PA Gov. Wolf’s Plan to Kill Drilling via Methane Emissions Regs

tom wolf
Tom Wolf

As we predicted yesterday, Pennsylvania Gov. Tom Wolf released a new plan that purportedly targets methane emissions from oil and gas operations in a vain attempt to help ole Mom Earth with her global warming problem (see PA Gov Wolf Targets O&G Industry (Again), Via Methane Emissions). What we didn’t know is just how onerous and ludicrous his plan would be. Yesterday Wolf and his sidekick the PennFuture Secretary of the Dept. of Environmental Protection (DEP), John Quigley, released a four-point plan (full copy below) to supposedly reduce methane emissions by 40% over the next five years. Essentially it’s a plan to kill off what remains of the Marcellus industry. Looks like the millions of dollars California radical environmentalist billionaire Tom Steyer gave Wolf for his campaign went to good use–Steyer is now getting his payback…
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Range Resources Ethane Heading to Marcus Hook Beginning February

Range Resources’ ethane will start to flow through a “fully operational” Mariner East 1 pipeline to the Marcus Hook refinery in February, according to an announcement by Range. Mariner East 1 has been up and running for some time, but has not, until now, flowed ethane. Yesterday’s announcement states the ethane will be loaded onto ships. Range doesn’t say where the ethane on those ships will go, but we already know that part of the story. The ethane (at least some of it) is headed for Norway, Scotland and possibly Panama (see Ineos Gets Ready to Begin Ethane Exports from Marcus Hook, PA). Here is the fantastic news that the Mariner East 1 pipeline is about to be fully, 100% ethane operational, after a very long battle to complete it…
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EQT Sues WV County that Banned Injection Wells, Seeks Injunction

That was fast. A week ago three Democrat county commissioners in Fayette County, West Virginia voted to ban injection wells in the county (see WV County Officially Bans Injection Wells; Children Brainwashed). Immediately after that vote was taken (last Tuesday), on Wednesday EQT filed a lawsuit against the county. EQT not only operates an injection well in the county, they also operate 200 conventional oil and gas wells in the county, providing the county with $100,000 per year in tax revenue, and “tens of thousands of dollars in royalty payments” to private landowners. According to EQT’s lawsuit, the ban in Fayette is so broad, it would prohibit not only injection wells, but all oil and gas production in the county. EQT is seeking an injunction to stop enforcement of the new ban while the court case plays out. The county will now spend big bucks to defend their farcical ban that will no doubt end up being overturned. Perhaps taxpayers want to rethink whom they elect as county commissioners?…
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5th Marcellus Gas-Powered Electric Plant Coming to New Jersey

A fifth new natural gas-fired electric plant is planned for New Jersey. Genesis Power LLC plans to build what they call the Amwell Energy Center in Hillsborough Township (Somerset County), NJ. The 640 megawatts facility will cost $1 billion to build, provide enough electricity to power 700,000 homes during peak summer months, and use lots of yummy clean-burning Marcellus Shale gas from Pennsylvania to power it. The new plant is due to go online in 2018. Although New Jerseyans seem to hate natural gas pipelines, they sure love what flows through those pipelines. Well, most New Jerseyans anyway. There’s always a few nutcases who object, like the Sierra Clubbers…
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Gastar Spooked by Takeover Threat Adopts Shareholder Rights Plan

According to a press release from Gastar Exploration, a driller with operations in both the Marcellus and Utica Shale plays (among others), the company is adopting a “tax benefit preservation plan to preserve valuable net operating losses.” What, exactly, does that mumbo jumbo mean? It appears to us that Gastar is very concerned that they either are, or will become, a takeover target. The company holds certain paper assets, including an accounting line called a “cumulative net operating loss carryforward” that can be used to reduce Gastar’s income tax bill (i.e. boost per-share value). Apparently a new “Shareholder Rights Plan” just adopted by Gastar will ensure that if the company is taken over, they can use the carryforward to benefit existing shareholders. Yes, it’s complicated and we don’t pretend to understand it all. Our takeaway is that Gastar is spooked that they are being targeted for a takeover, and the current board and management is acting to either prevent it, make it more distasteful (“poison pill”), or perhaps just acting to be sure they don’t lose their own shirts in a takeover or sale…
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Shell to Cut 10,000 Jobs After Buying BG; Exiting Shale Drilling

In April 2015 MDN brought you the announcement that Shell was buying BG Group (the former British Gas) in a megamerger worth $69.7 billion (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). As we alluded in the title of that post, the deal is all about LNG–liquefied natural gas. The merger will make Shell THE dominant player in LNG worldwide. The process to obtain regulatory approval in multiple countries has been long and arduous. Later this month, on Jan. 28, BG shareholders will cast a final vote on the plan. In an update issued this morning by Shell, the company says they expect to complete the BG transaction in the next few weeks, and after they do, there will be a total of 10,000 layoffs between the two companies. Don’t you just love mergers? Ax and hack away. Toss a few thousand jobs here and a few thousand jobs there. We know, times a tough. Companies must cut in order to stay in business. We just want to remind you that behind these abstract numbers are 10,000 real people with real families that depend on them. Shell also said they’re hightailing it out of shale…
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Williams’ Transco Pipeline Floats New IOUs to Raise $1 Billion

Transcontinental Gas Pipe Line Company (Transco), is a pipeline that runs from Pennsylvania to the Texas Gulf Coast. Transco is a wholly owned subsidiary of Williams Partners L.P., and Williams Partners is part of Williams. Williams, including Transco, is about to become part of Energy Transfer Equity (see Williams Board “Unanimously” Committed to Selling to ETE). In a pair of announcements yesterday, Williams revealed that Transco will float new notes (also known as private debt, what we call IOUs). Transco will use the money they raise from these new IOUs to pay off $200 million of existing IOUs coming due in 2016. New debt to replace old debt. That’s what the first announcement revealed. The second announcement said not only do they want to pay off that $200 million coming due this year, they actually want to raise $1 billion (!) and the new IOUs will be due and payable in 2026–ten years from now. So what do they plan to do with the other $800 million not used to pay off old debt?…
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CLNG Merges with NGSA, Gets New Director from Former ANGA

The downturn in oil and gas prices doesn’t only affect drillers, and midstreamers, and landowners, and supply chain companies. It also affects trade associations. Last November we told you that America’s Natural Gas Alliance (ANGA) merged with/became part of the American Petroleum Institute (see Two Top O&G Trade Groups to Merge: ANGA & API). Another two trade groups announced a merger yesterday. The Center for LNG (CLNG) announced it is merging with the Natural Gas Supply Association (NGSA). CLNG will retain its identity and become a division of NGSA. In addition, CLNG has a new executive director–Charlie Riedl. Charlie joins CLNG from ANGA. Here’s the low down on two more trade groups combining…
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Energy M&A Deals Hardest Hit in 2015, 6.8% Fewer Deals than 2014

Mergermarket, a company that provides intelligence and news to people involved in big mergers and acquisitions (M&A) deals recently released its Energy, Mining & Utilities (EMU) Trend Report for 2015. It is a recap of M&A deals in the energy sector for last year. Among the findings: the energy sector was the hardest hit sector for M&A deals. There were 957 deals worth $547.7 billion last year, a 6.8% decrease from 2014. The report (full copy below) contains a lot of interesting information about the biggest M&A deals from last year, along with identifying the companies that worked on putting those deals together…
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Drill Our Way to Lower Gas Prices? Yes We Can!

You remember when then-candidate Barack H. Obama kept saying “We can’t drill our way to lower gas prices”? He was wrong, as he so often is. The United States did exactly that–we drilled our way to low gasoline prices. Shale drilling (for oil) led to a world oil glut and the lowest prices not only for oil, but for its refined product gasoline, in years. Our friends at Energy in Depth pulled out clip after clip of the arrogant Obama categorically stating we can’t drill our way to low gas prices, added some funny music, and borrowed Obama’s own hackneyed “yes we can” language to make the point very loud and clear that Obama got it wrong. Take time to watch this short and hilarious video…
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Marcellus & Utica Shale Story Links: Wed, Jan 20, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Tompkins County, NY fights fossil fuels; Akron Bar attracts new o&g members; MDN quoted in Pittsburgh Business Times as breaking Chevron story; Marcellus gets 1 extra rig last week; after the carnage, shale will rise again; investors take second look at drillers; crude oil pressure cooker; Chesapeake stock falls to 15-year low; oil stays low even with Mideast squabble between Saudis and Iran; and more!
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