Marcellus & Utica Shale Story Links: Mon, Feb 3, 2014

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

New York

Future of fracking in Chautauqua County foggy
Dunkirk Observer
Hydraulic fracturing, or “fracking,” in the state of New York has become a hot topic. Although the possibility of major industrial fracking in Chautauqua County has yet to be thoroughly discussed, there are many questions to be answered. County Legislature Chairman Jay Gould, R-Ashville, said there may be some special work sessions involving fracking in Chautauqua County in the coming months. “We’ve got some people that want to try to educate the legislators on fracking,” Gould said. “We were going to do it at the end of last year but we decided we would wait and do it at the beginning of this term.” According to Gould, plenty of land in the county is available to be drilled. However, he declined to comment until he knows more information on the topic. “Economically, it’s good, I hear,” Gould said. “Environmentally, there are questions.” More than 30 U.S. states allow high-volume hydraulic fracking, but New York is not one of them. Since 2008, a moratorium has been in place on the subject in order for environmental review.
If Natural Gas Is No Threat, Why Are They Worried?
Natural Gas Now/Richard Downey
New York’s natural gas opponents have adopted a new strategy lately; trying to prove there isn’t any. If so, why are they so worried about it? Otsego County’s gas potential was the subject of a symposium last Friday at the Foothills Performing Arts Center in Oneonta, Otsego County, New York. Four gas activists/analysts shared their opinions on geology, production, and industry practice, with a side trip into the usual Doomsday Scenario. The thrust of their argument was that New York doesn’t have much gas. Because of a lack of gas, the companies left, leaving the scraps to smaller players. The Foothills presenters made forays into Wall Street financing and compared geological factors and production in Pennsylvania and New York, indicating a limited area in New York where drillers could make money. They closed with a litany of a dozen ills, from wreaked roads to global warming The takeaway was, “There’s nothing here. Don’t drill.”

Killing New York to Save New York
Natural Gas Now/Jeff Heller
Environmentalism isn’t what it used to be. It’s gone extreme and with it any common sense. We’re now killing owls to save owls and killing New York to save New York. A few recent developments in the energy area need to be noted by our local energy consumers – which means almost all of us. My last propane delivery included a note that from now on every propane delivery (and I assume this will apply to my oil deliveries as well) will include an additional charge of $9.62 to cover increased costs of Hazmat regulations and environmental regulations. If your average propane delivery (not this week’s) amounted to roughly $100, that fee represents (BAM!) a 10% increase in your heating costs – due to over-the-top environmental regulation that seems to know no end.


Utica shale play jobs surge 56 percent since 2011
Columbus Business First
Jobs in core industries developing Ohio’s Utica shale play have increased 56 percent in two years, according to the Ohio Department of Job and Family Services. The department said today that employment in those industries, such as well drilling and pipeline construction, increased by 3,876 in the second quarter of 2013 compared with the same time in 2011. There were 6,873 employed in 2011, compared with 10,749 in 2013, the report said. The number of companies involved in core oil-and-gas activity increased from 591 to 720, or 22 percent. Job and Family Services uses 2011 as the base for comparisons in its quarterly shale reports. In the previous report for the first quarter of 2013, jobs had risen by 30 percent in the first quarter of 2013 compared with the same time in 2011, as we reported. The average salary of shale-related jobs is $70,160 a year in core industries, the report says. Employment in ancilliary oil-and-gas industries grew 3 percent.

Plastics Grow In Stride With Shale Development [Audio]
Cleveland Public Radio WVIZ
OMNOVA Solutions is based in the small Summit County city of Fairlawn. It makes a number of products that are actually made from a natural gas byproduct, ethylene. CEO Kevin McMullen explains: “Ethylene is turned into polyethylene, which is used to make a number of products in plastics: films, paints, coatings, and many, many, other materials,” says McMullen. “So, it is very fundamental to much our economy.” McMullen says ongoing production in the Utica and Marcellus shale plays may transform the North American chemical and plastics industry significantly. He says chemical companies in the U.S. and elsewhere are revisiting their investment plans in American manufacturing. “This has the catalyst to be something that really takes the industry to the next level. And I think that will continue,” says McMullen. “I think what you’re now starting to see happening is people—who process the natural gas to form ethylene and polyethylene— are now starting to make investments in North America in a more significant way than they had maybe 6 or 8 or 10 years ago.” Plastics comprise the nation’s third largest manufacturing industry. The Society of Plastics Industry trade group says it accounted for nearly $42 billion in payroll in 2012, and employs nearly 1.5 million including suppliers. And Ohio is among the top makers of plastics and rubber in the upper Midwest.

Utica Shale Academy Charter School Planned for Eastern Ohio
The Daily Jeffersonian
The planned Utica Shale Academy would strive to develop energy trade skills in high schoolers. An Ohio county in the heart of the Utica shale play is planning an oil- and gas-oriented charter school. The Southern Local Board of Education in Salineville, a village of about 1,300 in Columbiana County, is moving ahead with an open-enrollment school for grades 9-12, reports the Steubenville Herald-Star. The name: Utica Shale Academy of Ohio. John Wilson, superintendent of Southern Local schools, told the Herald-Star the charter program would strive to prepare students for careers in the oil and gas industry while also offering a traditional curriculum. Many of the classes would be taken online with on-site assistance available from teachers. The charter for the school needs to be completed by the end of February if it hopes to open in September, Wilson told the newspaper. The school would be in Columbiana County. A charter school for oil and gas jobs is unique. Rayola Dewar, senior economic adviser for the American Petroleum Institute, said she’s never heard of specific school training at the high-school level. “Getting in high school and pointing them in a direction where they can achieve these jobs would be a great thing,” she told me.

Utica fractionator helps ease propane shortage [Audio]
Kent State Public Radio WKSU
Having a “fractionator” nearby came in handy for some Columbiana County residents, who were about to run out of fuel to heat their homes this week. WKSU’s Tim Rudell explains…starting with: “What’s a fractionator?” It is a half-a-billion-dollar chemical plant that separates products like methane, butane and propane from the typical raw output of a Utica Shale well. This one is in the woods near Scio, in Harrison County, two-dozen miles south and west of Columbiana County. Monday, a regional propane shortage became acute, with delivery delays threatening to leave some rural residents with no home heating fuel. Luke Newbold of Columbiana County Emergency Management called Eric Mize of M3 Momentum — the company that owns the fractionator and processes propane propane storage units on a massive commercial scale…to see if they could help locally. “He immediately went to work and coordinated a delivery of upwards of eight thousand gallons of propane form the Scio plant. And it was delivered that night. It’s nice to have this connection…now we won’t be running out.”


Northeast PA rail industry picking up
Scranton Times-Tribune
The region’s railroad traffic increased 6.5 percent in 2013, continuing recent growth since traffic was relatively stagnant during the recession and outpacing the national average of 5 percent among similar lines. The Pennsylvania Northeast Regional Railroad Authority reported 7,086 carloads of freight traveled over its 100-mile rail system in 2013. When the authority took over the rail system in 1985, only 393 carloads used its tracks, recalled Larry Malski, the authority’s president. That period was a dark time for Northeast Pennsylvania’s railroad industry, and Mr. Malski said the situation got so bad the region could have lost the mode of transportation completely if the authority had not intervened. “The lines were being abandoned, and the tracks were being ripped up by the companies that owned them,” Mr. Malski said. “If they had ripped it all up, there would be no rail system today, and it would have killed the economic growth of Lackawanna County.” Instead, railroad traffic rebounded to 2,000 units by 1994, then 6,418 units by 2004. Traffic leveled off during the recession around 6,750 carloads in 2010 before it gradually started to increase again. By 2011, the authority reported traffic had increased 4.25 percent to 7,037 units. All sorts of freight is transported along the region’s railroad tracks ranging from Mt. Pocono-based Horizon Milling’s flour to artillery shell casings from Scranton’s General Dynamics. From the Carbondale rail yard in Fell Twp., Linde Enterprises has increasingly been using the railroad system as the company supplies the Marcellus Shale industry with materials like sand and lumber, Mr. Malski said. “People see trains and don’t realize what’s inside,” Mr. Malski said.

Oil and gas industry faces limited space options
Pittsburgh Business Times
Real estate opportunities remain limited as oil and gas companies continue to make their way to western Pennsylvania. R.T. Walker, a vice president who leads the energy services group in the Pittsburgh office of CBRE, said that dynamic exists for both industrial and office space. In fact, Walker sees the imbalance worsening and expresses a concern that some companies will set up operations elsewhere due to the lack of space options in the region. “The companies are definitely still coming in. But we’re running into an even more drastic supply-and-demand challenge,” he said. “We’re at the point now where it’s critical that we find new buildings.” While activity in the Marcellus has continued to mature, the industry has operated through a deep trough in the price of natural gas since mid-2012 despite a recent rebound in prices.

Northeast no longer premium market for Marcellus, Utica gas, analyst says
SNL Financial
“Initially, there was talk of how the Marcellus and Utica being closer to the demand center would get a premium. But as can be seen, this is no longer the case,” Webster said. “We’re seeing on an annual basis, the basis spreads are widening, and it’s something to really keep an eye on.” From a resource standpoint, the Marcellus and Utica are still in the early going, but the industry now has enough data to get a better handle on where the sweet spots are, Webster said. “It’s an exciting time to be in the natural gas industry and the Marcellus and Utica are in the driver’s seat, so I think it will make for a very interesting investment environment to come,” he said.


What is shale? Clarifying the muddy terminological waters
Colorado School of Mines Ore Digger
Every student in SYGN 101 learns that “shale” refers to a clay-rich, fine-grained, laminated (thinly-bedded) sedimentary rock that breaks apart in sheets. Any geologist could quote this definition. But, as with most words, “shale” has come to mean many things over the years which have little to do with the original definition. Dr Bruce Hart, a researcher from Statoil Houston and a former AAPG (American Association of Petroleum Geologists) Distinguished Lecturer, began his talk with a multiple choice question: is a shale a rock type, a stratigraphic designation, or a play (ie. oil/gas reservoir) type? The answer, he revealed, depends on who is being asked to define it. The industry, he observed, uses the term “pretty much indiscriminately”, leading to confusion as to its precise meaning.

Fact Checking Optional Among Fracking Opponents
Natural Gas Now/Tom Shepstone
Fracking opponents have never been high on accuracy and we have a funny illustration of it with another errant missive from Sharon Wilson at BlueDays. Getting the facts right has never been much of a priority with opponents of fracking. Josh Fox set the precedent with his baseless suggestion fracking made a faucet flame in Colorado despite overwhelming evidence it was anything but true. Caught like a deer in the headlights by Phelim McAleer, Fox dissembled, claiming the facts to simply be irrelevant. He did the same when a NPR reporter asked an innocent question that ending up exposing the mythical $100,000 gas company offer that wasn’t. Now comes TexasSharon Wilson at BlueDaze who was shamelessly attacking landowners for being arrogant the other day. This time she jumps to a different conclusion and, in that hasty decision, makes a careless assumption that should raise set off alarm bells among the fracking opposition about the soundness of their foundation. Here’s the story that ran on Sharon’s BlueDaze blog the other day. We’re showing you the screenshot because she’ll have to take the original down soon if she has an ounce of integrity and we’re giving her the benefit of the doubt and supposing she does.