North Carolina Fracking Commission Postpones First Meeting

In 2012 the North Carolina legislature cleared the way for the state to allow horizontal fracking of shale (see NC Law to Legalize (and Encourage) Fracking Advances). The law gave state officials two years to come up with rules and regulations to govern fracking in NC. Along the way a lawsuits were launched, slowing things down (see Judge Puts NC Fracking on Hold Pending Outcome of Lawsuit). The case got resolved in January 2016. However, even if a company wants to begin drilling, members of North Carolina’s Oil & Gas Commission, who would approve applications, have not been sworn in (see NC Fracking Remains in Limbo, 5 Yrs After Legislature Approved It). Nine commissioners were appointed by outgoing Republican Gov. Pat McCrory and the Republican legislature–but new Gov. Roy Cooper (Democrat) refuses to swear in the commissioners and allow fracking to begin. One more Democrat who acts like a dictator. Where have we seen that before? No matter. The new Oil & Gas Commission isn’t waiting for Cooper. The Commission scheduled its first official meeting yesterday, in Sanford. Antis accused the agency of “going rogue” (they should talk!). However, at the last minute, on Tuesday, the Commission’s new chairman, Jim Womack, said the first meeting will be postponed until October or November, to give more time for state ethics officials to review economic disclosure statements of commission appointees for potential conflicts of interest. Looks like it will be six years before any fracking takes place in the Tar Heal State…
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Quebec Government Publishes Draft Utica Fracking Regulations

Although the primary focus of Marcellus Drilling News has always been on Marcellus and Utica Shale gas (and oil) as found in the northeastern U.S., the Utica Shale also underlies part of Canada’s Quebec province. And from time to time we highlight news concerning the Utica in Canada. There hasn’t been much news to highlight over the years since Quebec has had a moratorium on fracking at least as long as New York’s moratorium (NY’s ban as of today has been 9 years, 1 month and 29 days). But as we reported back in December, some of a minor miracle happened–the Quebec National Assembly voted to pass Bill 106, ostensibly to support Quebec’s “clean power plan” (see Fracking in Canadian Utica Shale Takes Big Step Closer to Reality). The bill includes a section that “lays out a framework for oil and gas development” in Quebec. Fracking will not begin immediately. The bill does, however, mean that new regulations will come along in 2017 and after that, it’s an almost certainty that fracking will begin. Those draft rules have finally been released (full copy of the 266-page document below), nearly 10 months later. Questerre Energy, which owns Canadian Utica leases in Quebec and has long lobbied get the government to allow Utica drilling, shares the good news that we have taken another step closer toward fracking in Quebec…
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Marcellus & Utica Shale Story Links: Thu, Sep 21, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: DRBC’s fracking ban is immoral AND illegal; ‘for sale’ sign out on Ultra Petroleum; OH rig count stays at 23; San Fran and Oakland go berserk, sue 5 oil companies for climate change; FERC holds first open meeting since quorum restored; Sen. Inhofe intros legislation to make FERC lead agency in pipeline approvals; US has way more natgas that estimates say; Big Oil gets greener, cuts emissions; Asian countries have big natgas reserves; and more!
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3 Pipelines About to Change Marcellus/Utica, Spur More Drilling

Every now and again it’s helpful to step back and look at the big picture, in particular with respect to major pipeline projects. These projects have a deep and profound effect on drilling. In fact, the addition of just three pipelines in our region (currently under construction) will fundamentally change the price of gas in the Marcellus/Utica region–and ultimately lead to more drilling. How so? As part of an article on the Seeking Alpha investor’s website, author and investor Callum Turcan wrote about “Why Appalachia Matters” in which he details that three pipeline projects already getting built will provide an extra 6.45 billion cubic feet per day (Bcf/d) of capacity to flow our natural gas out of this region to other regions. Some of that capacity is already happening, with a partial startup of Rover Pipeline. When Rover is completed in early 2018, it will flow 3.25 Bcf/d of natural gas out of our region. Massive! In addition, Atlantic Sunrise is now under construction and when it is completed by the middle of 2018, it will flow 1.7 Bcf/d of gas out of the area. Finally, Leach XPress is due to be done by the end of THIS YEAR, and when it is, it will flow an extra 1.5 Bcf/d of gas out of the area. What will be the response? It’s pretty easy to predict that (a) prices for our gas will go up, and when prices go up, (b) drillers will complete wells already drilled but not yet completed (DUCs), and then (c) begin to drill more new wells. Those three pipelines aren’t the only ones that will get built…
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WV State Agency Rejects Anti Appeal to Stop US Methanol Plant

Antis in West Virginia who filed an appeal of a permit allowing US Methanol to build a plant in Institute, WV have been rejected by the WV Air Quality Board. Earlier this month US Methanol broke ground in Institute (Kanawha County), WV for its very first methanol production plant (see US Methanol Breaks Ground on First Plant in West Virginia). This is the first of what is rumored to be up to five such methanol plants to be built in the Mountain State by US Methanol. Methanol plants convert natural gas into methanol, used as a chemical feedstock (or raw material) to create other things, like gasoline, antifreeze, plastic bottles–even LED and LCD screens. A number of dignitaries attended the groundbreaking in Institute, including colorful WV Governor Jim Justice. People Concerned, a Big Green group, has painted nightmare scenarios that “if” a 1.2 million gallon methanol holding tank explodes, it’s the end of the world for anyone and everyone in the Institute area. In an unbelievable act of disgust, the attorney for People Concerned “reminded” the Air Quality Board that the location of the US Methanol plant is located next to “a historically black university”–implying there’s something racist about the plant and the so-called safety threats it may hold for black students. Loathsome. Fortunately the Air Quality Board refused the appeal by People Concerned, meaning the plant will continue construction as planned, going online by mid-next year…
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PA Dem Senator Calls for “Study” to Address DEP Permit Delays

A Pennsylvania Senator from Wilkes-Barre, John Yudichak (Democrat) has floated a “memoranda” among his Senate colleagues asking them to join him in sponsoring a resolution (copy below) for an “independent performance review” of the state Dept. of Environmental Protection (DEP) and its shale permitting program. Since Tom Wolf assumed office as governor of Pennsylvania in January 2015, the DEP has been in a downward spiral when it comes to the speed with which they approve permits for the Marcellus Shale industry. The DEP has a policy of issuing erosion and sedimentation permits 14 days from the date of application. These types of permits are common and necessary when building roads, well pads, etc. Lately it has taken the DEP 250 days to issue those permits! Permits related to drilling wells are supposed to take no more than 45 days. Those permits now average 93 days. The DEP is hopelessly backlogged–and it’s getting worse. When PA’s traitorous Republican Senate sold out and signed on to a Marcellus Shale severance tax back in July, the Senate also approved (as part of the budget bill) fixes to speed up the permitting process (see PA Senate’s “Olive Branch” of “Relaxed Regulations” for Drillers). Senators included a provision to have third party contractors–people outside of the DEP–review applications at the DEP, including permits for oil and gas drilling, when the DEP can’t review those applications in a timely manner. There’s also a provision that certain permits, like those granted to drillers for sediment and erosion, will automatically be granted if the DEP drags its feet and doesn’t grant the permit by the current, specified deadline (45 days, with a possible 15 day extension). Since DEP can’t seem to fix its own mess, the Republican Senate is willing to “lend a hand” to help them get it done. Democrats are adamantly opposed to the plan. Enter Yudichak and his plan to “study” the situation. This is nothing more than a typical delay and stall tactic. Appear to be addressing the problem when you really aren’t. To which we say–“too much, too little, too late” Sen. Yudichak. Your guy (Wolf) has had nearly three years to fix it and he hasn’t–it’s time to let the Republican legislature get the job done…
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Atlantic Sunrise Gets Ready to Cross 5 Towns in Lebanon County, PA

As MDN reported yesterday, construction work on two compressor stations part of the Williams $3 billion Atlantic Sunrise Pipeline project began last Friday, the same day the Federal Energy Regulatory Commission (FERC) gave the project permission to begin construction (see Williams Breaks Ground on Atlantic Sunrise Pipe, Ahead of Schedule). Next up will be digging to lay the pipeline itself. The Lebanon Daily News reports residents in Lebanon County can count on seeing activity there “any day now.” The article names the five townships where the pipeline will cross, and says first up will be staging of equipment, then tree clearing, and finally (perhaps in mid-to-late October) the pipeline itself will get laid in the ground. A few antis in Lebanon have been quite vocal against the project over the past couple of years (see Lebanon County Antis Want Public (Spectacle) Mtg or No Mtg at All). Interestingly, over the past year or so Lebanon antis have been mum. Will we see any nutjobs chain themselves to bulldozers in Lebanon County? We doubt it, but you never know. Depends on whether or not out-of-town Big Green groups send troublemakers into the area. Here’s the list of five towns fortunate enough to see the Atlantic Sunrise, along with the list of four contractors hired to build the pipeline…
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Sprague Expands Fueling Footprint in Marc/Utica, Buys Coen Energy

Here’s a business you might not think about nor associate with Marcellus/Utica drilling–fuel deliveries. If you own a home and live outside of an urban area, you know all about fuel deliveries, because you likely either burn fuel oil or propane to heat your home. What you may not know is that drilling operations need a similar service–diesel fuel deliveries (mostly) at drill pads, to run the engines that generate electricity to run drilling and fracking operations. And fuel deliveries to trucking fleets, to keep the trucks moving. Perhaps an unglamorous part of the business–but vital nonetheless. Fuel deliveries run 24/7 in the oilfield, just like every other activity associated with drilling wells. Sprague Resources, founded in 1870 (not a typo!), is one of the largest independent suppliers of energy and materials handling services in the Northeast with products including home heating oil, diesel fuels, residual fuels, gasoline and natural gas. Sprague has just bought out Coen Energy, headquartered in Washington, PA. Coen pretty much does the same thing, but specializes in servicing the fueling (and storage) needs of Marcellus/Utica drillers. No financial details were included in the announcement, other than Sprague expects the addition of Coen to its company will result in an extra $7-$8 million of revenue per year. Here’s the news about one competitor gobbling up another in order to expand its presence in the Marcellus/Utica…
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Rover Pipeline: Growing the Pie, or Stealing Slices from Others?

Rover Pipeline–$3.7 billion, 711-mile natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada–starting flowing natural gas through a portion of the pipeline on Sept. 1st (see Big Portion of Rover Pipeline Now Up & Running – Thru Most of Ohio). Since then, Phase 1A of the pipeline has steadily increased its throughput and now flows over 700 million cubic feet per day (MMcf/d) of yummy Utica/Marcellus Shale gas to Defiance, OH. But where does that gas come from? Have a bunch of drillers suddenly flipped a switch and turned on new wells to fill that capacity? Well, to some degree that has happened. There is certainly new gas finding its way through Rover–but most of the gas flowing through Rover comes at the expense of flowing through other pipelines. Several other pipelines in the region are giving up some of their gas according to the experts at BTU Analytics. Which pipelines? Most of the gas flowing through Rover likely comes from gas that would have flowed through the Texas Eastern Transmission Company (TETCO) pipeline, says BTU Analytics. In addition, REX (Rockies Express Pipeline) and Dominion Pipeline have also lost some business to Rover. Here’s how Rover has changed the supply/demand landscape over the past three weeks…
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Congress Needs to Fix State Vetoes of Federal Pipeline Projects

As we have reported, history was made last Friday when the Federal Energy Regulatory Commission (FERC) overruled the New York Dept. of Environmental Conservation’s (DEC) denial of a water permit for Millennium Pipeline’s tiny 7.8 mile pipeline spur from the main Millennium Pipeline to a natural gas power plant under construction in Orange County, NY (see History Made! FERC Overrules NY DEC on Millennium Pipe Permit). The DEC eventually denied the water permit, but not before taking 19 months to do it. According to federal law, states have a maximum 12 months in which to make a federal Clean Water Act water permit decision. FERC said NY took too long, and therefore waived the permit, allowing Millennium to proceed with construction of the pipeline. The federal law governing all of this was written to give states a voice, but not a veto, of federal pipeline projects. Whether or not a project gets built is NOT up to the individual states–it is up to FERC and (if necessary) the U.S. Court of Appeals. The law specifically foresaw one state denying a project that another state needs and wants. However, rogue states like socialist NY are pushing the bounds of law by denying pipeline projects authorized by FERC. So what if NY rejects a pipeline, denying a water permit, but does so within the 12 month time period? What then? The legal beagles at the Blank Rome law firm address that issue on their environmental blog. Mike Krancer (former PA DEP Secretary), Fred Lowther and Margaret Anne Hill write that it’s time for Congress to act to clarify the law and ensure NY (and other states) cannot block federally approved pipeline projects…
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Hey Broome County: Enviros Love NG Advantage’s Virtual Pipeline

As we reported in August, a Broome County, NY judge ruled that the Town of Fenton (Binghamton area) Planning Board did not take a hard enough look at environmental and traffic issues related to their approval of NG Advantage’s plan to construct a facility in the town to compress and load natural gas onto tractor trailers for delivery to regional customers who desperately need the gas–what is called a “virtual pipeline” (see Judge Rules Against Broome Virtual Pipe, NG Advantage to Try Again). The judge’s ruling delays the project for months, at least. NG must now resubmit the project for approval by the Fenton Planning Board. Before doing that, NG must first conduct a full environmental impact study and an aquifer study. Even with environmental studies, don’t expect the locals, who appear to have very closed minds, to accept the outcome (see 2nd Approval for Virtual Pipeline in Broome County Not Assured). Some (many?) of the locals have been unduly influenced by charlatans who swoop into town and talk about “bomb trucks” and other nonsense, and then leave town once the locals are hot and bothered and agitated. These out-of-towners are professional agitators–paid by Big Green to do what they do. In a bid to counter the lies and smears pedaled by these people, NG is spreading the news that REAL environmentally-conscious people support NG’s virtual pipeline operations. For example, a dairy farm cooperative in Vermont and a sustainable lettuce and caviar farm in eastern New York are both NG customers and sing the praises of clean-burning, sustainable natural gas deliveries to their operations. Yes, those who actually care about the environment support NG Advantage and virtual pipelines…
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Select Energy, Rockwater Energy Merger Delayed 2 Months

Rockwater Energy Solutions is a “leading provider of comprehensive water management solutions to the North American unconventional oil and gas industry” and the only company that provides complementary chemistry products and expertise in connection with its water solutions. Rockwater operates in the Marcellus/Utica region, among other shale plays. Select Energy Services is a billion dollar oilfield services company with three main divisions: water services, rentals, and wellsite completions. They operate in every major shale play in the country, including the Marcellus/Utica. In July the two companies announced they are merging in an all stock swap deal (see Select Energy, Rockwater Merge to Create Huge Shale Water Provider). They originally thought the merger would be completed by Nov. 1st, however, the date has now been pushed back to Dec. 31st…
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Marcellus & Utica Shale Story Links: Wed, Sep 20, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Dump WV personal property tax on businesses to lure more gas power plants; PA Senate Repubs don’t like House budget, want a severance tax; OH first responders say o&g companies do good job with information; Haynesville Shale gas production hits 4-year high; lawsuit aims to block fracking on US land in Nevada; 2 new $400M power plants coming to Michigan; gas producers boost 2017 production outlook; how productive and efficient is US shale; final 2 FERC nominees due for full Senate vote; climate scientists admit their predictions on global warming are WRONG; Japan LNG imports down; India LNG imports down; and more!
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Rex Energy Update – Brings 10 New Wells Online in Butler Co. PA

Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), is a plucky company. Although it has faced its share of financial challenges, it continues to drill in the Marcellus/Utica–bringing new wells online. Rex released an announcement yesterday to tout two new wells pads with a cumulative 10 new wells between them that the company has now brought online into production. Rex always refers to their drilling program in three areas: “Bulter Legacy” and “Moraine East” are drilled on Rex’s leases in Butler County, PA; “Warrior North” refers to Rex’s drilling program on land in Carroll County, OH. The latest two pads were both drilled in Rex’s Moraine East area of Butler County. One of the pads, the “Shields” pad with six wells, produced an initial cumulative rate of 9.2 million cubic feet equivalent per day (MMcfe/d), dropping to 7.9 MMcfe/d after 30 days. The “Mackrell” pad with four wells produced an initial cumulative rate of 8.4 MMcfe/d. No 30-day rate (yet) for the Mackrell pad. Here’s the particulars of our “little driller that could”…
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Williams Breaks Ground on Atlantic Sunrise Pipe, Ahead of Schedule

Earth moving has begun for a compressor station in Columbia County. (Williams Partners)

Well that didn’t take long! Yesterday MDN brought you the fantastic news that the Federal Energy Regulatory Commission (FERC) had granted Williams a certificate/go-ahead to begin construction on Atlantic Sunrise, a $3 billion, 198-mile natural gas pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County (see FERC Greenlights Construction of Atlantic Sunrise Pipeline). FERC issued their permission to begin construction last Friday. Based on a previous Williams statement, we expected construction to begin tomorrow, on Sept. 20th. However, as soon as Williams had the certificate in their hands, they began construction–LAST FRIDAY. Where? Williams fired up bulldozers at two locations–one in Wyoming County, the other in Columbia County (both in northeast PA), to clear land for two new compressor stations they will build as part of the project. Yesterday both Williams AND Cabot Oil & Gas issued the same press release to announce construction has begun. Interesting that Cabot issued the release too, showing just how important this project is to Cabot’s future (and to their stock price)…
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FERC Lifts Rover Horizontal Drilling Ban, Pipeline Work Resumes

Rover Pipeline–$3.7 billion, 711-mile natural gas pipeline that (will eventually) run from PA, WV and eastern OH through OH into Michigan and on to Canada–began flowing natural gas through a large portion of the pipeline on Sept. 1st (see Big Portion of Rover Pipeline Now Up & Running – Thru Most of Ohio). In the past three weeks, Phase 1A of the pipeline has steadily increased its throughput and now flows over 700 million cubic feet per day (MMcf/d) of yummy Utica/Marcellus Shale gas to Defiance, OH. However, it could flow more, if the Federal Energy Regulatory Commission (FERC) would lift its considerable boot off Rover’s neck and let them finish Phase 1B pipeline work in eastern Ohio to feed more gas to the main part of the pipeline. The problem is that Rover had early missteps, the most serious of which spilled 2 million gallons of non-toxic drilling mud in a swamp near the Tuscarawas River back in April (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). An investigation by the Ohio Environmental Protection Agency (OEPA) found the presence of diesel fuel in the drilling mud, which means the mud wasn’t so non-toxic after all (see OH EPA Says Diesel Fuel Found in Rover 2M Gal Drilling Mud Spill). Rover believes sabotage may have been the cause. Since April, FERC has blocked all new underground HDD work for the Rover project. Rover has asked (begged, pleaded) FERC, several times, for permission to restart the HDD work–at least in a few select locations. In August, FERC issued eight conditions before they would agree to lifting the HDD ban (see FERC Issues Rover 8 Commandments to Restart Horizontal Drilling). Rover says they have met all of those conditions. However, the OEPA says they have not. Last week OEPA asked FERC to continue blocking HDD activity until they (OEPA) are satisfied (see Rover Pipeline Still Battling Ohio EPA, Asks FERC to Lift HDD Ban). Rover fired off a letter to FERC that says OEPA’s public statements are opposite of their private statements with Rover. In other words, OEPA is lying. Who will FERC listen to? Now we know. They’re listening to Rover. Yesterday FERC lifted the ban on HDD for nine key locations–NOT including the Tuscarawas River site. FERC says they are still investigating that spill. FERC said, in lifting the HDD ban, that “Rover has demonstrated sufficient progress on the required rehabilitation and restoration of the areas affected by the inadvertent release and drilling mud contamination” and that the company is following FERC’s 8 Commandments. We’re pretty sure yesterday’s FERC decision won’t make the OEPA happy…
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