Shell PA Cracker Plant Project a Lot Bigger Than First Thought

Artist's rendering of Shell Monaca Ethane Complex
Artist’s rendering of Shell Monaca Ethane Complex – click for larger version

Yesterday MDN was one of the first to bring you the fantastic news that Shell has decided to move forward with building their multi-billion dollar ethane cracker plant (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Shell mentioned their positive final investment decision (FID) as part of a larger, wide-ranging announcement on their plans for the next few years and beyond. They were slow off the mark, but Shell finally issued a separate press release about the FID for the Monaca, PA ethane cracker plant complex. As usually happens with a story this big, more details have come out after the initial announcement. For example: Shell’s initial estimate for the cost of the project, more than four years ago, was “$2-$3 billion.” Now? They won’t say. But some news sources are reporting it will be closer to a $6 billion investment. One even goes as high as $11 billion! What Shell *is* saying is that construction on the main part of the facility will begin in 18 months, with production expected to flow beginning “early in the next decade”–which we take to mean sometime around 2020 or 2021. Shell says the project will provide work for 6,000 temporary construction workers while it’s being built, and 600 permanent, full-time employees to operate the facility once it is built. Needless to say, local economic and government leaders in the Pittsburgh region are ecstatic with the news. Here’s more details about the Shell ethane cracker coming to PA, along with select reaction and comments…
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PA Gov Wolf Attempts to Take Credit for Shell Cracker Decision

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Former PA Gov. Tom Corbett – the reason Shell decided to build a cracker

You know what’s really sleazy about politicians? When they take credit for something they had NOTHING to do with. Like Pennsylvania Gov. Wolf is doing with the fantastic news that Shell will build an ethane cracker plant in the state (see yesterday and today’s stories). The reason Shell even considered PA in the first place is because of Wolf’s far more able and talented predecessor, Gov. Tom Corbett. Corbett fought tooth and nail to get Shell to locate the cracker in the Keystone state. Part of Corbett’s fight included getting $1.7 billion in tax breaks approved, to lure the plant to PA (see Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break). The cracker decision kept getting delayed during Corbett’s tenure, something he took a lot of heat over. If Shell had committed sooner, PA may have had a different election result (re-electing Corbett instead of the disastrous Wolf). Anywho, that was yesteryear, and today, Tom Wolf is taking credit for something Tom Corbett did. Typical…
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Seventy Seven Energy Officially Files for Prepackaged Bankruptcy

SSE logoIn May MDN told you that Seventy Seven Energy (SSE), the old Chesapeake Oilfield Operating unit that was spun into its own company a few years ago, was planning to screw shareholders by devaluing their shares to worthless status and converting the company’s considerable outstanding debts into new shares of ownership (see Seventy Seven Energy Makes Progress in “Pre-Packaged” Bankruptcy). It’s called a “pre-packaged” bankruptcy–where a company cuts a deal with note holders (those who hold IOUs) to convert the debt into equity. Magnum Hunter Resources did it to their shareholders (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). A number of other companies with operations in the Marcellus/Utica are also trying it, including Warren Resources, Halcon Resources, Penn Virginia and Ultra Petroleum. A couple of others are on the cusp of doing it: Stone Energy and EXCO Resources. SSE announced yesterday they have all of their ducks in a row with debt holders and they have officially filed for their “pre-packaged” bankruptcy…
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May 2016 Rig Counts Continue to Slide in US, Marcellus/Utica

Baker Hughes logoBaker Hughes released their monthly rig count, for May, yesterday. While the worldwide rig count went up by 9, it continued to crash here at home in the U.S. May’s rig count in the U.S. was down another 7% (in one month), from April’s count. Sadly the trend was the same in the northeast. While PA’s count averaged the same month over month–16 active rigs–both OH and WV slid, with 10 rigs operating in each state. Overall the Marcellus/Utica rig count was down by 3 in the past month…
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Tulsa Mayor, 3 Former Williams CEOs Blast ETE Merger Deal

As the World TurnsLast week three former CEOs of the Williams Companies sent a letter to Williams shareholders outlining their reasons for voting against the proposed merger with Energy Transfer Equity (copy of the letter embedded below). The CEOs urge all shareholders to “strongly consider” voting against the deal. The CEOs say the deal would give Williams shareholders a permanent second class status. The mayor of Tulsa, Oklahoma–where Williams is headquartered–is also voicing his opposition to the proposed merger. Mayor Dewey Bartlett Jr. said in his own letter that the merger has no “economic merit” and would be “tragic” for both the city shareholders. MDN told you yesterday we’re dubious the deal will actually happen, based on all of the legal posturing we see (see ETE & Williams Engage in More Posturing Before June 24 Deadline). Will the letter from the CEOs and Tulsa mayor have any effect on the deal?…
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Jailed Ben Lupo Sued Again over OH Wastewater Dumping

lawsuitAn update on the notorious case of illegal frack wastewater dumping near Youngstown, OH that happened in 2012 and 2013. Ben Lupo, previous owner of D&L Energy and its associated company Hardrock Excavating, directed employees to dump frack wastwater hauled by Hardrock into a drain that emptied into a stream that emptied into the Mahoning River near Youngstown, OH (see Youngstown Business Dumped >200K Gal of Untreated Wastewater). It was later discovered that from September 2012 to end of January 2013, Lupo was responsible for dumping at least 30 loads of frack wastewater literally down the drain and into the river. After an investigation and charges, in August 2014 Lupo plead guilty and was sentenced to 23 months in prison and a $25,000 fine (see Final Chapter for Youngstown Illegal Wastewater Dumper: Prison & Fine). The company itself plead guilty and was fined $100,000 in May 2015 (see Hardrock Pleads Guilty to Illegal Wastewater Dumping, Fined $100K). That should have been the end of the story. But now this: Ohio Attorney General Mike DeWine has filed a civil lawsuit against Ben Lupo, two of his companies and three of his employees–for more than $25,000…
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Talen Energy Converting Moutour, PA Plant to Burn Coal AND NatGas

Talen EnergyIt was just two days ago MDN told you about a Pennsylvania-based electric power generating company–Talen Energy–getting bought out by an investment company (see Investment Firm Buying Talen Energy – PA Electric Generating Co). We have more Talen news. The company just announced that one of its coal-burning electric generating plants, located in Montour County, PA, will get an upgrade to burn natural gas in addition to burning coal. The Montour Power Plant went online in 1972/73 and generates 1,504 megawatts of electricity. The $70 million upgrade planned by Talen (requiring a 15-mile pipeline) will continue to produce the same amount of electricity, but will give the plant the option to power it with either natgas or coal, depending on which is cheaper. More yummy, clean-burning Marcellus Shale gas on the way!…
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PA’s New Acting Sec DEP: What Do We Know? Will He Be Permanent?

Patrick McDonnell Acting Secretary, DEP
Patrick McDonnell Acting Secretary, DEP

Two weeks ago Pennsylvania Dept. of Environmental Protection (DEP) Secretary John Quigley was fired for using a PRIVATE email account to collude with his Big Green friends to try and bully PA’s legislators into supporting his onerous proposed regulations (see Smoking Gun: Copy of the Email that Got John Quigley Fired). Richly deserved. The man who took his place as Acting Secretary is Patrick McDonnell, a 19-year veteran of the DEP. What do we know about Pat, and will he be appointed as the new, full Secretary?…
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Police Find No Evidence of Suicide in Aubrey McClendon’s Death

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Aubrey McClendon

We spotted an interesting article from Oklahoma about Aubrey McClendon’s death (God rest his soul). Everybody, including MDN, read the tea leaves and thought McClendon had committed suicide by vehicle (see McClendon’s Biggest Backer Backed Away the Day Before Car Cras). However, there has always been some doubt (see Aubrey McClendon’s Death Still a Mystery – Suicide or Distracted Driving?). A new report from the police investigating Aubrey’s death have pronounced they can’t find “any evidence” that it was actually suicide…
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Marcellus & Utica Shale Story Links: Wed, Jun 8, 2016

best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Ohio has 1,748 drilled Utica wells; lawmakers clash over PA drilling regs; DC public pension divested without retiree permission; Henry Hub avg natgas price was $1.92/MMBtu in May; why did natgas prices rise 25% over past 2 weeks?; market rebalancing will take longer for gas than oil; TransCanada’s XL Pipeline revenge; and more!
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