Marcellus & Utica Shale Story Links: Thu, Jan 30, 2014

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

New York

Cuomo Orders Oversight of Oil Shipping by Rail
New York Times
Andrew M. Cuomo directed state agencies to strengthen oversight of petroleum shipments by rail, citing devastating accidents in Quebec and North Dakota and the expansion of crude oil shipping through the Port of Albany. Joe Martens, commissioner of the state Department of Environmental Conservation, announced the action at a legislative budget hearing. He said the governor had issued an executive order directing the department and other agencies to evaluate the state’s spill prevention, response and inspection programs involving rail and ship transport of petroleum products. The agencies are to report recommendations on April 30. The state is also calling on the federal government to expedite enhanced standards for transporting crude oil by rail and water to reduce the potential for spills and accidents.


Antero Resources: Utica Shale Shines
Seeking Alpha/Richard Zeits
Utica Shale, the sleeping oil and gas giant, yesterday sent another reminder that its mighty awakening is inevitable and is just a matter of time. In its fourth quarter operating update released after the close yesterday, Antero Resources (AR) provided results of its five most recent Utica wells drilled in Noble County, Ohio (condensate-rich gas). The results are exceptionally strong and, as shown in the summary table below, are consistent with the IP rates the company reported for its previous five wells in Noble County. The new wells had an average 24-hour peak processed rate of ~32.2 MMcfe/d versus ~27.5 MMcfe/d for the existing five wells.


Making headway on LNG for rivers
Pittsburgh Post-Gazette
The idea of using liquefied natural gas to power vessels coming through the Port of Pittsburgh hasn’t advanced much since it popped up on the radar three years ago. But things should start moving quickly from here on, said Jim McCarville, executive director of the Port of Pittsburgh Commission. The port is launching a study to assess the feasibility of producing LNG in the region, the infrastructure that will be needed to distribute it, and the financial and technical barriers to running boats with the fuel. LNG is a cheaper and cleaner fuel than diesel for marine vessels and the supply is expected to be rather stable for years. For gas producers, the marine market, however small compared to heavy duty trucks, is yet another market for their product at a time when supply far outstrips demand.

Anti-fracking activist barred from 312.5 square miles of Pennsylvania
Grist Magazine
Cabot refused several requests to respond, beyond a brief email statement from spokesperson, George Stark. “Cabot has a policy of not commenting specifically on litigation to which it is a party,” the statement reads. “That being said, Cabot supports an individual’s right to free speech and regrets having to seek relief from the court in order to prevent Ms Scroggins from repeatedly trespassing on company property, where she could potentially jeopardize the safety of herself and others.” However, the company arranged for Tom Shepstone, a consultant who blogs at Natural Gas Now, to speak on its behalf. Shepstone said the injunction was overdue. “I’m proud of Cabot and what they’ve done because they’re saying we’re not going to take this any longer,” he said. Cabot in court filings does not accuse Scroggins of violence or of causing harm to property, and she has never been arrested or charged with trespass. She has not chained herself to machinery, or staged sit-ins. But Shepstone argued Scroggins had upset too many people to be tolerated. “I believe she is a public menace because what she does is she essentially trespasses not so much on property — though she does do that — but she trespasses on the soul of the community,” he said. “She does not allow the people of this community any peace.”

Infrastructure causing natural gas ‘price blowouts’ in Pennsylvania
Pittsburgh Business Times
Infrastructure for Marcellus Shale gas is still playing catchup in the race to link abundant natural gas supply to demand, and that’s putting pressure on the price found at physical trading locations across Pennsylvania. Blake Webster, director of Houston, Texas-based private equity firm Quantum Energy Partners, said the lag in infrastructure needed to meet demand makes it difficult to price natural gas toward normal benchmarks. That results in localized price spikes. “Price blowouts are not just a seasonal phenomenon, and you see these basis spreads continue to widen,” at locations like the Leidy Transco trading location in northeastern Pennsylvania and Dominion South in southern Pennsylvania, Webster said Wednesday at Hart Energy’s Marcellus-Utica Midstream Conference & Exhibition at the David L. Lawrence Convention Center, downtown. “That’s something to keep an eye on,” Webster said. “Unless you see more infrastructure in the region, you’re going to see more gas-on-gas competition.” Webster noted there’s been a run-up in the New York Mercantile Exchange price for natural gas, but it hasn’t directly benefited users because of the wide difference at pricing hubs in the region.

West Virginia

Future Fund bill to be introduced this week
WV MetroNews
A bill creating the West Virginia Future Fund, a type of endowment fund for the years ahead that would draw on a portion of present-day severance tax collections, could be introduced in the state Senate before the end of the week. It’s an idea Senate President Jeff Kessler (D-Marshall, 2) is again proposing, as he has done several times at the State Capitol, as way to save some of the additional money the state is collecting through natural gas developments in the Marcellus shale. Kessler said the state missed a similar opportunity, in the past, when coal was booming. “I tell folks that, had we done this in 1975, just one percent of our severance tax dollars, had we put it in the bank, today we would have near $8 billion dollars.” There are a lot of ways, he said, the annual interest from that kind of total amount could be spent in the future, more than 20 years from now.


President’s State Of The Union: A Plan Without Action Is Just A Speech. Let’s Act On Energy.
Forbes/T. Boone Pickens
President Barack Obama talked about energy in his State of the Union address as every President since Richard Nixon has done. In his State of the Union address, President Obama came out strongly for the continued development of natural gas as a major American resource. That is great news and music to my ears. I have championed a comprehensive national energy strategy – the Pickens Plan – since 2008, with natural gas as a cornerstone. The goal has been to get off OPEC oil by using natural gas for heavy duty trucking. While I’m obviously heartened by the President’s endorsement of that, I’m also a realist. A plan wihout action isn’t a plan, it’s a speech. The OPEC oil threat is real. Our national security is threatened by it as is our economic future. After 40 years we just take OPEC for granted, and that’s a big mistake.

How Fracking Gas Rewrote The State of the Union
Forbes/Jeff McMahon
President Obama paid much less attention to energy and climate in last night’s fifth State of the Union address than he did in the previous four, highlighting only two specific initiatives: natural-gas fueling stations and fuel-efficiency standards for trucks. The president has spoken of energy and climate as a single issue ever since candidate Obama formulated the new-energy economy as the answer to climate change. But as cheap natural gas flooded the country during his presidency—thanks to hydraulic fracturing and lateral drilling—Obama had to revise the “new-energy economy” to include some very old fossil fuels: “The all-of-the-above energy strategy I announced a few years ago is working,” he said last night, “and today, America is closer to energy independence than we’ve been in decades.”

Natural gas big winner in Obama SOTU address
The Hill
While standing by his “all of the above” energy strategy on Tuesday night, President Obama gave a big hat tip to natural gas production. Obama credited natural gas as one of the top factors in bringing the U.S. closer to energy independence for the first time in decades. “The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades,” Obama said during his fifth State of the Union speech on Tuesday. “One of the reasons why is natural gas, if extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change,” Obama said. In a fact sheet accompanying the speech, the White House called on Congress to establish “sustainable shale gas growth zones. My administration will keep working with the industry to sustain production and job growth while strengthening protection of our air, our water, and our communities,” Obama said.

Enterprise Reports Record Results for 2013
Enterprise Products Partners (press release)
Enterprise Products Partners L.P. (“Enterprise”) today announced its financial results for the three months and year ended December 31, 2013. For the year ended 2013, Enterprise reported record results for each of the following: net income of $2.6 billion; earnings per unit of $2.82 on a fully diluted basis; and gross operating margin of $4.8 billion. Distributable cash flow for 2013 was $3.8 billion. “During 2013, we successfully completed and began operations for major growth projects totaling $2.3 billion of investment. Most of these projects were completed on or under budget and on time or ahead of schedule. During the fourth quarter of 2013, we completed $800 million of large projects including our eighth NGL fractionator and the Texas Express Pipeline. In January 2014, we began commercial operations on our ATEX pipeline, which can be expanded to transport up to 265,000 barrels per day of ethane from the Marcellus and Utica shale regions to petrochemical markets on the U.S. Gulf Coast,” continued Creel. “Including ATEX, we have approximately $7.8 billion of announced, major capital projects under construction that are scheduled to begin commercial operations from 2014 to 2016. Approximately $5.0 billion of these projects are expected to begin operations and start generating cash flow in 2014. The revenues associated with these projects are predominately fee-based and the larger projects have the additional assurance of demand revenues or minimum volume commitments,” stated Creel.