American Oil and Gas Reporter - June 2019 - 124

ConventionSection: Virginia Oil & Gas Association
gain from the projects, which are intended
to carry shale gas from West Virginia to
Mid-Atlantic markets already served by
Virginia gas.
As to the status of those two projects,
Landon says as of mid-May, all construction
had ceased on the Atlantic Coast Pipeline
as a result of several adverse court rulings.
Most recently, in December, the U.S. Court
of Appeals for the 4th Circuit overturned
permits the U.S. Forest Service had granted
project developer, Dominion Energy, to
cross two national forests.
In February, Dominion issued a statement that said it hoped to recommence
at least partial construction by the third
quarter this year, although press reports
speculate that full service, which initially
was expected this year, will not begin
until 2021 while pipeline costs have ballooned from $4.5 billion-$5.0 billion to
$7.0 billion-$7.5 billion.
Landon says Mountain Valley is laying
pipe and hopes to begin flowing by yearend, although it, too, continues to face
challenges to its permits.
State Regulation
VOGA also is keeping its eye on
several emerging state regulatory issues,
Landon reports.
As part of a transition to a renewable
economy, he says, Governor Northam
has mandated the Virginia Department
of Environmental Quality investigate
methane leakage from natural gas infrastructure and from landfills.
"They are starting with natural gas infrastructure," Landon says. "Fortunately,
VOGA had a few members appointed to
that committee, so we do have a seat at
the table."
As of mid-May, he says, the group
had held only one organizational meeting,
although proposed legislation is the anticipated end result.
On another front, the DEQ has commissioned a study on environmental justice,
Landon reveals. "There was some legislation to establish a state-level environmental
justice council to advise the governor.
That failed, so now DEQ is investigating
it, possibly as a result of the interest the
legislature has shown as well as recent
criticism of the permitting process.
"Absolutely everybody wants everyone
to have a voice in the process," he continues. "But again, it does have the potential to place more burdens on the permitting process for all industries, so we
are keeping an eye on it."

And the Virginia Department of Mines,
Minerals and Energy has begun a periodic
recodification of Title 45.1 of the Virginia
Code, under which the Division of Gas
& Oil falls. It is a two-year process that
Landon says VOGA doesn't expect to
result in any major rule changes, but
bears watching.
"VOGA will be involved in that, but
so will the environmental groups, so we
have to keep our eyes open," he attests.
Federal Déjà Vu
At the federal level, Landon admits to
a slight case of déjà vu. Ahead of its
2018 annual convention, he recalls, VOGA
was hoping for some relief from the Obama administration's Clean Air Act Subpart
OOOOa methane emission requirements
for new and modified oil and gas sources,
and was watching as the Pipeline and
Hazardous Materials Safety Administration
reworked its onshore gas gathering rules.
This year, he says, VOGA is still hoping
for relief from the methane rules and waiting
for new pipeline safety requirements.
As to the former, he notes, the latest
development came last September when
the Environmental Protection Agency proposed amendments to the 2016 Obamaera rules. Those amendments proposed
lighter-handed regulation of low-volume
wells-defined as wells producing less than
15 barrels of oil equivalent a day averaged
over the first 30 days of production-but
not the exemption VOGA had hoped for
(AOGR, October 2018, pg. 26). Additionally, the proposed amendments failed to
include any way to reclassify a well as
low-volume once production dropped
below the 15 boe/d threshold.
Southwest Virginia is stripper well
country. "We don't have the volumes on
a well-by-well basis these regulations
were meant to address, but we bear the
burden," Landon complains.
Adding to the state's problems, he
continues, is that most completions are
performed with nitrogen, which can't be
flared because it doesn't burn. Under the
existing rules, Landon says, additional
costs are added for minimal benefit.
PHMSA, meanwhile, issued its initial
notice of proposed rule making on rural
gathering in August 2011. The intent was
to ensure safety of large, high-pressure
gathering lines necessary in new shale developments, Landon acknowledges. But
it threatens to encompass the low-pressure
pipes generally used in Virginia's oil patch.
He says the focus is on the American

124 THE AMERICAN OIL & GAS REPORTER

Petroleum Institute's Recommended Practices 80 and 1182. RP 80 defines the end
of production, which is exempt from
PHMSA regulation, and the start of gathering. RP 1182 defines large-diameter
rural gathering subject to regulation.
PHMSA has expressed concern that
RP 80 lacks clarity and is not applied
consistently, especially with respect to
designating incidental gathering lines.
In April, Landon says, the industry
Gas Policy Advisory Committee sent to
its members for an up-or-down vote a
proposal to request PHMSA continue using RP 80, contingent on industry demonstrating progress in addressing the agency's
concerns.
On RP 1182, he says, the GPAC proposal
is to subject any pipelines 12.75 inches in
diameter or greater in Class 1 areas (i.e.,
where 10 or fewer buildings intended for
human occupancy are located in the vicinity
of the pipeline) to PHMSA safety regulations.
"Initially, that would apply to new lines
only, then existing lines would be phased
in over a couple years," Landon clarifies.
"Looking at production in Virginia,"
he assesses, "hopefully the overall impact
will be minimal. Fortunately, we generally
do work in rural areas and most of our
lines are going to be smaller diameter.
But the line size really isn't as relevant
as the pressure. We have a lot of larger
diameter pipes that may have very low
pressure, but are going to be caught under
those regulations."
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Superior Energy Builds
Baltimore Propane Site
BALTIMORE-Superior Energy Systems has completed building a propane
terminal for Tri Gas & Oil, which will
operate it as an affiliate, Mid-Atlantic
Rail Services. Tri Gas & Oil offers energy
solutions to residential and commercial
customers in Maryland, Delaware, Virginia, New Jersey and Pennsylvania.
The new terminal, served by Norfolk
Southern and CSX Railroads, initially
will provide 120,000 gallons of propane
storage, along with a four-position rail
rack and two truck-loading racks, Superior
Energy describes. The facility also features
double-acting compressors for recovering
vapor from rail cars and turbine pumps
with loading rates of 550 gallons a minute.
Located slightly north of Baltimore
Harbor off Highway 85, the terminal allows trucks access to bulk propane product,
Superior Energy points out.
❒

American Oil and Gas Reporter - June 2019

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