Marcellus & Utica Shale Story Links: Wed, Dec 18, 2013

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

New York

No end in sight for hydrofracking debate
Time Warner Cable News
Sunlight will shine on the state’s ongoing review of the controversial hydrofracking process, but only at the end. That’s according to state Department of Health Commissioner Nirav Shah, whose review of the impact of fracking on human health is stretching to well over a year. “Science needs to be done in sacred place with objectivity understand both sides of the issue. Understand the science, dissect it and then come to a reasonable conclusion, so the process needs to have transparency at the end, not during,” said Shah. The state has missed multiple regulatory deadlines to develop an environmental impact statement for high-volume hydrofracking, a process that is used to extract natural gas from below ground. In September of last year, Governor Andrew Cuomo directed the health department to conduct an impact study for fracking. The review is yet to be completed and there’s no end in sight. “When can the public expect to see some of your work?” “When I’m done,” said Shah.

Also Now Overdue: New York’s Updated Energy Plan
NY Shale Gas Now!
Anybody else wonder what’s going on here? An expert inter-agency panel of energy specialists in New York has been meeting fairly regularly since Sept. 2009 in order to update the state’s Energy Plan, as directed by the legislative and executive branches. The whole process is as dully transparent as things get in New York, on a seldom-visited web site here. Energy planners went through a similar exercise previously in 2009, and in 2002. But — to keep on top of the inexorable changes — the wheels were set in motion four years back to get the plan updated by 2013. The 2013 draft was said to be due in Fall 2013, and the final by Spring 2014. Judging by the astronomical calendar, I suppose that means they’ve got a few days left. Judging by the foot of snow I just shoveled, their time is already up. But the draft plan is still nowhere to be found on their web site. Does that kind of delay rank as news in New York, or is it just another sleeping pill?


Shale speculation pushed up ag land prices
Youngstown Vindicator
As shale speculation increases the value of agricultural land in the Valley, farmers have to be creative if they want to expand their operation at a reasonable cost. Land values have been thrown off by shale, said David Marrison, Ohio State University extension agent for Trumbull and Ashtabula counties. “In Ashtabula County — and we’re on the far north end of the shale — [agricultural] land values went from an average of $2,000 an acre up to $4,000, and then as talk of the shale has changed, they’ve bottomed out back to $2,000 an acre,” he said. There is a tremendous amount of speculation in the area when it comes to land values, Marrison said. The speculation has created more of an impact because there is a limited amount of land, he said.

EVEP CEO Deems Utica a Key Growth Driver
NGI’s Shale Daily
Even with about 60% of the company’s production and capital spending still tied up in the Barnett Shale, EV Energy Partners LP (EVEP) CEO Mark Houser wasn’t shy about calling Ohio’s Utica Shale play the “key driver of the EVEP story” last week at the Wells Fargo Energy Symposium in New York. To hear Houser talk about the play’s potential, especially as his company is concerned, that story is about to get a lot better in the years ahead.

Penny Stock’s Buzzers – 1st NRG Corp.
SB Wire
1st NRG Corp. (OTCMKTS:FNRC) opened the session at $0.0004, trading in a range of $0.0003 – $0.0006. The stock showed a positive performance of +66.67% in the last trading session from its previous close of $0.0003 and closed at 0.0005. The stock traded on a volume of 358.40 million shares and the average volume of the stock remained 28.72 million shares. 1st NRG Corp., an independent energy company, engages in the exploration, development, and production of natural gas properties in the United States. The company holds interests in the Clabaugh Ranch Field comprising 42 coal bed methane wells covering an area of 6,025 gross acres located in the Powder River Basin in northeast Wyoming. It also explores for oil, natural gas, and natural gas liquids in the Niobrara Shale that covers an area of 1,370 acres located in western Nebraska; and the Utica Shale, which covers an area of 7,150 acres located in eastern Ohio.


Hearing Wednesday on charges from gas well site fluid discharge
Harrisburg Patriot-News
A preliminary hearing is scheduled Wednesday in a controversial criminal case involving the discharge of fluids by a Texas natural gas company at a Marcellus Shale natural gas well site in Lycoming County. XTO Energy Inc., headquartered in Fort Worth, is charged by the state attorney general’s office with five counts of unlawful conduct under the Clean Streams Law and three counts of unlawful conduct under the Solid Waste Management Act. The hearing is slated to start at 9 a.m. before District Judge James G. Carn in Williamsport. XTO, a subsidiary of Exxon Mobil Corp., calls the charges “an abuse of prosecutorial discretion.” It contends there was “no intentional, reckless or negligent misconduct (and) the incident in Penn Twp. outside Hughesville did not result in significant or lasting environmental harm.” It settled a federal lawsuit brought the Environmental Protection Agency in which it did not admit any liability or wrongdoing but agreed to pay a $100,000 civil penalty.

Penn Virginia Corporation Announces Promotion of John A. Brooks to Chief Operating Officer
Penn Virginia Corporation
Penn Virginia Corporation today announced that its Board of Directors is promoting John A. Brooks, Executive Vice President, Operations, to the position of Executive Vice President and Chief Operating Officer, effective January 1, 2014. Located in our Houston office, Mr. Brooks has served in several operational management roles since 2002, including as Executive Vice President, Operations, since February 2013 and Senior Vice President from February 2012 to February 2013. He holds a B.S. degree in petroleum engineering from the University of Texas. H. Baird Whitehead, President and Chief Executive Officer, said, “John’s excellent leadership has been critical to the development and expansion of our Eagle Ford Shale position. Congratulations to John and the employees of Penn Virginia on a job well done.”

Peoples acquisition of Equitable Gas finalized
Pittsburgh Business Journal
Peoples Natural Gas has acquired the Equitable Gas natural gas pipeline business of EQT Corp. for $740 million. The previously announced transaction between the two Pittsburgh-based companies included $720 million in cash and a $20 million adjustment, EQT Corp. said in a prepared statement released Tuesday. The Equitable Gas deal cleared the last regulatory hurdle on Nov. 14. Included in the deal are 200 miles of pipelines and four storage pools. “During the last five years, our business strategy has focused on Marcellus Shale development as we intensified efforts to grow our natural gas exploration and production program, and expand our midstream operations. This transaction provides capital to continue investing in EQT’s core businesses – delivering shareholder value and providing sustained economic growth in our operating regions,” EQT CEO David Porges said in a prepared statement.

Sunoco will move out of Philadelphia to new headquarters in Pa. suburbs
StateImpact Pennsylvania
Sunoco Inc. will move out of Philadelphia and consolidate its corporate headquarters in the the Delaware County suburbs in two years, a company spokesman has confirmed. Spokesman Jeff Shields told StateImpact Pennsylvania the new building in a Newtown Square development called Ellis Preserve would be “a good central location for our employees.” There are currently 120 Sunoco employees at the Mellon Center at 1735 Market Street in Philadelphia, and 340 employees at an office park in Lester, Tinicum Township, Delaware County. Shields said the new 200,000 square foot property was purchased Monday. “The retail marketing operation, which really is the company today, is run out of Lester,” Shields said in an e-mail. The move comes as a blow to Philadelphia that has fought to retain companies in Center City, according to the Philadelphia Business Journal that broke the story Tuesday afternoon:

West Virginia

W.Va. In Top 10 Drilling States
The Intelligencer/Wheeling News-Register
Powered by plenty of Marcellus Shale drilling and fracking in the northern portion of the state, West Virginia rocketed into 10th place among natural gas producing states, according to statistics released Tuesday. The U.S. Energy Information Administration shows a 37 percent increase – or an increase of 146 billion cubic feet – in Mountain State natural gas production from 2011 to 2012, elevating the state’s position from 11th to 10th.


Region’s electrical grid feeling strain of cold-weather demand
New Hampshire Union Leader
Cold weather is straining the New England power grid, as demand for electricity on Tuesday was expected to break the record for 2013 set in January. Peak demand was expected to reach 21,400 megawatts Tuesday night, compared to the previous peak for the year of 20,887 on a frigid Jan. 24, according to ISO-NE, the independent system operator. The all-time record was set on Jan. 15, 2004, when peak demand hit 22,818 megawatts. Utilities that provide gas to heat homes and businesses buy up the space on those pipelines. Most of the year, there is enough room left over for the gas-fired power plant owners to get the gas they purchased on the spot market delivered into New England. But when the demand by utility customers is high, there is no room on the existing pipelines for the gas needed by power plant operators. “There are some periods on the system when natural gas is simply not available at any price,” Dolan said.

Tight pipelines hinder natural gas chance
New Hampshire Union Leader
Most of the country is enjoying historically low and stable energy prices, except New England, where a lack of pipeline capacity is constraining the region’s ability to take advantage of the natural gas revolution, according to several speakers at an energy conference on Wednesday hosted by the Business and Industry Association. “You can’t get the gas into New England on days like today,” said Jim Schuckerow, director of electric supply for Northeast Utilities, alluding to the unseasonably cold weather outside the Center of New Hampshire. “There is no space on the pipelines.” Most of the capacity for natural gas to be delivered into the region on extremely cold weather days is locked up by local distribution companies like Liberty Utilities, which provide gas to heat homes and business. They purchase long-term contracts for delivery, and on really cold days, those contracts take up most of the available space on the five pipelines into the region. That means the operators of power plants looking for gas to fuel their generators pay an extremely high price on the spot market, or simply pull their plants off the grid until the prices stabilize. The result has been an erratic market for energy prices in New England, even when compared to our nearest neighbors in New York state, Schuckerow said.

Electricity Prices To Jump Throughout Region Due To Natural Gas Concerns
The Hartford Courant
Electric generation rates throughout New England are facing steep increases in 2014, pushing power costs in Connecticut close to 20 percent higher for some residents. The jump in standard service rates in Connecticut, however, is smaller than increases in other New England states. In Massachusetts, rates will increase by as much as 38 percent. In Rhode Island, the electric costs are set to increase by 27 percent. The higher prices affect just the generation portion of the bill for customers who haven’t switched to a third-party electric supplier. For customers who use 700 kilowatt hours a month, the increase at Connecticut Light & Power and United Illuminating will be $9 to $12 a month, depending on the utility. And the main culprit for the rise in generation rates is a lack of capacity in natural gas pipelines.

Noble Energy Announces 2014 Capital Program and Guidance
Noble Energy
Total capital expenditures are estimated at $4.8 billion for 2014, with investments allocated 70 percent to U.S. Onshore and 30 percent to Global Deepwater activities. Charles D. Davidson, Noble Energy’s Chairman and CEO, stated, “Noble Energy continues to deliver substantial value across the portfolio. For the third consecutive year, production is projected to grow at strong double-digit rates. We continue to accelerate development in the DJ Basin, which will receive the greatest portion of our capital program, as well as the drilling program in the wet gas area of the Marcellus Shale. The Company’s strong balance sheet and growing cash flow allow us to execute our recently sanctioned developments and continue our robust exploration and appraisal programs to further enhance the major project pipeline.”

Report: Big Companies Ready for EPA Climate Change Regulations
Energy Trends Watch/Michael Krancer
First came the news that a majority of the American public and many big investors are increasingly open to curbing the effect of global warming and supportive of mitigating carbon emissions by government action. Now comes a new report from the CDP revealing that many of the largest U.S. and global companies are ready for it, too. The CDP, which released its report last week, analyzed data from many of the biggest companies headquartered in the U.S. or doing business here. They included oil giants like ExxonMobil, Chevron, BP, and Shell, and industrial behemoths like GE, DuPont, and Duke Energy, just to name a few. The CDP found that many are planning their fiscal futures around a price on carbon. A price on carbon—whether through a simple tax or a market-based cap and trade type system—is the most likely mechanism regulators would use to reign in greenhouse gas (“GHG”) emissions and, ultimately, climate change.


Mexico and the Next Fracking Boom
The Motley Fool
Mexico’s natural gas production has not kept up with demand. In 1999 Mexico’s imports of U.S. natural gas were close to nothing, but in 2012 the country was importing more than 1.6 billion cubic feet per day. The EIA estimates that Mexico has 545 trillion cubic feet of technically recoverable shale gas, signaling that there is more than enough gas below the ground for Mexico to meet its domestic needs. Geology does not respect national boundaries and shale formations are no exception. Texas has seen the rapid development of Eagle Ford, and the field does not stop on the U.S.-Mexico border. The Mexican senate recently approved energy reforms that allow concessions to foreign firms. While the reforms still need to be passed by other branches of government, Mexico’s fiscal pressures from falling oil production will continue to push the reforms forward.

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