Stonewall (so-called) "Gathering" 36 inch Pipeline

WV Property Owners are Standing Their Ground

From an Article by Michael Barrick, Appalachian Chronicle, July 14, 2015

Local farmers battle with companies building Stonewall Gas Gathering Pipeline over crop damage; WV DEP issues Notice of Violation to company for violations nearby, continues investigation of incident impacting farm

Photo: Stonewall Gathering Pipeline construction as seen from a hilltop in Doddridge County, W.Va.

Big Isaac, WV – Justin McClain is a farmer. At 35, it is all he has ever done in this small Doddridge County community since before he was a teenager. It is also all he plans to ever do. However, recent damage he says was caused to his crops by the company building the Stonewall Gas Gathering pipeline has him questioning if he will be able to keep his farm going. It also has him and his father, Robert, concerned about the farm’s future if the larger and longer Mountain Valley Pipeline is approved, and has left them both with a bitter taste about the industry as they have tried to get the companies building the 55-mile Stonewall Pipeline Project to compensate them for the loss of Justin’s spring hay crop.

To date, the companies have not admitted responsibility for the damages to his crops. Indeed, they’ve insisted that the McClain’s sign a Release and Waiver that states that the companies are not responsible. In fact, the McClains were given a different version of the Release and Waiver than an attorney in Charleston received – and approved – on their behalf. The two men have also had several conversations on their property with several different corporate representatives, the last ones being told by the elder McClain to leave. “They called Justin a liar. That was enough for me. I told those boys to leave, that they were trespassing.” Justin added, “They took that paper, put it in front of our faces and told us we had to sign it. It was like they were trying to jam it down our throats.”

Meanwhile, Jamie Tallman, an environmental inspector with the West Virginia Department of Environmental Protection (WVDEP) has acknowledged he has inspected the damage done to the McClain’s crops and the area upstream where the pipeline construction is occurring. While Tallman said that no Notice of Violation (NOV) has yet been issued to the company building the pipeline – Stonewall Gas Gathering, LLC (SGG) – he added, “We’re still evaluating it.” (However, a NOV has been issued to SGG on the project. Details are below). He spoke with the McClains on July 7. If a NOV is to be issued, it would generally be done within about two business weeks of his investigation. Tallman emphasized, though, that the McClains were not the only people who had contacted WVDEP. “This particular complaint came from many different directions,” he said.

The dispute between the McClains and SGG began after a heavy rain on the evening of June 20th. Just about 2,000 feet upstream from the McClain farm, Precision Pipeline, a subcontractor for SGG, was preparing to lay a 36” pipeline on a steep hillside directly above Meathouse Fork, near Isaac Creek. Meathouse Fork is a tributary of Middle Island Creek, the longest creek in the United States. It empties into the Ohio River near St. Mary’s, W.Va., after meandering for about 77 miles north and then southwest from Doddridge County.

Photo: Meathouse Fork on June 22, 2015 — Note the heavy sediment in the stream.

Following the rain, a hayfield that would produce approximately 500 bales of hay for Justin’s cattle was flooded. When the waters receded, the McClains found the hay to be unusable. “It’s full of mud,” said Justin. “You can’t use it like that. It’s bad for the cows. It hurts them when they try to eat it, and it is bad for their intestines. It can kill them.” He continued, “It is also bad for the equipment. It clogs it up. And, if you’re the one harvesting it, you get covered with dust. So it is unusable.”

Equally frustrating to the McClains is the treatment they’ve received from the employees of the various companies involved in the project. Robert recalled, “We went up a week before this happened. We talked to a guy from Wisconsin and told him we were concerned about the threat to the valley from runoff.” Robert said the man told him, “If it comes down that valley, if anything happens, we’ll stand good for it. Now go on and don’t worry about it.”

Then the rains came on June 20th, damaging the hay field. Justin explained, “There is just no way to get that mud off that hay. Two or three of them came down. Said they understood and would replace the hay.”

Yet, they’re still waiting. Robert said that after the first visits by company officials, they were being told a different story. “They called back and said they wouldn’t buy the hay. It was an act of God, that it could happen anywhere. He said they had rain gauges all along the line and that it had rained three-and-a-half inches in 15 minutes. I told him we were out there and it could not possibly have rained that much in that amount of time.” It was then, he said, that he began to not trust them. Robert, who has lived on the land since the late 1940s, added, “That would have been the most rain we have ever seen in this valley.”

Conflicting Release and Waiver documents
The most recent exchange, after several visits over three weeks by various company officials, included two versions of the same Release and Waiver. The attorney in Charleston that the McClains contacted received a faxed version with a cover sheet without a letterhead. The attorney told the McClains they could sign it, as it was more to their liking than an earlier version because it was limited to the 2015 June hay crop. However, it also reads, “It is understood and agreed by the Owner (the McClains) and SGG that this settlement is a compromise of disputed claims, and payment by SGG is not an admission of liability, and that SGG expressly denies any liability.” The previous version required the McClains to abandon all rights to future claims, denied them the right to talk to any third parties about the matter, and threatened them with an injunction if they violated any of those stipulations.

“I wasn’t going to sign that,” said Robert. “I told them, this is a free country. I’ll talk to who I want. If I want to tell my neighbors up and down the valley, I will.”

That is when the company presented the second document. However, while the attorney was receiving his copy, company representatives presented the McClains with a different version. Justin said, “They kept calling over here wanting to know if the attorney had seen it yet. Once we did get it, they sent someone over right away. But that was a different document than the one they sent the attorney. I asked them what they were trying to pull. The man told me it was a mistake, that he had grabbed the wrong document at the office.” It still contained the provisions that the McClains could make no future claims against the company, and required them to not talk to third parties.

The pipeline construction passes within 100 feet of this home. None of the three documents contained company letterhead.

Justin recalled, “I told them I’d be a fool to sign that. I told them I just couldn’t trust them. That’s when they called me a liar and put that paper right in front of us and told us we had to sign it. They were following dad around the property demanding that he sign it.” He continued, “I told them I didn’t want money. I just wanted them to get some hay and deliver it. I don’t know why they won’t make it right. It would be so simple.”

Robert added, “That’s the kind of people we’re dealing with. They do not care about the land or water. I don’t think anyone in West Virginia can do anything because they own the politicians. Who’s going to go behind them to fix their destruction?”

Justin added, “All they care about is money. They don’t care about people or land.” Yet, Justin concluded, “Dad has always told me, ‘Stand your ground.’ That’s what we’re going to do.” Robert simply nodded his head in agreement.

Notice of Violation
While the investigation by the WVDEP continues regarding the complaints about the event that impacted the McClain’s farm, SGG was issued a Notice of Violation by WVDEP on June 16th for violations about two miles north of that community. The streams impacted there are Buffalo Calf Fork and Buckeye Creek. Buckeye Creek joins with Meathouse Fork to form Middle Island Creek, so both are tributaries of the nation’s longest creek, with a watershed of more than 550 square miles.

According to Tallman’s report, sediment and erosion control requirements for stream crossings, perimeter controls, and access roads were found to be unsatisfactory. He wrote, “The stream crossing and perimeter controls in Buffalo Calf Fork were observed to be in noncompliance. …” He continued, “Access roads, or stabilized construction entrances to project areas, were observed to lack the required seventy (70) feet of stone as required by the project and E&S plans.”

Water quality was also impacted according to the report. “Sediment associated with pipeline construction was observed to have left the project site through a compromised section of super silt fence and entered into Buffalo Calf Fork, resulting in Conditions Not Allowable in State Waters.”

Tallman included five warnings for SGG at the end of his report:
1. It is to operate systems and facilities “ … to achieve compliance with the permit.”
2. Entrance signs are to be posted at the project’s site entrance.
3. “Each side shall have a stone access entrance and exit and parking areas to reduce the tracking of sediment onto public or private roads.”
4. “No sediment-laden water shall be allowed to leave the site without going through an appropriate best management practice.”
5. Ensure compliance with the project’s General Permit, Stormwater Pollution Prevention Plan, and Groundwater Protection Plan.

The NOV number is W-NW-JGT-061615-001. Attempts to reach SGG officials for comment were unsuccessful.

About the Stonewall Pipeline Project
Stonewall Gas Gathering, LLC was incorporated in Delaware on June 4, 2014. According to a spokesperson with the Delaware Secretary of State’s office, principals of companies need not be listed. SGG is a subsidiary of Momentum (officially M3Midstream). Momentum is based in Texas and Colorado. The Stonewall Gathering line is part of Momentum’s Appalachian Gathering System (AGS).

The Stonewall Gathering pipeline will connect to the AGS in Harrison County and terminate in Braxton County, where it will connect to the Columbia pipeline.

The company laying the pipeline is Wisconsin-based Precision Pipeline, LLC. Calls to Precision regarding the McClain’s concerns were not returned, but according to the company’s website, “The required qualifications of today’s pipeline contractor are much different. Today’s contractor must not only be cost efficient, but must do so while making a significant priority of the project’s safety needs and the needs of the landowner and the environment. Because of these fundamental changes within the industry, contractors have changed the way they operate by re-training their management, estimators, superintendents, and general workforce. Over the past 20 years, existing contractors have been forced to make this transition to remain on the bid lists of their prospective clients.

“Precision Pipeline is the first pipeline contractor uniquely designed to successfully and efficiently work within today’s more stringent pipeline construction parameters. When considering pipeline contractors to bid on your next pipeline project, remember Precision Pipeline. Our business is built around your needs and the needs of today’s pipeline client. We have the experience and expertise to safely complete any project while maintaining total environmental compliance with minimal impact to landowners. Precision Pipeline is not a new contractor; we are the next generation pipeline contractor.”

SGG secured a loan of $350 million to fund operations, including the Stonewall Gathering pipeline. The loan is due in 2022. Moody’s Investors Service reports, about the pipeline project, “The proceeds of the term loan will be used to fund a portion of the $460 million construction cost. While the term loan is non-recourse, Stonewall benefits from long term, minimum volume commitments from Antero Resources Corporation (Antero, Ba3 stable) and Mountaineer Keystone (unrated) for roughly 83% of the start-up capacity of 1.4 Bcf per day. Stuart Miller, Moody’s Vice President, said, “Stonewall’s (rating) reflects the project risks associated with constructing a gathering and transportation system on a non-turn-key basis, its small scale and weak business profile, the counterparty risk of its major customers, and the lack of revenue and cash flow until the first quarter of 2016.”

WVDEP Oversight
Unlike the proposed Atlantic Coast and Mountain Valley interstate pipelines, the Stonewall Gathering pipeline is not subject to federal oversight because it is entirely within the state’s boundaries. According to Tallman with WVDEP, intrastate pipelines were exempted from federal oversite by Congress in 2005. In response, said Kelley Gillenwater, the WVDEP communications director, the WVDEP recommended to the legislature that the agency be allowed some oversight. The result was legislation that took effect in June 2013 that does allow the WVDEP some oversight of projects, but she added, “It is limited to stormwater construction permits.”

According to Gillenwater, WVDEP has oversight of the project because, “This would be a non-residential construction project that disturbs more than three acres, which requires a Construction Stormwater Permit and a Site Registration Application.” She noted that the application bundles the Stormwater Pollution Prevention Plan and Groundwater Protection Plan.

The permit for the plan was issued on January 29, 2015. The permit number is WVR310402 under General Permit number WV0116815.

Asked if notices were issued for public comment or if comments were made, she answered, “Site Registration Applications require public comment if they exceed 100 acres. As this project does, it should have gone to public comment.” She said that the legal add was advertised in the West Union Herald Record from December 16, 2014 through January 15, 2015. She said that no comments were received.

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Urgent Note from Greenbrier River Watershed Association — Comment Period for Dominion Atlantic Coast Pipeline National Forest Alternative 5 Extended to July 20. Comment by email to address comments-eastern-monongahela-marlinton@fs.fed.us or fax to 304-637-0582. We believe Alternative 5 is no better than the other alternatives. It will cross the mainstem of the Greenbrier River below Cass and Deer Creek and affect the Elk River trout fishery, as well as Sharp’s cave. Plus, there have been no public meetings concerning this alternative specifically. Do you agree that this is wrong!

See also: www.FrackCheckWV.net

Many Legal Questions Arise!

Commentary by S. Tom Bond, Resident Farmer, Lewis County, WV (Part 1 of 3).

The people who conduct Shale Drilling have talked up advantages of their enterprise, but never mention costs to the land owners.

Look at property damage. A shale well or compressor next door cuts property values, sometimes to a little as one-third or even one-tenth. Why? No one wants to live near an industrial establishment with bright lights, noise, fumes and dust; nor do they want to live where nature is replaced by ugly pipes and paved lots, where the woods is replaced with scraggly grass, and the roads broken down with large trucks and racing pickups.

No one wants reduction of income potential by conversion of cropland to acreage graded to subsoil and paved with 12 to 18 inches of rock, connected with rights of way suitable for heavy trucks. No one wants his or her woodlot converted to pipeline rights of way. No one wants domestic animals sickened and killed, nor the wildlife habitat affected.

There are many ways property owners are abused by shale drilling. You can’t collect from insurance if the cause may be drilling waste. And in many areas farms and homes are not only reduced in value by a substantial amount, but a prospective borrower won’t be able to obtain a loan to buy if a drilling establishment is on or adjacent to the property. You really can’t blame the bank, can you? Or, the insurance company? Why should they pay for damage done as a by-product of drilling and removing natural gas or oil?

How can something happen so inconsistent with the spirit of free enterprise, where the state is supposed to protect the property interests of its hard working citizens? How can common notions of morality be so completely ignored in a free country? The answer is simple. It is the sophisticated way the oil and gas industry has built a legal structure so that its control has grown like compound interest. This began more than 120 years ago with the earliest leasing.

The early executives took not only what they needed to do well at that time, but tied up the resources forever. Instead of leasing just the “5th Sand,” their target, for example, they leased all oil and gas, whether they could use it then or not. This tied a succession of the lessors heirs to the corporation, even beyond the time they had no further attachment to other uses for the land.

The next step was a quantum leap: “separation of the oil and gas.” It became normal for persons moving on from the farm to keep the “oil and gas rights.” The tax was nominal to keep control of this asset, and the “royalty” was taxed the same as if the person still lived on the land. This is “manna from heaven” for these heirs of the original lessors. They don’t know the current surface owners, so why should they care about what happens to the land? In effect, this was an endorsement of the practice by the legislature, no doubt well understood by the oil and gas industry.

Where this has happened in the past, it is a headache for the lessee company to keep track of all the divided and subdivided interests. I have a minuscule interest in a lease given by my grandfather. He had a lot of kids and they had a lot of kids and they had a lot of kids. Royalty was evenly divided in each family, generation after generation. At this point the less kids one generation had the larger the portion of the royalty its descendants have. About one-third of the lines died out or are no longer traceable.

Guess who gets to use the royalty until a claimant shows up? Many of these interests are sold at the courthouse for unpaid taxes, with the result there is a class of speculator at tax sales gobbling up tiny fractions of any oil and gas rights available.

And when the oil and gas is separated, with no current landowner involved, guess how hard it is to get changes made to the lease. Either the promise of an increase in royalty, or the threat of plugging a well and stopping the royalty can produce almost any lease modification a company wants. It takes a highly principled heir of the original lessor, now insulated from the other uses of the land or personalities on it, to consider anything but his or her personal income. That much is history.

Next: Who owns the land?  See also the WV Surface Owners Rights Organization.