1971 Eastern Regional Final, played at Reynolds Coliseum, saw Penn face Villanova, whom we’d beaten three straight times, including 78-70 earlier in the year. The Quakers were so confident that they already had their flight and hotel reservations for the Final Four in Houston the next week.  We didn’t need them.  In a game that remains among the most inexplicable in college basketball history, Villanova destroyed us by the incredible score of 90-47.

Penn coach Dick Harter never got over that loss. Within a few weeks he left for Oregon and later coached Penn State.  Whenever he faced Villanova or anyone connected with that 1971 team, he would try to run up the score or have them do the same to him.  Harter went on to a long and distinguished career as an assistant coach in the NBA.  When he died however in 2012, the obituaries all featured the 1971 disaster.  Harter took that game to his grave.

Now, eight years later, we were back in North Carolina in the same building, trying to write a different script.

Tobacco Road was a different place.  Even today, the South remains the only part of the country that retains large elements of its own culture.  It has its own dialect and accent (the drawl), its own music (country), its own sport (NASCAR) and its own social history.  At dinner Saturday night, we ran into a young southern couple that also was visiting from out-of-town.  They were in Raleigh for the cock fights – not something you saw every day in Philadelphia.

After dinner, we headed to a bar with other Penn people.  They were angry and determined.  The Carolina press had been very dismissive of us.  They even got on our cheerleaders, calling them “Pale and Plump.”  I ended the evening standing next to DP reporter John Eisenberg.  No surfer dude ever stared out at the waves with more intensity than John did looking over the scene at the bar, repeating over and over again, “We’ve got to beat them Danny, we’ve got to beat them.” 

FINER THAN CAROLINA

We did beat them, but it didn’t look that way early.  UNC jumped out to a quick lead, then stole the ball and threatened to break the game open.  We stabilized, however, and sat back in a 2-3 zone almost the entire game.  UNC had seen that before, but we played it exquisitely.  Near halftime we tied the score at 34, only to see Carolina dunk to end the half up 36-34.

NBC was broadcasting the game across the country, so we at UTV weren’t allowed in the press box.  At halftime however I used my press pass from Friday’s game to enter the press room.  Penn Team Manager Pete Levy walked in, called me over and told me “You know Danny, they can hear you.  Our guys are going nuts on the bench listening to you. The Carolina people aren’t saying anything but they can hear you guys yelling and cheering all game.”  Not that we needed much encouragement, but when I got back to my seat I let everybody know.

So the Penn fans were even louder the second half. When Willis missed two free throws, he went back on defense dejected.  As he passed us, we all yelled encouragement.  His demeanor instantly changed.  The disappointment became determination.  We were affecting the game and we knew it.

Penn took the lead for good at 52-50 midway through the second half and held it down the stretch.  Down five, Carolina pressed, forced two turnovers and had a chance to regain the lead, but Dave Colescott missed a wide-open jumper with 40 seconds remaining.  Price grabbed the rebound and threw the length of the court to Salters, who scored and was fouled.

As the minutes wound down, I noticed ACC broadcaster Jim Thacker sitting right behind the basket.  He was expressionless.  During the entire last five minutes, the voice of the ACC sat silently, first looking at the court, then at the scoreboard, and back again. He couldn’t come to grips with what he was seeing.  Carolina was losing, but not playing badly.  We were just … better.

The clock hit three seconds.  Salters was at the line with a one-and-one and a two point Penn lead.  There was no three point shot, so one made free throw would just about ice it. Salters toed the line, dribbled, bent his knees low and swished it.  He turned around and threw his arms in the air.  A few seconds later it was over: Penn 72, UNC 71.

We rushed the court.  How we got there I don’t remember, as we started from the upper deck.  But there we were, celebrating in disbelief. Our mascot Bob Wachter was running and jumping around the court.  After hugging everyone in sight, I couldn’t resist.  I walked over to Thacker and said “Jim, on behalf of Penn, welcome to the Ivy League.”  Then it was on to the locker rooms.

The Carolina locker room was a funeral.  Al Wood sat with his head between his legs.  A manager passed him a stat sheet.  He stared at it, shaking his head. Mike O’Koren lay on a bench with his knees up in the air, staring at the ceiling. The UNC program always had a reputation for class. Now, under the most excruciating circumstances, they proved it. There were no histrionics, no excuses, no finger pointing.

Dean Smith leaned against the wall, cigarette butt in his fingers, surrounded by his media.  Everything was quiet and respectful.  The reporters asked questions in hushed tones.  “What happened Dean?” one asked.  “We played well,” Smith responded. “They played well.  They won.”  That’s what was so incomprehensible to the ACC.  Carolina had played well.  We were better.

Across the hall the scene was much different.  Assistant Coach Bob Staak had brought out the cigars.  The locker room reeked.  “I kept telling the team, we’ve got a secret,” Staak said. “We know how good they are, but they don’t know how good we are.  Now they do!”  Price said he thought UNC was a television show, given how many times they’d been televised that season.  Tim Smith was voted player of the game, but as usual Price led in all the statistical categories.

After just a few minutes the air inside the Penn locker room became too foul, and I left to return for the second game.  As I passed the tunnel leading to the court I saw St. John’s coach Lou Carnesecca, whose team was about to face Duke.  “Come on Louie,” I yelled, “do it for the East!”  Carnesecca smiled, gave me a thumbs up, then turned and watched his team get dismantled.

It was a mismatch. After the first ten minutes St. John’s looked hopelessly outclassed.  Duke seemed completely in control.  With a long drive ahead of us and emotionally drained, we all left to head back to Philly. We didn’t even listen to the Duke game on the radio.  Instead we, and all the other Penn fans, headed north, blaring our horns.  Every time we passed another Penn car on I-95 we rolled down the windows, yelled at them (and they at us), and blasted the horns.

After about 90 minutes, we got curious so we put the game back on the radio.  The announcer said, “the ball goes into Gminski, he turns, shoots, misses, and the game, AND THE SEASON, are over for Duke.”

DUKE LOST??!!!  Somehow, St. John’s came back, and the horns going north got even louder. In ACC history March 11, 1979 is known as Black Sunday.  We forever will be thrilled to have been there to witness it.

DOWN TOBACCO ROAD – PART II

The 1979 Eastern Regionals were held in Greensboro, North Carolina, about 75 miles south of Raleigh.  Our opponent in the Sweet 16 was eighth-ranked Syracuse.  The Orangemen were 26-3 and led by their young, third year head coach Jim Boeheim (yes, THAT’s how long ago this was).  Syracuse featured the “Louie and Bouie Show” (Louie Orr and Roosevelt Bouie) as well as the “40% Jewish Team” of Danny Schayes and Hal Cohen.  Both Schayes and Cohen were Upstate New York legends of sorts, Schayes for being the son of NBA Hall of Famer Dolph Schayes and Cohen because in high school in Canton, New York he once hit – get this – 598 consecutive foul shots.  Both went on to great success, Schayes in the NBA and Cohen as a Syracuse radiologist.

We blew Syracuse out.

Penn’s lead ballooned to 46-29 in the first half and we cruised to an 84-76 triumph.  At one point in the first half, Bobby Willis threw a long, lob pass to Tim Smith streaking downcourt.  Willis overthrew him.  In one motion, Smith leaped up, caught the ball and without looking threw it over his head, off the backboard into the hoop – most likely the greatest single play in Penn history.

“An over the head shot!” I yelled into the microphone (we were allowed to televise this game).  “Timmy Smith just made a reverse layup over his head.”  After the year ended, we at UTV decided to do a 30 minute highlight film of the tapes we still had.  Of course, this play was the intro.  We put the tape into the VCR (if you don’t know what that is kids, just go with it).  Grrriiiinnnd.  The machine picked then, of all times, to malfunction and destroy the tape.  On such moments are great broadcasting careers ended.

With little to do in Greensboro, we settled in on Saturday to watch the Midwest and West Regional Finals.  Undefeated Indiana State beat Arkansas in the first game and UCLA then took on DePaul in the West.  DePaul jumped on UCLA early in Provo, Utah on Brigham Young’s campus.  At halftime, underdog DePaul had raced out to a 51-34 lead. UCLA still had hope though, because DePaul never substituted.  Ray Meyer’s team was so thin, the veteran coach literally played the same five the entire game. They were sure to get winded.

Enter the UCLA pep band.  At halftime, the BYU dance team was performing when the UCLA players took the court.  Immediately the pep band broke into the Bruin fight song, totally disrupting the dance team.  The BYU crowd was outraged.  When DePaul came out the fans gave them a standing ovation, and cheered wildly for the Blue Demons in the second half.  DePaul needed all of the support.  UCLA pressed the whole half, eventually cutting the lead to two points, but couldn’t get over the hump. When freshman Mark Aguirre broke a UCLA trap to lay the ball in with ten seconds left, DePaul had a 95-91 upset.  There have been thousands of NCAA Tournament games, but UCLA probably is the only school that ever lost one because of its pep band.

On Sunday we played St. John’s—which had squeaked by Rutgers on Friday night — for the Eastern Regional championship.  The other three regions featured No. 1 vs. No. 2. The East had No. 9 vs. No. 10. The arena was empty.  Tickets had been bought by Carolina and Duke fans. Without those teams in the game, the ACC faithful decided they had better ways to spend a Sunday afternoon.

That also was the attitude of NBC’s lead announcer, Jim Simpson. I was standing at press row before the game when Simpson complained to his producer.  “Yesterday I saw two absolute superstars (Larry Bird and Sidney Moncrief), today I’m broadcasting a center that went to Choate for chrissake” (Penn’s center Matt White, who was a Connecticut prep school kid).

We hated to admit it, but Simpson wasn’t entirely wrong.  The spark was gone. Both teams were emotionally spent making for an artless, grind-it-out affair.  We led almost the whole game, but in the second half St. Johns made a run to go up by four.  The ever-reliable Smith then hit from the corner to propel a rally. With 23 seconds left and the game tied at 62, St. John’s guard Tom Calabrese fouled Salters, giving him a one and one.

With a spot in the Final Four on the line, Boonie again dribbled, bent his knees all the way down and swished both shots to put Penn up 64-62. One more defensive stop and the Quakers would be headed to Salt Lake City.  St. John’s worked the ball upcourt and Calabrese got off a shot which missed.  Gordon Thomas missed a follow-up but the rebound fell right into the hands of the Redmen’s  Ron Plair.  He was just eight feet from the hoop but shot it seven.  We were going to Utah!

The Penn fans celebrated on the court, but not like in Raleigh. We had another long drive home. While thrilled, this drive was more of an ordeal than the last one.  We all were exhausted.  Spring break was over.  We were heading back to a full week of classes.  It would be a week like no other.

FINAL FOUR WEEK

College athletics are bedeviled by innumerable problems, and legitimate questions exist about whether they truly can co-exist with academics.  But for sheer good feeling and excitement nothing in my seven years on Penn’s campus (including three years of law school) came close to Final Four Week.  The mood was electric.  Staid Ivy Leaguers went crazy over the idea that our basketball team had a chance to win the national championship.

During the week the team held an open practice at the Palestra.  It was attended by more people than went to many Ivy League games.  Smith, who would have the dubious honor of guarding Michigan State All-American Magic Johnson in the semifinal, held court with the press under the basket.  “A lot of people call what he does magic. To me, it’s schoolyard.”  Poor Tim.  In a few days he would learn.

Before leaving for Utah on Thursday, the team held a pep rally with 8,000 fans at Franklin Field. Weinhauer was in his glory. “The Orange are still shoveling snow up in Syracuse,” he yelled as the crowd cheered. Tickets cost just $15 for each game and we saved money by staying at the Salt Lake City YMCA, but the costs of the flights forced many students to stay home.  NBC of course had exclusive broadcast rights, so I’d be watching from the stands.

Penn-Michigan State was Game 1, followed by Indiana State-DePaul.  Newspapers all over the nation were hoping for a Bird/Magic final.  We were hoping to spoil their fun.

For Penn to win, Price and Smith had to have great games. No such luck. Michigan State jumped off to a 4-0 lead before Price drew the Quakers even. During the first few minutes we couldn’t stop the Spartans, but we were matching their ball movement offensively.  Unfortunately we couldn’t shoot.  The 4-4 tie quickly became 13-4.  Despite getting good shots, we were 2-11 from the field.  Weinhauer had to take a timeout. Willis scored to make it 13-6, but five minutes later it was 22-6.  Weinhauer took another timeout.  Price now was on the bench with three fouls, Penn was shooting 3-18 from the field and Michigan State was shooting 8-11 from the field.

It didn’t get any better.  At 30-6, the Michigan State fans were waiving their green and white pompoms yelling, “Just six points.”  Like our basketball team, we fans had no answer.  The halftime score was 50-17 and the final was 101-67. About the only bright spot was the play of seldom-used forward Ted Flick.  Due to all the foul trouble, Flick played 14 minutes.  His blond locks and mustache won the hearts of lots of women watching on television, and he received gobs of fan mail afterwards.  Andy Warhol, thy name is Ted Flick. Smith learned that Magic was more than schoolyard.  Tim finished with the ultimate goose egg stat line: 0 points, 0 rebounds, 5 fouls.

Salters and Price were crushed.  They returned to their hotel room and got under the covers.  Price thought the Michigan State game may have cost him a pro career. Who could blame him?  A good performance in a national semifinal could have been his springboard to the NBA.  We fans sat with our tails between our legs as Indiana State and DePaul played a marvelous second game.  Indiana State won by two when DePaul wasted the last 20 seconds before firing up a wild shot.  We commiserated with some DePaul fans at a bar later over which was the worse way to lose, but it didn’t help much.

And the season wasn’t yet over.  Back then, the NCAA still insisted on a third place game. Perhaps we could regain some level of dignity? Instead, we played worse. No matter how bad the Michigan State game was, our performance in the first half against DePaul topped it. Even with Meyer actually substituting some, we played like we didn’t belong. DePaul raced ahead 46-23 with 4:00 left in the first half.  We were shooting 9-27. It was humiliating. Then, as suddenly as the true Quakers had disappeared, we again became the team that had beaten UNC and Syracuse. By halftime we’d closed to 54-43 and with a minute left in regulation we tied the score. The game went into overtime at 85 and we even took an 89-88 lead, but couldn’t hold on and fell, 96-93.

Almost nobody saw the consolation game, but for the team and the fans there was some redemption.  We had shown what we were capable after the first 16 minutes. Finishing the season on that note certainly was better than after the Michigan State debacle.

We settled in to watch the Magic/Bird Final.  Forty years later, Michigan State/Indiana State remains the most-watched college basketball game in history.  In fact, it wasn’t a very good game.  Michigan State controlled the entire way and won 75-64. The most interesting part was two strange calls that went against Indiana State. Twice ISU players were called for “undercutting” MSU players who were driving to the hoop.  I’ve seen that call maybe five other times in my life. Twice in the NCAA final?  A member of the officiating crew in the NCAA final, of course, was Hank Nichols.

FORTY YEARS LATER

In the forty years since that season, the sport, the country, television and the NCAA tournament have changed immensely.  For the people involved though, it remains an indelible memory.  Some went on to great success, others less so.

After two more NCAA trips, Bob Weinhauer left for Arizona State in 1982.  Like Dick Harter, he never achieved in college the greatness he found at Penn.  Also like Harter, Weinhauer then went to the NBA, where as general manager he won two championships with the Houston Rockets in the 1990’s.

Booney Salters led Penn back to the NCAA tournament in 1980 by hitting a last-second shot to beat Princeton in the Ivy League playoff game.  One of the greatest clutch players in Quakers history, he unfortunately had some rocky business dealings later on.  Hopefully that all is behind him.  In 2014 he was inducted into the Penn Sports Hall of Fame.  His emotional speech expressed so much that is good about Penn.

Bobby Willis worked in New York in the real estate business for many years and now spends time as an adjunct professor at the City University of New York teaching computer science.  He admits to almost having quit basketball during Penn years to focus on technology, which remains his passion.  We’re awfully glad he didn’t.

Tim Smith worked at the Philadelphia District Attorney’s Office for many years.  As with most of his teammates, he spends a lot of time now in the non-profit world.

Ironically, the Penn player who had the best professional career was Matt White, the “center from Choate for chrissake.” Drafted by the Portland Trail Blazers of the NBA, he played overseas for 14 years.  Unfortunately, White also became the team’s most tragic story.  In 2013 his wife Maria began showing signs of schizophrenia.  While White was trying to get her admitted for psychiatric care, Maria grabbed a knife and stabbed him to death in the throat.  As the school remembers the 1979 team, he will be missed.

Any discussion of the 1979 team begins and ends with Tony Price.  Perhaps due to the Michigan State debacle, Price only got a cup of coffee in the NBA with the San Diego Clippers. His son A. J. did better.  After starring at Connecticut, A .J. played five years in the NBA and currently plays in China. Tony now runs the “Paying the Price Foundation” trying to give underprivileged kids the tools they need to make it.  He returns frequently to Penn to give clinics and inspiration, often joined by his Penn teammates.

The DP’s John Eisenberg went on to a long and distinguished sports writing career.  His latest book, “The League,” is about the birth of the NFL.

Of everyone involved directly or peripherally with the Final Four team, perhaps none reached the heights of mascot Bob Wachter. Currently the Chair of the Department of Medicine at the University of California San Francisco, Wachter was voted one of the most influential people in American medicine.

Others dealt with difficulty.  Like San Diego State’s Goetz and Gwynn, Jim Valvano died way too young.  His farewell speech at the 1993 ESPY Awards when his body was wracked by cancer remains a classic.

Lord knows what the future holds for Rose Queen Gilmour.  We only can wish her well.

In 2010, Cornell became the first Ivy League team since Penn to reach the Sweet 16. College athletics is now so interconnected with big money that recently the Pac-12 schools discussed getting a private equity firm to invest in their conference.  If you have enough courage, talk to a professor at a school in a major conference and ask how he/she feels about the money spent on athletics as opposed to academics?  Duck before you wait for the answer.

Without athletic scholarships or television exposure and with high academic standards, it gets harder every year for the Ivy League to imagine another Final Four run.  As each year passes those of us who were there feel a little luckier. We got to be a part of something no other Penn students ever did.  It was 40 years ago, but we’re all still cheering at the Palestra.

Daniel B. Markind is a 1980 graduate of the Wharton School of the University of Pennsylvania and a 1983 graduate of the University of Pennsylvania Law School.

Pipelines, Courts and Reports

Storage Tanks and pipelines in the refinery.

Pipeline issues continue to dominate the natural gas news.  Last week, the pipeline industry got some good news, some bad news, and some news potentially so devastating it could threaten the entire industry.

Good news came for Mariner East 2.  First, the Pennsylvania Supreme Court rejected a challenge from the Clean Air Council and some landowners in Delaware and Chester Counties to the utilization by the pipeline builder, Sunoco Logistic, of eminent domain along its 350 mile route.  Later in the week, an Administrative Law Judge for the Pennsylvania State Public Utilities Commission rejected a request from seven citizens in Delaware and Chester Counties to shut down finishing of Mariner East 2 and to stop existing operations on Mariner East 1.

Sunoco Logistics repeated again that it would get Mariner East 2 in service by the end of the year, but not in the form originally intended.  In certain areas, Mariner East 2 only will be 20 inches in diameter, with older pipe being attached to newer pipe.  Sunoco Logistics never has fully explained why this is happening.  Is it because of an operational problem?  A cost cutting move?  A supply issue?  A timing issue?  Especially with the use of older pipe that was never part of the original plans and the use of smaller diameter pipe than was originally proposed, concern with safety should be paramount.  At the very least, the public is entitled to a full explanation from the pipeline company.

Make no mistake, Mariner East 2 is a very important project.  It secures the supply of gas to Marcus Hook, where it either can be exported to help free Western Europe from reliance on Vladimir Putin or it can be moved domestically to ensure our national supply.  It’s for this very reason that the PUC should demand answers.  For years, Mariner East was proposed as a certain type of project.  In the end, Sunoco Logistics is delivering another one, with a slightly different route, less capacity, and older pipe in certain places.  If the PUC doesn’t know why this is, it needs to find out and publicize its findings.

While Sunoco Logistics received its good news on Mariner East 2, Penn East Pipeline, which will go from Northeastern Pennsylvania to Central New Jersey, also got positive court results.  On Friday, US District Court Judge Brian Martinotti ruled that PennEast Pipeline Co. LLC, the owner of the pipeline, can use eminent domain to take properties in New Jersey – although initially, PennEast may only be seeking survey access to those properties as it still needs to address local environmental concerns for which the New Jersey Department of Environmental Protection has still not given State blessing.  The pipeline will go through Hunterdon and Mercer Counties in New Jersey, allowing connection to pipelines that serve New Jersey and potentially the New York City Metropolitan Area.  The New Jersey Attorney General’s Office had no comment.  Since the election of Democrat Phil Murphy in 2017, New Jersey has done an about-face and is not friendly to natural gas development.  As with other opponents, however, Governor Murphy has no real plan to live without it.

There was bad news also.  On Friday a pipeline owned by Mark West exploded in Washington County in Western Pennsylvania, injuring four people, one critically.  It is believed that workers were cleaning the pipeline when vapors caught fire and ignited other combustible material.  No matter how you slice it, pipelines are serious business, and safety should always be, but sometimes is not, given the full attention that it deserves.

More bad news for the pipeline industry came further south.  A panel of judges for the Fourth Circuit vacated certain permits issued by the United States Forest Service to the Atlantic Coast Pipeline that would have allowed the pipeline to be built through the George Washington and Monongahela national forests. Atlantic Coast would run 600 miles from West Virginia through Virginia and into Eastern North Carolina.  Twenty one of those miles would be through national forests.  The Forest Service repeatedly told Dominion Energy, Duke Energy and the Southern Company, co-owners of the pipeline, that the pipeline might violate environmental standards.  In 2017, however, the Forest Service issued permits allowing for the pipeline’s building through these forests.  The Fourth Circuit Panel vacated the permits, stating in effect that the Forest Service isn’t doing its job properly.  The pipeline owners intend to fight the decision, saying the judges are undermining the judgment of seasoned professionals.

Finally, the really devastating news came from California, where the California Public Utilities Commission charged utility Pacific Electric & Gas with falsifying safety and maintenance records.  PE&G in effect admitted the accusation.  Now the utility is facing massive criticism in light of the recent wildfires that were the most destructive in California history.  While there is no evidence tying natural gas pipelines to the wildfires, PE&G’s system is antiquated and poorly maintained.  It also doesn’t have enough inspectors to fulfill its reporting obligations.

Should any evidence arise that ties the pipelines to the fires, and then to PE&G’s malfeasance, the entire industry could be at risk.  Once again, it is up to the industry, and its trade groups like the Marcellus Shale Coalition, to start supporting the industry and not just reflexively opposing all government regulation and involvement.  Like all of our nation’s infrastructure, the pipeline system is antiquated and wearing out.  It needs to be rebuilt, using new materials and state of the art construction techniques, and it needs companies willing to do so.  It also needs government both willing to let them do so and to hold them to the highest standards.  Let’s all focus on that.

Questions? Let Dan know.

Daniel Markind of Flaster Greenberg

Daniel Markind is a shareholder at Flaster Greenberg PC with over 35 years of experience as a real estate and corporate transactional attorney. He has represented individuals and companies in the energy industry for over 20 years. Dan is a frequent lecturer on Marcellus Shale and other mineral extraction issues and is regularly asked to speak at conferences, in the media and at other venues regarding energy issues and their legal and political implications.

 

Depoliticizing Middle East Oil Dependence through Increased Production of U.S. Shale

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While America was transfixed with the sordid spectacle of the Brett Kavanaugh confirmation hearings, the news that really can have international impact was playing out in Istanbul, Turkey.  On Thursday its ramifications began being felt in this country.  Thanks to our shale industry, however, President Trump will have many more options going forward than otherwise.

Jamal Khashoggi was a Saudi Arabian journalist who has been highly critical of the ruling House of Saud.  A columnist for the Washington Post, Khashoggi was a permanent resident of the United States.  He also has been a thorn in the side of the de facto Saudi ruler, Crown Prince Mohammed bin Salman.  Readers of this blog will know that I’ve written about “MbS” before.  He is part reformer (opening up new avenues for Saudi women), part irresponsibly aggressive international leader (kidnapping the Lebanese President; getting involved in a reckless war in Yemen), and part thin-skinned autocrat (ordering many of his own royal family held at a Saudi hotel on corruption charges).

Over the last several months, Khashoggi received death threats and other intimidations.  Nevertheless, Khashoggi entered the Saudi consulate in Istanbul to obtain necessary papers for his upcoming wedding.  He hasn’t been seen since.

Turkey, which is a major Middle Eastern adversary of Saudi Arabia, claims he was murdered inside the consulate, his body later dismembered so it could be smuggled out to uncertain location.  The Saudis deny this but can’t produce him.  American intelligence intercepts seem to point the finger directly at MbS for a plot to at least detain Khashoggi, or worse.

Congress now is up in arms.  Twenty-two senators from both parties signed a letter demanding President Trump sanction Saudi Arabia, including cutting off arms shipments.  Trump is resisting the arms embargo, but it looks more likely that he will have to do something substantial.  It was, after all, an American green card holder who was detained and possibly executed in brutal fashion.

What can the President do?  Saudi Arabia is crucial to Trump’s strategy of developing a new axis of power in the Middle East featuring Saudi Arabia, Israel, and Egypt.  It is regarded as a counterweight to the ambitions of Turkey and Iran, both of which are led by Islamic governments (as is Saudi Arabia) yet neither of which is friendly toward the West.

Since the 1973 Yom Kippur War, Saudi Arabia literally has held the United States over a barrel (pun intended).  Their oil weapon intimidated American presidents for 40 years; quite simply, the United States needed their product.  However, during that time, Saudi oil money – in large part coming from America – also funded Islamic schools called madrassas that indoctrinated Saudi (and in Pakistan, Taliban) youth into their radical, misogynistic form of Wahhabism Islam, sponsored terrorist camps around the world, and produced 15 of the 19 hijackers on September 11, 2001.  Somehow, the Saudis always got a pass.

Now, however, the world might be different, and that difference is due in significant part to our frackers.  As out of “PC” favor as it may be, it is the shale industry that has given the President, or any president, freedom of movement in this situation.  Given the gravity of the situation, Trump will probably have to make serious moves, but he must be very careful in what he does given the complexity and volatility of the Middle East.  A military option would only be a last resort.  An economic one is far more likely but its chances for success in bringing about reform are heavily dependent on the degree of Saudi pain that it might inflict.  This is where the shale industry becomes an important factor.In response to any economic sanctions, any threat by the Saudis to use its oil weapon would have far less sting today than it did during the oil embargos of the early 1970s.  Such a move certainly would increase the price of oil and gas, but it would also give the American shale industry a huge opening to increase production, expand international market share, and actually make some money (which many of the companies really don’t do).  Environmental activists can act self-righteous all they want, but it is the frackers who provide the breathing space for the American government to use economic weapons instead of military ones – and for the economic weapons to have real effect.

Provided many scientific questions get answered (which is not a foregone conclusion), both America’s and the world’s long term future may be with “renewables.”  In the short term, however, those of us with younger children need to say a “thank you” to George Mitchell and the other pioneers of the shale industry.  Thanks to them, our sons and daughters have substantially less chance being sent overseas to fight another Middle Eastern war we don’t want among people we don’t understand.

Questions? Let Dan know.

Daniel Markind of Flaster Greenberg

Daniel Markind is a shareholder at Flaster Greenberg PC with over 35 years of experience as a real estate and corporate transactional attorney. He has represented individuals and companies in the energy industry for over 20 years. Dan is a frequent lecturer on Marcellus Shale and other mineral extraction issues and is regularly asked to speak at conferences, in the media and at other venues regarding energy issues and their legal and political implications.

Flaster Greenberg Continues to Grow Business, Corporate, Estates & Tax Teams, Deepens Real Estate Department and Adds National Aviation Practice

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Flaster Greenberg PC is pleased to announce three new attorney additions. Daniel B. Markind has joined the firm as a shareholder effective August 31, 2018, bringing with him a nationally known Aviation Practice and over 35 years of experience as a real estate and corporate transaction attorney. Tax attorney Eric Loi and trusts and estates attorney Courtney Dolaway Zeuner also joined the Flaster Greenberg team last week.

“Flaster Greenberg is excited to begin Q4 by welcoming three new attorneys,” said Alan Zuckerman, Managing Shareholder of Flaster Greenberg. “Dan Markind has built an impressive aviation practice and is a nationally recognized real estate and corporate attorney. All three of our new hires will make a fantastic addition to our growing law firm.”

Daniel Markind’s real estate and corporate practice has focused on representing some of the largest companies in the United States in sophisticated purchase, sale, financing, leasing, zoning and land use, workout and development matters. He also has helped form numerous start-up and smaller entities and has assisted in their growth. Over the past decade, Markind has developed a sub-specialty in energy law, including solar and wind energy, and oil and gas development and leasing. He speaks widely on Marcellus Shale and other mineral extraction issues and represents numerous companies and individuals involved in different capacities related to natural gas and oil leasing, production, transmission and waste disposal.

Markind also brings with him a national aviation law practice, adding Flaster Greenberg to a short list of nearly a dozen full-service firms that handle aviation law in the United States. He represents airports in litigation against the Transportation Security Administration, in business matters for the purpose of growing the business at their airports, and with regard to the energy assets at their airports. In addition, he represents companies that seek to assist airlines in establishing their business model, that seek to make airports safer and that seek to transact business at airports.

Former General Counsel of the Philadelphia International Airport, Markind currently serves as outside general counsel and outside specialty counsel to numerous airports. He is recognized as one of the nation’s foremost authorities on the relationship of aviation law to mineral extraction law.

A graduate of the University of Pennsylvania Wharton School of Business and University of Pennsylvania Law School, Markind is rated AV preeminent by Martindale-Hubbell® and has been named to the prestigious “Best Lawyers in the America” list for his work in real estate law. He is licensed to practice law in Pennsylvania, New Jersey and New York.

Eric Loi joins us as a member of the firm’s Business & CorporateEmployee Benefits and Executive Compensation and Taxation Departments. Focusing his practice in tax and areas related to employee benefits and executive compensation, he advises corporate, non-profit, and governmental employers on issues relating to the design, administration, and compliance of qualified and non-qualified retirement plans and health and welfare plans.

Most recently, Loi worked an as associate at Norris McLaughlin & Marcus, P.A. Prior to entering private practice, he worked for a large national accounting firm where he advised large multi-national companies and U.S. companies of all sizes and industries on compensation and employee benefit matters, as well as other general federal tax matters. Licensed to practice law in New Jersey, New York and the District of Columbia, Loi received his J.D. from the University of Buffalo Law School and his LL.M. in Tax from Georgetown University Law Center.

Courtney Dolaway Zeuner joins us as a member of the firm’s Trusts & EstatesTaxation and Business & Corporate Departments. She focuses her practice on estate planning, estate administration, business succession, and general corporate matters and represents individuals and business owners in their estate plans and corporate planning. Prior to joining the firm, she worked as senior associate at Baratta, Russell & Baratta, P.C.

Dolaway Zeuner is licensed to practice law in Pennsylvania and New Jersey, along with the United States District Courts for the District of New Jersey and the Eastern & Middle District of PA. She received her J.D. and LL.M. with a focus on estate planning from Villanova University Charles Widger Law School.

Marcellus Shale Update – 7.3.2018

As we approach Independence Day, the disconnect between what is reported in the press and what the world situation actually is remains very curious.

Today, speaking on MSNBC’s Morning Joe, host Joe Scarborough and Council of Foreign Relations President Richard Haass bemoaned the fact that President Donald Trump is eviscerating the post-World War II order and not replacing it with anything.  Haass said we voluntarily are giving up our international position of primacy.  One wonders if Mr. Haass has spent much time looking at Nord Stream 2, the gas pipeline from Russia to Germany through the Baltic Sea, bypassing Ukraine, Russia and the Baltic States.

The effect of this pipeline will be to give Russia greater control over Europe’s energy supply.  It will enrich Putin, remove any control or payment that these other countries would have received, and make German Chancellor Angela Merkel even more subservient to Russia.  Ukraine for example, may lose 2% of its GDP as a result of the loss of trans-shipment payments.

Trump, who according to Morning Joe and much of the Western press is a Russian stooge, adamantly opposes the pipeline.  The Trump Administration is going so far as to have Secretary of State Mike Pompeo announce that the United States has made it clear that Russia should not be allowed to get more opportunities to exert political influence not only in Germany, but also in Europe in general, if Nord Stream 2 is implemented.  The current Administration has threatened to sanction any company involved in the project.

None of this has stopped Merkel, ostensibly the leader of the country blazing the trail toward a “green economy”.  She is determined to get this pipeline built, increase her dependency on Putin’s energy and rely more fully on Russian gas production from environmentally sensitive areas of the Arctic.

All of this sounds upside down, doesn’t it?  Indeed yesterday Estonia’s Minister of Foreign Affairs Sven Mikser said it is in the EU’s best interests to stop the project as it serves Russian geopolitical interest.  Earlier today, the German environmental group Nabu filed a lawsuit with Germany’s highest constitutional court asking to halt the pipeline.

Supporters of the project say that Nord Stream 2 will give Germany access to a cleaner form of energy than it currently uses.  That this might be so shows how dirty Germany’s current power supply is.  Despite refusing to greenlight any power project that is not “renewable” this decade (or perhaps because of this), Germany remains highly dependent on a very dirty form of coal called “lignite”.

Why then, is the Trump Administration, which according to many press reports (a) is in the pocket of Putin, (b) doesn’t care about the environment and (c) is willing to tear apart the old European alliance, so opposed to this pipeline?  Even if its only concerns are geopolitical and economic, the fact that the Administration is opposed to Nord Stream 2 shows that something is missing from the national debate.  A Putin puppet would just go along.  Instead the United States is taking a remarkably hard line.  Nowhere, however, is this nuance reflected in the press.

The topic of energy encompasses so many facets of our modern political debate, from geo-political power to environmentalism to future economic growth, that these stories have to be part of the discussion.  Trump may be secretly aligned with Putin.  None of us really knows.  The fact though that the Trump Administration is fighting so hard against Putin’s interests in this critical field is a story that needs to be told.  Each reader or listener then can draw his/her own conclusions.  It certainly may not show that Trump is an environmentalist, but it argues against the idea that he’s in Putin’s pocket.

Why Scarborough, Haass, the rest of MSNBC, CNN and even Fox News  fail to report on Nord Stream 2 remains mystifying.  It only increases the level of suspicion and derision with which the American press is held.

Questions? Let Dan know.

Marcellus Shale Update – 3.02.2018

Yesterday may have been the most instructive day ever to understand the current international situation involving natural gas.

Russian President Vladimir Putin, in his State of the Nation address, bragged about “invincible” missiles that could carry nuclear warheads.  He showed videos of missiles raining down on Florida.  As he did so much of Europe was battered by two weather storms called “Storm Emma” and the “Beast from the East”.  Today is the coldest spring day in UK recorded history (I guess they consider March 1 spring over there).  Unfortunately they may have no heat.  Britain’s National Grid warned yesterday that it did not have enough natural gas to supply the country.

UK running out of gas, warns National Grid

UK weather: Armed Forces called in as death toll rises to 10 in coldest spring day on record

Britain has a lot of shale gas potential but it has not developed it, running into the same environmental objections that bedevil most of Europe.  We might have been able to help make up the shortfall, but our export capacity remains limited.  Now Britain freezes.   How many people will die in the UK because of their energy policies?

There are other reasons for Britain’s current situation, including the foolish shutting down last year of a natural gas storage facility at Rough, but the result is that Britain may turn in desperation to the same person that New England relies upon in times like these, Vladimir Putin.

Putin has been very busy.  Also yesterday, the Science, Space and Technology Committee of the US House of Representatives released a report detailing how Russia used Facebook, Instagram and Twitter to exacerbate tensions over American energy policy and climate change.  For example, Russians created a group called “Native Americans United” which put out an ad showing a young girl looking out over the prairie with the caption “Love Water Not Oil, Protect Our Mother, Stand with Standing Rock.”  This tension obviously benefitted Vladimir Putin.

In this country, gas prices remain so low that many of the suppliers are hurting badly.  As one of the producers told me yesterday, after fixed costs just about every place production is sold is negative.  In the very short term that’s good for the consumer.  In the long term that’s not.  Were more export terminals operating, the price could rise to a sustainable level, more gas could be sent overseas to break the energy vice grip of countries like Russia and the chances of gaining effective leverage over Russia and other rogue states would increase.

Since the Cold War we’ve had a debate over which is more important, soft power or hard power.  Here’s a tip for the “soft power’ proponents:  Soft Power works best when you have it.  Internationally, our current energy policy seems to be unilateral disarmament.  Again, that raises the possibility that the only way we can project force internationally and protect our allies and our vital interests is through hard power.  In English that means your sons and daughters and mine being sent overseas to fight.

When an “environmentalist” asks why you support hydraulic fracturing, you can answer very simply.  “I love my children.”