Marcellus & Utica Shale Story Links: Mon, Feb 10, 2014

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

New York

Follow the Money: NY’s Own Pro-Drilling Grassroots Now Funding “Industry” Lawsuits
NY Shale Gas Now!
The jaded assumption from both pro- and anti-drilling forces in New York is that Big Oil and Gas entities, probably from out of state, were anonymously bankrolling the legal challenge to the Cuomo Administration which features the pathetic (old meaning) bankrupt estate of Norse Energy as lead plaintiff. Word of Norse’s new case was first publicly broken by NY Shale Gas Now on Nov. 23, 2013. And then there was a formal filing on Dec. 17, 2013, after which it got quite a bit more coverage as collated here. It is the first case out of the gates to challenge Cuomo’s misuse of the state’s environmental review laws in order to thwart fracking — by never making a decision, one way or the other. The allegation, in bureaucratic terms, is that the governor has illegally frozen the Supplemental Generic Environmental Impact Statement (SGEIS) as a perpetual draft, under a tangled process spawned by the State Environmental Quality Review Act (SEQRA). It all amounts to a mechanism for Cuomo to uncourageously pocket-veto any shale gas getting produced from inside the state’s lines.


Chesapeake ‘stoked’ on Utica sites
Columbus Dispatch
Chesapeake Energy expects to double its Utica shale processing capacity by the end of the year. The increase will come even as Chesapeake on Thursday announced it was reducing overall 2014 capital spending by about 20 percent compared with 2013 levels. Chesapeake, based in Oklahoma, is the largest energy operator in Ohio’s Utica shale. The company said it has drilled more than 450 Utica shale wells to date, with executives saying in a conference call with industry analysts that they expect to see “a very strong ramp-up in the production of the Utica.” In December, Chesapeake said it was producing the equivalent of 35,000 barrels of oil a day — including natural gas and related liquids — from its Utica holdings. By comparison, Chesapeake said it was producing the equivalent of 193,000 barrels of oil a day, primarily natural gas, from its Marcellus shale holdings.

Locally produced propane not lowering prices
Weirton Daily Times
Although Utica and Marcellus shale drillers extract large quantities of natural gas liquids from across the Upper Ohio Valley, retail propane prices are setting record levels at a time when residents need extra fuel to withstand frigid winter temperatures. As governors of six midwest states, including Ohio Gov. John Kasich, ask President Barack Obama for help increasing their propane supplies amid a very cold winter, residential retail prices now hover around $3.90 per gallon. This reflects an increase of about $1.10 per gallon since prices were $2.80 per gallon on Dec. 30, according to the U.S. Energy Information Administration. Although EIA statistics show that propane prices have steadily increased since the average cost per gallon was $1.04 in October 1990, the recent spike is the most significant during the 24 tracking period. “In a typical winter, an average customer will use 600-650 gallons of propane,” said Heath Smith, dealer at Pivotal Propane in St. Clairsville. “Use is up this year because of the extreme cold. It was up by 35 percent in January compared to last year.” With costs on the rise, heating a home with propane could cost as much as $600 to $750 more this year compared to last because of the increase – if propane is availble. “I know some (sellers) are out of propane,” Smith said.


Annual gains in Marcellus Shale boost output
Pittsburgh Business Times
An oil and gas analytics firm says that 2014 production will average about 68 billion cubic feet per day. Those levels are attributed to continued production growth in natural gas liquids basins as well as dry gas from the Marcellus Shale. Denver-based Bentek, a unit of Platts, also says that U.S. domestic natural gas production in the lower 48 states averaged 65 billion cubic feet per day (Bcf/day) in January 2014. That is down 0.8 Bcf/d or 1.1 percent from December 2013, but on a year-over-year basis it is up 3.2 percent from January 2013. “The recent and persistent cold in the U.S. Northeast and Midwest regions affected overall production this month, given that wells can freeze during very cold weather,” said Jack Weixel, Bentek director of energy analysis. “The deep freeze was particularly noticeable in sample data from the Marcellus shale gas plays. But the annual production gain shows just how resilient domestic natural gas production has become.” For 2013 as a whole, U.S. natural gas production averaged 64.8 Bcf/d, more than 1.2 Bcf/d or 1.9 percent higher than the 2012 average of 63.6 Bcf/d.

Emissions limits could cause headaches for shale companies
Pittsburgh Business Times
Revisions made to the general permit for natural gas-fired engines and equipment stations could create big issues for Marcellus Shale operators. Last year the Department of Environmental Protection significantly lowered allowable emission limits, known as a GP-5. Where issues arise, however, is under the DEP’s single-source aggregation policy for oil and gas sources, according to Jessica Sharrow, associate at Eckert Seamans. On Friday, the law firm hosted an event at Southpointe to discuss the state of government and non-government efforts to ensure safe and reasonable natural gas extraction. The revised GP-5 only covers gas processing and compression facilities and does not cover exploration, production and transmission. However, if the DEP applies the single-source aggregation policy, exploration, production and transmission will be taken into account. Sharrow said under the DEP’s rules, this can apply to any property within a quarter mile, because it is considered adjacent under the revised regulation. This means all operations within that space must collectively fall under the emission standards. Operators of all newly drilled oil and gas wells would be required to decide between demonstrating eligibility for the exemption or applying for a plan approval.

Ref-Chem has big plans for Pittsburgh area
Pittsburgh Business Times
A Texas-based industrial construction company has set up a branch in Pittsburgh where it hopes to take advantage of the growth happening in the Marcellus Shale. Ref-Chem has taken out a lease at the Gulf Tower in downtown Pittsburgh. The next move is to find a fabrication facility, a warehouse and a yard to store equipment. The company now has three Pittsburgh-based employees but it will add dozens more as it wins business contracts. It would then need 8,000 to 10,000 square feet of shop to fabricate the piping and components that go into the projects. Those would then be sent into the construction field where as many as 200 workers will be located. An average site will have 50 to 60 employees. Odessa-based Ref-Chem is bidding on several projects and that the pace of its growth is dependent on winning the bids. It builds such things as meter stations, gas compressor stations and cryogenics plants, which separate the components of a natural gas stream. “Our company as a whole expects to grow by 20-30 percent over the next few years,” said Bruce Stewart, who is the Northeast area manager for Ref-Chem. “We expect to be a large percentage of that growth.” Ref-Chem generates roughly $300 million in a year in revenue. Stewart says that he expects his branch that will do business in Ohio, West Virginia and Pennsylvania to account for 20 percent of the company’s future revenues. “We are veterans of the industry,” said Billy Hinton, manager of business development.


Domestic natural gas production falls in January from December
Today’s Energy Solutions
U.S. domestic natural gas production in the lower 48 states averaged 65.0 Bcf/day in January, according to the latest estimates from Bentek Energy, the oil and natural gas analytic unit of Platts. This is down 0.8 Bcf/d or 1.1% from December, but up 3.2% from January 2013. “The recent and persistent cold in the U.S. Northeast and Midwest regions affected overall production this month, given that wells can freeze during very cold weather,” says Jack Weixel, Bentek director of energy analysis. “The deep freeze was particularly noticeable in sample data from the Marcellus shale gas plays. But the annual production gain shows just how resilient domestic natural gas production has become.” For 2013 as a whole, U.S. natural gas production averaged 64.8 Bcf/d, more than 1.2 Bcf/d or 1.9% higher than the 2012 average of 63.6 Bcf/d. Bentek data analysis suggests 2014 production will average approximately 68.0 Bcf/d due to a higher overall price environment for producers and continued production growth in liquids-rich basins such as the Eagle Ford, Bakken, Permian, and Greater Anadarko, in addition to continued increases in dry production in the Marcellus. The Bentek data analysis is based on an extensive sample of near real-time production receipt data from the U.S. lower 48 interstate pipeline system. Platts’ Bentek production models are highly correlated with and provide an advance glimpse of federal government statistics from the U.S. EIA.

Natural Gas – A Model of Sustainability
Natural Gas Now
Every day there is further demonstration natural gas is the fuel of the foreseeable future, if there is such a thing, providing a model of sustainable development for rural America. Sustainability is one of those concepts that is always defined in the mind of the beholder. The EPA provides a useful definition, though, that most of us can probably agree makes sense:

Elitist Foundations Fund Fracking Opposition
Natural Gas Now
DRBC e-mails and an article from a philanthropy journal show just who is funding the fracking opposition and what they’re all about – power to the elites. UPDATE FEBRUARY 7, 2014: Google is now the second most valuable company in the world, eclipsing ExxonMobil. Announced just today, this development puts things further into perspective, demonstrating just how ridiculous is the notion that fractivist foundations have difficulty matching the efforts of the “rich” oil and gas industry. Bear this mind as you read the rest of this post! The role of wealthy special interest foundations in funding the opposition to fracking is is starting to become known as the work we’ve done here, at Energy at Depth and by folks such as Kevin Mooney has finally seeped out into the press. Mike Soraghan was one of the first writers to offer the big picture story on how the Park Foundation and friends have their grubby green hands on every aspect of the fracking battle, from creating the controversy to reporting on it, topped off by financing others to give themselves rewards for their work. They know how to throw money around, all the while screaming about the industry running a few positive ads on natural gas, as if promoting one’s own product was somehow inappropriate.

U.S. firm eyes northeastern seaboard
Chronicle Herald
Texas-based Spectra Energy Corp. is planning to expand two existing pipelines along the northeastern seaboard to connect abundant natural gas supplies with energy-hungry markets in the New England states and Maritime provinces. The proposed Atlantic Bridge project would expand the Algonquin Gas Transmission and Maritimes & Northeast pipeline systems. Bill Yardley, Spectra’s president of U.S. transmission and storage, said the pipeline systems are strategically positioned to meet New England’s energy demands. “We are able to expand our existing facilities, mostly within their current footprint,” he said. “The additional supply will keep prices lower overall, while also dampening future gas and electricity price volatility, generating savings for homeowners, manufacturers and businesses.”

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