Here’s what happens when the Heinz Endowments, William Penn Foundation, National Resources Defense Council and other far-left “environmental” funders don’t fund a study: real science gets done. We’ve knocked Yale University in the past when so-called studies (junk science) were released about fracking in the Marcellus/Utica (example from March 2018: Yale Study Claims Ohio Utica Fracking Causes STDs). Those studies are almost always funded by Big Green groups and the results conform to Big Green’s predetermined outcomes. This time, a group of Yale students and professors conducted a field experiment where they drilled a number of water wells in an area where there would soon be (and subsequently was) Marcellus wells drilled–in Susquehanna County, PA. A controlled experiment to find out if drilling shale wells leads to water contamination via methane migration. The results are in. According to the Yale researchers, there was NO (zero, nada) impact on the water wells from nearby shale well drilling. Case closed. The study (full copy below) was published yesterday in the Proceedings of the National Academy of Sciences. It’s the third such study in the past few months to be released showing the same thing: NO impact from Marcellus/Utica drilling on groundwater supplies. The funny thing is how biased mainstream media, like (Dis)Associated Press, is reporting it. They can’t paper over the results of these studies, so they spin the story and the headline instead. Try this headline out from an AP article running in dozens (maybe hundreds) of newspapers: “Studies show groundwater holding own against drilling boom.” The truth is there is no impact from Marcellus Shale drilling on groundwater. But AP simply can’t present the bold, honest truth. Instead, they spin it to imply “Water has to hold it’s own and fight off fracking. That water is brave. It’s courageous. Even though those nasty frackers WANT to pollute our precious groundwater, that old water just hangs in there and holds its own.” That’s the impression left by AP’s headline and the accompanying story…
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Trade War Puts $83.7 Billion Chinese Investment in WV on Hold
You can’t say we didn’t warn you. In early April, when the current “trade war” with China began to heat up, we said this with respect to the deal China signed to invest $83.7 billion in West Virginia shale and petrochemicals: “However, if a trade war does develop, it would be foolish to not think those investments (withholding them) will be used against us.” (Will Trade War with China Affect $83.7B Investment in WV Shale?) At yesterday’s Northeast U.S. Petrochemical Construction Conference in Pittsburgh, our fears (and prediction) were confirmed. Chinese officials were due to attend the event and announce the first round of investments in WV. However, Brian Anderson, director of the West Virginia University Energy Institute, said given the trade war now on with China, the officials elected to stay home instead. Anderson said, “The pending trade war has put this project in jeopardy.” Add to the trade war the fact that WV Gov. Jim Justice just fired the guy who built the relationships and negotiated the $83.7 billion deal, Commerce Sec. Woody Thrasher (see WV Commerce Secretary Who Brokered $83B China Deal…Fire), and it doesn’t bode well for China’s billions of investment. The Chinese are using their announced investment as an economic weapon against the U.S. Which points out the folly of relying on investments from your enemies to prop up your economy. Make no mistake: China is an enemy of the United States. However, there’s one thing the Chinese are not retaliating against, and indeed something they want more of: U.S. LNG…
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EIA June ’18 Drilling Report: M-U Production Up Another 1/3 Bcf/d
Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. Each month, as has been happening for months on end, the Marcellus/Utica region (called Appalachia in the report) continues to see production go through the roof. Last month (and the month before and the month before) EIA predicted M-U production would go up by more than 1/3 of a billion cubic feet (see EIA May ’18 Drilling Report: M-U Gas & Permian Oil on Fire). Once again for this month, EIA says in the coming 30 days M-U production will grow another 1/3 Bcf–371 million cubic feet/day to be precise. Because of the enormous amount of associated gas coming out of holes along with oil in plays like the Permian and Bakken, collectively all seven major shale plays will produce an additional 1.1 Bcf/d in the next 30 days. It is simply astonishing! No less astonishing is the amount of oil output. Oil will increase an average of 141,000 barrels per day in the next 30 days. Needless to say, but gas and oil output for the coming month breaks another record. Shale is the gift that keeps on giving…
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FERC Grants MVP Permission to Cross Blue Ridge Pkwy in Virginia
The good news keeps rolling in for Mountain Valley Pipeline–a $3.5 billion, 301-mile pipeline currently under construction from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. MVP is being built to move Marcellus/Utica gas south. Following multiple lawsuits and regulatory challenges by Big Green groups, MVP is getting work done and on track to be completed this year. Just last week we told you that following delays by illegal protesters sitting in trees in the Jefferson National Forest, the Federal Energy Regulatory Commission helpfully extended tree cutting season for MVP to July 31 (see Big Green Fail – MVP Permission to Cut Trees in VA Until July 31). One of the faux arguments against MVP used by “environmentalists” is that the pipeline will cross under the Appalachian Trail and Blue Ridge Parkway in Virginia–somehow doing irreparable damage in the process. Good news: MVP has just received permission to drill and insert the pipeline under the Blue Ridge Parkway, which will have antis howling at the moon…
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FERC Authorizes Tetco TEAL Phase II – Connecting to NEXUS Pipe
Here’s a project we’ve mentioned in passing as part of other posts, but until now, have not specifically focused on. In August 2017, Enbridge received approval (a certificate) from the Federal Energy Regulatory Commission (FERC) to construct and operate the Texas Eastern Appalachian Lease Project (“TEAL Project”). TEAL boosts the capacity along the Texas Eastern Transmission Company (Tetco) pipeline and connects it to the NEXUS pipeline. NEXUS has been under construction since last October (see NEXUS Pipeline Begins Construction in OH, MI). TEAL will bump up volumes of Utica/Marcellus gas along Tetco by an extra 950 million cubic feet per day–nearly 1 billion cubic feet! The markets for the gas are the Midwest and Canada. The justification for the project, when it was filed two years ago, was “offsetting the impact of the decline in traditional western Canadian supplies available to serve these markets.” That was before TransCanada lowered the tolls along its pipeline to bring more western Canadian gas to eastern Canada. Oops. What’s done is done. On December 19, 2017, Texas Eastern received approval to proceed with construction of the Phase I TEAL Project facilities. Last week Texas Eastern requested permission to begin Phase II in Columbiana and Belmont counties (in Ohio), and yesterday FERC said yes…
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TransCanada Bringing More W Canada Gas East to Compete with M-U
TransCanada, one of Canada’s leading midstream/pipeline companies, cooked up a deal in 2016 to pipe natural gas from Canada’s West Coast to the East Coast in order to fend off cheap supplies of Marcellus/Utica gas that will flow into Canada from the NEXUS and Rover pipelines (see TransCanada Pipe Drops Price 42% to Compete with Marcellus/Utica). TransCanada dropped their pipeline price to lure drillers by (theoretically) making it less expensive to get gas from Western Canada, some 2,400 miles away, than from the Marcellus, just 400 miles away. Following a couple of open seasons and stiff regulatory hurdles, the plan was adopted and went into service last November (see TransCanada Pipe Begins Lowball Shipping to Compete with Marc/Utica). In February, TransCanada announced a $1.9 billion plan to expand its Western Canadian pipeline system in a bid to gather up and send even more Western Canadian gas to the East Coast–to compete with our gas (see TransCanada Spending $1.9B to Bring More Canadian Gas to Northeast). The expansion plan calls for an additional 1 billion cubic feet per day of gas to flow through the Nova Gas Transmission Line (NGTL) in Western Canada, which in turn connects to TransCanada’s Canadian Mainline that hauls gas to our region. The new news is that TransCanada has done it yet again. They’ve cut agreements with shippers for another 280 million cubic feet per day of natgas on the NGTL system…
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Diversified Gas & Oil Adds to Conventional Assets in KY, VA, WV
UPDATE: A source has shared with us who is doing the selling–see our note below.
Diversified Gas & Oil, founded in 2001, is an operator of oil and gas wells (and pipelines). According to the Diversified website, the company’s “innovative, disciplined investment strategy is focused on the acquisition of mature, low-decline and low-risk wells, enhancement of operations with a focus on efficiency, and maximization of profitability for shareholders.” Diversified issued a press release last week to say it has signed a letter of intent to purchase 2.5 million acres of leases, and 11,350 wells, in Appalachia–for $575 million. The acreage and wells are located in Kentucky, Virginia and West Virginia. Although the press release doesn’t say, the wells are almost certainly all conventional wells (no shale wells). We were not able to determine if any of the acreage includes rights to drill shale wells. Given the company’s focus on “low-decline and low-risk wells,” we have to conclude they target only conventional wells, since shale wells are high decline and moderate to high risk (sink a shale well in the wrong place and you just blew $7-8 million). Diversified recently closed on deals to pick up acreage and wells from both Alliance Petroleum Corporation and CNX Resources. Who’s the seller this time? We have a guess about who it may be…
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Energy Stories of Interest: Tue, Jun 19, 2018
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: PA Senate committee OKs pipeline eminent domain landowner bill of rights; another CNG station starts up – in Altoona; dozens seek jobs in “fastest growing industry in Ohio Valley”; trucks take their toll on OH roads; Tellurian selling shares to fund Driftwood LNG pipeline; Pruitt faces revolt in Trump country; shale is a uniquely American story; NYC’s hired guns for climate lawsuit get pushback from judge; the pope lectures oil CEOs on global warming; Russian pipeline bad news for Ukraine; and more!
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Cabot O&G to Begin Drilling in Ashland County, OH This Week
As we have reported since late last year, Cabot Oil & Gas, long-known for the incredible amount of Marcellus natural gas they produce out of a single northeastern Pennsylvania county (Susquehanna), is eyeing north central Ohio as a potential spot for “what’s next” after the Marcellus (see Cabot O&G Considers Drilling in Ashland County, OH). Cabot locked up leases and is planning to drill a number of test wells in not only Ashland, but also Holmes, Knox, Richland and Wayne counties in the Buckeye State (see New Details Emerge on Cabot’s Shale Plans in Central Ohio). The company doesn’t know exactly what it will find–gas, NGLs or perhaps even oil–but they’re about to find out. In April Cabot began pushing dirt around to construct its first wellpad in Ashland (see New Cabot Drilling Program Kicks Off This Week in Ashland, OH). Sometime this week, the company will spud (drill) its first hole in the ground. Buckle up! This is an exciting time for landowners in Ashland County. Here’s more on Cabot’s new program in Ohio…
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WV Ethane Cracker Plant Rumored to be Back On Again
It increasingly looks like LyondellBasell Industries, one of the largest plastics, chemicals and refining companies in the world, will buy out/take over Braskem, the largest petrochemical company in Latin America (headquartered in Brazil). Braskem and its parent company Odebrecht, as you may recall, was hot-to-trot to build a multi-billion dollar ethane cracker near Parkersburg, WV–four years ago. Odebrecht got mired in scandal in Brazil and that put things on hold in 2015 (see Odebrecht Pushes the Pause Button on WV Ethane Cracker). But in 2016 it appeared the project may rekindle (see A Pulse! WV Ethane Cracker Project Comes Back from the Dead). Since that time, we’ve not heard much. A rumbling here and there, but not much. Now that LyondellBassell is actively pursuing Braskem, there is once again excitement about the cracker project in WV. MDN has heard from an industry source that if Braskem sells to LyondellBassell, the Parkersburg cracker plant will be a high priority. In fact, an expert speaking at the recent NGL storage hub event in Southpointe mentioned the WV cracker by name as one of three projects that he thinks will get final approval in the next 12 months (see Industry Expert Says 3 More Crackers Coming to M-U). Here’s news about how M&A deals happening on other continents directly affect our region–how a LyondellBassell purchase of Braskem may indeed reignite the Parkersburg ethane cracker project…
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Manufactured Controversy re $10B NGL Storage Hub Proponent
There’s a new (manufactured) controversy swirling around Steven B. Hedrick, CEO of Appalachia Development Group and also CEO of the non-profit Mid-Atlantic Technology, Research and Innovation Center, or MATRIC. What’s that? You’re not familiar with that name? Hedrick, in his role as CEO of Appalachia Development Group, has led an effort to get a $10 billion NGL (primarily ethane) storage hub established in Appalachia–most likely in West Virginia. It’s a huge amount of money, will take cooperation from multiple states and will require multiple sources of funding to make it all happen. Hedrick has led the effort. Both of WV’s U.S. Senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat) have worked on behalf of this project (one could argue they’ve worked on behalf of Hedrick) and have had words of high praise for Hedrick and his efforts. But the Charleston Gazette-Mail, working in tandum with the left-leaning ProPublica, has decided Hedrick needs to be taken down a notch or two. In a recent article, the Gazette-Mail tries to paint Hedrick as having a big conflict of interest and bilking taxpayers for a trip. Hedrich was a member of the delegation that visited China last year when then-Commerce Secretary Woody Thrasher got China to sign a mammoth $83.7 billion deal to invest in shale and petrochemicals in WV (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). The Gazette-Mail article says Hedrick went on the taxpayer-funded trade mission not to represent WV, but on his own behalf, attempting to get Chinese investment that would somehow benefit him (Hedrick) personally. No doubt he was trying to get the Chinese interested in investing in the $10 billion storage hub. We would expect nothing less! But that attempt has now been twisted into a narrative that Hedrick was trying to benefit himself rather than WV…
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Another New Gas-Fired Elec Plant Being Planned in New Jersey
Details so far are sketchy, but it appears that plans are taking shape to build a 660-megawatt gas-fired electric plant in Holland Township (Hunterdon County), NJ. Phoenix Energy Center wants to build the plant along the shore of the Musconetcong River, classified as a Category One (C1) trout stream. Sierra Club nutters are in full panic mode, attempting to prevent such a horrible injustice from happening. God forbid more New Jerseyites get cheaper electricity from a cleaner source! The Holland plant, if it were to get built, would likely get its natural gas from Elizabethtown Gas, which in turn is due to get additional gas supplies from the still-unbuilt PennEast Pipeline. Holland Township officials stress talks are preliminary, and nobody has signed nor agreed to anything. Phoenix isn’t saying anything–and no wonder, because anytime Big Green (the Sierra Club) catches wind of a project like this one, they rush in to try and abort the baby before it’s even born. Here’s the few, scant details known about the Phoenix Energy Center project in Holland Township…
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Part of Leach XPress Pipe Up and Running Following Explosion
Last Thursday MDN reported that TransCanada was working to restore partial service to the Leach XPress Pipeline (see TransCanada Working to Restore Partial Service on Leach XPress Pipe). Leach XPress only came online in January. The pipeline experienced an explosion and fire on June 7 (see Leach XPress Pipeline Explodes in Marshall County, WV). Most of the 1.5 billion cubic feet per day of Marcellus/Utica gas flowing through the pipeline was stopped. As of Friday, the Stagecoach-LXP meter, which ties into the Strike Force South gathering system station, was once again flowing, up to 190 million cubic feet per day. Which means Monroe and Belmont counties (OH) are now reconnected and flowing. As for the rest of the pipeline and its various metering stations, it’s all still shut down with no word on when it will be repaired and back online. There’s still no word on what caused the explosion in the first place…
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FERC Denies Rehearing Request for Mountain Valley Pipe 3-2
In May MDN told you that Big Green groups were successful in getting the U.S. District Court of Appeals for D.C. to force the Federal Energy Regulatory Commission (FERC) to either move forward with, or reject a rehearing request on their decision to approve the Mountain Valley Pipeline (see Fed Court Forces FERC to Decide on MVP Rehearing, No More Delays). MVP a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA–to move Marcellus/Utica gas south. Last Friday FERC obeyed the court and voted 3-2 against rehearing their previous decision to approve the project. Yes, the two Democrat Commissioners voted to rehear the decision–meaning they want to stop MVP. The two Dems have been co-opted by Big Green and Big Democrats and now apparently don’t/won’t think for themselves. It’s a scary proposition for “someday” when Dems regain the White House and can once again pack FERC with a majority–which will stop any new pipeline projects cold. Scary thought. At any rate, FERC’s Republicans made powerful and persuasive arguments for why the original decision to approve MVP was/is correct and doesn’t need to be revisited. Bottom line: Big Green is no doubt at the courthouse even as you read this filing a lawsuit against FERC and their decision. They could not file the lawsuit prior to a rehearing denial by FERC. Now that FERC has told Big Green to buzz off, a lawsuit to try and stop MVP is 100% certain to follow…
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Calendar of Marcellus/Utica Events for Jun 18 – Sep 17
Events related (or of interest) to the Marcellus and Utica Shale, primarily pro-drilling events. To have your event included (or if you are aware of a worthy event you believe should be on this page), please send the details and/or a link to have it included to the [email protected] email address.
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Energy Stories of Interest: Mon, Jun 18, 2018
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Analyst says Ohio in for chemical & plastics boom; Southern Star natgas pipeline catches fire in Kansas; US LNG exports drop last week, no cargoes from Cove Point; EIA expects Brent crude prices to average $71/barrel this year, $68/barrel next year; all eyes are on OPEC & Russia to see if they boost production; what if India & China used natgas and oil like the U.S.?; green future stars with natgas, world energy chiefs say; and more!
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