There are a number of midstream (pipeline and processing plants) companies operating in the Marcellus and Utica region. The country’s largest midstream company, Kinder Morgan, increasingly has a presence in the region. Joint ventures of various kinds, like Blue Racer Midstream (Dominion and Caiman Energy) are important new–and big–players. Williams Partners is one of the biggest. But if we had to identify which midstream company has the most assets, the most presence in the region, we’d have to say it’s MarkWest Energy. Yesterday MarkWest issued an operational update on their Marcellus and Utica projects–and frankly, it’s really impressive. This is a “time to crow about what we’ve done and will do” update. They’ve earned the right.
Over the past four months MarkWest has brought seven new, major projects online: 5 new cryogenic processing plants (separates wet gas into two streams, methane and NGLs), and 2 new fractionation plants (further separates the NGLs into their components, like ethane, butane and propane). Each one of these projects represents hundreds of millions of dollars of investment and hundreds of jobs. Here’s the kicker: MarkWest has another 17 major processing and fractionation projects under construction! Incredible. Below is the update issued yesterday by MarkWest which identifies many of projects and customers. It’s well worth your time to read:
Blue Racer Midstream CEO Jack Lafield spoke at the Hart Energy Marcellus-Utica Midstream Conference and Exhibition in Pittsburgh yesterday, and he had some interesting things to say. As for the $10 billion in infrastructure already invested in the Marcellus/Utica, Lafield says that’s “only a fraction” of what’s needed for investment in the coming years. Lafield says at least $30 billion more needs to be spent “just to keep up with the demand” for infrastructure. Yikes! He also said in his 42 years in the industry, “this is about as good as it gets.”
Also speaking yesterday was MarkWest Vice President of Corporate Development, Scott Garner, who said that MarkWest is spending $2 billion this year on the Marcellus/Utica. As MDN found with our list of 111 midstream/infrastructure projects published in our Marcellus and Utica Shale Databook Volume 2, we estimated there’s at least $40 billion in projects planned or already in process over the next five years or so. Here’s more pickings from yesterday’s conference:
John “foreigner hunter” Kasich, who sounds more like a Democrat every day, says he won’t accept a “puny” severance tax increase on Utica Shale drilling. He wants him a big, fat, mother of a tax increase on Utica drilling–and nothing less will do. In comments yesterday, Kasich (strangely) started to channel fairy tales, telling reporters that tax increases on drilling are “…kind of like porridge. It can’t be too cold, it can’t be too hot, it’s got to be just right.” Wow, Kasich would make Karl Marx proud.
Here’s the latest back and forth between Kasich and his own Republican Party, a party ready to cave (yet again) on the issue of taxes:
GreenHunter Water, which is building a frack wastewater recycling (and potentially barging) facility in Wheeling, WV, has hit a snag. So far, it’s a pretty big snag. Last year the company received approval from the Wheeling Planning Commission to proceed with the plant, after initial resistance. So far, the WV Dept. of Environmental Protection (DEP) has not issued any permits because they won’t and don’t need to review the plant until it’s ready to start operating. Then they’ll visit and evaluate.
However, the WV Dept. of Transportation’s Division of Highways (DOH) has rejected GreenHunter’s plan to have trucks with frack wastewater entering and exiting the plant. The DOH rejection happened last August and according to the DOH, they haven’t heard a thing from GreenHunter since…
The Democrat candidates running in the primary for governor in Pennsylvania, all of whom (with maybe one exception) support less Marcellus drilling in the state, including a draconian moratorium, might want to pay attention to the results of the recent statewide poll conducted by Franklin & Marshall College. It shows 68% of Pennsylvanians support Marcellus Shale drilling. They WANT the gas industry in the state. It shows the wacko fringe objectors to be 27%. You do the math and see how you win by bashing shale drilling in PA.
Here’s a summary of the results from the latest F&M poll:
Devon Energy announced earlier this week that they’ve added a pair of drilling industry veterans to their board of directors. The additions are “immediate” and include Barbara M. Baumann, 58, a former BP Amoco executive who currently serves as president and owner of Cross Creek Energy Corporation, and John E. Bethancourt, 62, a retired Chevron executive. Devon is a major acreage holder in the Utica Shale with 157,000 acres under lease.
Does this sudden, with no warning, addition signal problems or issues? We don’t think so, but we don’t know. We haven’t come across any scuttlebutt about Devon–they seem to be doing well, focusing largely on oily shale plays, including the Utica. A couple of years ago the company picked up $2.2 billion from Chinese oil major Sinopec International Petroleum Exploration Production Corp. in a joint venture deal (see China Makes $2.2B Investment in U.S. Shale, Including Utica). Last October Devon more or less bought out Crosstex Energy (see Crosstex Energy Gets a Name Change, Merger with Devon Proceeds). Seems like everything is going well, full speed ahead with no corporate raiders lurking in the background. Whew. Here’s the board announcement from earlier this week:
For the past month and a half, MDN editor Jim Willis hasn’t seen a day without a story about how natural gas prices have skyrocketed in New England (and even around New York City) because there aren’t enough natgas pipelines to the region. Not enough infrastructure. We find it amusing that the governors of six New England states recently sent a letter to their regional coop asking for help in getting more pipelines to the region (see Blue State Blues: 6 New England States Want New Natgas Pipeline). One of those states–Vermont–passed a law banning fracking (see Vermont Becomes First State to Ban Fracking). And yet Vermont wants that cheap, fracked gas from the Marcellus! How’s that for hypocrisy?
Knowing that New England tilts pretty far to the political left (and is mostly anti-fracking), we found it interesting when we spotted a story about communities in Massachusetts being approached by Kinder Morgan and their Tennessee Gas Pipeline with plans to extend the pipeline through their communities–across the entire state. How will they respond? Mass protests (pun intended)? Keep the evil, fracked gas away? No fracking way jest keep them pipes away? Interestingly, no. The attitude (so far) is more like, let’s find out where you want to run the pipeline and we’re sure we can accommodate it. Wow! What a change in attitude a price hike of $100 per thousand cubic feet of natural gas can create…
Seems like today is midstream day on MDN. Many of our stories revolve around pipelines and processing plants, including our lead about MarkWest (be sure to give it a read). Here’s an interesting story about a pipeline project in Canada that has a Marcellus tie-in. Enbridge Gas Distribution wants to expand their natural gas pipeline in the Toronto area, spending upward of C$686 million to do it. The “greens” of Canada (garden variety fossil fuel-hating anti-drillers) objected. The greens’ objection #1: If we just turn our thermostats down low, we won’t need the extra gas. The Ontario Energy Board said: Nope. Not buying that one. Objection #2: This pipeline will bring in that evil, nasty, fracked Marcellus Shale gas and kill us all because it pollutes water (in the U.S.) and releases fugitive methane into the atmosphere (global warming, heeelp!). Again, the Ontario Energy board said: Nope. Not buying that one either.
Below is the full story about the pipeline. Embedded in it is the response by the calm, wise heads from the Ontario Energy Board to the greens, responding to them on the shale gas issue:
A quick note to let you know that tomorrow (Saturday, Feb. 1) you can once again download Photojournal of a Pennsylvania Natural Gas Well: Book 1: Ground Preparation. It’s a really cool book of photos (and captions) taken by a non-professional photographer, Susquehanna County resident Janice Gavern. MDN recently reported on Janice’s project to document a Cabot Oil & Gas shale well being drilled just outside of Montrose, PA, close to (yes) Dimock (see PA Resident Snaps 8,000 Pictures of Cabot Well Construction).
Jancie has been a busy beaver. She’s now posted her second volume in this multi-volume series: Photojournal of a Pennsylvania Natural Gas Well: Book 2 Site Set-up. You can grab a copy of this volume for free on Sunday, Feb. 2. Be sure to grab them while they’re free! It will save you $9.99 (or if you like, download it and pay the $9.99 to give Jan a little bit of money for her efforts).
What if you don’t own a Kindle reader? No problem. You can download and install a Kindle reader application on your computer, smartphone–just about any device you have that connects to the internet. So don’t lack of a Kindle stop you from grabbing a copy of Jan’s books.
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Last night I had the site moved to a new server and it seems to be responding well today (at least so far). I have also found and corrected the issue causing logged in subscribers to not be remembered on subsequent visits.
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The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading: