Last Friday at a Columbiana (OH) Area Chamber of Commerce event, Harry Schurr, general manager of Utica Shale operations for CONSOL Energy, spilled the beans on which Ohio counties he believes will see drilling for oil and gas in the near- and medium-term. He outlines where oil drilling is not going to take off (not enough pressure to pump it out), and where gas drilling will not take off until gas prices go higher. But like the story of Goldilocks, there are a few Ohio counties where the conditions (i.e. large volumes of condensate) are “just right” for drillers…
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No one pretends there are not negatives when it comes to oil and gas drilling, least of all MDN. There are some drawbacks–but the negatives must be weighed against the positives. Local business and government leaders in Carroll County, OH (the county with the most Utica Shale wells drilled, so far), had a frank discussion of the both the good and the bad in a recent meeting with State Rep. Andy Thompson, R-Marietta.
Highlights of the good and the bad when it comes to shale drilling:
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With new wet gas pipelines being built from the Marcellus/Utica to the Gulf Coast, and with new cracker plants being built along the Gulf Coast, will any ethane cracker plants ever get built in the Marcellus/Utica? It’s a serious question that more and more people are asking.
Aside from West Virginia Secretary of Commerce Keith Burdette’s eternal optimism that WV will get a commitment for an ethane cracker plant any day now (see WV “Very Much in the Game” to Get a Cracker Plant), and aside from Pennsylvania Gov. Tom Corbett’s changing timeline on when Shell will make a final final final final final decision on building a cracker in Pennsylvania, MDN made the following observation more than a month ago:
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It’s official. Since last year we’ve known about and have reported on plans by Williams and Cabot Oil & Gas to build a new Marcellus Shale pipeline from Susquehanna County, PA to Schoharie County, NY–called the Constitution Pipeline (see New Marcellus Constitution Pipeline Announces “Final” Route). On Friday, Williams filed the official application for the new pipeline with the Federal Energy Regulatory Commission. Original plans called for the FERC filing to happen in “spring” of this year, with construction set to begin in April 2014 and the pipeline coming online in March 2015. According to the latest press release, the in-service date is still on track.
In addition to three original investors, the Constitution Pipeline picked up a fourth investor just a few weeks ago (see New Partner Invests in Marcellus Shale Constitution Pipeline). Perhaps that’s why a “spring” filing became an “early summer” filing? The announcement from Williams last Friday:
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CONSOL Energy has a contract and has actively been drilling Marcellus Shale wells (37 so far) near Beaver Run Reservoir in Westmoreland County, PA. The reservoir provides water to some 120,000 customers in the region. Just to keep an eye on things and to be sure none of the drilling has led to contamination of the reservoir’s water, the Municipal Authority of Westmoreland County contracts with Indiana University of Pennsylvania (IUP) to conduct quarterly water tests. Students both collect and analyze the data.
Two years ago the Municipal Authority paid IUP $55,000 for the work. Last year, $75,000. This year? The price is going up to $100,000. Built in to this year’s higher price is a “third party” review of the water quality…
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A Limerick update: There once was a man from… er no, that’s not it! This Limerick update is about a pair of nuclear reactors used for generating electricity–in Limerick, PA. Apparently Marcellus Shale gas is so plentiful and cheap, it’s not worth the nuclear plant’s operator, Exelon Nuclear, to ramp up the two reactors to produce more electricity as originally planned. That is, Marcellus Shale gas is not only having an effect on the coal power industry, it’s now affecting the nuclear industry as well…
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Three cheers for former PA Sec. of the Department of Environmental Protection Michael Krancer who, talking on a recent radio program, said the Obama administration’s desire (and plan) to regulate fracking at the federal level is unnecessary and the “feds should back off.” He said the individual states already do a great job and the feds have no business horning in.
We sure do miss having the mince-no-words Krancer as Secretary at the DEP…
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According to a speech delivered by PA Gov. Tom Corbett at the Franklin Institute on Friday, foreign businesses in both South America and Germany are very interested in cheap, abundant, clean natural gas being produced by the Marcellus Shale in Pennsylvania. Of primary interest to them: Where’s PA headed with its shale gas program?
Of course, Corbett’s speech also attracted the obligatory small group of anti-fossil fuel nutters…
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Below are upcoming events for this week and next.
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The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Three town board members in the Town of Sidney (Delaware County), NY should be concerned–very concerned. They voted February 13th to enact a one-year moratorium against shale drilling and fracking. Two other board members voted against the moratorium, so it passed. Now, all residents of the Town of Sidney will have to shuck out more money in taxes to defend that vote–on Wednesday they were sued by a group of local landowners whose property rights have been violated by the ban.
The worrisome part for Sidney is who is doing the suing on behalf of the landowers–Hinman, Howard & Kattell (HHK)–the same law firm that successfully sued Binghamton over their moratorium. Binghamton’s moratorium was found illegal and tossed last year (see NY Judge Throws Out Binghamton Fracking Moratorium). Below is a summary of the lawsuit against Sidney, as provided to MDN by HHK:
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Although New York Gov. Andrew Cuomo has dithered for more than a year on whether or not to allow fracking–and continues his equivocation–there is a much more important drama unfolding that will ultimately, in our opinion, determine whether or not New York will ever see meaningful shale drilling. The more important issue is now in the courts. Specifically, it revolves around whether or not New York’s highest court, the Court of Appeals, will hear a pair of cases from towns that have banned drilling.
A few weeks ago we told you about the appeals from a landowner near Cooperstown (Middlefield) and from Norse Energy (Dryden) asking the Court of Appeals to hear the case and overturn the town bans. The Town of Dryden has now sent their own request to the Court of Appeals–asking them to not consider the case…
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A little over a month ago MDN told you the rumor that Antero Resources, a private drilling company headquartered in Denver, CO with major drilling operations in the Marcellus Shale (311,000 acres) and the Utica Shale (92,000 acres) would go public this year (see Rumor Has It: Antero Resources Will Go Public This Year). Looks like the rumor was right.
Yesterday, Antero filed paperwork with the Securities & Exchange Commission to float an initial public offering (IPO) sometime this year. Antero’s announcement (see below) does not list the number of shares nor the price they hope to get, although Reuters is reporting the company hopes to raise up to $1 billion with the IPO…
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This is the second year that Pennsylvania, under its new Act 13 law, has collected and will disperse an impact fee. In 2012 (based on 2011 drilling activity), the state collected and dispersed $204 million (see List of PA Impact Fee Disbursements by County/Town). This year, in 2013, the state has collected and will soon disperse $202 million based on 2012 drilling activity. (See the list of drillers and what they paid below, along with the list of municipalities and what they will receive, also embedded below.)
While the politicians and various organizations slap themselves on the back at how wonderful this is, we will remind you that 40% of the “fee” collected is a tax, not a fee–because it goes to municipalities that have zero drilling and thus zero impacts from drilling (it’s supposed to be an “impact” fee!). Why do they get money? It’s the sleazy political price to be paid for passing the Act 13 law. Payola. Shake down. Call it what you will. Example: Philadelphia gets $1.29 million of the $202 million collected this year for doing precisely nothing except putting their hands out–they get more than most counties with drilling. It’s the same for suburbia counties around Philly: Bucks – $524,925; Chester – $421,961; Delaware – $468,518; Montgomery – $673,442.
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An interesting article in yesterday’s Wheeling News-Register (below) takes a look at rig counts in the Marcellus/Utica region, noting the big increase in rigs drilling in Ohio while the number of rigs in West Virginia has remained the same or gone down slightly, and the number of rigs in Pennsylvania has decreased rather dramatically. The article also gives us a look at how much money, on average, Chesapeake Energy makes per day per well in both dry and wet gas areas. Very useful information.
MDN has inserted a Baker Huges rig count chart at the bottom showing the number of rotary drilling rigs by state (PA, OH, WV) for the past 12 months (taken from the Marcellus and Utica Shale Databook):
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We guess we’ve always known that country music superstar Willie Nelson tilts to the liberal spectrum when it comes to politics (but dang, we like his music!). One of the things Willie has done over the years, to his credit, is promote family farms. He’s raised a boatload of money from his “Farm Aid” concerts to benefit family farms. Unfortunately, Willie has allowed his liberal buddies to convince him that fracking is bad, and now that misinformed philosophy has sadly co-opted the Farm Aid events.
Willie is coming to upstate New York in September for another Farm Aid concert. His message? Buy locally grown/produced food, and ban shale drilling. We recommend you pass by supporting Willie, his music, and Farm Aid events…
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