Russia, Ukraine and Marcellus

russian ships blocking access to ukrainian ports

The simmering dispute over waterway rights between Ukraine and Russia broke into armed conflict this week. Its implications are enormous both for the energy world as a whole and especially for us in the Marcellus Shale region. But some background is required to appreciate the connection.

Briefly, when Vladimir Putin seized the Crimea in 2014 he gained control of the Kerch Strait, which cuts off the sea lanes from Southeastern Ukraine between the Azov Sea and the Black Sea. Until 2014, Russia had controlled the eastern shore of the Kerch Strait but Ukraine had controlled the west. The two countries had reached an agreement in 2003 allowing for shared access of the Kerch Strait and the Azov Sea. However, Russia’s military and political moves in Crimea in 2014 changed that.

Eager to connect the Crimea to the Russian mainland, Putin ordered the building of a 12 mile bridge over the Kerch Strait after the annexation, which he formally opened himself this year in May by driving a truck across it. Russia then placed more armed vessels in the waters around the bridge. The Russians claimed they needed better security. In practice, the extra traffic increased delays to ships trying to access and use the Ukrainian ports on the Azov Sea, increasing the costs of doing business there and undermining the utility of these ports in international trade.

Ukraine responded with a military show of force, but this was overwhelmed by Russian naval power. Russia then used the supports of the bridge, which had been built at a strategic distance, to permit its own warships to blockade the Ukrainian ports. Weaker militarily, Ukraine has few cards left to play and access to its Azov Sea ports is now very much under Russian de facto control.

As I noted in July during the controversy over the Nord Stream II pipeline that Germany is building with Russia and which will bypass Ukraine and Poland, Ukraine currently gets over 2% of its GDP from transfer payments for the trans-shipments of Russian gas and oil to Western Europe. Thanks to Angela Merkel, that transport route may become irrelevant. Nord Stream II brings Putin’s dreams of Russia once again dominating Eastern Europe one step closer. However, more than just Ukraine’s loss of access to its ports and its lost revenue from diverted oil and gas trans-shipments, thanks to this new pipeline Russia can cut off energy supplies to Poland, Ukraine and the Baltic States any time it wishes, without worrying that Western Europe will react harshly as their supplies are also cut off. While economically in the short term this direct pipeline access to Russian gas and oil may be better for Germany, Nord Stream II is a geo-political disaster due to its implications for further expansion of Russian power and influence over former Soviet states, if not more globally.

For these reasons, President Trump was right in calling the Germans out on the new pipeline at the NATO summit in July. However, the President has not been forthcoming with an appropriate condemnation of Russia’s actions, leaving our allies confused and leaving UN Secretary Nikki Haley to act as the lone Voice of America while the President – inexplicably but not unexpectedly – dithers on calling Putin out for what is obviously going on.

Meanwhile, with Putin again showing his aggressive nature, the rest of the West is scrambling.  Cyprus, Israel, Greece and Italy agreed this week to build a $7B pipeline for the Eastern Mediterranean from the Leviathan Field in the Mediterranean Sea. Germany, perhaps belatedly realizing the folly of putting all of its energy eggs in Putin’s basket, now is partnering with Dow Chemical also to build a liquefied natural gas import facility in the German city of Strade, near Hamburg.

Who will supply the gas to feed Western Europe should Russia turn out to be unreliable or if Nord Stream II becomes another pawn on Putin’s chess board to regained Soviet dominance? It could and should be us from right here in the Marcellus. By building out our pipeline system in the US, we can supply Strade and other future European gas import terminals, thereby helping thwart Putin’s aggression, and projecting American “soft power” – which is what critics of an aggressive American foreign policy often demand. At the very least, this will help keep American troops out of harm’s way, but it could also serve as a geopolitical foil to Russia’s attempts to use its energy largesse for political, military, and evident expansion purposes.

Will we have the political will to do it?

In order to do so, the natural gas industry in this country must first recognize the strategic reasons why this is important which, in turn, requires understanding the interconnections between domestic energy policy, international trade, and political, military, and diplomatic events in far away places. Few Americans presently understand how Russian moves in the Azov Sea could eventually end up causing young men and women in Pennsylvania, West Virginia, Ohio and elsewhere to be sent overseas in military uniforms. Fewer still comprehend how the pipeline build out and export terminals in this country can help (1) secure our future militarily while simultaneously (2) creating good jobs for people in our region and (3) decreasing greenhouse gas emissions worldwide. None will understand if they are not told.

Tom Wolf just won reelection handily as Governor of Pennsylvania. He is no friend of the natural gas industry. Unlike his counterparts in New York and Maryland, however, he hasn’t moved to try to shut it down. There will be more pressure on him to do so now that the National Climate Assessment has been released.

Wolf, though, lives in the real world. He must perform for Pennsylvanians. Strange as it sounds, the Governor and the industry need each other. The gas industry has to provide him with the explanation as to why working with the it not only is in Wolf’s own best interests politically but is also in the best interests of all Pennsylvanians, and indeed all Americans. Somehow this message has not gotten through as forcefully as it should.

Further, our newly elected representatives from the Marcellus States in their state legislatures and in the United States Congress must understand – and not be hesitant to educate the public about – the international dynamic. Some, like Chrissy Houlahan of my home district in Southeastern Pennsylvania, are military veterans who have dealt with the intricacies of international relations. Others are untested. It will be up to all of them to work to keep American men and women safe. It will be up to all of us involved with the industry to explain how it can be instrumental – indeed, strategically essential – in doing so.

Meanwhile, Vladimir Putin will be watching, waiting, and planning his next chess move.

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.

Natural Gas’s Dilemma – How to Respond to the National Climate Assessment?

The day the world changed concept

On Black Friday, the Trump Administration released Volume II of the National Climate Assessment. Running 1,600 pages, the report is the second volume of the fourth National Climate Assessment, which was mandated by Congress in the late 1980’s and is required to be prepared every four years by scientists from 13 designated government agencies. It is being referred to as NCA4 Vol. II.

According to initial press headlines, the warnings contained in NCA4 Vol. II are dire. They include:

  • The “earth’s climate is now changing faster than at any point in the history of modern civilization, primarily as a result of human activities.”
  • Average sea levels along the United States coast have increased by about 10 inches since the early 20th century as the oceans have warmed and land ice has melted.
  • More than 100 million people in the United States live in places with poor air quality – and climate change will “worsen existing air pollution levels.”
  • Climate change will “disrupt many areas of life” by affecting trade and exacerbating overseas conflicts.

It is conceivable that the initial press reports will turn out to be exaggerated and that the actual language in NCA4 Vol. II is more nuanced than what has been reported. This Update specifically is being written before full examination of the 1,600 pages can be made, although we will certainly correct any errors or omissions in what the press has written about the Assessment as soon as a more fulsome review of the report is possible.

However, for most members of the public, the press reports may be the only information that they will ever receive about the Assessment because it is unlikely that most people will take the time to pore over 1,600 pages of dense text. They will only remember headlines like those listed above. Whether fair or not, this is the environment that the natural gas industry finds itself in during 2018. It must adapt to that reality. While the industry can, and should, pick apart reports and assessments, including NCA4 Vol. II, to the extent that they contain erroneous data or jump to conclusions unwarranted by the evidence, the industry must realize the impact that the overall public mindset has on national, state, and local energy policy and initiatives.

To that end, the industry needs to recalibrate its message. For too long, what little public relations the industry as a whole has engaged in has concentrated almost only on the economic benefits of natural gas to consumers. While certainly not inaccurate, that overly simple message no longer will carry the day. The economic argument now is framed as: “We all can spend $X for energy which will destroy our planet, or we can spend $X time Y and save our planet. Nobody likes paying higher costs for anything, but if it will save our children’s futures, why shouldn’t we do it?”

It is imperative for the industry now to do two things. First, it must concentrate on the environmental case for natural gas, both over other fossil fuels and until so-called renewable energy becomes more universally available. The natural gas industry has a terrific story to tell, but it needs to tell it. The public does not know what the industry has not told it. America leads the world in greenhouse gas reductions since the fracking revolution. We’re producing massive new quantities of oil and gas, yet our greenhouse gas emissions have dropped over 10% to levels not seen since the 1980’s.

There is no harm in admitting that natural gas may not be the be all and end all of energy use to save the planet, but as a bridge fuel it is unsurpassed. If, as NCA4 Vol II states, we must do something positive fast for the environment to lessen any climate change impacts, there is no better way than to build out the natural gas pipeline infrastructure. This will allow the massive switch from coal to natural gas to occur as quickly as possible.

Second, the industry must point out, gently, that currently there is no feasible alternative. All proposals to power our economy via renewables still are speculative at best. Even if it can be done, we are decades away from a realistic plan to power the world with net neutral sources. Germany is a great example of this. In 2010 it refined its renewable energy policy to limit most, if not all, power projects not involving renewables. Despite this, over the last few ytears, German carbon emissions have increased, not decreased. Now, despreate for energy, Germany is helping the Russians build a new pipeline directly to Germany and it is involved with Dow Chemical to erect a new liquefied natural gas power plant in Strade. Good intentions are one thing. NCA4 Vol. II makes it clear they are not enough.

If the industry truly believes in itself and what it’s doing, it should take up the challenge. Engage on the playing field where the battle is taking place. Target our message to the mindset of the audience, and don’t be afraid to amid there are things we don’t know. Despite NCA4 Vol. II’s warnings, fossil fuels will be with us for decades moer, at least. Wishful thinking about promoting more renewables will not change that stark reality. Until such time as renewables can effectively and completely power our modern economy, we all will benefit from clear headed policies that encourage increased natural gas development, transportation and usage while simultaneously establishing a priority to develop and implement a nationwide renewable energy strategy. Isn’t that really what we all should want?

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.

Pipelines and Politics

Marcellus Shale Update by Daniel Markind of Flaster Greenberg

The tortured story of the Mariner East 2 Pipeline construction may be coming to an end.  If so, it will end the way it began, mired in controversy and inconsistent with what had been proposed and promised by the developers.

Last Thursday, Energy Transfer Partners announced that it will start shipping natural gas liquids through the pipeline by the end of the year.  That pipeline, however, will look different from what had been expected.  The original plans called for a 16-inch pipeline (Mariner 2X) and a 20-inch pipeline (Mariner 2) that each would run along the same right-of-way as the original Mariner East Pipeline from 1931.  ETP now says it only will construct one pipeline, that will merge an existing 12-inch pipe with certain areas of 16-inch pipe and other areas of 20-inch pipe, and this will be called Mariner East 2.  ETP did not explain why its plans had changed, how much of each size pipe will be used, and why the final route through Delaware and Chester Counties in Pennsylvania will be slightly different than previously stated.

Not surprisingly, local residents and elected officials were not pleased.  Pennsylvania State Senator Andy Dinniman, who has been a longtime critic of the pipeline and has also pointed out instances of ETP’s failure to follow State regulations, released a statement that said in part “the cobbling together of new and antiquated pipelines of varying sizes appears to have the potential for even more safety risks and concerns.”

As Mariner East limps toward the finish line, natural gas prices surged this week to five-year highs.  The early storm combined with low stockpiles to produce spot market prices over $4/Mcf.  With winter still a month away, this should be a good time for the natural gas industry to redouble its efforts to convince the Northeast public about the virtues of the pipeline buildout.  The industry has an excellent case to make, both economically and ecologically.  Stories like Mariner 2 however, put the industry in a deep hole.  It’s hard to convince the public of the environmental benefits when a feature project is recycling antiquated pipe at the last minute without explanation.  If the gas industry wants to thrive in the Marcellus, it might try doing itself a favor and treating the public like the concerned residents most are.

Elsewhere, judicial and administrative rulings affected other Marcellus pipelines.  Last Wednesday, the 4th Circuit Court of Appeals ordered a temporary halt to a water crossing permit in West Virginia needed to build the Atlantic Coast Pipeline from West Virginia to North Carolina.  The Court ruled that two conditions required by the West Virginia Department of Environmental Protection to protect the state’s water quality, including a requirement that the stream crossing must be completed within 72 hours, had not been met.  The three judge panel in Charleston, which in October had issued a similar stay to the Mountain Valley Pipeline, overruled an Army Corps of Engineers grant which was issued following a route change.  This should be worked out without much difficulty, but it adds to the suspicion with which pipeline projects currently are viewed.

Finally, FERC granted the Constitution Pipeline, which would run from Dimock, Pennsylvania to Schoharie County, New York, a two-year extension to complete the project.  The unanimous ruling came from two Democratic commissioners and one Republican commissioner.  The Constitution is much needed and was the source of the original power grab by New York Governor Andrew Cuomo regarding the Section 401 Clean Streams Permit, a power play that has been copied by other activist governors (and in spirit by Premier John Horgan of the Canadian Province of British Columbia).

The ruling may be prophetic.  Just one week after winning reelection, Cuomo is in serious political trouble.  Details of the extraordinary giveaways New York State made to the richest man in the world, Amazon’s Jeff Bezos, so that Amazon would locate one of its new headquarters in Long Island City have put Governor Cuomo squarely on the defensive.  From an Upstate New York perspective, Amazon is another case of Upstaters getting taxed heavily and having their industry stymied so that New York State Government literally can give their money away to a multi-billionaire for the benefit of Downstaters.

New York’s natural prices already are rising.  A difficult winter possibly is approaching and New York needs gas, which it may have to import again from Vladimir Putin.  None of this looks good for Governor Cuomo, especially with the 2020 Presidential Election season approaching.  It is possible that the Governor may have to do something that actually helps the Southern Tier and build the pipeline.  This will begin to unlock the Marcellus potential for the benefit of New York, New England and the entire United States.  If so, it means we could be less dependent on the Russian dictator for our energy.  That should strike all of us as a good thing.

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.

A Conference, A City & A Tragedy

ADLBefore the end of each day at last week’s Shale Insight Conference in Pittsburgh, first MSC President Dave Spigelmyer and then WVONGA President Anne Blankenship warned the attendees to take off their conference badges once they left the Convention Center, for their personal safety.  I’m sure that struck some of the participants as odd, and even a little unnerving.  Owing to my religion, for me it was commonplace.  Ironically if not prophetically, two days after we left the Conference, eleven of my co-religionists were massacred less than ten miles from the Convention Center by a lunatic gunman while attending Sabbath Morning Services.

As I look back upon the events of last week, it strikes me how Jewish much of the week was.  I don’t know how many non-Jews who attended the Conference could truly comprehend it from a Jew’s perspective.  Please permit me then to try to use what happened last week in Pittsburgh, first when many of us conferees were together and then the awful events after we left, to explain what it’s like to walk in our religious shoes.

Very few people inside the Conference hall considered themselves, and the people they were with, inherently evil.  That was not the case outside.  When we attended the opening night reception, we were met by demonstrators, some dressed up like ghouls, claiming that the natural gas industry is the enemy of mankind.  They believe members of that industry – meaning, you and me – are heartless profiteers, willing to suck the blood out of the environment for our short term financial gain.  According to the protesters, we will endanger their lives, and indeed even our own, for our personal pecuniary interests.

In order to do so, we members of the industry will use our financial wealth and acumen to seize effective control of State, local and even national governments.  We then will subvert the will of the decent, common people in favor of our own interests.  While our actions may result in the ultimate destruction of the planet due to our blind pursuit of profit and power, we don’t care about that.  So driven are we by the prospect of financial wealth that we will risk celestial destruction for our parochial benefit.

Sound familiar?

Welcome to the world of Jews.

There is no accusation too incredible or outlandish that it can’t or hasn’t been leveled against the Jewish people.  Last week it was that we were responsible for the immigrant caravan heading toward this country from Central America.  Seriously?  During the Middle Ages, Jews were blamed for Bubonic Plague.  We “poisoned the wells!”  Actually, we washed our hands before eating.  Later Jews were accused of kidnapping Gentile children, murdering them, and using their blood to make the unleavened “matzoh” we eat during Passover.  And of course less than one hundred years ago we were told we “stabbed the German State in the back” during World War I.  Six million of my distant relatives died because of that claim.

As with us Jews, we members of the natural gas industry needn’t bother trying to argue against our critics using facts.  It won’t work.  To them, the case is settled.  Fracking destroys communities, pipelines foul Mother Earth, and natural gas is a fossil fuel that causes climate change which will end life as we know it on our planet.  So what if Yale, Penn State and the University of Cincinnati all this year published research saying they could not find a causal connection between fracking and water contamination or other environmental evils.  The critics don’t want to hear it.  They “know’ the truth.  Any arguments we make to the contrary are just smokescreens set up to confuse the people.  We’re good at that you know.  Besides, we will stop at nothing to achieve our evil ends.

When we confront the “enviros”, we might as well be on another planet.  They want to reduce carbon emissions.  We show how the increased use of natural gas has actually decreased those emissions 15% in the United States.  It doesn’t matter.  We’re still killing the planet in other ways.  This way just makes us rich.

They want economic justice.  We show how one of the leading causes of poverty in the less developed countries is the lack of a reliable energy supply, and natural gas can make that possible for hundreds of millions of people.  To them, that’s just another example of how we weasel our way into other societies for our ultimately nefarious ends.

For we Jews, Israel is the most tolerant society in the Middle East with regard to the LGBTQ community.  Does that impress the human rights community?  Hardly.  They even invented a new term, “Pinkwashing”, to describe how Israel’s treatment of the LGBTQ community is just a ruse to deflect attention from Israel’s “grievous” human rights abuses against Palestinians.  I’m not kidding.

Perhaps the enviros are right.  It may be that hydraulic fracturing is causing grave harm to the planet.  None of us really knows, any more than we know whether or not cell phone use over extended periods of time causes damage to the human brain.  We need to do the best we can, keep studying what’s happening, and make our decisions based on rational thought, study and analysis.  Fracking is an industrial process, not a religion.  If it turns out to be doing great harm, it should be stopped.  Modern environmentalism now borders too uncomfortably on becoming a religion.  As it moves closer to that state, industry members become more like Jews.  It is not enough that the industry should be stopped.  It (and us as its members) must also be destroyed.  Any action taken against the industry in that greater cause will be justified.

For members of the industry at least there is a chance at absolution.  We can always join those people of pure heart and mind, turn away from our evil fracking, and worship at the altar of “renewables”.  If we do so, we will gain the eternal gratitude of the mainstream press, get invited to the swankiest parties, be celebrated as far seeing visionaries, and be a part of the eternal salvation of the planet.  But please don’t ask uncomfortable questions like how will the energy created get where it needs to go, what types of non-renewable elements and other sources will be needed to get it there, and what environmental damage will be caused by the massive infrastructure needed to power our society by renewables, or if we even can.  Some things you just have to take on faith.  Some questions are best left unanswered, or never even asked.

But for we Jews, there is no true salvation.  Regardless of whether or not I convert, my children and even their children will be marked with the Scarlet Star of David.  They always will look over their shoulder, and will always feel a little uneasy to show freely and proudly who they are among others who aren’t. And they will always know that there is no accusation too ridiculous that somebody, somewhere, will still hate them for it and try to destroy them.

This week, we say “Kaddish,” our memorial prayer, for eleven souls whose only crime was to believe a different way than other people.  It’s a terribly uncomfortable feeling.  We Jews carry it around wherever we go and throughout our lives.  Yet when the conferees took off those badges after we left the David Lawrence Convention Center so that we would not advertise who we were, all conferees became de facto Jews as well.  Wear that Star of David well.  Regardless of what the haters think, our tradition is a glorious one, and something to be eternally proud of.

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.

The DRBC and the Limits of Administrative Agency Power

20180927_Marcellus Shale Update.png

There are two lessons from the petition by Pennsylvania State Senators Lisa Baker and Gene Yaw and Senate President Pro Tempore Joseph Scarnatti to intervene on behalf of a Wayne County landowner in his challenge to new rules by the Delaware River Basin Commission that would ban hydraulic fracturing in the entire Basin. The first is that there is a limit to how far administrative agencies can go and how far their power extends.  The second is that it is imperative for the industry to engage with the citizens of the State to enforce its rights and not just speak to some residents or concentrate on only one issue.

The move by the State Senators is the latest in a series of maneuvers related to proposed rules by the DRBC that stretch back years. In their current manifestation, the DRBC announced on September 13, 2017 it would publish new rules that would ban fracking throughout the Basin. The Commission claimed that fracking anywhere in the Basin constitutes a “water project” that is within the DRBC’s power to regulate. Earlier, in 2016, a landowner in Wayne County had sued the DRBC claiming that it did not have jurisdiction to prevent the drilling of a natural gas well on his property. The lawsuit was dismissed in US District Court but overturned by the Third Circuit, which in July 2018 sent it back to the District Court.

The current landowner argues that the DRBC interprets the term “Project” so broadly that it can regulate anything that happens within the Basin. I made that same argument at a public meeting in Philadelphia in January 2018. One person from the American Petroleum Institute came, but nobody from any of the natural gas producers showed up. Because there was no one there to advance the industry position, all we heard was a series of truths, half-truths and plain falsehoods. It was a propaganda session for those who oppose any natural gas development. Given a chance to engage with Southeastern Pennsylvanians who know little about the subject, the energy industry punted. It was yet another missed opportunity.

The industry could have made the point that the DRBC’s position is so overbroad it puts them in virtual control of, or at least gives them a veto over, any development, whether fracking related or not, that happens anywhere within the Basin – which extends the length of the 330 mile Delaware River. Supporters of the ban were thrilled, but cooler heads in the Third Circuit asked whether the 1961 interstate compact granting power to the DRBC was meant to be so broad. Using the DRBC standard, it could prevent the erection of a gas station 30 miles away from the river.

All three Pennsylvania State Senators seeking to intervene are Republican, but we need to ask ourselves whether this truly is a partisan issue. Are our citizens truly comfortable with an administrative agency comprised of five unelected but appointed individuals claiming so much power to regulate our lives, even for activities outside the natural gas industry? There are those who think fracking should not be permitted in the area within the jurisdiction of the DRBC – or anywhere else for that matter. Regardless, they should not be so sanguine about the enormous power grab being attempted by the DRBC.  Over subscribed power has a way of appearing fickle when the next project comes along that we do not oppose but actually support.

One other area where those opposed to natural gas development should not be so sanguine is in their ultimate reliance on Russian gas exports for their winter power.  Heading into the 2018-9 winter, New York and New England may be even more reliant on gas imports than they were last winter. As you recall, that meant Boston had to turn to Moscow for gas drilled in the environmentally sensitive Arctic. The Russian supply may not be as available this winter. While all eyes have been focused on the Supreme Court confirmation, the United States and Russia are edging closer to confrontation in the Middle East.

Last week, Israel attacked a Syrian rocket facility in Latakia, on the Mediterranean coast north of Lebanon.  The area is well outside of the normal Israeli area of operation, and indicates the importance the Israelis placed on the target. Syrian anti-aircraft guns erupted, missing all of the Israeli planes but shooting down a Russian military transport plane, killing 15 Russians. The Russian military blamed Israel, claiming it did not follow the normal rules for informing Russia when Israel conducts military operations in Syria.  Although Russian President Putin played down the issue, the Russian military continued to accuse Israel. Last week Russia announced that new, more sophisticated anti-aircraft weapons were being transferred to Syria. National Security Advisor John Bolton warned Russia that such a transfer would be a “significant escalation”.

Oil prices rose over $70/barrel. While not moving in step with natural gas prices, the coming of further Iran sanctions adds to the price pressure on fuel. If Russia and the United States grow further estranged in the Middle East, it could affect the ability of Massachusetts to call on Russian gas now that it has effectively banned Pennsylvania gas. Both short term and long term, I doubt that is a good move economically, ecologically or national security-wise for New Englanders.

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.

When Gas Pipelines Explode

20180911_Marcellus Shale Update

At 5:00 a.m. yesterday, a portion of the newly-built Revolution pipeline exploded in Center Township, Beaver County, western Pennsylvania.  Luckily nobody was hurt, but one home, two garages, a barn and several vehicles were destroyed.  Nearby residents described what at first sounded like an airplane crash or a freight train, then a fireball.  The fire burned out by 7:00 a.m., but parts of Interstate 376 were closed for hours and the Central Valley school district cancelled classes.

The Revolution Pipeline is a 24 inch gathering line owned by the star-crossed Energy Transfer Partners.  It is used to feed ETP’s Rover and Mariner East 2 pipelines.  Officials believe that a mudslide occurred in the vicinity and may have caused the explosion.

ETP of course, is the same company that has had such difficulty with Mariner East 2.  It is instructive that fear of moving earth in the form of sinkholes in Chester County caused the suspension of construction of Mariner East 2 earlier this year.  If a mudslide was sufficient to cause such a fireball in the Revolution, then ETP has some serious explaining to do about how Mariner East 2 will be safe given the geology of Chester County.

As I’ve written numerous times before, ETP has done itself no favors with its dismissive attitude toward governmental oversight and regulation.  Now, at perhaps the worst possible time (right before an election and with Mariner East 2 still not completed and operational) and with little to no goodwill among Pennsylvania State legislators or DEP officials, ETP must show how and why the Revolution exploded, why this won’t happen again and why residents near Mariner East 2 shouldn’t be suspicious of that pipeline.

The leaders of this demand for explanation should come from the industry itself.  The people at the Marcellus Shale Coalition and at the major producers like Cabot, Range Resources, Chesapeake and EQT need to be insisting that all work on such important projects be done correctly, without cutting corners, with maximum transparency and giving safety ultimate priority.  It is their industry that is at risk, and all of our futures.  It must be the industry standard to insist that all companies use best practices and to demand that any company which fails to do so not be allowed to continue operating in Pennsylvania.

There is no risk free method of energy generation and transmission.  We all know about the dangers of nuclear power.  You can generate electricity by solar and wind but you need dangerous high tension wires to transmit it.  Given the modern political realities regarding fracking and natural gas, however, it is in the industry’s interest to show that it will not tolerate anyone who won’t walk the extra mile for the safety of all Pennsylvanians.

In more mundane legal news, last week the industry received a split decision from Pennsylvania Commonwealth Court.  Ruling in the case of Marcellus Shale Coalition v. Pennsylvania Department of Environmental Protection, the Court struck down part of the Act 78a Regulations  which stated that as part of the well-permitting process the DEP had to consider comments and recommendations submitted by municipalities.

The background is a little confusing.  Previously in the Robinson case, the Pennsylvania Supreme Court invalidated what was known as Section 3215(d) of the regulations that said the Environmental Quality Board of the DEP “may” take such comments into account.  This was considered improperly minimizing local input.  The new regulation sought to cure this defect, but the Court said this fix would not work because the clause in the Act 13 Oil and Gas Law that gave the DEP the right to promulgate such regulations in the first place no longer exists.

The result of the ruling is hard to predict.  The Court also said the DEP did not exceed its authority in the regulations when it allowed applicants and public resource agencies, including municipalities, to provide information that could assist the Agency in deciding whether or not to grant a permit.  A lot of this seems inherently contradictory.

On the plus side for the industry, the Court ruled that the expansion of the definition of “public resources” in the Act 78a Regulations to include “common areas of a school’s property” and “playgrounds” was unlawful as it was “unduly burdensome” on the applicants.  The Court noted that a McDonald’s playground or a school parking lot utilized as a playground would be covered by this definition.  These uses were not of the same class or nature as a scenic river or public park.

Finally, north and east of the Pennsylvania border New York State goes to the polls today for its primary election.  Two-term Governor Andrew Cuomo has run an uninspired campaign against challenger Cynthia Nixon.  Ms. Nixon, known most for her role in Sex and the City, has forced Cuomo even more to the left than before.  Specifically, Nixon proposes that New York adopt a law requiring it to obtain all of its energy through renewable sources by 2050.  In her platform, Ms. Nixon criticizes the Governor by saying “his plan still won’t fully halt all new fossil fuel infrastructure.”

Cuomo’s policies already have led to a halt in the pipeline infrastructure for New York and New England, as well as a stoppage of much power plant construction.  Events like today’s explosion in western Pennsylvania can only add to the pressure on natural gas proponents.  Unfortunately for New York, their governmental officials have been overly optimistic in describing the current science for renewable energy.  New York officials will shut down Indian Point Nuclear Power Plant by 2021.  Given Massachusetts’s sad experience in predicting how it will make up the energy shortfall from mothballed nuclear plants, expect New York’s energy situation to become dire quite soon.

With Massachusetts likely to import more natural gas from Russia this winter, New Jersey and Maryland officials limiting construction of offshore wind and solar farms and Pennsylvania natural gas pipelines exploding, the time is more critical than ever to have an honest conversation on energy.  It needs to be led not by Cynthia Nixon, Josh Fox or the executives at ETP but by people who recognize the pluses and minuses of all forms of energy generation, storage and transmission, and who are not afraid to ask the stupid questions.

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

2018 Aug New Hires - Facebook 1200x630 (1)

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.