Northeast Pipelines Gone Wild! Making Sense of it All

gone wildLately it seems like a week doesn’t go by that a new pipeline project is announced. No one should be surprised, but of course we all are. It only makes sense: drillers have sunk a lot of holes in the Marcellus and Utica, and now all of that gas and natural gas liquids (NGLs) needs a way to get to market. The northeast alone can’t handle all of the gas and NGLs being produced. Yes, the ethane cracker plants will help with regards to ethane–but there’s still way more ethane that even the planned three cracker plants can handle. And way more methane (natural gas) than the northeast can absorb. How do you get it to market? With pipelines. The first thing pipeline operators do is pick the “low hanging fruit”–in this case reversing pipelines and using loops to increase capacity and change the direction of the flows. But according to the midstream companies themselves, the low hanging fruit is about all picked. Now it’s on to the higher hanging fruit–so-called “greenfield” pipelines that cut through “virgin” land. Below we have a very interesting quote about decisions that will soon be made impacting the rest of this decade, along with a very useful chart of pipeline projects…
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OH State Geologist: Upper Devonian Second Look, CO2 May Coax Oil

We have a couple of new names to throw at you when it comes to Ohio shale drilling: Huron and Rhinestreet. You may recognize another name instead: Upper Devonian (UD). Both the Huron and Rhinestreet are layers within the larger grouping called the UD. MDN has been talking about the UD for oh, maybe going on two years now. A number of drillers in the PA Marcellus are experimenting with the UD. Ohio drillers, a year ago, seemed pretty cool to the idea of drilling in the UD (see Ohio Drillers Not So Excited About Upper Devonian Shale). However, that now appears to be changing according to Ohio’s chief state geologist, Tom Serenko…
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ODNR Clears Trumbull Co. Injection Well in August Quake

An earthquake nobody felt on August 31 caused the Ohio Dept. of Natural Resources (ODNR) to shut two frack wastewater injection wells in Weathersfield (Trumbull County), OH operated by American Water Management Services (see ODNR Temporarily Shuts Down Injection Wells After Low-Level Quake). ODNR has been hard at work trying to determine whether or not either of the wells may have caused the low-level (nobody could feel) quake. Last Thursday they gave the shallower of the two wells, the AWMS #1, the all-clear sign. American Water can restart that well at any time (and likely already has). However, they’re not quite ready to restart the deeper AWMS #2…
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What Nightmares Keep Drillers Up at Night? Hint: Not Fines

The ScreamWhat are the nightmares that keep drillers up at night? Is it the prospect of having to pay big fines, like the biggest fine paid to date in Pennsylvania, announced just last week (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). While we’re sure that fine stung, the money paid was more like a bee sting. According to the drillers themselves and their comments, the thing that keeps them up at night is negative publicity. Bad public relations (PR). It’s not the fine itself but public perception about being fined or being in violation. Some of the problem is caused by an unrealistically high standard of zero mistakes and zero screw-ups imposed by those who oppose shale drilling…
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PDC Energy Settles Lawsuit with Previous Investors for $35M

There’s a fair amount of high finance when it comes to how drilling companies are structured on paper. There are, in some cases, corporations, partnerships, and then there’s the Master Limited Partnership (MLP), a special form of company allowed under United States law to encourage the mineral and extractive industries. At the end of the day, they’re businesses, no matter that form of legal structure they take. However, the legal structure of partnerships is used to encourage investors to invest large sums of money. And when those partnerships are bought out, the investors want their due proceeds. Sometimes there’s a dispute, as happened to PDC Energy (formerly known as Petroleum Development Corporation). PDC had several layers of partnerships that they rolled up into one company back in 2010/2011. The partners in the sub-units purchased felt that they didn’t get their fair share, so they sued. On Friday PDC announced they had settled and over the next 13 years they’ll pay out money to the tune of $35 million…
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Wetzel County, WV Schools Score $4.7M Surplus from Marcellus

What a difference a few years makes. Not so long ago school districts in Wetzel County, West Virginia were forced to cut electives and take other belt-tightening measures due to lack of funds. For fiscal year 2013–the current budget year–the school has an extra $4.7 million in revenue to spend (more than 10% of it’s overall budget). It’s a complete reversal from just two years ago. Where did the extra funds come from? Did Sen. Jay Rockefeller open his extensive coffers (worth $100 million or more) and bestow money on the county? Nope. Did the teacher’s union renegotiate salaries down for their members? Not on your life–what are you crazy?! Did the state send along some of its surplus? What surplus? The state actually cut back on their aid to the county. The answer, of course, is that Marcellus drilling has taken off in Wetzel in a big way and property tax collections have gone through the roof…
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Albany Times Union’s Continued Obtuseness on Fracking

Last week MDN highlighted two new studies out that prove fracking doesn’t pollute water supplies (see New Study Finds Well Casings, Not Fracking, Cause Methane Migration and Federal NETL Study: Fracking Doesn’t Contaminate Water Supplies). Objective science proving that fracking is A-OK is anathema to liberal editors at publications like the Albany Times Union. What to do? Ah yes, write an editorial acknowledging those studies (because you can’t hide the news forever), and then lie about those studies by saying people still have “polluted” water…
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20 People Crash FERC Meeting, Complain about Cove Point LNG

Some 20 citizens out of the 88,737 that live in Calvert County, Maryland–where the Dominion Cove Point LNG export facility is to be built–crashed a recent Federal Energy Regulatory Commission (FERC) meeting to express their displeasure with the government’s approval of the Cove Point plant. What really ticked them off was that FERC didn’t send the top brass out to Calvert but instead used lower level reps. So 0.0002 of the population of Calvert County performed what they called “an unannounced intervention,” which is another way of saying they threw a snit fit. More behaving badly in public–like they always do. Here’s a glittering example of “how to win friends and influence people” at FERC brought to you by the anti-drilling folks of Calvert County, all 20 of them:
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