Marcellus & Utica Shale Story Links: Mon, Sep 21, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Fractivism goes blue; welders needed in Ohio; budget compromise or political suicide in PA; Cabot’s $50K scholoarship; Penguins & PNG partner up; Dominion says no easy fixes for pipelines; pipes in NH; Goldman sees 15 years of cheap oil; and more!

MARCELLUS/UTICA REGION

New York

Blue fractivism: the new green
Natural Gas Now/Tom Shepstone
You need to watch this video if you can tolerate the morose music and the accompanying condescension for what I promise is less than five minutes. It’s all about painting trees blue to create a “work of art” that can be copyrighted for purposes of contesting the expansion of the Spectra Energy Algonquin Incremental Market pipeline. It will, supposedly, create a “Greek chorus” that will force a battle over the “moral rights of arts.” Somehow, I suspect protecting trees painted with a “non-toxic blue slurry” and set to bad music is not going to trump New York City’s need for more natural gas, but I could be wrong. This is New York, after all, and logic never beats political correctness there, but one can just imagine the legal wrangling over the rights of trees, art and people. Will the trees get questioned in the depositions? Who has the right to speak for them? Is the new “green” blue? What do the trees think about that?

Ohio

Union official: ‘sky is the limit’ (welders needed)
Wheeling (WV) The Intelligencer/Wheeling News-Register
According to one local trade union official, the sky’s the limit for students at Utica Shale Academy. Chris Ricker of the Ohio State Association of the Plumbing and Pipefitting Industry Local 495 of Canton spoke to nearly 30 students in the program on Sept. 10 at Southern Local High School and informed them about the many opportunities available in the oil and gas industry and related fields. He explained his task was to seek welders to join the local union and go to work. Incidentally, he said the local union has 550-600 members, and the international organization spans the U.S., Canada, Australia and Scotland. It also provides apprenticeships and other programs for further training. “The need for welders is so strong right now. We started two programs in Canton over the last year (for welding), and its four nights a week to become expert pipe welders. It’s an eight-week program and we had 10 in the first class. It is a precursor to our apprenticeship program,” he said.

Pennsylvania

Compromise a dirty word in Harrisburg
Washington (PA) Observer-Reporter
The disagreements seem to be clear-cut at this point. Wolf is fighting for a severance tax on Marcellus Shale development and an increase to the income and sales taxes in exchange for increased school funding and a reduction in the crippling property taxes that plague many homeowners. The Republicans rolled out their own plan (without the Marcellus Shale tax, of course) that would be net neutral and funnel all new revenue back into property tax relief rather than helping to fund the state’s allotment for school aid.

Cabot funds $50K scholarship at Wyoming Seminary
Wilkes-Barre (PA) The Citizens’ Voice
Wyoming Seminary College Preparatory School announced Tuesday a scholarship of $50,000 from Cabot Oil & Gas Corp. made through the state Educational Improvement Tax Credit Program. It will help academically-talented students with an interest in STEM — science, technology, engineering and mathematics — attend Sem’s Lower and Upper Schools. At least two students at the Lower School in Forty Fort and two students at the Upper School campus in Kingston will receive financial aid through Cabot’s donation. The students will have access to an engaging series of STEM courses and activities on both campuses through Sem’s Louis Maslow STEM School, Wyoming Seminary President Kevin Rea said.

Penguins, Peoples Natural Gas announce partnership
Pittsburgh (PA) Post-Gazette
The Penguins and Peoples Natural Gas announced a “major partnership agreement” this morning that will give the North Shore-based gas utility the naming rights of an entrance at Consol Energy Center. The partnership is a “multi-year agreement,” but other terms of the deal were not disclosed. The new “Peoples Gate” will be at Fifth Avenue and Washington Place, site of the former American Eagle Outfitters Gate. The new signage will be installed during the Penguins’ preseason. As part of the sponsorship agreement, Peoples will donate $10 to the Dollar Energy Fund for every Penguins’ shot on goal at Consol Energy Center this season.

The keys to expanding benefits of Pa.’s shale-energy revolution
Philadelphia (PA) Inquirer
Pennsylvania is at the forefront of America’s energy revolution. As a result of our abundant shale resources, the United States has surpassed both Saudi Arabia and Russia as the world’s leading oil and natural-gas producer in 2014. But what does that mean for manufacturers and small businesses here at home? It’s absolutely clear that safe shale development is stimulating new manufacturing opportunities, delivering for consumers, and creating environmental benefits, all while providing us with a reliable source of energy.

West Virginia

Dominion says no ‘easy fixes’ remain to transport natural gas
Richmond (VA) Times-Dispatch
Doddridge this year became the top-producing county in West Virginia for natural gas extracted from the Marcellus Basin, a deep formation of shale that has turned the energy industry upside down and begun to reverse the traditional flow of natural gas from the Gulf Coast to the Northeast. The gas-rich Marcellus is the impetus for Dominion’s 42-inch Atlantic Coast Pipeline, a massive $5.1 billion investment for the Richmond-based utility and partners whose long path through Virginia’s mountains and Piedmont has stirred environmentalists to battle. Beneath the Marcellus lies the Utica, another gas-rich shale formation that producers want to mine and market. “Since the Marcellus has come on, all of a sudden the supply is here,” said Jody Derrickson, director of gas control for Dominion Transmission Inc., based in Clarksburg, W.Va.

Leadership West Virginia class visits Wheeling
Steubenville? (OH) WTOV Channel 9
Leaders from around the state are visiting Wheeling this week as part of the Leadership West Virginia program. The Critical Issues/Marcellus Shale Session brings the Class of 2015 to the Northern Panhandle to learn more about the impact of the oil and gas industries in West Virginia. Informational sessions and entertainment were provided in Wheeling through Friday.

OTHER U.S. REGIONS

New England

Eversource finding ‘balance’ is key to progress
Dover (NH) fosters.com
There is little disagreement that New England has an energy capacity deficit. Natural gas fuels most of our region’s power plants. In the winter months, when natural gas is diverted to heat homes and businesses, the pipelines feeding the region cannot carry sufficient natural gas to also fuel electricity producing power plants and for the past several winters that has caused prices to spike; a financial blow to individuals, families and businesses. Three companies are vying to “deliver significant volumes of incremental natural gas supplies to New England from the Marcellus Shale gas formation in Northeastern Pennsylvania,” according to a Sept. 15 report from the Public Utilities Commission.

NATIONAL

Goldman sees 15 years of cheap crude
Houston (TX) Chronicle – Fuel Fix Blog
A glut of crude may keep oil prices low for the next 15 years, according to Goldman Sachs Group Inc. There’s less than a 50 percent chance that prices will drop to $20 a barrel, most likely when refineries shut in October or March for maintenance, Jeffrey Currie, head of commodities research at the bank, said in an interview in Lake Louise, Alberta. Goldman’s long-term forecast for crude is at $50 a barrel, he said. Goldman cut its crude forecasts earlier this month, saying the global surplus of oil is bigger than it previously thought and that failure to reduce production fast enough may require prices to fall near $20 a barrel to clear the glut. Prices may touch that level when stockpiles are filled to capacity, forcing producers in some areas to cut output, Currie said Wednesday. “When we think of the longer term oil price, yes we put it at $50 a barrel,” he said. “However the risks are to the downside given what’s happening in the other commodity markets and the macro markets more broadly.”

Growth in some propane demand sectors, decline in others
RBN Energy
Traditional domestic propane markets were dominated by seasonal consumer demand in the Northeast and Mid-Continent and petrochemical industry demand in the Gulf Coast region. Today domestic demand is still dominated by these two sectors although consumer use is declining slowly while new propane dehydrogenation (PDH) plants look set to boost chemical demand. Meantime the bounty of shale production has swamped domestic consumer needs – making exports by far the largest growth sector. Today we continue our deep dive review of the propane market. This blog and others in the series are based on an analysis recently completed by RBN for the Propane Education and Research Council (PERC).

Centers of domestic propane
RBN Energy
Surging domestic propane production in PADD 1 (East Coast) and PADD 2 (Mid-Continent) over the past four years is unlikely to result in an increase in traditional consumer propane demand in those regions, even with today’s lower overall domestic propane prices. Most propane use in those markets is from the residential and commercial sectors, and that demand has been in a slow, steady decline for years due to competition from electricity and natural gas, efficiency improvements and the general population shift to warmer states. In fact, the only sector of the U.S. market expected to see an increase in propane demand in the next few years is for its use as a feedstock to produce petrochemicals. Most petrochemical demand has traditionally been centered at the Gulf Coast but is projected to expand on the East Coast as well. Today we detail current and projected propane demand.

Shale oil’s retreat threatens to leave U.S. short on natural gas
Bloomberg
The retrenchment in drilling for U.S. oil is threatening to leave a different market short: natural gas. “The impacts of oil rig counts extend beyond oil: the outlook for U.S. natural gas is critically dependent on the outcome of this balancing act in U.S. oil rigs,” Anthony Yuen, a strategist at Citigroup Inc. in New York, said in a report to clients Wednesday. “If the oil market remains oversupplied and oil-rig counts fall, the decline in associated gas production would leave the market short of gas.” Associated gas is the gas that comes out of oil wells along with the crude.

Oil: shale production breakeven and marginal costs, moving the goalposts?
Seeking Alpha/The Nattering Naybob
Examination of US shale oil producer breakeven prices: Bakken, Eagle Ford and Permian Basin. Examination of global oil producer breakeven prices and US efficient shale production marginal costs. Brief discussion of informational market techniques and the benefits of investor awareness.

Oil: shale moving the goal posts? – Part 2
Seeking Alpha/The Nattering Naybob
Brief shut-in or cash cost update. Examination of shale producer interest costs and North Dakota production. Examination of shale production decline rates and durations. Examination of shale tight oil efficiencies and rig counts. Discussion of historic crude oil prices.

INTERNATIONAL

Saudis winning oil market share wars despite fiscal pain
Forbes/Gaurav Sharma
Saudi Arabia appears to be winning the oil exporters tussle for market share, even if it is denting the country’s coffers. Anecdotal and empirical evidence doing the industry rounds was backed up by US Energy Information Administration’s recent research pointing to the OPEC heavyweight maintaining its crude oil market share among Asian customers, where much of the recent growth in liquid fuels demand has occurred.