Marcellus & Utica Shale Story Links: Tue, Dec 3, 2013

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


Ohio hits 995 Utica permits with 609 Utica wells drilled
Akron Beacon Journal
Ohio is quickly approaching 1,000 Utica shale permits. As of Nov. 23, the Ohio Department of Natural Resources says it has approved 995 permits, of which 609 Utica wells have been drilled. A total of 189 wells are producing. ODNR reports that 44 rigs are working in Ohio. That number appears to be up slightly. The eight new permits came from Carroll County, 3; Columbiana County, 2, Guernsey, Jefferson and Noble counties, 1 each.

ODNR to Start Reporting Quarterly Production Data in February
NGI’s Shale Daily
The Ohio Department of Natural Resources (ODNR) expects to begin releasing quarterly oil and gas production reports in February, after a push from investors, members of the agency itself and other industry stakeholders, who called for more up-to-date figures on the pace of development in the Utica shale play last year. For more than a year, state regulators have fielded requests for more frequent reporting. The move comes as an amendment to Ohio’s biennial budget bill, which was signed into law by Gov. John Kasich in June. The provision was strongly considered last year, but was not included when legislators passed Senate Bill 315 — a sweeping law that reformed oil and gas policy, midstream regulations and rules for waste water disposal in underground injection wells.

Shale drilling: ‘Home rule’ case in Ohio being watched closely
Columbus Leader
A closely watched lawsuit in Ohio is asking a question that’s burning in cities and towns throughout shale country: Can regulations in states eager for the jobs and tax revenues that come with gas and oil drilling trump local restrictions that communities say protect them from haphazard development? The case was brought by Munroe Falls, an Akron suburb of 5,000. It involves a well that Beck Energy Corp. began to drill — with the state’s permission — on private property in the city in 2011. In the process, the company sidestepped 11 local laws on road use, permitting and drilling, the city contends.

Gulfport Well Pumps 30M Cubic Feet Daily
Intelligencer/Wheeling News-Register
Energy analysts referred to the well Gulfport Energy drilled in the Egypt Valley area of Belmont County last year as a “monster” upon learning it generated 28.5 million cubic feet of natural gas per day. Now Gulfport has an even more productive Belmont County well, as the Irons 1-4 H well along Ohio 148 near Armstrong Mills is yielding about 30 million cubic feet of dry methane natural gas daily. “We are very pleased with the initial results from our Irons 1-4H well, our first well in the dry gas corridor in the Utica. With approximately 44 percent of our acreage located within the dry gas phase of the play, this well stands to unlock meaningful value across a large portion of our acreage,” said Gulfport CEO Jim Palm.

FERC Clears Marcellus/Utica Flow West on REX Pipeline
NGI’s Shale Daily
FERC has cleared the way for Rockies Express Pipeline LLC (REX) to offer westbound capacity on part of its system from the Marcellus/Utica region without the threat of having to match for existing west-to-east customers the lower rates it is charging for the new service. The Federal Energy Regulatory Commission (FERC) ruled last week that “most favored nations” (MFN) provisions of REX’s negotiated contracts for eastbound gas with foundation/anchor shippers would not be triggered by future agreements to ship natural gas westward on the eastern end of its system.


Gas drillers should minimize impact on nature, poll says
Pittsburgh Post-Gazette
Results of a poll by The Nature Conservancy in the six-state Marcellus Shale gas region of the Appalachians indicate strong support for better regional planning to minimize impacts on forest and water resources, as well as tougher environmental safeguards. The poll, scheduled for release at noon today, also shows that a majority of those polled — 54 percent — say conservation of natural habitats and water resources should be a higher priority than shale gas development, even if that would produce higher energy costs. Forty-two percent of those polled say creation of new natural gas industry jobs should be a higher priority.

Marcellus Shale freeze-offs? No big deal, industry says
Platts Gas Business Briefing (paid or free trial access required)
Even as the Northeast/Appalachia was pounded last week by Winter Storm Boreas, industry officials and analysts disagreed on the likelihood/market impact of well freeze-offs in the Utica and Marcellus shales this winter. It’s been nearly three years since the market has seen significant freezing in a gas supply basin — a February 2011 arctic blast that resulted in freeze-offs from Texas to New Mexico. At the height of that event, some 7.5 Bcf/d was shut in — comparable to the production losses from some Gulf of Mexico hurricanes, according to the Energy Information Administration. The result was 4.4m customers without electricity and 50,000 without gas service, and subsequent investigations by federal and state regulators. Now, the eastern US is getting more and more of its gas from local production — fields sitting in a colder northern climate and with gas streams that sometimes have a high liquids content.

How To Play The Shale Boom’s Next Phase
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.

West Virginia

Industry leaders speak on cracker
Weirton Daily Times
Although natural gas processors continue pumping ethane out of the Marcellus and Utica shale regions, the head of an organization representing chemical companies is “very confident” Odebrecht’s planned Parkersburg cracker plant will come to fruition. “A cracker in West Virginia just makes sense. The chemical industry historically follows abundant raw materials, and the vast amount of ethane in the Marcellus shale provides a great foundation for new chemical manufacturing investments,” said Kevin DiGregorio, executive director of the West Virginia-based Chemical Alliance Zone, a nonprofit organization formed in 1999 that states it is “dedicated to supporting and expanding the chemical industry and technology economy” in the Mountain State. “Although situations can change and none of us have a crystal ball, I’m very confident that the cracker in Parkersburg will become a reality,” DiGregorio said.

CONSOL Energy Announces HSR Clearance for Sale of Five West Virginia Coal Mines to Murray Energy
CONSOL Energy Inc. announced today that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired in connection with the previously announced sale of its Consolidation Coal Company subsidiary, which contains all five of its longwall coal mines in West Virginia, to a subsidiary of Murray Energy Corporation for $3.5 billion in value. CONSOL Energy signed a definitive agreement regarding the sale to Murray Energy on October 28, 2013. The closing of the transaction is subject to the satisfaction of various other customary closing conditions, and CONSOL Energy anticipates closing the transaction in the next few weeks.


Shale drilling boom is fading across Kansas
AP/Akron Beacon Journal
The economic future seemed so tantalizing just two years ago as the nation’s big oil firms rushed into Kansas. They snapped up mineral leases from landowners for high prices and drilled horizontal wells to extract unknown riches from the same Mississippian Lime formation that had spawned an oil boom in neighboring Oklahoma. Things have changed. Most of those big out-of-state players are gone. The biggest blow came when oil giant Shell Oil Co. halted its Kansas exploratory drilling program in May and has since put up for sale 625,000 acres of leases it owns in the state. Life here has for the most part settled back to normal in the rural farming communities in Harper and Barber counties which were once ground zero for the oil and gas exploration frenzy.

State lawmakers advance bill that would ban fracking in Massachusetts
Boston Business Journal
The Marcellus Shale’s vast underground reservoir of natural gas doesn’t quite stretch into Massachusetts from Pennsylvania and New York. We do have the Hartford Basin, essentially tracking the Connecticut River Valley on a north-south axis through Massachusetts and Connecticut. But the gas resources there are unknown and believed to be limited at best. Still, that hasn’t stopped environmental activists, particularly in the western Massachusetts communities that might be affected, from raising a hue and cry about the possibility of hydraulic fracturing here in the state. Those opponents just won a victory at the State House last week, when the Legislature’s environment and natural resources committee advanced a bill that would ban fracking statewide through Dec. 31, 2024. The bill would also prevent wastewater and other byproducts from out-of-state fracking wells from being stored, treated or disposed in Massachusetts.

Fracking-led energy boom paves way for ‘Saudi America’
All along the highway that leads into this city in West Texas, the rows of black pump jacks seem endless, bobbing up and down as they pull crude oil from beneath the parched scrub desert. The pump jacks have long been here, in good times and bad, a symbol of this city’s long status as the heart of America’s petroleum industry. Even when U.S. oil production was dropping and many feared the Permian Basin, which feeds Midland’s oil economy, was all but exhausted, the pump jacks continued their work — even when the result seemed hardly worth the effort. Now, their up and down motion seems all but unstoppable, a symbol of an energy revolution that seems likely to transform the globe. “Everything has changed,” said Jim Henry, 78, who’s worked in Texas’ oilfields most of his life.

The Weekly Oil & Gas Follies
Are You a Fracking Ignoramus? – Sadly, the hearsay is winning right now. Today in America most people are miserably ignorant about what fracking is, according to a recent study released by the Yale Project on Climate Change Communication. Of the more than 1,000 people the Yale researchers polled, “13 percent did not know how much they had heard [whatever that means]; 39 percent had heard nothing at all; 16 percent heard a little; 22 percent heard some; and 9 percent heard a lot,” according to a paper on the study published in journal Energy Policy. Translation: only about one in ten people felt they were even familiar enough with the matter to form an opinion. Yet, every week I get loads of anti-fracking emails from various political/environmental organizations. Among these emails are stories that have little or nothing to do with fracking at all.

The #1 Fracking Movie You Simply Must See
The Motley Fool
Fracking. It’s a word laced with misconceptions. Because of this it has been portrayed as an evil villain by pop culture and many in the media. Some say that it kills animals, can make tap water flame and causes earthquakes. No wonder so many fear the very thought that it could be allowed to occur in their own backyard. The problem is that many of the concerns Americans have with fracking are simply not true. What’s portrayed in some popular movies on the subject is a version of the truth. Because yes, tap water can be set aflame and earthquakes are felt in areas that are associated with oil and gas drilling. However, neither is directly associated with the process of fracking. There are so many other things most Americans don’t know about the process.

New EPA Admin: Natural Gas Key to More Jobs, Cleaner Environment
Energy in Depth
Today, EPA Administrator Gina McCarthy once again touted the importance of natural gas as a “game-changing” and clean-burning fuel for America’s energy mix. Her remarks, made during an event sponsored by the Center for American Progress, are yet another example of Obama administration officials’ support of natural gas – and the importance of hydraulic fracturing in accessing this vital source of domestic energy. According to Administrator McCarthy…


South Africa’s Zuma says country must pursue shale drilling
Bloomberg/Akron Beacon Journal
South Africa must pursue the potential for shale-gas drilling in the Karoo region because it may transform the country’s economy, President Jacob Zuma said. The government will decide whether to allow shale-gas exploration in the region early next year after consulting local communities, Zuma said today in Hozatel, Northern Cape province. South Africa, seeking to tap as much as 485 trillion cubic feet of gas resources in the Karoo, published draft regulations governing hydraulic fracturing on Oct. 15, a year after lifting a ban on the drilling process known as fracking. Opponents of the practice, which blasts water, chemicals and sand into rock to release gas, say it risks contaminating ground water.

Pipeline development will help shape Canada’s energy future
Bloomberg/Akron Beacon Journal
Canada’s bid to become what Prime Minister Stephen Harper calls an energy “superpower” is at risk as approval delays for new pipelines threaten an industry already hurt by high costs and rival production. The world’s sixth-largest crude producer can’t get its surging crude supplies to markets in Asia where prices are higher than in North America. Decisions in the next year or so on proposed pipelines designed to connect oil-sands production to supertankers on the Atlantic and Pacific coasts may set the tone for the future of the nation’s energy industry. “There’s no doubt that over the next 12 to 24 months, there will be some significant decisions made on pipelines infrastructure in Canada,” Ian Anderson, president of the Canadian division of Kinder Morgan (KMP) Energy Partners LP, said in a Nov. 29 interview in Lake Louise, Alberta. “What’s important about the time frame is, there’s a window of opportunity here to build this infrastructure.”