Marcellus & Utica Shale Story Links: Mon, Dec 16, 2013

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


Natural gas bleeds into gubernatorial campaign
Baltimore Sun
The controversy over exporting liquefied natural gas via the Chesapeake Bay has become an issue in the race for Maryland’s State House, at least among the Democratic candidates for governor. Saying the environmental costs are too high, Montgomery County Del. Heather Mizeur announced Friday that she opposes a bid by Dominion, a Virginia-based energy company, to export LNG through a terminal it owns at Cove Point in Calvert County. Dominion has proposed spending $3.8 billion to convert the terminal from a rarely used import station to one where natural gas piped in could be liquefied and loaded on huge tankers for shipping to customers in Asia and elsewhere worldwide. But Mizeur echoed environmentalists’ criticism of Dominion’s proposal, saying the converted facility would release more climate-altering greenhouse gases into the air than all of the state’s coal-fired power plants put together. “If we are serious about fighting climate change,” she said, “the Cove Point export facility must be stopped.”

New York

N.Y. pro-fracking interests think courts may be last chance
Poughkeepsie Journal
After nearly 5 1/2 years, two governors, three Department of Environmental Conservation commissioners and countless rallies and protests, New York’s review of hydraulic fracturing for natural gas awaits an analysis from the state Department of Health. But could it be a judge that ultimately forces Gov. Andrew Cuomo’s administration to act? At least two pro-fracking interests have been preparing lawsuits against Cuomo and his agencies, alleging New York’s lengthy, ongoing review of fracking violates state laws meant to prevent regulatory delays. And in one case, a deadline looms. In a letter to DEC Commissioner Joseph Martens this month, oil-and-gas attorney Thomas West demanded the state respond by Tuesday with a timetable for completing its review, known as the Supplemental Generic Environmental Impact Statement, or SGEIS. If not, a lawsuit will be filed shortly, the letter said. West represents the trustee for Norse Energy, a now-defunct oil-and-gas subsidiary that received permission from a federal Bankruptcy Court judge Nov. 25 to pursue the case. “We’re not expecting a response by Tuesday,” West said. “I’d love to have DEC write me and say they’ll issue (the SGEIS) in January and there’s no need for litigation. Is that going to happen? I doubt it.”

Fact-Check: Follow (Some of) the Money As it Lobbies NYS on Shale Gas
NY Shale Gas Now!
I started down the wayward path of this kind of fact-checking because of an incredibly sloppy article appearing on Politico’s new Capital New York outlet Dec. 6, 2013. There they reported that just two anti-fracking green groups spent only $43,094 on lobbying in New York during the first half of 2013. That paltry figure was set against the mammoth, $667,159 spent on lobbying during the same period by four different arms of industry (three definitely pro-fracking organizations, and the fourth just a power seller that got unfairly thrown into the mosh pit, for some reason). This was done by the reporter in order to “prove” the headline: “Fracking industry out-lobbies opponents, still loses ground.” But — if you actually check, as I did — pressure groups with anti-fracking positions spent $352,569 during just the first half of 2013 — pushing elected, appointed, and professional-class officials at many layers of government in New York.

New York: The Font of All Fracking Opposition
Natural Gas Now
Catskill Citizens for Safe Energy is again using Pennsylvania residents as foils in a campaign against fracking in New York, the font of fracking opposition. Sometimes, I fear readers will think this site is too New York centric, but the truth is this; the bulk of the fracking opposition, whether it takes place in Colorado, California, Texas or the UK (where Dimock is a well known name) is, ultimately, all about New York. It is primarily New York money that funds most anti-fracking campaigns. It is New York based organizations who lead the effort. It is New York activists who gin up the controversy wherever it occurs. No further proof of this is needed than the continued exploitation of Pennsylvania residents, both pro and con, by a group known as Catskill Citizens for Safe Energy.

Gov. Cuomo: Where Do We Go to Get Our Business Back?
Natural Gas Now
The people of Upstate New York are rejecting fractivist agendas, but Gov. Cuomo just stands there, paralyzed with fear, while they wonder where to go to get their business back. The elections are over; results are in. The people have spoken and almost all candidates running on the anti-gas platform in Chenango County failed to be elected. It was a hard fought battle. Most towns had record breaking turnouts. In the end, the people spoke, as it should be. Most folks who voted took time to investigate and weigh both the assertions and the facts. It was a case of fear of poisoned water and devastation of the land vs. the facts and an appreciation that the state and a few court cases will determine the path and direction of development with respect to our mineral rich subsurface. Logic and facts prevailed.


Marietta College’s Bob Chase is a master at churning out petroleum engineers
Crain’s Cleveland Business
Dr. Bob Chase has mined what many would call a charmed career in the oil and gas industry. It all started in 1968 with a $900 annual scholarship offer from Pennsylvania State University to study petroleum engineering. Back then, tuition was only $200 a quarter, so he made money on the deal. This attractive scholarship came the day after another offer, also from Penn State, to study mining engineering. “Mining engineering had no appeal to me because I grew up in Scranton, Pennsylvania, and I had relatives who died of black lung disease,” said Dr. Chase, who is in his 38th year of teaching. “The petroleum engineering offer intrigued me, so I took that offer, and that was how I got into that field.” He went on to earn bachelor’s, master’s and doctorate degrees in petroleum and natural gas engineering — all from Penn State.


Proposal requires drillers to inform Allegheny County
Pittsburgh Post-Gazette
Allegheny County Council is considering new reporting requirements for natural gas companies, filling a gap in the policing of shale drilling. On Tuesday, council will decide whether to require energy companies to notify the county Health Department when they hit any one of four milestones in the drilling process, giving the department’s air quality inspectors time to set up monitoring equipment. “If we get notification there’s going to be a well site and if there is a populated area close by, we may consider additional monitoring in that community,” said Jim Thompson, the Allegheny County Health Department’s deputy director of environmental health. “It’s so we can deploy our assets best.” Mr. Thompson is in a rare position. Allegheny County and Philadelphia are the only two counties in Pennsylvania to regulate air quality locally, with the rest of the state overseen by the Department of Environmental Protection in Harrisburg. As such, the health department’s 14 inspectors are assigned to make sure natural gas drillers conform to the myriad regulations imposed on them by both county and state law.

After BMX coal mine expansion, CONSOL to focus nearly all growth on natural gas
SNL Financial
Nearly all of CONSOL Energy Inc.’s production growth will occur in natural gas following the expected completion of the BMX coal mine expansion in April 2014, according to a presentation for Boston-area investors Dec. 12-13, as the producer continues to emphasize its natural gas evolution. In the wake of selling five thermal coal mines to Murray Energy Corp., CONSOL said in the presentation that it will continue to examine opportunities to “high-grade” its portfolio of assets, including monetizing some remaining infrastructure assets. The company said it is focused on organic growth and not transformational acquisitions. The Murray deal left CONSOL with coal reserves totaling 3.1 billion tons and infrastructure assets including its Baltimore coal terminal, coal preparation plants and midstream assets.

Chevron targets location in Moon
Pittsburgh Tribune-Review
Chevron USA’s proposal to build a regional headquarters in Moon would be the largest single development in the township since the former Pittsburgh airport terminal was built in 1952, a township official said. The population of the mostly middle-class township increased during the past few decades — 24,185 people lived there as of 2010, census figures show. The township experienced a slowdown in commercial development starting in 2008 because of the economic downturn, said Richard Mills, solicitor for Moon Transportation Authority. The tide is starting to turn, a Moon supervisor said, and a Chevron campus would significantly contribute to that. “It’s going to create jobs for Moon Township. Obviously, a development of this size increases our tax base,” said Marvin Eicher, chairman of the board of supervisors. Chevron spent $17.5 million to buy two parcels of land along Market Place Boulevard, but a company spokesman said Chevron has not decided about building in Moon. “I can’t tell you when a final decision will be made,” spokesman Trip Oliver said.

Westmoreland County water, sewer rates won’t change
Pittsburgh Tribune-Review
Rates charged to customers of the Municipal Authority of Westmoreland County will remain unchanged next year, thanks to royalties earned from Marcellus shale gas wells. The authority this week presented a preliminary budget that is fueled by natural gas royalties of $5.6 million — $1 million higher than projected. “Royalties have been helpful in subsidizing our budget,” said authority manager Chris Kerr. There are about 32 deep wells harvesting natural gas on authority property at its Beaver Run site in Westmoreland County, its Mill Run Dam property in Fayette County and other sites. Through October, the wells have generated more than $2 million in royalties.

Range Resources’ Management Presents at 2013 Capital One Securities Energy Conference (Transcript)
Seeking Alpha
The Range story is pretty simple. It’s been consistent over the years and we’ve had a real proven track record of performance really based around three core values: focused on production and reserve growth per share on a debt-adjusted basis, maintaining a real simple, strong financial balance sheet, and then operating safely and being good stewards. We’re currently in Texas, Virginia and Appalachia, and of course the crown jewel is the Marcellus and we’ll talk a lot about that as I go through the presentation.

Marcellus shale, conservation keeping natural gas prices low
Uniontown (PA) Herald-Standard
Staying warm indoors this winter will cost people who heat their homes with natural gas half as much as it did five years ago due to the influx of Marcellus shale gas and conservation. Customers of Columbia Gas of Pennsylvania, the natural gas distribution company that serves most of the area, are paying $5.13 per unit for gas in the fourth quarter this year compared to $10 to nearly $16 in 2008, when Marcellus extraction was just getting started. “We are seeing natural gas prices that are on average about 45 percent lower since 2008, and a significant portion of that is attributable to Marcellus shale,” said Jennifer Kocher, state Public Utility Commission (PUC) press secretary.

West Virginia

Opinion: Rule Not Likely To Block Cracker
Shale Play Ohio Valley
It has been suggested the proposed ethane cracker plant in Wood County may have to overcome obstacles erected by a state air pollution law. But if statements by the company planning the facility are candid, there should be no problem. Though West Virginia legislators and governors have argued with federal rules aimed at reducing greenhouse gases blamed for climate change, a similar state rule was enacted in 2011. It requires owners of new plants such as the proposed ethane cracker to use “best available control technology” to reduce greenhouse gas emissions. State legislators were, in effect, blackmailed into adopting the rule. Officials at the U.S. Environmental Protection Agency vowed that unless states enacted and enforced such regulations, the federal government would step in and do so. That could have eliminated much existing state authority over environmental questions, so state officials bowed to the EPA demand. In doing so, some seem to be arguing, the state may have to require more stringent air pollution limits than it would have otherwise. That could be a problem for the Wood County cracker. But Odebrecht, the Brazilian firm planning the cracker, already has issued statements pledging to safeguard air, water and ground quality.


Mark Landsbaum: Climate alarmists’ search for proof going cold
Orange County Register
Recall global warming hysteria’s halcyon days? Just 13 years ago, Dr. David Viner, senior scientist at Britain’s University of East Anglia’s climatic research unit, confidently predicted that, within a few years, winter snowfall will become “a very rare and exciting event.” “Children just aren’t going to know what snow is,” he said. Of course, that doesn’t mesh with what happened. This past October, the UK Express headlined, “Worst winter for decades: Record-breaking snow predicted for November.” By the end of November, Brits were shivering, “as Britain faces snow, ice and plummeting temperatures,” reported the Mirror newspaper. “Most of Scotland has been issued severe weather warnings for ice, and temperatures are expected to remain low, causing problems with snow and ice across the country.” Winter yet lay ahead. We shouldn’t pick on Great Britain. There is plenty of global warming foolishness here at home. Recall James Hansen, global warming guru whose alarmist campaign was underwritten by his NASA paycheck. By the 2020s, Hansen predicted in 1986, the U.S. average annual temperature would rise 9 degrees Fahrenheit, or more, and up to 3 degrees by the 2010s. A funny thing happened on the way to the 2010s and 2020s. It didn’t get so hot. In fact, depending on which data set you use, it probably has cooled down for 17 years.

The curious case of the oil and gas engineer who really wasn’t
Every journalist’s nightmare is to use a quote from somebody who is not really who they say they are. And something like that has now come to the fracking debate. The Telegram, a newspaper based in St. John’s, Newfoundland, last week ran a letter from a Syd Peters. He claimed to be an engineer based in Alberta who had worked with fracking, and oh, he can talk some trash. According to the energy view of Syd, jobs produced by fracking are far less than claimed; damage to groundwater supplies is extensive; methane leakage is rampant. It’s the usual litany brought up by fracking critics. You can see the letter here. That particular instance of the letter includes The Telegram being forced to admit that it hadn’t gone through its normal procedures to determine the identity of a letter writer. The statement was not much more than “mistakes were made.” It took a column in The Telegram by a writer named Ezra Levant to declare what the paper itself seems loath to admit: there is no Syd Peters. “Except there is no oil and gas engineer from Calgary named Syd Peters,” Levant wrote. “APEGA, Alberta’s professional association of engineers, has no record of him. He’s not in the Calgary phone book. His stories were fake, just like he is.”

Coast Guard wants barges to ship fracking water
AP/Seattle KING5
The U.S. Coast Guard wants to allow barges filled with fracking wastewater to ply the nation’s rivers on their way toward disposal. Many environmentalists are horrified, but industry groups say barge transport has its advantages. Now, the wastewater is usually disposed of by truck or rail, which poses more risk for accidents than shipping by barge, according to a government report. And one barge can carry about the same amount of waste as 100 exhaust-spewing trucks. The disagreements go to the core of the fight over shale gas drilling. Environmentalists say the chemicals in fracking waste are a tragedy in the making, but the industry says far greater amounts of toxic chemicals are already being moved by barge, including waste from oil drilling. In 2010, U.S. barges carried 2,000 tons of radioactive waste, almost 1.6 million tons of sulfuric acid and 315 million tons of petroleum products, according to the U.S. Army Corps of Engineers. “We expect that shale gas wastewater can be transported just as safely,” said Jennifer Carpenter, of American Waterways Operators, a trade group based in Washington, D.C.

Cheaper Natural Gas Lowering Carbon Dioxide Emissions
Carbon dioxide emissions are indeed lower than at any time since 1994, according to data recently released by the U.S. Energy Information Administration (EIA). But if you think that the rise of the hybrid car, our embrace of public transit, walking, biking and those new windows on the house are behind the trend, think again. According to the EIA, increased energy efficiency has played a role, as have recent warmer winters and the recession, but the key driver has been the swapping out of coal at power plants and industrial facilities across the country for cleaner-burning and now more abundant natural gas. The reason so much natural gas is around is the rise of hydraulic fracturing (“fracking”), a technique whereby drillers inject water and chemicals into underground shale rock deposits to free up otherwise trapped natural gas. Fracking has allowed U.S. oil companies to access huge natural gas deposits from the Marcellus Shale in the Northeast and elsewhere. The increased supply has brought natural gas prices down so that it has been cheaper than coal during the last few years. Our carbon footprint benefits because burning natural gas to generate electricity generates about half the carbon emissions of coal for every megawatt hour of power generated.

Rail resurgence raises concerns on the Seacoast
The Sea-3 expansion that has captured the attention of the region and raised concerns about what the future holds for freight rail traffic may just be the first sign that railroad activity could trend upward in the near future. Sea-3 is seeking the approval of the Newington Planning Board to make upgrades at its Shattuck Way facility that would greatly enhance its ability to unload propane delivered by freight train. The company has said the changes are necessary for its survival because of market changes spurred by increased supply of domestic propane created by hydraulic fracturing, or fracking. Sea-3 is a subsidiary of Trammo, an international merchandising and trading company that markets, trades, distributes and transports ammonia, fertilizers, petrochemicals, liquefied petroleum gases and other commodities. That company changed its name this year from Transammonia, a company that Forbes ranked as the 24th largest private company in the country in 2012, with revenues of $11.3 billion. According to Trammo, retrofitting the Newington facility will allow it to handle the rapidly growing domestic supply of propane resulting from fracking, which extracts natural gas from shale. A major source in the Northeast is the Marcellus Shale, a sedimentary rock buried thousands of feet beneath the Earth’s surface stretching from upstate New York south through Pennsylvania to West Virginia and west to parts of Ohio.

Patagonia Sees Green in the Pockets of the Pampered
Natural Gas Now
Patagonia is a company that has finessed the art of pandering to the pampered. Its recent attack on fracking is just more of the same. Casey Sheahan, the CEO of Patogonia, the ritzy outdoor clothing company built on selling things such as trendy “rain gear for an urban setting” for just $699 just announced he’s in favor of a statewide fracking ban in Colorado. He’s making a fortune wearing the cloth of “environmental and social responsibility” to sell over-priced merchandise to the pampered, who are blithely unaware of the incongruity of a company branded on the appeal of the great outdoors marketing rain gear for city sidewalks. Sheahan’s really good at appealing to the guilty consciences of those who imagine they have done undeservedly well but don’t want to sacrifice any of it. He seduces them with shallow talk about how much better the world would be with them in charge to impose their utopian vision on the rest of us, subtly suggesting, of course, the first step might be buying a $45 t-shirt that carries their Live Simply© Guitar image. After all, it’s made with organic cotton that’s “not genetically modified in any way” and “screen-printed using PVC- and phthalate-free inks.” Who knew demonstrating your social consciousness and living simply were just one expensive t-shirt away?

Tronox spinoff may cost Anadarko up to $14 billion, judge says
Bloomberg/Akron Beacon Journal
Anadarko Petroleum Corp. and its Kerr-McGee unit acted improperly in the 2005 spinoff of Tronox and may have to pay as much as $14 billion related to environmental cleanup and health claims, a judge ruled Thursday. Anadarko shares plunged on the decision, in which the judge weighed how much money can be recovered from a successor to a polluting company, even after bankruptcy has ostensibly cleaned the slate of obligations. The case stems from Kerr-McGee’s spinoff of its chemicals business and old environmental liabilities as Tronox beginning in 2005. About three months after that transaction was completed, The Woodlands-based Anadarko offered to buy Kerr-McGee’s oil and natural gas assets for $18 billion. Burdened by environmental debts, Tronox filed for bankruptcy in 2009 and sued Anadarko and Kerr-McGee the same year. A nonjury trial was held before U.S. Bankruptcy Judge Allan Gropper in Manhattan in 2012.

Minnesota Department Of Commerce Brushes Off Big New Solar Project, Prefers Natural Gas
The Minnesota Department of Commerce has advised Xcel Energy, one of the state’s biggest utilities, to not take on a new solar project in its search for new power sources. Xcel expects it will have to add over 550 megawatts of new electricity generation by 2020 to meet Minnesota’s rising needs, and to that end the utility established the Competitive Resource Acquisition Process to solicit ideas for new projects. It got five responses, including a 100 megawatt solar project — spread among 31 sites throughout the state — put forward by Geronimo Energy.

The Weekly Oil & Gas Follies
Space, the Final Oil & Gas Frontier – With that little collision with rank hysteria, Space becomes the second anti-Fracking activist we’ve seen contend that “fracking” is going to destroy human existence, the first having been Yoko Ono. (Come to think of it, can there be much doubt that Yoko Ono serves as a role model for anyone named “Space”?) To date, in spite of all the propaganda, hyperbole, hysteria, fake documentaries and episodes of CSI and Longmire that contend otherwise, hydraulic fracturing is yet to claim a single human victim. That’s after 66 years and about 2 million frac jobs having already been performed. So getting up to doing away with more than 7 billion human beings is going to take quite some time. One might daresay that Space won’t be around to see it all happen, but then, we guess that goes without saying, doesn’t it?


This Year’s Best News for U.S. Shale Gas
The Motley Fool
Comes from Scotland. In the petrochemicals sector. As I discussed last Monday, the fate of U.S. natural gas production is increasingly tied to liquids. Commodities like ethane and propane produced alongside nat gas from shale wells. Selling these co-products has allowed many gas producers to stay profitable, even at low natgas prices. And now the rest of the world wants a piece of America’s growing natural gas liquids supply. Especially European petrochemical giant Ineos. Who said this week it will build an ethane import terminal at its Grangemouth ethylene cracker complex in Scotland. Ineos’ Grangemouth facility formerly sourced feedstock ethane from nearby North Sea gas fields. But with nat gas liquids production falling here, the company is looking further afield for supply. The new import terminal will allow the company to bring in ethane from around the world. And especially from America. The company said it intends to target imports of low-cost ethane from U.S. shale plays.

Shale boom shakes UK’s $32bn chemicals industry
Gulf Times
The US shale gas boom is reverberating across Britain’s chemical industry, the nation’s second-largest export earner. The £20bn ($32bn) chemicals business is losing sales to lower-cost competitors such as in the US, where new supplies from domestic shale drilling have reduced prices for natural gas, the fuel used in making chemicals such as plastics. By 2020 the chemicals industry in the US will be 21% larger than in Europe, from near parity now, according to the American Chemistry Council. The price of gas, also used to make electricity, in the past month averaged about two-thirds less in the US than in Britain, the steepest discount in five years. That’s giving Americans an edge over UK chemicals makers such as Ineos, the largest. BASF, India’s Tata Chemicals and Lotte Chemical Corp of South Korea have closed plants in Britain this year. The UK chemicals industry has responded by joining the oil lobby in pushing the government to clear obstacles for drilling shale rock. The threat to chemicals, among the most energy-intensive industries, shows how the widening cost gap risks inflicting further pain on a UK industrial sector that’s yet to recover from the financial crisis.

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