Marcellus & Utica Shale Story Links: Mon, Dec 2, 2013

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

New York

New York’s Fracking Hypocrisy Underscores Energy Illiteracy
New York has issued a moratorium for hydraulic fracturing in the portions of the Marcellus Shale that fall within its borders, but the state is benefiting economically and environmentally from the fracking going on in neighboring Pennsylvania, as NPR reported. New York City, for example, has rolled out a program, “NYC Clean Heat,” to encourage building owners to switch from heating oil to natural gas. One building owner told NPR that by switching, he expects to reduce his building’s energy costs by 50 percent. The abundance of natural gas produced by fracking in places like the Marcellus has driven down prices and made those savings possible. The irony, as NPR points out, is that most New Yorkers oppose fracking:

Why the Frack Are We Listening to Celebrities?
Natural Gas Now
Earlier this month, a group called Americans Against Fracking posted a series of videos asking elected officials to “Ban Fracking Now”. The most popular video (shown below after the jump) is titled, “Celebrities Ask President Obama: What the Frack?” and features household name celebrities such as Hayden Panettiere, Lance Bass, Wendie Malick and Julie Bowen. The video begins with a series of these well-known faces asking “what the frack?” followed by “President Obama, are you fracking kidding me?” Even after the video was over, I was left wondering if these celebrities actually know what the word “fracking” means…


What Is Moving The Needle For Chesapeake Energy?
Seeking Alpha
The Utica Shale is leading the way for Chesapeake Energy’s growth. In the third quarter of 2013, production in the Utica shale shot up 91% compared to the previous quarter. With 63 additional wells being connected to pipelines in the third quarter, Chesapeake Energy delivered 165 million cubic feet of natural gas equivalent per day. The company drilled 377 wells in the play, of which 169 are producing and 208 wells are still in different stages of completion.


Will the Jesse White Shenanigans Ever End?
Natural Gas Now
Rep. Jesse White, the guy who likes to pretend he’s a teenage girl on the internet to attack his constituents, enemies in his own political party and Range Resources, was one for three in this year’s elections, but wasn’t on the ballot, which tells us something. McDonald, Pennsylvania, where I live, is in Washington County, in the southwest corner of Pennsylvania, which is in the heart of the Marcellus Shale gas area. Unfortunately, despite all the gas drilling for gas going on around us, which is producing tremendous economic benefits, two townships, Cecil and Robinson, are at a stand still. The reason, as I stated in a previous post, is simple. It’s politics of the worst sort: Jesse White politics.

Pa. moves slowly ahead in compressed-natural gas fuel
Philadelphia Inquirer
The River Valley Transit’s spiffy new compressed natural gas filling station here [Williamsport, PA] is the latest link in a growing CNG network aimed at fleets of large, fuel-hungry vehicles. “We think this is going to be a winner,” said Kevin W. Kilpatrick, the planning manager for the transit agency, which already owns one CNG bus, has four more on order, and aspires to convert its entire 29-bus fleet to natural gas within a decade. River Valley is the mass-transit company for Williamsport and Lycoming County. The new station, which will also sell fuel for $1.99 a gallon to the public once a credit-card reading device is installed, is expected to find an instant market among businesses eager to promote natural gas in this thriving hub for the Marcellus Shale gas industry. The station joins a network of 632 public refueling outlets nationwide, according to U.S. Department of Energy. The department’s Alternative Fuels Data Center lists 27 stations in Pennsylvania, seven in New Jersey, and one in Delaware.

UGI gas rate to drop; company credits shale gas
Scranton Times-Tribune
UGI officials announced its quarterly Purchased Gas Cost Rate – the price it pays to provide natural gas to customers – will drop 4.4 percent to $4.89 per thousand cubic feet of gas, the lowest rate for that portion of the bill in at least 15 years.

Fracking boom a dilemma for environmentalists
Erie Times-News
Here, in the heart of coal country [Pittsburgh, PA], at the center of the natural gas boom and the former foundation of U.S. manufacturing might, a long-shuttered auto plant now houses the Aquion Energy factory where workers are building innovative batteries to store solar- and wind-generated electricity. Yet Aquion’s best customers are across the globe, not down the street. The battery manufacturing plant is southeast of Pittsburgh, atop the Marcellus Shale, the rich geographic formation that is one of the epicenters of the natural gas boom. So the battery storage systems the company makes aren’t likely to be used here, a region brimming with abundant natural gas reserves and reliant on coal-fired plants for energy. “The interesting paradox here is that we are a clean energy sitting on top of the largest natural gas deposit known in North America, maybe the world,” said Jay Whitacre, a scientist who spun Aquion off from research conducted at Carnegie Mellon University. “And we are producing technology to ship elsewhere, where there is no natural gas.”

Greener than ‘Green’
National Review Online
Despite the shrill complaints of fracking foes, this productive but tranquil patch demonstrates how much greener fracking is than other power sources — even “green” ones. Since 2002, carbon dioxide output has grown 32 percent globally, Manhattan Institute senior fellow Robert Bryce wrote for Bloomberg View in September. “In the U.S., meanwhile, carbon dioxide emissions were 8 percent lower in 2012 than they were in 2002, largely due to a surge in shale gas production, which has reduced coal use.” Indeed, fracking has helped America keep its unratified Kyoto Protocol commitments while other countries decry so-called global warming and yet continue boosting CO2. New York City, home of über-frackophobe Yoko Ono, is benefiting enormously from fracking.

Former Pa. DEP chief: ‘The facts are starting to get out’ on gas
SNL Financial
A sizable segment of the American public is uncomfortable with hydraulic fracturing, a former secretary of the Pennsylvania Department of Environmental Protection said, but the U.S. cannot have energy independence without it and the rest of the unconventional natural gas production techniques. The public is starting to understand, said Michael Krancer, who is now a partner with Blank Rome LLP and chair of the firm’s energy, petrochemical and natural resources practice. All the critics and “all those movie actors who came to Pennsylvania, screaming and yelling that the sky would fall down — well, it didn’t fall down,” he said. “It’s good. The facts are starting to get out.”

Multi-State Shale Research Collaborative Is Phony Political Outfit
Natural Gas Now
A group called the Multi-State Shale Research Collaborative came out with a report entitled Exaggerating the Employment Impacts of Shale Drilling: How and Why which came off like a hit piece on Tom Corbett. That’s hardly a surprise given what the group is; a collaboration of leftist political entities funded by two of the biggest enemies of shale gas development, the Heinz Endowments and the Park Foundation. The report was essentially another piece of junk science along the same lines as the Cornell report the two foundations funded a couple of years ago. Yet, it predictably got media attention courtesy of editors and reporters who somehow never think it’s important to identify the accusers or their agenda. An editorial in the Wilkes-Barre Times-Leader offers a case in point by quoting the report uncritically.

West Virginia

Operators Developing West Virginia at Steady Pace
NGI’s Shale Daily
Although the state’s first horizontal well was drilled in 2008 and West Virginia’s oil and gas industry dates back to 1859, when oil was first discovered in Wirt County, much of the focus in the Appalachian Basin has been on the excitement surrounding the promise of the Utica Shale in Ohio and the prolific gas fields of Pennsylvania. Natural gas production in the Marcellus continues to surge, with 12.9 Bcf/d expected to come out of the play in December, or a 3.3% increase from the 12.5 Bcf/d projected for November, according to the U.S. Energy Information Administration’s (EIA) Drilling Productivity Report released this month.


Big Natgas Producer Chesapeake Energy Makes Oil Move
Investor’s Business Daily
Chesapeake Energy’s diligent restructuring work is finally paying off. The oil and gas producer has logged three quarters of high earnings growth, into the triple digits, and four quarters of solid double-digit sales growth. This year marks a big turnaround from a string of poor earnings growth. The Oklahoma City-based firm earned 43 cents a share in its third quarter, up 330% from a year earlier and on par with Wall Street expectations. It took in $4.87 billion in revenue, up 64% and topping the $3.84 billion that analysts polled by Thomson Reuters anticipated. Much of Chesapeake’s financial progress in 2013 is attributable to its repositioning of focus more on oil than on natural gas, a big change in management and a strategy of selling off noncore assets.

Where Fracking Falls Short
National Journal
BOSTON—Cold weather created a perfect storm here last winter, with demand for natural gas peaking just as supplies ran low, sending prices soaring as New Englanders attempted to keep their homes warm in the unforgiving climate. At its height, residents were paying nearly nearly 10 times the typical rate for natural-gas heating. The problem was never solved: It simply faded as demand ebbed with warming weather. Now, with temperatures again dropping and sunlight growing scarce, there’s no quick fix to be found—and 2012 appears to be only a preview of the pain to come. It seems anathema that in a country where fracking has created a boom in natural-gas production, a region should encounter supply shortages severe enough to put its residents in crisis. The U.S. produced more than 25 trillion cubic feet of natural gas in 2012, according to the federal Energy Information Administration. That’s a trillion cubic feet more than in 2011, adding to a 25 percent production hike nationwide since 2007.

Northeast relying less on natural gas from Gulf
AP/Jackson (MS) Clarion-Ledger
The amount of natural gas extracted from the Gulf of Mexico and sent to the Northeast has dropped sharply in recent years as new discoveries in that region boost the nation’s overall supply, according to new federal data. New Orleans CityBusiness reports data from the U.S. Energy Information Administration showing the quantity of natural gas shipped via pipeline from Southeastern states to the Northeast has dropped 56 percent since 2008, from 7.9 billion cubic feet per day to 3.5 billion. The figures represent the average daily natural gas inflow from January to September of each year. The government agency notes, however, that new oil and gas shale plays discovered in the Appalachian region have replaced much of the supply that used to be pumped to the area via pipeline.

Princeton officials negotiating shutdown, alternate route of natural gas pipepline
Residents and town officials are hopeful they could be making some crucial headway in negotiations with Oklahoma-based Williams Co., the company with plans to build a 1.2-mile stretch of natural gas pipeline through part of the town’s most environmentally sensitive areas. The company’s plans to lay the 42-inch diameter pipeline through a portion of the Princeton Ridge area raised a few eyebrows among residents and town officials, especially when the company said it would keep the existing 36-inch line built in 1958, running during the excavation and installation process. Its $600 million Leidy Southeast project application was filed with the Federal Energy Regulatory Commission at the end of September, and if approved, construction on the pipeline, an expansion of the company’s Transco pipeline, could begin in the spring of 2015.

How To Play The Shale Boom’s Next Phase
The low-pitched thrum of natural-gas-fired engines vibrates across the rural valley in Pennsylvania’s Susquehanna County, where Cabot Oil & Gas is drilling a new well to tap the Marcellus shale formation a mile underground. As workers swing drilling pipe into the 135-foot-tall rig, a parade of trucks rumbles up the narrow dirt road from Montrose, Pa. Until the shale boom Montrose was best known for its bluestone quarries. Now the roads in this northeastern Pennsylvania county are filled with heavy trucks hauling drilling fluids, pipe and the thousands of tons of sand that drillers pump into the ground to open up fissures in the granite-hard Marcellus and let the gas flow. Cabot’s Pennsylvania wells are natural gas gushers, expected to produce an average of 14 billion cubic feet over a well’s 50-year life span, 14 times as much as a typical Oklahoma well. Already the Marcellus shale, extending from New York to West Virginia, is supplying 12 billion cubic feet a day, or almost 15% of U.S. gas demand.