Marcellus & Utica Shale Story Links: Wed, Dec 11, 2013

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

New York

This, I Gotta See: DEC Uses Twitter to Check Facts on “Fracking Brine” as Road De-Icer
NY Shale Gas Now!
I noticed yesterday that New York’s DEC has taken to Twitter in a half-hearted effort to set the record straight on the state’s latest crisis du jour — “Fracking Brine!” — which was birthed last week by Politico’s new Capital New York media outlet, as part of an ongoing romance between the colorful worlds of persuasion, journalism, and ignorance. And then, apparently, nursed along by other feverish media outlets…


GOP bill sets low drilling-tax rates in Ohio
Columbus Dispatch
A new tax on horizontal wells in Ohio is an effort to provide clarity to oil producers and ensure that the rate is low enough to keep them coming to the state in the fracking boom, the bill sponsor told his colleagues yesterday. But some Democrats questioned whether the tax rate is high enough if part of the severance tax’s estimated $1.7 billion in proceeds over the next decade is to be earmarked for income-tax reductions.

Ohio reports 627 Utica shale wells drilled, 250 in production
Akron Beacon Journal
Ohio has approved 1,015 Utica shale permits, as of Dec. 7. Of that total, 627 wells have been drilled and 250 wells are in production. A total of 48 rigs are working in Ohio. There were nine new Utica permits: two in Belmont County, six in Carroll County and one in Monroe County, the Ohio Department of Natural Resources reports.

Interesting tidbits from OOGA’s Oilfield Expo, Safety Congress
Akron Beacon Journal
Ohio has approved only two new injection wells since the moratorium was lifted earlier this year. That means that Ohio now has 188 operating injection wells. An additional 43 wells have been permitted but have not yet been constructed. The 180 Utica shale horizontal wells in production are averaging 4.3 million cubic feet of natural gas per day plus 302 barrels of oil per day. From Brent Breon of Blue Racer Midstream: Ohio and Pennsylvania are together producing about 11.2 billion cubic feet of natural gas per day, and that total is expected to climb to 20 billion cubic feet per day by 2020.


Williams Partners’ Management Presents at 2013 Wells Fargo Pipeline, MLP and Energy Symposium Conference (Transcript)
Seeking Alpha
ACMP has a big footprint in Marcellus with 1.7 million acres dedicated OEM at 236,000 acres. Again wet gas, some of the richest gas in the nation and we expect good things long-term despite some of our early challenges. Susquehanna County, we have 150,000 acres under dedication and then Three Rivers at 275. So almost 3 million acres directly in the Marcellus and then through ACMP and the Utica another 1.8 million acres and then Blue Racer has some acreage that’s under dedication but not much announced yet.

West Virginia

Citizen groups seek more drilling protections
Charleston Gazette
Citizen groups are pressing West Virginia lawmakers to enact more restrictions to protect residents who live in the midst of the state’s boom in natural gas production. Representatives of the West Virginia Environmental Council and the West Virginia Surface Owners’ Rights Organization say the results of recent state-sponsored studies show the need for more action. Dave McMahon, a lobbyist for the surface owners group, reminded lawmakers this week that state regulators declined to propose tougher restrictions themselves, saying that the state studies showed “no indications of a public health emergency.” “We don’t think they should wait for an emergency,” McMahon said. “We think they should improve people’s quality of living right now.”

Proposal Put Forth To Obtain Maps Of Natural Gas Lines In West Virginia
West Virginia Natural Gas Blog
Tom Taylor, the executive director of the state’s one-call/811 system, testified at a legislative interim meeting this week that he would propose to include “production lines” on a required basis in the system—effectively meaning that maps would be mandated for such lines for submission to the state—and that companies would have a responsibility to keep those maps updated and to have someone assigned as a liaison to the 811 system when calls came in. The committee took no action. The many natural gas industry reps in the room seemed generally upset at the proposal, and that they knew nothing about the gentleman’s remarks prior to the meeting.


NatGas Production Moves Onshore And Why Hurricanes Don’t Matter Anymore
Seeking Alpha
U.S. natural gas production has surged, but growth hasn’t been across the board. U.S. natural gas production ticked down from record highs in September, according to the latest data from the Energy Information Administration. Gross output fell from 74.49 bcf/d to 73.91 bcf/d, but that still leaves output 1.24 bcf/d higher than a year ago in September. For all the talk of the ongoing U.S. oil boom, it’s easy to forget natural gas production in the country has increased just as fast. Since 2005, natural gas production is up a whopping 19 bcf/d. But growth has been far from even. Offshore natural gas production has actually fallen by 65 percent, from 10 bcf/d to 3.55 bcf/d in the period. In contrast, onshore production — which includes the prolific shale plays such as the Marcellus, Haynesville and Eagle Ford — has jumped 56 percent, from 45 bcf/d to more than 70 bcf/d.

NGL supply growth could outpace demand through 2017
SNL Financial
The natural gas liquids market’s ability to consume growing amounts of supply should be limited through at least 2017 as production grows from 2.4 million barrels per day in 2012 to nearly 4.5 MMbbl/d by 2018, according to various projections presented Dec. 5-6 at the second annual NGL Forum in San Antonio. Incremental takeaway of growing production will come from new pipelines and export projects, but may not be enough to substantially lift prices of commodities such as ethane until it is adopted more widely as a feedstock in ethylene crackers. Growth in supplies of NGLs will be somewhat broad-based, according to Michael Sloan at ICF International. Sloan said the strongest growth will come from the Marcellus, Utica, Eagle Ford, Bakken and Western Canadian plays, but “half of U.S. NGL production growth is projected in the Marcellus and Utica plays.” Expansion of several key shale plays will make up a larger proportion of overall output as well. “NGL production from Eagle Ford, Marcellus, Utica, and the Williston Basin will comprise 50% of total U.S. NGL production by 2018,” according to RBN Energy analyst Kelly Van Hull.

Who Will Take the Prize in Asian Natural Gas Exports?
The Motley Fool
One domestic challenger to Cheniere’s export plans is Dominion Resources (NYSE: D ) . This East Coast utility received approval to export natural gas from its Cove Point terminal. It must be pointed out that Dominion’s natural gas export operations currently will be spun off as a master limited partnership along with its interests in natural gas midstream assets called Blue Racer. These assets transport and process natural gas from the Utica Shale play. This export facility should commence operations in 2017 with the Asian market in its crosshairs. Unlike Cheniere, Dominion generates revenues from a variety of other sources. Admittedly, these are regulated and unregulated utilities but at least there’s a positive cash flow. Not to mention a dividend that has slowly grown over the years and positive earnings that topped guidance for the third quarter of 2013. The Cove Point terminal resembles Sabine Pass in that it was originally an import terminal until the U.S. shale gas boom stifled gas imports. Dominion should begin renovating the terminal for exports next spring with the first exports sailing in 2017. So Dominion will be roughly a year and a half behind Cheniere. Similar to Cheniere, two customers already have committed to buying Dominion’s exports.

Serious Environmentalists Should Love Shale Gas for Our Health
Natural Gas Now
The virtues of shale gas are clear, unmistakable and so obvious we sometimes lose sight of them in the arguments over details. Shale gas is a not only an energy revolution, but a healthy one. Richard Muller has been a Professor of Physics at the University of California, Berkeley since 1980 and, together with his daughter Elizabeth, recently authored a report on shale gas for the Centre for Policy Studies, a free-market neoliberal British policy think tank, that should be getting a lot more attention than it has. Why? Because, this is what it says:


Shale Gas Is Changing the World
Natural Gas Now
Since its Orange Revolution of 2004, Ukraine has sought to distance itself from its longtime master, Russia. Over the last few years, Ukraine painstakingly negotiated a series of trade agreements with the European Union that would integrate Ukraine into the Western economic zone. The deal was set to be signed at a conference this week in Vilnius, Lithuania. That all changed when President Viktor Yanukovich suddenly announced that he was backing away from the deal, and instead would move closer to Moscow. For years, Vladimir Putin has put enormous pressure on Ukraine, its largest neighbor to the East. These included threats of retaliatory trade sanctions and, perhaps most critically, withholding of key energy supplies. Ukraine has been one of the leading proponents of exploiting its large potential shale gas reserves, but so far development has been slow and Russia retains a near monopoly position in terms of energy supply. Moscow used its traditional hardball tactics, and, under the pressure, Yanukovich buckled. His about-face sent shockwaves throughout the country of 46 million, many of whom yearned for greater economic opportunity outside the clutches of Moscow.