Marcellus & Utica Shale Story Links: Mon, Jul 8, 2013

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:

New York

Gas line upgrade proposed for NY-to-Boston route
In another sign that natural gas is outpacing costlier heating oil, a Texas energy company is proposing to install new pipelines, replace others and build transmission stations in the heavily populated, 200-mile New York-to-Boston corridor. The preliminary plan proposed by Algonquin Gas Transmissions, a unit of Spectra Energy in Houston, would build and replace about 44 miles of pipeline in Connecticut, Massachusetts, New York and Rhode Island, install a new pipeline to span the Hudson River in New York and build compressor stations to boost gas flow.


DTI planned gas pipeline sale draws a crowd
SNL Financial
Pipeline companies and shippers are moving to protect their interests from modifications to the Dominion Transmission Inc. system after DTI submitted an application to FERC to sell a natural gas line that will become a gathering system under Blue Racer Midstream LLC. On June 13, the Dominion Resources Inc. pipeline company submitted an abbreviated application asking for authorization to abandon by sale its Line No. TL-388 and related facilities with a predetermination that when the assets are sold they will perform a gathering function. The application also asked FERC to amend certain certificates to remove or replace affected pipeline interconnects from service agreements, and if necessary abandon related pipeline interconnects.


Sub $2 Natural Gas Returned Last Week–Marcellus Northeast America’s Cheapest Gas
John Hanger’s Facts of The Day
Natural gas priced below $2 for a thousand cubic feet returned to America on July 3 and July 5 at the Marcellus Northeast trading hub. That’s about $1.50 less than gas traded at the Henry Hub in Louisiana, making the Marcellus gas a tremendous bargain. Gas priced below $3.50 knocks out substantial coal-fired electric generation. Gas priced below $2 sets off an avalanche of switching from coal to gas for electricity. The recent price decline of gas from above $4 will slow the market share gains coal made at the expense of gas from November 2012 through April 2013.

AP: Foul-Mouthed Zealot Is Just a Endearing Golden Girl
Natural Gas Now
Mary Esch, a more than decent reporter from Associated Press (AP) did an infuriating thing earlier this week, treating Vera Scroggins, a foul-mouthed zealot and xenophobe with zero credibility as if she was some endearing grandmother figure speaking truth to power in a quixotic quest to halt fracking. Esch knows better, or should.

DEP agrees to hold meeting on Worstell impoundment
Washington (PA) Observer-Reporter
The state Department of Environmental Protection has agreed to hold a meeting with Cecil Township supervisors later this month to answer questions regarding the status of a controversial Marcellus Shale water impoundment. Township Manager Don Gennuso indicated at a board meeting Monday that the meeting regarding the Worstell impoundment on Swihart Road would be open to “any residents that may have issues or concerns.” However, he also said that space is limited to 10 seats, which includes supervisors and DEP representatives, unless prior notice is given to the DEP.

Everybody into pool, reluctantly
Scranton Times-Tribune
Property rights supposedly are sacrosanct to the conservative Republicans who lead majorities in both houses of the Legislature. But when the opportunity arose last week to help the natural gas industry, those leaders threw property owners under the gas rig. Generally, when a lawmaker who sponsors successful legislation later says he’s not sure how it originated, it’s a bad bill. So it was with Rep. Garth Everett, a Lycoming County Republican, who said after his bill passed that he couldn’t remember the genesis of the amendment in question. The two-line amendment deprives certain landowners of the leverage they otherwise would have in negotiating with gas drillers.

Drilling boom helps keep gas prices lower
Scranton Times-Tribune
UGI Penn Natural Gas customers’ bills should still be one-third lower than they were five years ago – even with a rate increase on June 1. Since the Marcellus Shale drilling boom started in 2008, the resulting bounty of natural gas has translated into savings for Pennsylvania customers. And Pat Creighton, a spokesman for the industry group Marcellus Shale Coalition, says it’s a trend nationwide. “We are flush with gas in the United States, and that is a direct benefit to the consumer,” he said.

Faced With Shale Boom, SRBC Vows Increased Monitoring, Communication
NGI’s Shale Daily (paid or free trial subscription required)
The Susquehanna River Basin Commission (SRBC) said it will focus on regulatory activities and water quality monitoring related to shale gas development within the basin, as the organization begins its latest two-year Water Resources Program for the fiscal years 2014 and 2015. In an added twist, the SRBC — an interstate compact that includes Maryland, New York, Pennsylvania and the federal government — said it would “improve overall regulatory coordination with New York and Maryland sister agencies, with particular emphasis on the anticipated expansion of natural gas well drilling in the Southern Tier region of New York.” The current two-year program began on Monday and ends on June 30, 2015.

West Virginia

Kessler to Study N.D. Use of Gas Tax
The Intelligencer/Wheeling News-Register
West Virginia Senate President Jeff Kessler will lead a delegation of state lawmakers to North Dakota this summer to learn more about that state’s efforts to set aside severance tax dollars generated by the oil and gas industry. Kessler, D-Marshall, has advocated creation of a similar West Virginia Future Fund. He said North Dakota leaders started their North Dakota Legacy Fund in 2009, and it has generated about $1.3 billion in the last four years.


Shale Gas, Gasland, And Truthiness
I should have been pleased to hear that Gasland II is coming out. It took only a brief viewing of Josh Fox ’s original Gasland to move me to tears—of laughter. He employs a number of fairly transparent tricks to imply things that aren’t demonstrated factually, most famously playing a banjo while wearing a gas mask, as if the air was toxic. Although perhaps the audience was meant to think he was at an organic farm after a manure spreading.

Shale Gas Is Fracking Green
The American Interest
Ask a green what he or she thinks about fracking, and you’re likely to get an earful of criticism about methane leaks, poisoned groundwater, and climate change disaster. But a new report from the ecologically minded Breakthrough Institute (BI) makes the case that shale gas actually has a net environmental benefit. Nevermind the boosts to our energy security, and economy that fracking provides; the controversial drilling process is worth embracing on green merits alone.

Proposed ocean pipeline would pump natural gas from port off New Jersey coast
A Canadian company wants to build a liquefied natural gas port off the Jersey Shore that it says will help reduce the region’s gas prices during peak demand periods. But environmentalists say the project — which resembles a similar proposal that Governor Christie vetoed in February 2011 — could accelerate drilling for natural gas in Pennsylvania using a controversial technique called hydraulic fracturing, or fracking. The proposal by Liberty Natural Gas would include a port at sea to extract liquefied natural gas from specially designed ships that convert it back into a gas form so it could be pumped to shore on Long Island to serve the New York market. The system, which would use two buoys to connect with ships, could receive about 45 vessels per year filled with liquefied natural gas, or LNG, from Trinidad and Tobago in the Caribbean, mostly during the peak demand periods in winter and summer.

Goldman Sachs Cuts 2013 Forecast for U.S. Gas on Higher Supplies
U.S. natural gas will average $3.85 per million British thermal units in the third quarter and $4.25 in the fourth quarter, below earlier forecasts as supply increases, Goldman Sachs Group Inc. (GS) said. “Debottlenecking” at the Marcellus shale sites in West Virginia and Pennsylvania are among the drivers of supply gains, Goldman Sachs analysts led by Damien Courvalin in New York said in an e-mailed report today. Goldman previously forecast U.S. natural gas prices would be $4.50 in the third and fourth quarters. Production gains may be “temporary” because the number of gas rigs operating is low, Goldman said. Natural gas prices need to increase to $4.25 per million Btu by 2014 to bring rigs back into active production and keep the market balanced, Courvalin said.

Sand Rush: Fracking Boom Spurs Rush on Wisconsin Silica
National Geographic
They look like pyramids in a cornfield, or sea dunes mottled by the summer rain. But these stockpiles hold one of the secrets to America’s energy revolution. The heaps of dozer-hauled, diesel-crushed grains are pure silica sand, and the future of fracking depends on stripping hundreds of millions of tons of it. Every day since the rush began about two years ago, thousands of laden train cars rumble out of the world’s unlikeliest sand castle—Wisconsin—headed for oil and gas wells from North Dakota to Pennsylvania.

Do Fractivists Give a Damn about the Kids?
Natural Gas Now
Nick Grealy offers some perspective on what the shale gas battle is ultimately all about – our kids and their future. If we are truly concerned about worldwide health then we’d be doing everything we could to shift from coal to natural gas both here and everywhere.

District Court Vacates Resource Extraction Issuer Payment Disclosure Rules; May Foreshadow Ruling on Conflict Minerals Challenge
Oil & Gas Law Report
On July 2, 2013, the United States District Court for the District of Columbia vacated Securities and Exchange Commission (SEC) Rule 13q-1, which required certain companies to disclose payments made to foreign governments in connection with the commercial development of oil, natural gas or minerals. The court found: (1) the SEC erroneously read the statutory language as requiring public disclosure of these payments; and (2) the SEC’s decision to deny any exemption to the disclosure requirements, specifically in the case of countries that prohibit disclosure of these payments, was arbitrary and capricious.

Linn Energy: A Different Kind Of Oil And Gas Company?
Seeking Alpha/Richard Zeits
Linn Energy may not make the Top 20 list of US oil and gas operators by production volume, but in terms of popularity and emotional intensity surrounding it — both positive and negative — the partnership holds one of the top positions in the sector. Sadly, Linn may also win the title of the sector’s most painful security to own over the past two months. Its price is down by 41% since the publication of a controversial article in Barron’s and following the press release that disclosed the company and its affiliate LinnCo (LNCO) are subject to an informal SEC inquiry. Is the correction overdone?

It’s Time To Sequester Green Energy Subsidies, Not Mythical Oil And Gas Tax Breaks
U.S. oil exports last December hit a record 3.6 million barrels per day, and natural gas production last year saw a 33% increase over 2005 levels. As these successes have been occurring, “green energy” paybacks are turning decidedly brown. Joseph Dear, investment chief for the California Public Employees Retirement System recently commented, investing in clean energy has to be more than just “a noble way to lose money.”

Natural Gas Finds a Friend in US Climate Policy
The White House’s renewed push on climate change may have an unintended consequence—sparking new demand for natural gas, which is fast becoming a staple in creating electric power. Last week, President Barack Obama gave a speech that unveiled a broad array of new initiatives to reduce carbon emissions and buttress alternative energy. According to many observers, those new rules could come at a cost to coal plants—one of the culprits behind greenhouse gases, and integral to generating electricity.

Carrizo Oil & Gas: Fast Growing Eagle Ford Producer
Seeking Alpha
Oil is the one commodity that has held up well in 2013 even as about every other part of the commodity complex has declined. Both West Texas and Brent are up over $100 a barrel. Given this, I think it is time to look at another fast growing E&P concern that is benefiting and contributing to the huge expansion of domestic oil and gas production over the past 6-8 years. Today’s profile looks at Carrizo Oil & Gas, an E&P concern whose Eagle Ford production is booming.


French minister says she lost job over shale drilling ban
Bloomberg/Akron Beacon Journal
Former French Environment Minister Delphine Batho said her support for a ban on shale drilling and reducing dependence on nuclear power cost her her job. “The battle crystallized notably on the question of shale gas and more discreetly on the reduction of nuclear in France,” Batho said at a press conference yesterday at the National Assembly in Paris. “These forces that I am talking about wanted my scalp.”

Quebec Oil-Train Disaster Spurs Railroad-Versus-Pipelines Debate
Bloomberg/Washington Post
A train disaster that killed five people in Quebec promises to touch off debate over the safety of shipping crude oil by rail or pipelines such as TransCanada Corp.’s Keystone XL. As authorities began investigating the explosion of refinery-bound tank cars hauled by Montreal, Maine & Atlantic Railway Ltd., Quebec’s Green Party demanded stricter regulations and an energy industry association predicted tough scrutiny ahead for rail carriers.