Marcellus & Utica Shale Story Links: Thu, Dec 5, 2013

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

New York

Hydraulic Fracturing Regulations for CA and IL, What Price NY?
Natural Gas Now
Two big states, California and Illinois, made news recently by issuing proposed regulations on hydraulic fracturing. Here’s some perspective on what these states are doing (and one similar state is not). On Friday, November 15, the California Division of Oil, Gas and Geothermal Resources issued proposed regulations governing the process in California. The regulations, which also will cover “acidizing”, were promulgated following the passage earlier in the year of SB4, the State bill first regulating both processes.

Iroquois pipeline eyes Canadian export capacity: Iroquois
Iroquois Gas Transmission is considering opening up south-to-north capacity on its pipeline from New York City to the US-Canada border, according to an open season notice posted Tuesday. The company is holding a non-binding open season for the SoNo Project to gauge interest in up to 300,000 Dth/d of export capacity to Canada at Waddington, New York, while reserving the right to only accept bids of at least 15 years, the notice said. By making minor modifications to the existing system, Iroquois could achieve a November 2016 in-service date, and the level of interest expressed in the open season will determine the facilities to be constructed to physically flow gas north into Canada, the notice said.


Fracking wastewater one step closer to moving by barge
Youngstown Vindicator
The U.S. Coast Guard is moving forward with a proposal that would allow fracking wastewater to be transported by barge on inland waterways, opening a draft policy to public comment that ended in November. Transport companies, oil and gas producers and others working in Ohio and Pennsylvania have expressed a desire to use waterways such as the Ohio River to move wastewater by barge for recycling or disposal. James Guttman, CEO of the Guttman Group near Pittsburgh, which sources and delivers oil and gasoline to regional stations and transports the commodities by barge on the Ohio River, said his company is planning to provide comment in support of the draft policy. “These are tank barges. They’re not open-hopper barges with coal on them; they’re completely enclosed,” he said. “After they’re built, they’re inspected by the Coast Guard, the people that transfer goods to them are licensed by the Coast Guard, and the people that push the barges by boat are licensed. They’re scrutinized every step of the way by the right people.”

Growing Number of Well Shut-ins Could Hurt Utica EURs
NGI’s Shale Daily
A lack of gathering and transmission lines in some parts of the country, particularly those in the Utica and Marcellus shales, are leaving wells shut-in longer, and new data presented Wednesday at an oil and gas conference in Cleveland suggests estimated ultimate recovery (EUR) could be significantly impacted as a result. Although operators can count on a wait time of at least six to eight weeks before well completion and flowback begins, Performance Services Inc. President James Crafton said everything should be done to minimize the time a well is shut-in, from altering strategies at the pad itself to waiting for adequate takeaway capacity. Performance Services is an energy industry consultancy based in Colorado.

MC uses petroleum program to launch new degree
Marietta Times
Marietta College is building on its already renowned petroleum engineering program with a major and certification set to debut in the fall of 2014. The land and energy management degree seeks to draw new students and meet a need as Utica and Marcellus shale exploration continues to grow, while the engineering leadership certificate will join petroleum engineering’s forces with that of the leadership program, another area of distinction for the college. Graduates who major in land and energy management will be prepared for careers as exploration landmen, doing land and title research and negotiating mineral rights leases and royalties with landowners. Both practices have become more commonplace in Washington County as the search for natural gas and oil in deep-underground shale formations has moved south.


Corbett nominees grilled on Marcellus oversight
Wilkes-Barre Citizens’ Voice
Two of Gov. Tom Corbett’s nominees to head state environmental agencies were grilled Wednesday about oversight of Marcellus Shale drilling as they cleared a hurdle in their Senate confirmation process. Christopher Abruzzo of Hershey, acting secretary of the Department of Environmental Protection, was asked about state monitoring of potential air and water pollution near gas wells and compressor stations and public notification about gas pipeline projects. Ferretti and Abruzzo won a favorable recommendation vote from the Senate Environmental Resources and Energy Committee for their nominations. The action sets the stage for a confirmation vote next week in the Senate. Both have been acting secretaries for their respective agencies since last spring.

Proposed electric facility to tap into Marcellus shale
Susquehanna Independent Weekender
Plans are underway to establish an electricity generating facility near Nicholson that by next year will tap into the Marcellus shale gas beneath its feet and produce enough energy to power 13,000 residential homes. In August, IMG Midstream of Yardley and Chief Oil & Gas of Dallas, Texas, announced they had entered into an agreement that calls for the construction of five electricity-generating facilities that will be fueled by Marcellus natural gas produced locally. The one to be located off Bob Henry Road in Nicholson Twp. will be run by a firm called Oxbow Creek Energy LLC, a subsidiary of IMG Midstream. The limited liability company was started in March in Delaware, and by May 16 was registered in Pennsylvania to render wholesale electric generation. The company has applied for various permits with the state Department of Environmental Protection, and on Oct. 22, had an air quality plan approved.


Natural gas use for power generation falls as industrial sector’s use continues to rise
EIA/Today in Energy
For the first eleven months of 2013, natural gas consumption in the electric power sector was below 2012 levels because of relatively higher natural gas prices compared with coal prices, and cooler summer weather compared with 2012. EIA estimates that electric power sector natural gas consumption was, on average, down by 13% so far in 2013 (through November), relative to the same time period in 2012. By contrast, industrial sector natural gas consumption in 2013 was up 3% compared with 2012.

Utility-Scale Solar Power To Be Cost Competitive With Natural Gas By 2025
Utility-scale solar power is poised to become cost competitive with natural gas by 2025, according to a new report by Lux Research. The report, “Cheap Natural Gas: Fracturing Dreams of a Solar Future,” evaluated the levelized cost of energy (LCOE) for unsubsidized solar, natural gas, and hybrid solar/gas technologies through 2030 under a range of future natural gas price scenarios and across 10 different parts of the world. The bottom-up cost model assumed a 39% decrease in utility-scale system costs by 2030 and a delay in shale gas production due to anti-fracking policies in Europe and high capital costs in South America. The key take-away: the LCOE for unsubsidized utility-scale solar globally will be only about $0.02/kWh above the price of power produced by combined cycle gas turbines by 2025.

Buffett Ignores Gore; You Should Too
The Motley Fool
Al Gore recently wrote an op-ed piece in The New York Times encouraging investors to sell their holdings of oil-producing companies. Gore’s rationale was that these companies own oil assets that will never be fully monetized. He referred to the situation as a “carbon bubble.” Within days it was announced Warren Buffett invested $3.7 billion in ExxonMobil. His reasoning: ExxonMobil produces oil cheaper than any of the other major oil companies and is sitting on huge piles of oil. Of course, ExxonMobil was also selling at the right price. If you agree with Gore, read no more. If you’re inclined to go with The Oracle of Omaha, please keep reading.

Department of the Interior Releases Semiannual Statement of Regulatory Priorities
The Department of the Interior has released its Statement of Regulatory Priorities, a subsection of which highlights the Bureau of Land Management (BLM)’s priorities on energy issues including hydraulic fracturing. BLM’s stated highest regulatory priorities include revising antiquated hydraulic fracturing regulations, preventing waste of produced oil and gas, and ensuring a fair return to the American taxpayer for oil shale development. BLM’s stated priorities also address solar and wind energy projects and the management of waste mine methane. The current regulatory agenda of the Department is also publicly available.


Nova Scotia to ban imports on waste water from fracking activity
Shale Energy Insider
Novia Scotia has announced that it will not accept waste water from fracking activities carried out outside of the province, under new legislation. According to environment minister Randy Delorey, the ban is appropriate as there is a moratorium on fracking in Nova Scotia while an independent review of the process is carried out. The review is being conducted by Cape Breton University president David Wheeler and the results are due to be published in spring. Delorey argues that once the legislation is passed it should not have to be changed regardless of whether fracking is allowed in the province. He said: “If other jurisdictions want to proceed with hydraulic fracturing and the waste byproduct, we believe it is their responsibility to deal with that waste themselves.”

Study reveals EU shale gas production could create 1 million jobs
Shale Energy Insider
According to a recent study commissioned by the International Association of Oil & Gas Producers (OGP), as many as a million jobs could be created and the economy gain €1.7-3.8 trillion between 2020 – 50 as a result of EU shale gas production. Roland Festor, OGP’s European Union affairs director, said: “Europe is still in a period of difficult economic and social recovery. This new study shows that shale gas production could have significant economic benefits.” “We cannot afford to forego such an opportunity; every cubic meter of gas produced from EU shale resources means one cubic meter less of imported gas. That would translate into more jobs, more disposable income, better security of supply and ultimately more prosperity. We encourage policymakers to create the right conditions for exploration.”

Europe Faces Cold December With Gas Reserves at 5-Year Low
Most of Western Europe will probably be colder than usual this month, potentially boosting natural gas prices and widening the region’s biggest storage deficit in five years. A high-pressure system is poised to drive cooler air northwest across Europe through the first half of this month, said meteorologists including MDA Information Systems LLC, WSI Corp., MetraWeather and MeteoGroup U.K. Ltd.. Prices in the U.K., Europe’s biggest market for the fuel, may extend gains after yesterday closing at a seven-month high, according to Energy Aspects Ltd., a London-based energy markets consultancy.