Marcellus & Utica Shale Story Links: Fri, Sep 20, 2013

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:


Blue Racer in No Hurry for Petersburg Project
Youngstown Business Journal
Options on the land have been secured. A vast network of pipelines that stretches hundreds of miles through Ohio is in place. Energy companies prospecting in the northeastern tier of the Utica shale have started production. All these basic ingredients mix well in the hamlet of Petersburg, but whether it becomes the center of the region’s next major midstream and processing project may not be known for a year. “Petersburg strategically is a great location,” says Brent Breon, vice president of business development at Blue Racer Midstream LLC, a partnership between Dominion and Caiman Energy II that is developing a midstream system that stretches from West Virginia through eastern Ohio. “You have access to Tennessee’s pipeline system. You have access to Dominion’s pipeline transmission system,” he says, “and access to Dominion East Ohio.”

CNG and LNG from Ohio shale the topic at Great Lakes Truck Expo
Cleveland Plain Dealer
Natural gas as a fuel for trucks is a theme at this year’s Great Lakes Truck Expo happening today and Thursday at the Cleveland Convention Center. Thomas O’Brien, a managing director, CEO and president of Travel Centers of America LLC, gave the keynote address this morning. The Westlake-based company has a chain of 165 travel and refueling stations across the nation and earlier this year announced an agreement with Shell Oil Products, U.S. to provide liquefied natural gas, or LNG, at up to 100 of the facilities.

Youngstown debates a ban on fracking
Shale Reporter
In an office park just a few miles outside of town, a bright red sign reads “Local Jobs, Local Workers.” Roland “Butch” Taylor of Plumbers and Pipefitters Local 396 sits in a cramped office and talks about the heartache of helping folks find jobs in a rust-belt town where the steel industry dried up in the 1970s. “You really had to see the depths of what we went through,” he said recently, remembering times when he worried about possible suicides among union members. But since the shale industry came to town, that’s all changed, he said.

Local control is an issue as Utica Shale drilling ramps up
A new “anti-fracking” initiative has been put on this city’s municipal ballot for a November vote, as environmental activists attempt to block development of the Utica Shale play before production accelerates next year in eastern Ohio. Backers of the proposed “Community Bill of Rights” charter amendment here hope to capitalize on public reaction to the ongoing prosecution of a firm accused of dumping thousands of gallons of fracking wastewater into the city’s storm sewer last winter. State inspectors were tipped off about the dumping by an anonymous phone caller last January but only after repeated alleged violations.

Sierra Club sues ODNR over Youngstown dumping records
AP/Akron Beacon Journal
An environmental group seeking documents related to alleged illegal dumping of wastewater from oil and gas drilling into a northeast Ohio storm sewer is suing the state for access to the records. The Sierra Club filed its suit Monday in the Ohio Supreme Court. The group alleges the Ohio Department of Natural Resources has failed to produce public records it requested six months ago. The club’s Ohio chapter is seeking documents related to the department’s investigation of D & L Energy and Hardrock Excavating in Youngstown. The department revoked the firms’ permits in February amid a federal investigation into the dumping of wastewater from hydraulic racturing into a storm sewer that drains into the Mahoning River. A spokeswoman said the department does not comment on pending litigation.


Gas Industry Survey Contradicts Claims Of Widespread Drug Use
StateImpact Pennsylvania
Are a lot of people looking for work in the state’s drilling industry on drugs? According to a recent survey of gas companies, the answer is no. Governor Corbett made national news last spring when he suggested Pennsylvania employers are having a hard time finding workers who can pass a drug test. One of Corbett’s cabinet members brought the issue up again this week– specifically pointing to the state’s natural gas industry.

How This Marcellus Producer Is Coping With Low Regional Gas Prices
The Motley Fool
It’s safe to say that the Marcellus has exceeded most expectations about production growth. In the first half of this year, output from the prolific shale gas play increased 50% year over year, according to Bentek Energy, an energy market analytics company. Ironically, however, this supply growth has led to depressed regional prices that have proved a major challenge for the very same Marcellus producers that drove the surge in production in the first place. Let’s take a closer look at what Cabot Oil & Gas, one of the largest gas producers in the Marcellus, is doing to combat low regional gas prices.

Oil Trains Rumble Into Philly, Bringing Dakota Crude, Jobs And Safety Concerns
StateImpact Pennsylvania
Robert King remembers the very first time he saw an oil train. “It was April 14, 2013.” King, a 17-year-old Philadelphian, is a “railfan,” the name for members of a worldwide community of passionate, or some might say obsessive, train buffs. On that day, King and railfans from the Midwest to the East Coast were busily tracking the inaugural run of a brand new train: the CSX K040, an oil train more than one-mile long hauling raw crude from the Bakken Shale in North Dakota bound for South Philadelphia.

FERC OKs Tennessee Marcellus Expansion
NGI’s Shale Daily (paid or free trial subscription required)
FERC Thursday approved Tennessee Gas Pipeline’s application to increase the compression capacity along its 300 Line to meet the growing demand for interstate natural gas transportation service in the northeastern United States and Canada. The Rose Lake Expansion Project calls for the addition of 12,630 hp at the pipeline’s Compressor Station 315 near Wellsboro in Tioga County, PA; the addition of 3,661 hp for the expansion component of the project and the replacement of 9,000 hp at the Wyalusing Compressor Station 319 in Bradford County, PA; and the upgrade of an existing compressor and installation of other facilities at Tennessee’s Troy Compressor Station 317, also located in Bradford County.

Hung up on The Worstell Impoundment
Energy in Depth
Impoundments used in natural gas development have been a highly contested issue in Cecil Township over the last few months. Recently, at a Cecil Township supervisors meeting, impoundments were again brought up, mostly regarding the Worstell Impoundment located in the Township. Special time was set aside prior to this meeting to go over what the Township supervisors discussed during a meeting with the Pennsylvania Department of Environmental Protection (DEP) regarding the impoundment. The supervisors then took comment from the public to listen to the residents’ concerns and decide a course of action.

This Again: Activist-Led Tour Results in Misinformation and Trespassing
Energy in Depth
I recently followed around yet another tour of Susquehanna County, Pennsylvania given by none other than Vera Scroggins and Craig Stevens. A couple of New York Senators attended, including Senator Avella, who seemed particularly averse to hearing the truth about natural gas development. The group of about 20 came from New York City to see what natural gas looks like in rural Pennsylvania. One hopes they noticed the booming economy and the still rolling, lush hills of Pennsylvania – but my impression was they were seeking only gloom and doom to report back to constituents in justification of their already staked out positions. They certainly weren’t pleased to have a different viewpoint along to offer a positive voice on the subject, that much is for sure.


The Media And The UT/EDF Methane Study: Job Well Done
On a lark, we pulled together a report detailing how various media outlets and activist blogs covered Monday’s release of a study conducted at the University of Texas titled “Measurements of Methane Emissions at Natural Gas Production Sites in the United States.” The results of our exercise are simultaneously telling, mostly unsurprising and amusing. First, a brief summary of the facts around the study and its findings, taken from the EDF website, are in order…

Univ. of Michigan Study Confirms Safety of Hydraulic Fracturing
Energy in Depth
The University of Michigan has released the preliminary findings of its long-awaited hydraulic fracturing study, and the conclusions are likely to upset some of the most fervent anti-fracking activists in our state. Much of what is presented merely reaffirms what anyone who has been paying attention has already known: that the hydraulic fracturing process is safe, can co-exist with a healthy environment, is beneficial to our economy and – this point is worth stressing – does not contaminate groundwater. Below is a summary of key findings from each section of the U-M report…

Range Resources Corp.: It’s The Hottest Sector Of 2013 — And I’m Staying Away
Insider Monkey
It’s been all the rage the past few years. And with good reason… This new technology has literally reshaped the world energy market and put America back on the oil and natural gas map. Of course, I am talking about the shale revolution. Many investors seem to be clamoring to own a piece of the next big shale play — at higher and higher prices. But while investors are champing at the bit to get their hands on the next shale field, I am selling most of my holdings in this space. In fact, I’ve sold five oil and gas companies from the portfolio in my Scarcity & Real Wealth newsletter in the past few weeks so I can focus my money elsewhere. Let me explain why…

Catalysts For Growth Make Devon Energy Attractive
Seeking Alpha
Devon Energy Corporation is a US based oil and natural gas E&P company. It operates mostly in the US and Canada, so it is a low risk oil and gas company. It has proved reserves of approximately 3.0B Boe. It had Q2 2013 production of 698 Mboe/d. The production mix was 24% oil, 18% NGLs, and 58% natural gas. It has a significant midstream business that is expected to have a FY2013 operating profit of about $475 million. The chart below shows its major oil and liquids holdings.

Fracked Shale Could Sequester Carbon Dioxide
Chemical & Engineering News
The same wells that energy companies drill to extract natural gas from shale formations could become repositories to store large quantities of carbon dioxide. A new computer model suggests that wells in the Marcellus shale, a 600-sq-mile formation in the northeastern U.S. that is a hotbed for gas extraction, could store half the CO2 emitted by the country’s power plants from now until 2030. Although switching from coal-fired power plants to ones that burn shale gas could slow the growth of CO2 emissions, the overall demand for energy is increasing, so total carbon emissions will continue to climb, says Andres F. Clarens, an environmental engineer at the University of Virginia. Some researchers have proposed mitigating this trend by capturing CO2 at power plants and injecting it into deep saline aquifers, a process called geologic sequestration. But Clarens sees potential to sequester CO2 in depleted shale-gas wells.

Liquefied Natural Profits: The United States and the Remaking of the Global Energy Economy
Foreign Affairs
As the production of unconventional oil and gas in the United States rises — and as the United States increasingly exports that energy — the world’s economic map will be forever changed. The power of today’s petro states, such as Iran and Russia, will continue to wane. More and more, the United States will be the stable, competitive source of choice for gasoline, diesel, natural gas liquids, and, soon, liquefied natural gas (LNG). In the past two years, the United States has licensed four terminals for exporting LNG, mostly to countries with which it has no free trade agreement, such as Japan and various Latin American and European countries. By 2020, the United States could export as much as 61.7 million tons per year of LNG. That would make the United States the second-largest LNG exporter in the world, next to Qatar. Other deals in the licensing queue are likely to push the total closer to 80 million tons per year, compared to Qatar’s current total of 77.

Shale gas boom gives U.S. manufacturers an edge—Keeping the edge, Part 2
Plastics Today
As discussed in Part 1, the U.S. shale gas boom has made natural gas plentiful and cheap, giving U.S. manufacturers a competitive edge over rival manufacturing countries where the price of natural gas and electricity is several times higher. The U.S. edge has some staying power. Consider China, where the challenges of producing shale gas are significant. In less government-supportive locations like Europe, it’s even more challenging.) Energy companies and petrochemicals manufacturers from Exxon-Mobil to Dow are building enormous facilities to process natural gas to produce ethane and propane, then ethylene and propylene, the most important raw materials in the petrochemicals industry.
The advantage to U.S. manufacturers is largely dependent on natural gas staying cheap and plentiful. From a supply perspective, it’s easy to think natural gas prices have nowhere to go but sideways.

U.S. Shipbuilding Is Highest in Almost 20 Years on Shale Energy
U.S. shipyards are the busiest in almost two decades as surging domestic energy production increases cargoes for the merchant fleet, according to the Department of Transportation. Fifteen tanker and container ships are on order or under construction in the U.S., with options for “many more,” Paul Jaenichen, acting maritime administrator at the department, said at the TradeWinds Jones Act Shipping Forum in New York. That’s the biggest boom in almost 20 years, he said. The U.S. is the closest in decades to achieving energy independence because of oil and gas extracted from shale rocks, Jaenichen said. The Jones Act requires cargoes being shipped between U.S. ports to be carried on domestically built vessels with American crews. The maritime industry contributes $46 billion to the country’s economy, according to Jaenichen.

Will the U.S. Squander Its Energy Bounty?
Almost every aspect of the U.S. energy landscape is changing drastically — except government policy. Consider: The global price of oil has soared to more than $100 today from $30 a barrel in 2004. As a result, the U.S.’s annual bill for oil imports has risen to $365 billion, even though domestic oil production has jumped in the past two years to 7.5 million barrels a day from 5.5 million barrels. Meanwhile, the price of natural gas has plummeted. The tight shale gas boom in the U.S. has caused the domestic price of gas to drop to less than $4 per million cubic feet today from $10 per million cubic feet in 2010. By replacing a diesel or gasoline engine with one that accommodates compressed gas, Americans can drive for the equivalent of 50 cents a gallon.


What climate change? Fewer people than EVER believe the world is really warming up
UK Daily Express
A report from the UK Energy Research Centre also shows the number of those who resolutely do not believe in climate change has more than quadrupled since 2005. The Government funded report shows 19 per cent of people are climate change disbelievers – up from just four per cent in 2005 – while nine per cent did not know. The report comes as climate change scientists working on a landmark UN report on climate change are struggling to explain why global warming appears to have slowed down in the past 15 years even though greenhouse gas emissions keep rising.

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