Must-Read IHS Report: Midstream/Downstream Spending Hits $90B/Yr

a must readInformation Handling Services, or IHS, is the publisher of choice for the American Petroleum Institute (API). A new API/IHS study was published in December, but apparently just released to the public yesterday by the API. The study is titled “Oil & Natural Gas Transportation & Storage Infrastructure: Status, Trends, & Economic Benefits” (full copy embedded below).

We previously told you the API/IHS estimates each year drillers in the U.S. spend on the order of $150 billion to drill new oil and gas wells (see US Spending $150B+ to Drill New Oil & Gas Wells Each Year). MDN editor Jim Willis heard at the recent Platts Global Energy Outlook Forum that midstream-specific spending is only $15 billion per year (see Energy Industry Leaders Gather at Platts Forum in NYC). This new IHS report provides further clarification on spending in the midstream and downstream. If you lump new yearly spending together for all midstream (pipelines & processing plants) and downstream (refineries and distribution), IHS says the number was actually $53 billion in 2010, and had rocketed to nearly $90 billion in 2013. IHS researchers believe spending will remain around $90 billion in 2014 and something close that, per year, until 2020. Truly astonishing numbers. And that’s not the only revelation contained in this “must read” report. Like, there are 1 million new jobs on the way because of all this spending…
Continue reading

Researchers Backpedal on Bloomberg Story about Fracking & Babies

That was fast. It seems that Bloomberg’s article that implies fracking kills babies (see Another Flawed Fracking/Health Study Emerges…from Economics Conf) was a tad premature. According to Andy Revkin, environmental writer for the New York Times, the authors of the rumored research that reportedly shows a link between babies born close to fracking sites and low birth weight–didn’t want their research announced yet. They say they haven’t finished analyzing the data, it’s not peer-reviewed, and it’s not ready. The authors say Bloomberg jumped the gun and should not have printed their article.

To which we say, why did the authors mention their research and their preliminary conclusions/findings a public conference, if they didn’t want it known? Doh! Apparently the blow-back has been so swift and so strong that the researchers are now backpedaling as fast as they can…
Continue reading

Eureka Hunter Boasts 360% Yearly Increase in Marcellus/Utica Flow

Eureka Hunter, the wholly-owned midstream (pipeline) subsidiary of driller Magnum Hunter, published their month by month flow numbers yesterday for how much gas they pumped through their pipelines in West Virginia and Ohio during 2013. It was an impressive year for Eureka Hunter. The average daily flow or “throughput” in 2012 was 23,291 million Btus (or MMBtus), which equates to 23.3 million cubic feet per day (or MMcf/d). If the “average” well is producing, say, 3 MMcf/d, that’s the equivalent of having 8 wells connected to the pipeline. The average daily flow in 2013 was 83,828 MMBtus, or 83.4 MMcf/d, or 28 wells hooked up and flowing. That’s a 360% year over year increase–nearly quadruple the volume!

What the average doesn’t tell you, however, is that by the end of the year, Eureka Hunter’s pipeline flowed nearly 160,000 MMBtus, or 160 MMcf/d, which is production from an average 53 wells. They predict in 2014 the daily flow rate will hit 206,500 MMBtus. Somewhere between 40-50% of the gas they flow is from Triad Hunter, another Magnum Hunter subsidiary (sister company to Eureka Hunter). Below is the press release with Eureka Hunter’s monthly flow numbers. With our explanation above, you now know how to view it!…
Continue reading

Sierra Club Gets What They Want in OH, and It’s a Big Fat Nothing

The anti-drilling Sierra Club–an organization that once lauded natural gas as an energy bridge to the future but now hates it (because it’s a good fundraiser for them to demonize it)–went fishing for information in Ohio, and came up with nothing. The Sierra Club previously sued the Ohio Dept. of Natural Resources (ODNR) seeking all documentation (emails, etc.) for the case of D&L Energy/Hardrock Excavating–the company that repeatedly dumped untreated frack wastewater in the dead of night down a drain–untreated wastewater that ended up in the Mahoning River (see Youngstown Business Dumped >200K Gal of Untreated Wastewater).

Not only did the ODNR immediately take strong action against the perpetrators of this environmental crime by shutting down the companies involved, the drilling industry itself loudly and strongly condemned it. Not good enough for the Sierra Clubers. They thought there may be some teeny tiny sliver of something they could demagogue and use in yet another fundraising letter–if only they could sort through the pile of communications surrounding the case. So they sued. The ODNR finally relented and gave them what they wanted–and according to the Sierra Clubers, there were “few new details” in the document dump. In other words, it was a colossal waste of time and taxpayer money…
Continue reading

MWCD Open House on Leasing Piedmont Lake Property for Drilling

Oh, we love it! The Muskigum Watershed Conservancy District (MWCD) has definitely seen the light. Although they were scared off from allowing shale drilling on Watershed-owned property early on, the board came around and eventually saw the light. Now they can’t get enough of shale drilling! They’re leasing MWCD-owned land for shale drilling, and they’re selling water to drillers–in many instances to frack wells being drilled on MWCD land. Beautiful!

The MWCD announced yesterday that so many drillers are knocking on their door to lease MWCD land in and around Piedmont Lake (in Belmont, Guernsey and Harrison counties) for Utica Shale drilling, they will have a public open house next week to discuss it. The MWCD owns some 6,600 acres around Piedmont Lake–and leases in that area have seen some of the highest signing bonuses and royalties in the entire northeast. We’re talking serious money (many many millions) for the MWCD if they lease that land for Utica Shale drilling…
Continue reading

Former PA Parks Head John Norbeck Joins the Anti-Drilling Brigade

Sadly, the former head of Pennsylvania’s state park system, John Norbeck, has thrown in his lot with the strongly anti-drilling PennFuture organization and will become its vice president and chief operating officer. PennFuture has worked tirelessly to obstruct and stop drilling wherever and whenever it can. Apparently Norbeck was a closet anti-driller all along. Who knew?…
Continue reading

Drill Capital Launches Drill Research; Nifty Antero/Utica Report

MDN does not usually run self-serving press releases that are the sum total of “look at us.” But sometimes we do–when the release piques our interest. Such a release was issued yesterday by investment firm Drill Capital–a firm focused on investing in the North American energy sector. According to yesterday’s press release, Drill Capital has formed a separate, dedicated research arm called Drill Research that will evaluate energy sector investment opportunities. Of course this is a marketing technique to attract customers (i.e. investors) to join Drill Capital. Certainly nothing wrong with that! What piqued our interest is their publication of a sample model portfolio highlighting Drill Research’s top pick. Which is? One of the top drillers in the Marcellus and Utica Shale: Antero Resources.

By visiting the Drill Research webpage highlighted in the release, you can read their research and view the model portfolio. If you do, you’ll find interesting details about Antero, the Utica Shale, the Marcellus Shale and several other major U.S. shale plays. It’s definitely worthwhile info, which is why we share it with you…
Continue reading

China Comes to the Marcellus – to Learn and to Profit

In the dead of the holiday season, on Friday, Dec. 27, Energy Corporation of America (ECA) issued a press release that largely went unnoticed. In the release, ECA announced it has formed a 50/50 joint venture partnership with the world’s second largest (and China’s largest) coal company, China Shenhua Energy Company (100% Chinese government owned), to drill 25 Marcellus wells in Greene County, PA. Shenhua will invest $90 million in the venture and in the process learn how drill in shale–knowledge currently lacking in China. It’s not much of a stretch to predict this is not the final involvement of Chinese money that will flow to the Marcellus and Utica Shale.

Here is the brief statement issued by ECA, followed by a story about the jv from China Daily:
Continue reading