Shell Sets Expectations for What Happens if PA Cracker is Built

In yet another signal that Shell is very serious about building a $3 billion ethane cracker plant northwest of Pittsburgh, the company recently held public meetings in Beaver County, PA, where the plant would be built, to tell members of the local community what they can expect to hear, see, and smell during and after construction–if the plant gets built. Shell wants to be right up front about what happens when an industrial plant like the one they’re building comes into existence. We find that a “good neighbor” kind of thing to do. Look, there will be some inconveniences for a time when this thing gets built. Construction activity at the site will happen 24/7 for a number of years (yes, years) until it is completed. Let’s talk about it right up front so no one is surprised. Although Shell stresses at these meetings that a “final decision has not yet been made,” increasingly it looks (to us) like it has…
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NEXUS Pipeline Sues Columbiana County Landowners for Survey Access

The NEXUS Gas Transmission pipeline, you may recall, is a $1.5 billion natural gas pipeline that will carry Utica and Marcellus Shale gas spanning 11 counties in Ohio, 3 counties in Michigan, and eventually connect to the Dawn Energy Hub in Canada (see NEXUS Gas Pipeline Pre-Files with FERC, New Details Come to Light). A number of landowners in Ohio have been less than cooperative when it comes to surveying their property. One old codger in Medina County, OH threatened he would meet anyone trying to survey his property with a gun (see Medina, OH Landowner Says He’ll Meet NEXUS Surveyors Packing Heat). Two couples in Columbiana County aren’t threatening guns, but they have denied access to NEXUS, repeatedly, and NEXUS has had enough. NEXUS sued the two couples in Columbiana County Common Pleas Court to force them to allow their surveyors on their property…
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Construction on WV Stonewall Gather Pipeline Begins, Runs Thru Dec

In early April MDN told you that a section of M3 Midstream’s Appalachia Gathering System (AGS) had been spun off into its own company called Stonewall Gathering System (see M3’s New Stonewall Gathering System Extends Existing AGS in WV). At the time plans were under way to build out gathering pipelines in West Virginia’s Harrison and Doddridge counties, running through Lewis and into Braxton County where the pipeline will connect with Columbia Transmission’s interstate pipeline. The plans have come to fruition and the Stonewall Gathering System is now being built. Incidentally, they’re looking for welders and laborers–but only through local unions…
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Steep Decline in Rig Count Continues for Patterson-UTI in May

We continue to see mixed signals when it comes to the end of declining rig counts. Yesterday we ran a story highlighting the comments from the largest private oilfield services company in the U.S., Canary, saying we’ve now turned a corner in shale and “the industry is on the way back” (see Largest Private Oilfield Svcs Co Says Shale is Rebounding). Then we look at Patterson-UTI’s average rig count numbers for their company–and the numbers continue to decline rather significantly. Two months ago, in March, Patterson ran an average of 142 U.S. rigs and 4 Canadian rigs. In April, they ran an average of 131 U.S. rigs and 2 Canadian rigs (see Patterson-UTI Active Rig Count Drops Again in April). For May, Patterson just announced they ran an average of 122 U.S. rigs and 1 Canadian rig. Oy vey…
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Spineless Senate Republicans Confirm Quigley to Head PA DEP

Welcome to the PennFuture Administration that now runs the entire environmental policy of the state of Pennsylvania. The anti-drilling PennFuture has successfully installed one of their own as Secretary of the Dept. of Environmental Protection–John Quigley. Yesterday the Pennsylvania Senate, controlled by spineless Republicans, voted to approve Quigley as the next Secretary of the DEP in a 44-4 vote. Shame on the Republican party in PA. Now we have someone who will damage the Marcellus industry with his anti-drilling philosophy as head of the agency that oversees drilling in the state…
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Crestwood Midstream Reorganizes Company, Promotes Several Execs

Crestwood Midstream is a pipeline company with operations in several shale plays, including the Marcellus and Utica. They are a smaller but meaningful player in the northeast. Crestwood has 65 miles of natural gas gathering pipelines in Harrison and Doddridge counties in WV–along with eight compressor stations. They also own property along the shore of Seneca Lake in New York where there is a depleted salt cavern where they want to turn into an underground storage facility for liquefied propane (see Crestwood Execs on Radio to Promote Propane Storage @ Seneca Lake). That project is making progress after years of delays by the New York Dept. of Environmental Conservation. Crestwood merged with (bought out) Inergy Midstream in 2013 in an $8 billion deal (see Crestwood/Inergy Complete Their Merger Today, Worth $8B). With the dust finally settled from that deal, Crestwood announced on Monday they are reorganizing the merged company into several new units–and along with that reorganization comes several executive promotions…
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Research Says Converting Marcellus Gas into Methanol is Profitable

The Ben Franklin Shale Gas Innovation and Commercialization Center (SGICC) funded a research study that looks at the potential to convert natural gas to methanol on a small to medium size plant scale. The study, titled “Natural Gas Utilization via Small-Scale Methanol Technologies” (copy below) concludes that yes indeed, such a use for potentially significant quantities of natural gas is feasible. Methanol is the simplest alcohol and is a light, volatile, colorless, and flammable liquid with a distinctive odor. Methanol is produced mainly using a two-step catalytic chemical process. It is an important chemical with a wide range of applications and end-uses. The SGICC’s research shows that methanol is priced similar to oil (i.e. much more profitable than regular natgas) and building plants in remote areas without pipeline infrastructure is relatively fast and effective. What’s not to like?…
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Anti-Drilling Groups File to Defend BLM’s New Federal Lands Frack Rule

The “sue and settle” gang is back. A group of six virulently anti-drilling, fossil fuel-hating organizations, calling them (don’t laugh) “conservation groups” (nothing of the sort) have filed to intervene in two lawsuits brought by the individual states and the oil and gas industry against the federal government over the new fracking rules released by the federal Bureau of Land Management (see BLM Introduces “Final” Fracking Rules for Fed Lands – 3 Yrs Late). Here’s how it works with sue and settle: the federal government gets Big Green groups (with lots of money) to bring lawsuits against a department, like the EPA or BLM. The government agency then promulgates new restrictive and jobs-crushing rules that have the force of law because “the lawsuit and judge made us do it.” And unless those “rules” are challenged in court to get them repealed, we end up with laws created by government agencies and judges instead of the legislature, the way the Founders intended. So when the good guys sue to overturn these overreaching “rules”, the sue and settle gang with lots of Big Green money comes back to try and stop it. The groups are once again being led (by the nose) by Earthjustice and include the Sierra Clubbers, Earthworks, The Wilderness Society, Conservation Colorado Education Fund, Southern Utah Wilderness Alliance and Western Resource Advocates. None of them are truly concerned with “conservation,” contrary to what they say. They are all left-leaning political groups…
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Marcellus & Utica Shale Story Links: Thu, Jun 4, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Largest Private Oilfield Svcs Co Says Shale is Rebounding

reboundCanary LLC is the largest privately owned (no publicly traded stock) oilfield services company in the U.S. Canary competes with the likes of Schlumberger, Halliburton and Baker Hughes. We wrote about Canary in January 2014, pointing out the company has operations in both the Marcellus and Utica Shale (see Oilfield Services Company Canary Buys Wellhead Competitor). Being privately owned gives one a certain sense of independence and fearlessness. Perhaps even a touch of contrariness. Such is Canary’s CEO, Dan Eberhart, who said last week in a press release that he believes the downward spiral of declining rig counts has stabilized and that a shale recovery has already begun in the U.S. In fact, he said, “the industry is on the way back.” When the head of the country’s largest private company that rents rigs and the manpower to run them says we’re at a turning point and drilling is about to pick up again, you need to perk up and pay attention…
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Contractor Fined $13,550 for WV Well Pad Violations/Death in 2014

We don’t normally miss news like an accident at a well pad in the Marcellus that kills someone–but we did this time. At the end of November 2014, Ryan Dunn, a contract worker employed by Precision Drilling, was working at an Antero Resources well pad in Tyler County, WV when he was struck and run over by a front-end loader used to move pipe at the site. Dunn was pronounced dead at the scene. A true tragedy. The federal Occupational Health and Safety Administration (OSHA) investigated and found a number of problems at the site. OSHA has completed their investigation and is assessing a total of $13,550 in penalties against Precision Drilling. We’ve not spotted anything about lawsuits or about fines by the WV Dept. of Environmental Protection. Here’s what we’re able to locate on the accident and resulting fine by OSHA…
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Two Thumbs Down on John Quigley as Sec of PA DEP

2 thumbs downYesterday Pennsylvania Gov. Tom Wolf’s pick to head the all-important Dept. of Environmental Protection (DEP), John Quigley, faced a confirmation hearing in the PA Senate. Quigley sparred with Republican Senators who challenged him over his two-year stint at the anti-drilling organization PennFuture. He also assured the Senators that if Gov. Wolf’s insidious severance tax is passed, the “industry’s not going anywhere” he said. In other words, we have them by the short hairs and they have no other options. Au contraire, Mr. Quigley. Au contraire. We’ve made no bones about our disdain for Quigley. He shouldn’t be the next Secretary of the DEP. But we’re under no illusion. He’ll likely get approved. What was interesting, however, is that at the conclusion of the hearing, the Senators on the panel voted to refer Quigley’s appointment to the full Senate–without recommendation. That’s extremely rare. It was a vote of no confidence by the senators, as in “here, we’ll let ya’ll vote on him any which way you want to, we wash our hands of it.” It will be interesting to see how many vote against his confirmation. It’s good to know we’re not a lone voice crying in the wilderness. There is someone else–a very important someone else–who also doesn’t think Quigley should be confirmed. That important someone else is John Peterson, former U.S. Congressman and Executive Director of the Allegheny Forest Alliance…
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Eclipse Resources Update: Squeezing More Wells in Smaller Space

Eclipse Resources, a Marcellus/Utica driller headquartered in State College PA, but drilling mainly in the Ohio Utica Shale, issued an operational update yesterday. The company says by the end of the second quarter they expect to be producing around 180 million cubic feet of natural gas per day–the high end of the previous estimated range. The company is spending less money than it expected, which keeps the investors happy. Eclipse recently completed drilling a 3-well pad in Monroe County, OH with the well spacing just 730 feet apart–the first time they’ve tried spacing wells below 1,000 feet apart. All eyes are on the outcome of that experiment. (If successful, it means they can drill more wells in the same amount of space–by their estimates, 20% more wells.) Eclipse had wanted to put those 3 wells into sales in December of this year–which now looks like it will slip into January of next year. Here’s the update with details about their Utica drilling program…
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Earthjustice Asks Court to Stop Construction at Cove Point LNG

Three weeks ago MDN told you about the frivolous lawsuit filed by Earth[in]justice attempting to stop the Cove Point, Maryland LNG export plant from being built (see DOE Grants Cove Point LNG Final Approval, Earthjustice Sues). Earth[in]justice sued on behalf of themselves (they are a small group of Washington, DC lawyers backed by Big Green money), and on behalf of Chesapeake Climate Action Network, Patuxent Riverkeeper, and the Sierra Clubbers. Meanwhile, Dominion, the owner of the project, has pushed forward with construction at the site. Dominion is about to begin construction on the foundation of the new facility sometime in June, so Earth[in]justice has just filed another lawsuit–a request for a cease and desist order to stop Dominion from constructing the foundation until after their frivolous lawsuit has a chance to get in front of a sympathetic judge…
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Utica Natgas Production by County in Ohio for 1Q15 – Top 6

Top 6Which counties in Ohio produced the most shale gas in the first quarter of 2015? Can you guess? We have the top 6 (of 17) listed below…
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Anti Group “NOPE” Opposes Spectra Energy New England Pipeline

Both Spectra Energy and Kinder Morgan have competing pipeline projects to move Marcellus Shale gas to New England where it’s desperately needed. Spectra Energy’s project is called Access Northeast and has a number of regional utility partners–companies that want to buy cheap, abundant and clean-burning Marcellus Shale gas–to sell to New Englanders. Spectra Energy’s project will expand several existing pipeline systems and join them together, running from New York through Connecticut and into Massachusetts. Kinder Morgan’s project is called Northeast Energy Direct (NED), which builds a new extension of the mighty Tennessee Gas Pipeline system from New York across Massachusetts, into New Hampshire and back into Massachusetts. Both projects face resistance from nutty fossil fuel haters. The reality for both projects is that although they will deliver an abundance of new supplies of natural gas, which is good during the winter, there will be an oversupply in the summer. You don’t just turn the spigot off on a pipeline. So the plan is to put some of that natural gas on the Maritimes & Northeast pipeline and send it on up to Canada where it can be used by Canadians and/or exported. Yes, exported. Export is not a dirty word, nor will it raise the prices here at home–at least not appreciably (by more than a few cents per Mcf). A new group of anti-drillers has sprung up to oppose the Spectra Energy project. They call themselves DOPE…oops, that’s NOPE (No Pipeline Expansion). NOPE is all up in arms because a little bit of natural gas may get exported, and they think they have the smoking gun to prove it…
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