Cabot Cuts Deal to Supply PA’s Largest NatGas-Fired Electric Plant

Cabot logoThe pieces of a very complicated puzzle continue to fall into place to build what will be Pennsylvania’s largest natural gas-fired electric generating power plant in Lackawanna County, PA–near Scranton. Invenergy plans to build the Lackawanna Energy Center, a 1,480 megawatt plant in Jessup, PA that will cost “well over $1 billion” according to an exclusive MDN source working on the project (not $500 million as we previously estimated). The PA Dept. of Environmental Protection (DEP) approved the plant last December (see PA DEP Approves Jessup, PA Marcellus Gas Electric Plant). The locals in Jessup approved the project in March of this year (see Jessup Borough Final Approval for PA’s Largest NatGas Power Plant). The plant will use up to 240,000 dekatherms (or 240 million cubic feet) of natural gas per day. We’ve reported on two different companies that building pipelines to the plant to supply it–UGI and Kinder Morgan’s Tennessee Gas Pipeline (see UGI to Feed Jessup, PA Electric Plant with Marcellus Shale Gas and NEPA Pipeline for Power Plant Gets Positive FERC Assessment). One of the final pieces is, who will provide the natural gas that flows through those pipelines and powers the plant? We now have the answer. Cabot Oil & Gas yesterday announced a 10-year deal to provide Marcellus Shale gas from Susquehanna County to power the plant…
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Tide has Turned: Patterson-UTI June Rig Count Ticks Up by 2

Patterson-UTI logoAs we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Month by month Paterson’s rig count has declined over the past year plus. We have been waiting for over a year to report this: We’ve finally turned the corner! The Patterson rig count in June ticked up by 2 rigs–to 55 active rigs (up from 53 in May). Perhaps it’s too early to pop the cork on the champagne, but we are excited and hope/think this portends the slow down has finally hit rock bottom and new drilling is, ever so gradually, beginning to pick up again…
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Summit County Judge Blocks Munroe Falls’ Attempt to Stop Drilling

Gavel-falling.jpgEarlier this month MDN shared with you the news that Munroe Falls (Summit County), OH had filed yet another frivolous lawsuit against Beck Energy to prevent drilling–after already losing a similar case before the Ohio Supreme Court (see Munroe Falls Won’t Let it Go: Files New Lawsuit Against Beck Energy). Beck Energy’s lawyers fought this new challenge (see Beck Energy Lawyer Responds to Frivilous Munroe Falls Zoning Case). We have some good news. A Summit County judge has blocked Monroe Falls’ motion for a temporary restraining order to stop Beck from drilling a new well. Let the drilling begin! A final decision on Munroe Falls’ latest frivolous lawsuit is still pending. The judge is considering Beck’s motion to grant summary judgment in its favor. How much longer will the residents of Munroe Falls tolerate their “leaders” blowing taxpayer’s money on frivolous lawsuits?…
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Proposed NatGas Gross Receipts Tax Targets PA Low-Income Earners

Wolf taxesMDN has previously reported on efforts in Pennsylvania to substitute a so-called “gross receipts tax” (GRT) on natural gas for a severance tax as a way to raise millions of dollars for Democrats’ voracious appetite to spend money (see Ploy to Rename PA Severance Tax as “Gross Receipts” Tax and More on PA’s Potential Gross Receipts Tax on NatGas). A GRT taxes the use of natural gas, instead of the production. LibDems would have you believe Big Oil companies and Big Utility companies will bear the brunt of such a tax. Not so. As the Commonwealth Foundation lays out in a recent post, the brunt of such a tax would be borne by low-income families who heat their homes with natural gas. People who heat with natural gas will end up paying the tax because taxes are always paid by consumers and not corporations (the costs are ALWAYS passed on). Here’s a look at how the little guy will get screwed once again if the Dems in PA get their way…
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Sierra Club Loses Important LNG Case in DC Circuit Court

DC Circuit CourtThe litigious Sierra Club, an environmental organization that may have been founded for good reasons long ago but has become radicalized in their opposition to all fossil fuels, was dealt a serious legal blow last week. None other than the very liberal District of Columbia Circuit Court of Appeals ruled against the Sierra Club–responding to a lawsuit brought by the Sierra Club that tries to force the Federal Energy Regulatory Commission (FERC) to consider factors not within their purview when deciding on whether or not to issue permits for LNG (liquefied natural gas) facilities. The court decision directly affects two Gulf Coast LNG facilities but also has implications for the Cove Point, Maryland LNG export facility currently under construction by Dominion, now about half completed. The Sierra Club tried to argue that the more LNG you export, the more drilling (i.e. “upstream”) activity is needed, and drilling activity and what it produces (natural gas) is causing man-made global warming. Ergo FERC should be required to consider those “impacts” when making its decision on permitting such facilities. The problem is, under FERC’s charter they are specifically NOT allowed to consider such peripheral considerations. FERC is to make its decisions based on real science: Would a potential project impact the local ecology and environment in a negative way? If so, it doesn’t get a permit. The normally chatty Sierra Club went silent following the court’s decision…
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Southwestern Exceeds Goal in New Stock Offering, Raises $1.2B

southwestern energyLast week MDN reported that Southwestern Energy, a major Marcellus/Utica driller, was floating up to 86 million shares of new stock looking to raise $1.1 billion (see Southwestern Floats $1.1B of New Stock, Offers to Buy Back IOUs). If you do the math, it worked out to ~$12.75 per share. The stock offering is done and dusted. Southwestern ended up selling 98.9 million shares for $1.247 billion, or $12.60 per share. Not too shabby in a down market where investors have been reluctant to continue funding oil and gas companies…
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Eclipse Resources Completes New Stock Offering, Raises $123M

Eclipse_logo_hiresSeems this is the week to report on stock offerings. Last week Eclipse Resources, like Southwestern Energy, announced a new stock offering. And like Southwestern (see today’s companion story), Eclipse completed the offering yesterday. Eclipse, a pure play driller focused on the Marcellus/Utica, had planned to sell up to 43 million shares hoping to raise $131 million (see Eclipse Resources Ramps Up Drilling; Floats More Stock to Raise $). How did they do? They sold all of the original 37 million shares they wanted to sell. The underwriters still have 30 days to buy an additional 5.6 million shares. Eclipse received, after expenses, $123 million for the 37 million shares, or $3.32 per share…
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Rex Energy’s $190M Borrowing Base Reaffirmed by Bankers

Rex EnergyRex Energy, now a pure play driller focused on the Marcellus/Utica (see Rex Energy Selling Illinois Basin Assets, Focus 100% on Marcellus), announced yesterday that its bankers have reaffirmed (or continued) the company’s $190 million borrowing base. A company’s borrowing base is the value of its assets–in this case the value of the leases and oil/gas wells Rex owns. Those assets are used as collateral to back up loans and IOUs. Rex has plenty of both (see Rex Energy Swapping $631M in Private IOUs for Public IOUs). Here’s the Rex announcement that its bankers will continue to value Rex’s assets at $190 million…
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First Time Ever: U.S. Oil Reserves Pass Saudi Arabia, Russia

Rystad Energy LogoMDN has long pointed out that the United States has more natural gas reserves than any other country on earth, dethroning Russia years ago on that score–thanks to the shale revolution and the miracle of hydraulic fracturing. We’ve often heard the phrase that “the U.S. is the Saudi Arabia of natural gas.” But what’s this? A new research report issued by the respected Rystad Energy, an independent oil and gas consulting service, finds that the U.S. is now the Saudi Arabia of oil too! That is, the U.S. has more oil reserves, because of shale, than Saudi Arabia. Fracking has handed the U.S. what we’ve wanted for years–total energy independence from the tyrants in OPEC…
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Last Year Fossil Fuels Provided 81.5% of All Energy Used in U.S.

I love fossil fuelsWe hear it time and again when visiting rallies and talks by fossil fuel haters: The U.S. could transition to so-called renewable energy sources (like solar and wind) TODAY, right now, if we only had the “will” to do it. Having the will to do it typically means mass starvation and death, turning thermostats down to 50 degrees in the winter and the like. But these nutjobs conveniently leave out that part when they talk. The bare naked truth is that fossil fuels are here to stay for AT LEAST the next two generations, and perhaps longer. How do we know? Try this fact on for size (from the U.S. Energy Information Administration): Three fossil fuels–petroleum, natural gas, and coal–have provided more than 80% of total U.S. energy consumption for more than 100 years. In 2015, fossil fuels made up 81.5% of total U.S. energy consumption. It is beyond ludicrous to declare that we can end fossil fuel use any time within the next 100 years–and people who say otherwise are either lying, or delusional. Here’s an update on fossil fuels and their continuing dominance in the U.S….
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Marcellus & Utica Shale Story Links: Wed, Jul 6, 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: Baker Hughes rig count steady in the Marcellus/Utica; New York scrambles to answer why it gives natgas glowing remarks in report; Cuomo’s flotilla folly; PA’s budget logjam; natgas price volatility; how fracking has improved lives; Range Resources makes money at $2.55 natgas; Big Solar leaving Little Solar behind; corruption in the climate industry; Germany backpedals on CO2 plan; and more!
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