Marcellus & Utica Shale Story Links: Wed, Jan 15, 2014

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


As Utica Shale production increases, winners, losers emerge
SNL Financial
Growing production rates and more defined data sets for wells in the Utica Shale are differentiating the winners from the losers, and Chesapeake Energy Corp. is not among the winners, according to Bernstein Research. Of the companies Bernstein Research covers, Chesapeake is the most active in the Utica. But despite an early mover advantage and a large resource position, Chesapeake’s results have not been the best of the area’s producers, falling behind Antero Resources Corp. and Gulfport Energy Corp., Bernstein Research found. Using the Ohio Department of Natural Resources’ first-ever quarterly production rates for Utica wells, released at the end of 2013, Bernstein Research analyzed well activity, mapping out the sweet spots of the Utica. The Bernstein report showed that well activity focused in the eastern half of the state, with results contiguous. The best six townships were nearly all touching or at most one township separated, while the poorer areas of production were also grouped.

Lawmakers want drillers to provide standardized royalty statements to landowners
Columbus Business First
Unlike many states, Ohio doesn’t require oil and gas companies to provide standardized royalty statements to landowners. That has led to confusion and second-guessing among some landowners in eastern Ohio’s Utica shale play, says state Rep. John Carney, D-Columbus. That’s also why he and Rep. Jack Cera, a Democrat from Bellaire in Belmont County, have introduced a bill to make such statements mandatory. Under House Bill 400, land and mineral rights owners no longer would have to request well owners to provide comprehensive royalty statements. “Ohio does not require a standardized royalty statement,” Carney told me. “Most if not all oil- and gas-producing states do.” Although Carney’s home district isn’t ground zero for the shale boom, he has been traveling the state as he campaigns for Ohio auditor. During those treks to eastern Ohio, he’s heard from landowners concerned about whether the terms of their contracts are being honored.

Ohio Controlling Board Releases $100,000 to Accommodate Mahoning County Natural Gas Plant
Ohio Gas & Oil
The state Controlling Board released $100,000 Monday for a road project to accommodate a Mahoning County natural gas processing plant. The improvements to East Middletown, Rapp and Stateline roads in Springfield Township are aimed at Pennant Midstream, which plans to create 15 full-time jobs paying an average of about $32 an hour. Pennant Midstream is a joint effort of NiSource Midstream Services and Harvest Pipeline Co., and the new plant will require increased truck traffic in the area – an estimated “1,000 trucks per month,” according to documents.

University hoping to fill oil/gas job needs
Zanesville Times Recorder
Demand for jobs in the geosciences is expected to grow faster than many other occupations over the next 10 years, and Muskingum University is rolling out a new major field of study to fill that need. The new petroleum geology bachelor of science degree program, to be offered beginning the 2014-15 academic year, is intended to serve as a complement to majors in geology, environmental science, conservation science and earth science. The announcement comes at time when many institutions of higher learning across the state and country are trying to keep up with the energy industry demands for more skilled workers. The U.S. Bureau of Labor Statistics Occupational Outlook Handbook forecasts the need for geoscientists to grow by 16 percent during the next decade as oil and gas exploration and development intensifies across the country.

Pipe mill considers $81.5M expansion
Warren Tribune Chronicle
Youngstown City Council today will consider passage of an enterprise zone agreement that could lead to an $81.5 million expansion to Youngstown’s growing pipe mill industry. VAM USA LLC, subsidiary to French-based Vallourec Star, is considering the addition of an $81.5 million threading and finishing mill in a vacant building at 1053 Ohio Works Drive. The company is asking for a 10-year, 75 percent abatement on real property taxes in exchange for the investment and creation of 84 new jobs in the first year, projected to generate $3 million to $3.5 million a year, Mayor John McNally said Tuesday. If the new mill comes to fruition, it would generate about $80,000 a year in income tax revenue for the city of Youngstown, McNally said. Along with that would be a quarter of the would-be property tax and additional revenue for water usage and building permits.


Pa. Democrats running for governor try to out-green one another
WHYY Public Radio
Eight Democratic candidates for Pennsylvania governor sought to out-green one another last night at a debate focused on environmental sustainability. Some candidates promised not to take any campaign money from the natural gas industry. Others swore they’d put a moratorium on drilling in areas of the Marcellus Shale. And, of course, they blasted the incumbent, Republican Gov. Tom Corbett. Corbett was invited to, but did not attend, the event, which was held at Philadelphia’s Academy of Natural Sciences of Drexel University and moderated by WHYY-FM senior reporter Dave Davies. Overall, there was very little disagreement on policy matters. The candidates sought to distinguish themselves based on their electability, doggedness and individual style.

Public comment sought this week in Mechanicsburg on revisions to oil and gas drilling regulations
Harrisburg Patriot-News
Anyone interested in commenting on proposed revisions to the state’s environmental performance standards for oil and gas operations can attend a public hearing on Thursday, Jan. 16, beginning at 6 p.m. at the Good Hope Middle School Auditorium, 451 Skyport Road, Mechanicsburg. The hearing is being held by the Environmental Quality Board, a 20-member independent board that adopts all Department of Environmental Protection regulations. The hearing is one of seven being held around the state as part of the 60-day public comment period on measures that have received preliminary approval by the Environmental Quality Board. The revisions currently under consideration would update existing requirements for oil and gas surface activities to reduce potential environmental impacts from the oil and gas industry.

Work to Update Pennsylvania Oil, Gas Regulations Continues Slowly
NGI’s Shale Daily
The Pennsylvania Department of Environmental Protection (DEP) continues to move forward slowly with a set of proposed regulatory updates for the state’s oil and gas drillers with a series of public hearings scheduled throughout this month. Work on the rules has been ongoing since April 2012, said DEP spokeswoman Lisa Kasianowitz, after Gov. Tom Corbett signed Act 13 — a comprehensive piece of oil and gas legislation — into law that year (see Shale Daily, Feb. 15, 2012). It requires regulators to consider the impacts of the industry on the state’s environment. The proposed regulatory changes would update Chapter 78 of the state code, which sets out environmental protection standards at oil and gas well sites.

Potter County, PA, Wants Better Notification for Water Suppliers
NGI’s Shale Daily
Officials in Potter County, PA, want the Pennsylvania Department of Environmental Protection (DEP) to require that public water suppliers are notified when a permit is issued for oil and gas drilling in delineated water supply recharge areas. The Potter County Board of Commissioners sent a two-page letter to Marcus Kohl, director of the DEP’s north-central regional office in Williamsport, last week. The county said it wants better communication between the DEP, drillers and municipal water authorities, and to have regulators note any applicable recharge areas during the permitting process.

West Virginia

Blue Racer To Test Alarm
The Intelligencer/Wheeling News-Register
Tom Hart said residents in the Kent area of Marshall County should not be alarmed to hear a loud siren at 11:30 a.m. today, as Blue Racer Midstream is testing a new emergency alert system in preparation of restarting the facility. Marcellus and Utica Shale producers have been unable to use the giant processing plant along W.Va. 2 since a Sept. 21 accident caused a fire that burned for nearly eight hours, leading officials to evacuate 25 Kent area residents. In addition to closing W.Va. 2, CSX rail transportation was shut down as fire crews worked to extinguish the blaze. The fire eventually burned itself out. “Blue Racer is testing their new alert system,” said Hart, Marshall County Emergency Management director. “Following the accident, we met with them about the possibility of using the Axiall (Corp.) siren to alert the community in the event of an accident.”


Real Environmentalists Don’t Fight Natural Gas
Natural Gas Now
Nick Grealy, with a little help from his friends, observes that real environmentalists would never oppose fight gas and faux enviros are leading the movement down a blind alley. Christof Rühl and I met three years ago and we shared an appearance in Moscow last month, although unfortunately not on the same day, so we missed each other. Christof is Chief Economist of BP, but unlike many in Big Oil, he long ago understood the multiple implications of the shale revolution. I wish he was taken more seriously by many in his own company who, like colleagues at other oil majors, often still can’t get their heads around shale. Notwithstanding the popular perception of economists as dismal number crunchers, the best often divine the story the numbers are telling us long before the conventional communicators in PR and journalism.

Colorado Pro-Fracking Website Launched
NGI’s Shale Daily
A four-month-old group supporting hydraulic fracturing (fracking), Coloradans for Responsible Energy Development (CRED), has launched a website ( to spread its message in a state where fracking faces increased opposition from activists. The website emphasizes that fracking has been around for 60 years and has been used safely by the industry through that long history, and adds that widespread economic growth has resulted. It cites a University of Colorado Leeds School of Business assessment of the state’s oil and natural gas industry in 2012 as calculating nearly $30 billion in contributions to the state’s economy that year.


Fracking Guidelines May Ease Shale Exploration Across EU
Bloomberg/Washington Post
The European Union plans guidelines for shale drilling under proposals that may facilitate oil and gas extraction using the contested technique that’s brought the U.S. toward energy independence. The 28 member governments will be urged to follow the non- binding principles so that hydraulic fracturing, or fracking, is done safely and without confusion over conflicting environmental regulations among states and the bloc, according to draft recommendations seen by Bloomberg News. The guidelines wouldn’t interfere with a nation’s right to ban the practice. Investors and exploration companies have expressed concern that shale prospects may become too difficult to tap compared with other nations such as the U.S. and Russia because European countries are creating a jumble of new laws. France’s Total SA, banned in its home country from fracking, yesterday became the largest oil producer to enter the U.K.’s shale industry. “As shale-gas exploration activities are progressing, member states have started interpreting the EU environmental legislation in different ways” including bans and moratoriums, the European Commission said in a draft statement to governments to accompany the guidelines. The EU needs a level playing field to respond to a “fast-evolving energy landscape,” it said.

Why Shale Gas Won’t Conquer Britain
New York Times
With the announcement in December of its decision to award new shale drilling licenses in 2014, the British government has made plain its enthusiasm for shale gas. This zeal stems from the belief that an increased domestic gas supply will drive down national prices, at once enhancing export competitiveness while addressing growing public concern over rising domestic energy bills. But this strategy is misguided: Unlike in the United States, a shale gas revolution will not bring down prices in Britain. In Britain, proponents of increased drilling, including Prime Minister David Cameron, like to point to the success of expanded shale gas production in America. There, the ability to tap into vast resources of shale gas, thanks to developments in a technology called hydraulic fracturing, or fracking, has led to a significant drop in domestic gas prices, created tens of thousands of jobs and helped to move the United States away from dependence on gas imports. But America’s shale gas revolution, which was over 25 years in the making, occurred in a context that would be very difficult to replicate in today’s Britain.

China shale gas production grows fivefold in 2013, ministry says
Bloomberg/Akron Beacon Journal
Shale-gas production in China, holding the world’s biggest shale reserves, surged by more than five times last year to 200 million cubic meters, according to the Land and Resources Ministry. PetroChina Co.’s Changning-Weiyuan and Fushun-Yongchuan areas, along with the Fuling block operated by China Petrochemical Corp., known as Sinopec Group, have built new production capacity of 600 million cubic meters, the ministry said in a statement on its website today. Output was about 30 million cubic meters in 2012, according to Bao Shujing, a director at the ministry’s geological research bureau.


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