Will Drillers Bother to Show Up if NY Allows Fracking?

yes no maybeA new article by Platts asks the question MDN is often asked: “If shale drilling is allowed in New York State, will any drillers bother to show up and drill?” The Platts article quotes a number of experts who say, in a word, “no.” MDN has heard the same “no” sentiment from other experts as well. We’ve grappled with this issue in the past (see this MDN story from March 9, 2011).

These days, MDN has a contrary-to-popular-opinion position on the question of whether drillers will want to drill in New York soon after it’s allowed. But first, the viewpoints of those who say no:

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U.S. will Produce as Much Oil as Saudi Arabia Starting 2013

Not so long ago those of us who support shale gas drilling would proudly say, “The United States has as much natural gas sitting under it as Saudi Arabia has oil,” feeling the satisfaction of knowing that someday, somehow we may get out from under the thumb of counties who are our enemies by shifting our economy from using mostly oil to using mostly natural gas.

Never in our wildest dreams did we imagine saying, “The United States produces as much oil as Saudi Arabia.” Seemed like a fantasy. But starting next year, that statement will be true. Why? You guessed it: Shale.

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Shale Drilling will Create 3.5M Jobs, $5.1T in Investment

A major new study was released yesterday by global research company IHS titled “America’s New Energy Future: The Unconventional Oil and Gas Revolution and the Economy.” The study builds on previous IHS research on the economic impacts of unconventional gas to provide the most complete assessment to date of the economic contributions—in terms of jobs, economic value and government revenue—for both unconventional oil and unconventional gas in the United States.

What did the study find? Upstream (i.e. drilling) in the shale oil and gas sector will provide 1.7 million jobs—in 2012 alone! By 2035 there will be 3.5 million people employed in just the upstream sector of unconventional shale. Here’s a real heart stopper: By 2035, $5.1 trillion in capital expenditures ($2.1 trillion in the oil sector, $3 trillion in the gas sector) will be invested in upstream shale exploration and production.

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Microbes Eat Coal, Poop Natural Gas

Although strictly speaking this post is not about the Marcellus or Utica Shale, and it may seem a bit offbeat, it does have relevance. We include it to illustrate American ingenuity and creativity, and as a lesson that the energy industry is always on the lookout to better their technology and reduce the impact to the environment.

Who knew that microorganisms liked to eat coal?! And who knew we would figure out how to use that discovery to create more natural gas? Here’s the poop scoop from MIT:

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Handy Market Overview of U.S. NG Vehicle Infrastructure

The natural gas vehicle (NG vehicle) market in North America has all the signs of rapidly expanding. FC Business Intelligence, which is hosting the 2nd Natural Gas Vehicle Infrastructure Conference & Exhibition next February in Houston, has created a handy info pack full of charts, facts and figures about the NG vehicle market in North America (see below). The info pack is a clever marketing ploy by FC to garner interest in the conference—but there’s certainly nothing wrong with that! Hey, it worked. The info pack is worth your time if you have an interest in NG vehicles.

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President Obama’s Abysmal Energy Record

Startling news today that the U.S. is set to eclipse Saudi Arabia as the leading producer of oil (yes, oil) in the world by the end of next year (see this MDN story). This year, the U.S. will be the most energy independent we have been since 1990. We’re now on track to produce 4/5 of the energy we consume. Why? The miracle of hydraulic fracturing.

President Obama and his administration try to claim credit for this energy renaissance and make noise about an “all of the above” energy strategy. But a close examination of the record shows Obama’s energy policies have actually worked against our energy independence. Without his policies of restricting drilling on federal lands and offshore, we might actually be energy independent right now.

The numbers don’t lie:

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Senator to DOE: Explain Ground Rules for NatGas Exports

A super abundance of natural gas supply in the U.S. means we have the opportunity to export natural gas, reducing some of the supply and making money for our country (reducing our international trade imbalance). But the Dept. of Energy (DOE) stands in the way of issuing new export permits to allow that to happen. The DOE has commissioned a study on how exports will affect prices and other considerations here at home.

The Senate Energy Committee’s top Democrat member, Senator Ron Wyden, wants to know the precise criteria, the “ground rules” the DOE will use to make decisions on exporting natural gas. He’s asking some very pointed questions of DOE Sec. Steven Chu:

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Low NatGas Price Will Benefit Shell’s Ethane Cracker Plant

The low price of natural gas may not be good for drillers, but it’s great for manufacturing companies who power their plants with it. The fact that manufacturers are increasingly converting to natural gas to power their operations, and relocating to areas with an abundant supply of low priced gas—like Pennsylvania—is a good thing for Shell and their proposed ethane cracker plant in Beaver County, PA. Why?

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OSHA Puts Brakes on New Silica Handling Rules for Fracking

In June 2012, OSHA (Occupational Safety and Health Administration) and NIOSH (National Institute of Occupational Safety and Health) issued a joint hazard alert for workers who use silica (sand) used in fracking (see this MDN story). OSHA has been working for several years on a revision of its silica dust regulations—long before a new report was issued by NIOSH on silica used in fracking. The NIOSH report, released in May 2012, caused OSHA and NIOSH to issue the joint hazard alert in June.

The hazard alert, while using strong language to encourage stricter rules for handling silica, apparently does not carry the full weight of being a regulation—i.e., it’s not enforceable. The enforceable regulation comes from OSHA and release of a revised regulation on silica handling for fracking and other uses is now on pause. How come?

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Neighbors Not Happy with MarkWest’s Short Line RR

It’s not all peaches and cream when drilling comes to an area. Industrialization does have impacts—more truck traffic, more noise, higher rents, packed restaurants. Add to that list more railroad traffic. That can be good—MDN loves covering the stories of short line railroads on their way out that suddenly are revitalized.

But sometimes the railroad story has a few bumps. MarkWest Energy purchased an old short line railroad right of way that runs 4 1/2 miles in Mount Pleasant Township (Washington County, PA) a couple of years ago and rebuilt the rails. They recently started running a train along those rails to connect their Houston processing plant with a larger railroad to carry natural gas liquids (NGLs) including propane and butane to market.

Neighbors living close to the rail lines have complained of noise and late night runs:

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