Marcellus & Utica Shale Story Links: Wed, Feb 5, 2014

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

New York

Dear Clueless in Albany (a/k/a Andrew Cuomo)
Natural Gas Now/Inge Frafe-Kieklak
Inge Grafe-Kieklak, a natural gas supporter from New York, says she was leafing through some newspapers the other day and found this letter to Dear Abby from “Clueless in Albany,” also known as Gov. Andrew Cuomo. Just look what I found leafing through the news paper the other day–a letter that appears to be from our Governor, Andrew Cuomo, to Dear Abby. I think you all should know what was said as it reveals a great deal about the true nature of our Dear Leader in New York:


American Energy Buys 130,000 Acres
The Intelligencer/Wheeling News-Register
Former Chesapeake Energy CEO Aubrey McClendon plans to drill at least 1,600 Utica Shale wells over the next decade on the 130,000 eastern Ohio acres his new American Energy Partners firm acquired this week. Many Ohio mineral owners who signed leases with Hess Corp., XTO Energy, Phillips Exploration and Paloma Resources now have contracts with McClendon’s Oklahoma City-based firm. His company stated its acreage is in the “core of the play, defined as southern Jefferson, Belmont, eastern Guernsey, Harrison, Monroe and Noble counties.” The deals bring American Energy Partners’ Utica Shale acreage holdings to about 260,000 acres. After working in the Utica for nearly three years, New York City-based Hess Corp. is selling 74,000 Ohio acres to the McClendon firm for $924 million. Hess originally entered the Utica via its $750 million purchase of Marquette Exploration in 2011. “While our wells in the dry gas portion of the Utica were highly productive, we concluded that the potential returns from such an investment – at current and projected natural gas prices – no longer justified retaining this acreage as a strategic part of our overall liquids-based asset portfolio,” said John B. Hess, Hess CEO. “The sale of our Utica dry gas acreage is an example of our continued commitment to grow shareholder value through ongoing portfolio reshaping.”


Range Resources adds $10K to Day of Giving pool
Washington (PA) Observer-Reporter
A Marcellus Shale natural gas exploration company has become the newest sponsor of a one-day fundraiser linked to a Web-based platform allowing donors to select the Washington County charities they want to offer financial support. Range Resources of Southpointe will donate $10,000 to the campaign overseen by the Washington County Community Foundation, which processed $400,000 in donations to more than 100 organizations in the first Day of Giving last year. “It is a powerful way to make an impact in our community,” said Andrea Cooper, a Range Resources community relations specialist. “It’s a great opportunity for us to reach local groups that we have or have not supported in the past,” added Mark Windle, another community relations specialist at the company. This year’s campaign begins at 8 a.m. Sept. 10. Each of the nonprofit organizations involved will be given an additional percentage of an expected $100,000 bonus pool.

Anadarko reports record production in Marcellus Shale
Pittsburgh Business Times
Anadarko Petroleum Corp. saw record production in several major shale plays, including the Marcellus, in 2013. There was an average of 59,000 barrels of oil equivalent per day during 2013 in the Southern and Appalachia Region, the company said in a statement Monday. Anadarko’s domestic shale plays achieved a 25 percent increase in oil volumes in 2013 relative to 2012. Anadarko (NYSE:APC) reported a fourth-quarter loss of $770 million, $1.53 a share, compared to $203 million, 40 cents a share, in the fourth quarter of 2012. The loss was due to an $850 million pre-tax contingency due to potential damages in pending litigation. The Woodlands, Texas-based oil and gas developer said its $3.3 billion in revenues for the fourth quarter were down 3 percent compared to the fourth quarter 2012. Anadarko reported its full-year sales volumes of natural gas, crude oil and natural gas liquids totaled 285 million barrels of oil equivalent (BOE), or an average of 781,000 BOE per day. That’s a 7 percent increase over 2012 sales volumes of 732,000 BOE per day. “I’m confident we’ll continue to deliver differentiating results in 2014 and longer term through our focus on value acceleration, margin expansion and investment returns,” said CEO Al Walker in a prepared statement.

Corbett budget proposal expands drilling in state parks and forests
StateImpact Pennsylvania
Governor Corbett is seeking to overturn a Rendell-era executive order that placed a moratorium on new gas leases in state parks and forests. Today Corbett unveiled his $29.4 billion spending plan for the coming fiscal year. He says allowing new oil and gas leases could immediately generate $75 million in new revenue to the state, with substantial additional royalty revenue in the future. Corbett did not directly mention the issue in his budget address to the legislature, but he touted the benefits the Marcellus Shale has brought to the state, noting that Pennsylvania is on track to become the second-largest producer of natural gas in the nation. “Shale gas offers our country a chance at energy independence and greater economic security – and it’s part of the all-of-the-above strategy we’ve put in place,” Corbett said.

PA’s Corbett Praises Shale, Ignores Controversies in Budget Speech
NGI’s Shale Daily
Shale gas picked up some kudos in the prepared speech Pennsylvania Gov. Tom Corbett delivered Tuesday to discuss his proposed $29.4 billion budget, but no mention was made of controversies surrounding it, such as a possible severance tax or the ongoing legal battle over Act 13, the state’s omnibus Marcellus Shale law. The Republican governor lauded the state for becoming the nation’s second-largest producer of natural gas in just a few years’ time, and he said shale gas is an important component for the energy independence of the United States.

M.U.M. 2014: Need for pipelines cited at conference
Pennsylvania Business Central
Marcellus shale drillers need more pipelines to get their bountiful supply of gas to market, but improving the delivery infrastructure could cause them growing pains. The challenge of growing the delivery network without pressuring prices with more supply is something on the minds of industry officials who are attending a conference in Pittsburgh this week. “All these supplies that we’re growing on the gas production side are at risk if we can’t connect them to markets,” Alan S. Armstrong, CEO of the Williams Cos., a pipeline and processing group, told the Marcellus-Utica Midstream Conference & Exhibition on Wednesday. The industry has made progress, especially in the past 18 months, at getting pipelines to more wells. But with gas production growing so fast, the pipeline investment will have to go on into the next decade and maybe longer to keep pace, experts at the conference said.


Big Rigs Leading Switch To Cheap, Clean Natural Gas
Investor’s Business Daily
“Transformer”-sized vehicles such as big rig trucks and buses made by Ford, Navistar and others are leading the charge in use of natural gas as a cheaper, cleaner fuel. Thanks to hydraulic fracturing, or fracking, in America’s rich shale fields, the country in the last decade has gone from a natural-gas laggard to holding a 100-year supply, Oppenheimer said in a recent report. The recent rise in natural gas futures won’t change that. Railroad locomotives, specialized vehicles like Zambonis and garbage trucks are testing natural gas as a fuel. Natgas fuel will grow at an annual rate of 11.9% a year from 2011 to 2040, faster than any competing source, according to the Energy Information Administration. Natgas-fueled passenger cars will largely be relegated to company fleets. But if natural gas prices stay below diesel, as expected, about 40% of the nation’s new heavy trucks will run on natural gas by 2045, a National Petroleum Council report in 2012 projected.

Keystone and the Greedy Greens
National Review Online
For the fifth time in as many years, the State Department has found that the Keystone XL pipeline would not have a significant impact on the environment or worsen carbon emissions, according to a new report released Friday. That’s further evidence that the environmental lobby’s vociferous moaning about the pipeline isn’t grounded in scientific fact. Shadier motives are likely. Ever since TransCanada first proposed the pipeline in September 2008, green groups have responded with extreme claims about the environmental catastrophes we will face if Keystone XL goes forward. The Natural Resources Defense Council has written that “approval of the Keystone XL pipeline permit will trigger very large increases in carbon pollution that will significantly worsen climate change.” Friends of the Earth argues that the pipeline “could devastate ecosystems, pollute water sources, and jeopardize public health.” A Sierra Club factsheet on the pipeline continues in this line: “The U.S. now faces a clear choice: Promote the oil industry’s interests by green-lighting the most carbon-intensive, destructive oil on the planet, or demonstrate a bold commitment to addressing climate disruption and promoting clean energy solutions by saying NO to Keystone XL.”

The Weekly Oil & Gas Follies
News the Peak Oil Cult and Sierra Club will hate: America’s Energy Revolution Transforms International Relations – North America’s energy revolution is remaking all aspects of the global economy and international relations in what has turned out to be the most profound shift in the second decade of the 21st century. Policymakers and climate scientists prefer to talk about the transformational potential of clean technologies like wind, solar and electric vehicles. But in reality the biggest shifts in economic relations and the balance of power at present stem from changes in the production of decidedly old-fashioned and polluting fossil fuels such as oil and gas. Hydraulic fracturing, coupled with tougher fuel-economy standards and increased use of biofuels, has reversed the growing dependence of the United States on energy imports in less than 10 years. If fracking has not yet made the United States “energy independent”, it has certainly created a crucial source of competitive advantage and given policymakers much more room to manoeuvre.

U.S. Energy Secretary Plans To Review New England’s Natural Gas Shortage
The Hartford Courant
The head of the U.S. Department of Energy is calling for a review of New England’s natural gas shortage, which has led to higher electricity prices and concerns that the region’s electric grid is overly dependent on the fuel. Secretary Ernest J. Moniz said in a letter to New England senators that the issue of tight natural gas supplies will be one of the first raised in a broad federal review of the country’s energy system, which President Barack Obama requested earlier this month. A stakeholder meeting in the next few months will kick off the review, Moniz said. “As a New Englander myself, I am acutely aware of the constraints that existing infrastructure to and within the New England region present for the transmission of natural gas to customers, industrial facilities, and power plants,” Moniz, who is from Massachusetts, wrote in a letter to U.S. Sen. Chris Murphy and others.

White House leaves door open to revising crude export limits
The White House yesterday left the door open to revisiting the nearly four-decade-old limits on crude exports, saying after a landmark Senate Energy and Natural Resources Committee hearing on the ban that it is “closely monitoring the implications” of surging U.S. oil production. Even the handful of advocates for tweaking the export ban, led by ENR Committee ranking Republican Lisa Murkowski of Alaska, do not expect Congress to wade into the politically volatile topic, and urge President Obama to use existing executive branch authority to ease the nation’s growing glut of light shale oil. Asked to comment on the hearing, Obama spokesman Matt Lehrich did not rule out such a move.


Global transport sector looks to ride natural gas boom
Natural gas has started to challenge oil as the dominant transport fuel with companies building gas-powered ships and installing networks of service stations on water and land. The expectation of cheaper gas and tighter environmental regulation have created demand for a cleaner alternative to the oil-based fuels that have so far dominated the transport world. Although European and Asian liquefied natural gas (LNG) prices are currently high, trading at almost $20 per million British thermal unit (mmBtu) in Asia and around $10 per mmBtu in Europe because of booming demand, analysts expect prices to drop substantially later this decade when new production rises. Germany, Singapore and the Netherlands are among the countries investing in natural gas transport hubs while companies including Royal Dutch Shell, Gazprom and Total, are also developing LNG fuel infrastructure.

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