GreenHunter Changes Strategy with USCG re Wastewater Barging

change of strategyGreenHunter Resources, the fresh water and wastewater subsidiary of driller Magnum Hunter Resources, has changed strategies and has backed off their tough talk in dealing with the U.S. Coast Guard (USCG) with respect to barging brine down the Ohio River. You may recall MDN was the first to decipher just what was going on between GreenHunter and the USCG with respect to GreenHunter’s intention on barging (see GreenHunter/Coast Guard War of Words — MDN Explains It). The USCG is being manipulated by the Obama administration into blocking a request for GreenHunter to begin barging of wastewater (brine, actually). GreenHunter informed the USCG they have the legal right to do it under an existing 1987 rule that allows for it. The USCG has said not so fast, brine from shale wells may contain more radioactivity than brine from conventionally drilled oil and gas wells. In so many words, GreenHunter told the USCG they would move forward, daring the USCG to stop them (see GreenHunter to Coast Guard, We’re Barging While You Fiddle Around). As recently as May, GreenHunter claimed barging would begin soon (see GreenHunter Says OH River Wastewater Barging to Begin September). However, in an analyst conference call on Friday reviewing second quarter 2015 results, both parent company CEO Gary Evans and GreenHunter COO Kirk Trosclair changed their tune. Now GreenHunter is talking with the USCG again and attempting to convince them to let barging operations begin. You can hear the frustration both in GreenHunter’s comments, and in the comments by investors probing them on the topic…
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FANG Protesters Chain Themselves to RI Compressor Station Gate

FANG logoLet’s talk about optics and the strategies employed by fossil fuel haters. We’ll leave aside our standard argument that people who hate fossil fuels, like natural gas, are wildly hypocritical as their very existence is a direct result of the benefits of fossil fuels. Today we focus on two men who hit life’s lottery–one (younger) became a pediatrician, the other (older) a physics professor. Last week the two chained themselves to the entrance of Spectra Energy’s Burrillville, Rhode Island compressor station to call attention to Spectra’s Algonquin Incremental Market (AIM) project to beef up the compressor station and add pipelines to bring more cheap, abundant, clean-burning Marcellus Shale natural gas to gas-starved Rhode Island and other New England states. The two protesters belong to a fossil fuel hate group called FANG–Fighting Against Natural Gas. Using PVC pipe, chicken wire and (yes) tar, they intertwined their arms to make it extremely difficult to un-knot them. The police had to cut away a section of the fence and cart the fence and the two protesters to the hospital where doctors and nurses had to waste time untangling the mess. The optics, of course, is that FANG wants you to hear about a doctor and a physics professor (supposedly smart people) who put themselves in harm’s way to protest something–so the something must be evil and rotten since these two virtuous “high value” (and smarter than the rest of us) members of society are sounding the alarm. We think you should focus on different optics–the logo/mascot FANG uses on their website (pictured here, taken from their website). A wolf bearing its fangs indicates extreme danger–and a willingness to go to extremes to cause property, and perhaps even bodily, damage. Homeland Security should take note…
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OH Anti-Drilling November Ballot Measures Tossed in 3 Counties

Anti-drillers in Ohio are persistent–we’ll grant them that. Local anti-drillers in three Ohio counties–Athens, Fulton and Medina–have been hoodwinked (are being used by) Big Green groups like the Community Environmental Legal Defense Fund (CELDF), attempting to get so-called Community Bill of Rights measures on the ballot in those counties. Problem is, the Ohio Supreme Court has already ruled such measures unconstitutional (see OH Supreme Court Strikes Down Home Rule in Gas Drilling Case). And yet, certain counties with high concentrations of wackos keep trying again and again and again–even though the very same type of measure has already been ruled illegal. What was that definition of insanity promulgated by Albert Einstein? “Insanity: doing the same thing over and over again and expecting different results.” That about sums up the latest efforts by Athens, Fulton and Median county anti-drillers. They’ve filed petitions with enough signatures to once again put so-called “home rule” measures on the ballot. But this time officials in those three counties appealed to the Ohio Secretary of State who has ruled, striking down the ballot measures. A small victory for sanity in Ohio…
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WV Shale Drillers: New Safety Regs on the Way in 2016

Drillers in West Virginia–you’re on notice that Gov. Earl Ray Tomblin thinks it’s time to make shale drilling in the Mountain State safer than it is right now. Translation: new regulations will be coming at you in the 2016 legislative session. Tomblin formed the 19-member Oil and Natural Gas Industry Safety Commission with an executive order (see WV Establishes New Commission to Study Drilling/Pipeline Safety). The aim of the group is to present a list of recommendations in a final report on Nov. 16–a list that will be used to craft new rules and regulations and laws to be presented during next year’s legislative session. Now is the time for drillers to participate in the process. The kickoff session spent much the time reviewing previous accidents and dangers associated with oil and gas drilling…
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Cenergy Expands in WV for 4th Time; Gov Tomblin Celebrates

Founded in 2006, Cenergy is a West Virginia-based contractor for the natural gas industry providing turn-key facility and equipment engineering and fabrication for natural gas producers in West Virginia, Ohio and Pennsylvania. The Cabell County company last week held a grand opening for an expansion at its Milton, WV facility. Special guest of honor: WV Gov. Earl Ray Tomblin. Gov. Tomblin was there to brag that WV held on to Cenergy and the extra jobs that come with the new expansion. The young-but-rapidly-growing company has expanded four times in Milton and currently employs 170 people, many of them welders…
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GreenHunter Resources 2Q15: Revenue Down, But Bleeding Less Too

GreenHunter Resources, the fresh water and wastewater subsidiary of driller Magnum Hunter Resources (now focused totally on the Marcellus/Utica), issued its second quarter 2015 update on Friday. The company is a small company compared to others in the oil and gas space with revenues in the few million per quarter. In 2Q15 GreenHunter’s revenues were $4.6 million, down 33% from $6.9 million in 2Q14. No surprise there since drillers are scaling back their activities. GreenHunter has trimmed its operating loss number–from $3 million in 2Q14 to $1.6 million in 2Q15–so the bleeding is slowing, a good sign. The 2Q15 update below brings us up to speed on a number of interesting initiatives at GreenHunter, including their new wastewater injection wells in Meigs County, OH. However, the interesting thing MDN picked up on was in the unscripted comments during GreenHunter’s earnings call held on Friday with analysts. That’s so important we’re dedicating a separate post to it today. Here is the 2Q15 update from GreenHunter…
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Tiny Balls & Instant Credit – Oilfield Services Cos. Get Creative

For some time we’ve told you that drillers in the Marcellus/Utica, as well as other shale plays, have been hammering oilfield services companies on price. Oilfield services companies are companies like Sclumberger (largest such company in the world) and Halliburton (second largest in the world) and Baker Hughes (fifth largest in the world, being gobbled up by Halliburton later this year). Oilfield services companies provide much of the equipment, personnel, chemicals and other supplies to do the actual drilling and fracking of shale wells. They’re the contract workers, hired to do a job. Last December MDN was hearing that oilfield services companies were being forced to discount prices by as much as 20% (see Marcellus Oilfield Services Cos Being Forced to Discount). By February, when it was obvious the price downturn would last for an extended period of time, MDN picked up on Magnum Hunter’s comments that they were getting prices discounted by as much as 40% (see Magnum Hunter Slashes Drilling Budget by 75% for 2015). In addition to slashing prices, oilfield services companies, in an attempt to stay in business, are innovating in two other ways: (1) they’ve become bankers, allowing drillers to buy their services on credit, and (2) refracking existing wells with “tiny rubber-coated balls”…
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When Will There be Enough Pipelines in the Marcellus/Utica?

How low can and will prices go in the Marcellus/Utica? Without pipelines like the Constitution, Northeast Energy Direct and Access Northeast (among others), prices for natgas in the Marcellus/Utica can and will go pretty low. Would you believe the price of natural gas selling at the Dominion South trading point in southwestern Pennsylvania briefly hit $0.71 (yes, 71 cents) per thousand cubic feet in early July? Would you believe there’s talk the price could even go as low as 60 cents/Mcf? That’s apocalyptic, end of any more drilling kind of prices. Without pipeline infrastructure, shale drilling shuts down. Which is why it is vital these pipelines get built. One bright spot is the recent reversal of the Rockies Express Pipeline now carting Marcellus/Utica gas to the Midwest (see 1.8 Bcf/d of Marcellus/Utica Gas Heads West on REX Starting Aug 1). Two more pipeline projects, due to be fully online in September, will also help: Spectra Energy’s Uniontown to Gas City (U2GC) Project Sunoco Logistics’ Mariner East 1 NGL pipeline from western PA to the Marcus Hook refinery near Philadelphia (see 2 Pipelines Will Raise Gas Sale Price by $1 for Range Resources). More on how pipelines are directly tied to the price of gas and the future of drilling…
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MarkWest Sued for “Wrongful Death” in Washington, PA Car Crash

On Saturday, Jan. 3, 2015, a MarkWest Energy truck driven by a MarkWest worker, according to court documents, failed to stop at a stop sign at the intersection of Route 136 and Brownlee Road in Washington County, PA. That failure had tragic consequences. The Chevy Silerado truck hit a tiny Ford Fiesta car and a passenger in the car, Donna Simboli, 58, was killed. A lawsuit has just been filed in Washington County on behalf of Simboli’s two children (no ages given) against MarkWest for “wrongful death”…
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