PA RINO Wants to Slow Marcellus Drilling with $2M Bond per Well

Tom Murt - RINO
Tom Murt – RINO

Pennsylvania State Rep. Thomas Murt, a RINO (Republican In Name Only) from the Philadelphia area, has introduced House Bill (HB) 2277 that would require drillers in the state to post a $2 million bond for each shale well they drill. The current bond is between $4,000-$10,000. This is yet another attempt by the same cast of anti-drilling characters to slow down or stop Marcellus drilling altogether in the Keystone State, by erecting regulatory hurdles to hassle drillers under the pretense of protecting PA’s environment. Adopting such a law would actually indicate that PA has turned aggressively against the drilling industry–sending the clear signal the Keystone State prefers drillers to operate elsewhere, in other states. Fortunately, with Republicans in control of both the House and Senate, this “misguided proposal,” as the Marcellus Shale Coalition calls it, is DOA…
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Repair Work on Exploded Texas Eastern Pipeline in PA 25% Done

Spectra blaze9/1/16 UPDATE: Spectra Energy contacted MDN and sent us a copy of their progress report on repairs to the section of the TETCO pipeline known as the Penn-Jersey System. Thank you! We have included a copy of their progress report below.

An update on Spectra Energy’s Texas Eastern Transmission’s (TETCO) “Delmont Line 27” which exploded in Westmoreland County, PA on April 29 (see Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate). We previously told you that not only was Line 27 out of commission, so too were three other pipelines running through the same corridor, meaning 1 billion cubic feet of natural gas per day is not reaching certain mid-Atlantic markets (see Update on Spectra Pipeline Explosion Near Pittsburgh). The early evidence points to corrosion along welded seams, although the jury is still out and the exact cause may not be known for months (see Preliminary Guess on TETCO Pipeline Explosion Cause: Corrosion). One of the four lines that was offline (Line 19) was examined and certified by the Pipeline and Hazardous Materials Safety Administration (PHMSA) in early May to go back online (see TETCO Pipeline Up & Running Post-Explosion; Antis Exploit Accident). However, the other three lines have remained idle pending further investigation (see TETCO PA Pipeline Explosion Still Limiting NatGas Flow Month Later). In June Spectra said they expect to have the full system operating again by November 1st (see Ruptured TETCO Pipeline in PA Offline Until November). How is the effort going? Spectra has completed the initial analysis and is now digging up pipelines in various locations…
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FERC OKs 6 Dominion Compressor Station Upgrades in PA, MD, VA

Dominion Leidy South
Dominion Leidy South – click for larger version

It’s not often we miss reporting on a pipeline upgrade project in the Marcellus/Utica. This is one of those rare cases. Over a year ago Dominion Transmission, Inc. (DTI) filed an application with the Federal Energy Regulatory Commission (FERC) to upgrade six compressor stations along the DTI pipeline system in Pennsylvania, Maryland and Virginia. The upgraded compressors would allow DTI to pump an additional 155,000 dekatherms per day of natural gas, providing that gas to new and expanding natgas-fired electric generating plants. The project will cost $210 million. The new news for the project is that FERC approved it this week, granting DTI a certificate to move forward with the upgrades. Below is information about the project, and about FERC’s approval…
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EXCO Resources Turnaround is Working, but Comes at a High Cost

EXCO.jpgEXCO Resources was once a sizable player in the Marcellus. They still have 145,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out in March, has pretty much abandoned the Marcellus at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). In May the company announced it was looking at “restructuring,” which is typically a code word for bankruptcy, and the company’s stock took a nosedive (see EXCO Resources Board Looks at “Restructuring” – Stock Nosedives). Not long after, EXCO announced it was firing some board members, hiring new ones, and aggressively hammering midstream companies to lower pipeline costs (see EXCO Restructuring Plan: New Board Members, Hammer Midstreamers). It looks like the plan is working. The bleeding slowed in 2Q16 (see EXCO Still Hammering Midstreamers re Contracts, Bleeding Slowed). So far the company has stayed out of bankruptcy. How did they do it, where some others in similar circumstances have failed? According to EXCO’s chairman (and major investor) Wilbur Ross, Jr., the turnaround is due to turnaround expert C. John Wilder that the company hired last year…
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Senior Management Change at Marathon’s MarkWest Subsidiary

riding into sunsetIn December of last year, one of the biggest and brightest stars in the midstream firmament for the Marcellus/Utica, MarkWest Energy, sold itself to Marathon Petroleum (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). As we pointed out at the time, the sale lined the pockets of investors and MarkWest’s top management (see Golden Parachutes Pop Open for MarkWest Top Management/Board). Two of the people in top management who benefited were John Mollenkopf, who was named executive vice president and chief operating officer for the new MarkWest unit (essentially taking over running MarkWest) and Gregory Floerke, who was named executive vice president and chief commercial officer of the new MarkWest unit. Last week Marathon announced that Mollenkopf is now riding off into the sunset (a very rich man), and Floerke will take has place running the MarkWest unit…
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What Happens to Landmen During a Severe Downturn?

landmanLandmen, the people on the front lines interfacing between drillers and landowners, are facing tough times. With the slowdown in drilling has come a slowdown in leasing, or re-leasing. Landmen are the guys and gals who perform that duty–and many of them are now doing other jobs, waiting and hoping for the next upturn in the industry. Here’s the story and perspective of one landman who has been in the business for the last 37 years, through five different up and down cycles. Most recently he worked as a landman for Noble Energy–until he was laid off 1.5 years ago…
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Research Paper: Shale Wells Lead to Long-Term Low Prices

RFF-DP-16-32-coverIs unconventional (i.e. shale) natural gas supply more responsive to price changes than conventional gas? A new research paper suggests that the answer is yes–specifically, almost three times as responsive, because shale gas wells are far more productive (2.7x more) than conventional gas wells. In “Trophy Hunting vs. Manufacturing Energy: The Price-Responsiveness of Shale Gas” (full copy below), researchers from Resources for the Future (RFF), a nonpartisan think tank devoted exclusively to natural resource and environmental issues, takes a look at how the “new way” of drilling multiple wells from a single pad, which is akin to a manufacturing process, is flattening out the supply curve. A flattened supply curve reduces price volatility–the wild up and down swings in the commodity price of natgas. While the focus of the paper is on how shale wells are leading to lower and more stable prices over the long term and does a deep dive into economic models, the paper also contains a good, basic primer on drilling a shale well. We found it a good read and wanted to share it with you…
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Chamber Report Details Why ‘Keep it in the Ground’ a Disaster

off limitsA new report issued by the U.S. Chamber of Commerce addresses the question, “What If…Energy Production was Banned on Federal Lands and Waters?” (full copy below). The short answer to that question is, it would be an unmitigated disaster for this country. There is a movement underway by radical environmentalists with the catch phrase of “Keep It In The Ground”–meaning we should stop extracting oil and natural gas. It is an acutely ignorant position to take. The report says, “Instituting a ban on future federal-lands leasing and stopping the current production of these resources would increase energy prices for consumers by removing low-cost resources from the available supply stream. The impact would be immediate and severe to the U.S. economy, leading to the loss of hundreds of thousands of American jobs, and robbing the federal government and primarily eastern states of potentially billions of dollars in revenues in the form of lost royalties.” Keep It In The Ground boobs don’t own land and sip lattes at Starbucks in large cities with their radical friends. They don’t care about lost jobs and lost royalty revenue–because it doesn’t affect them. Opposing “nasty, dirty fossil fuels” makes them feel good about themselves. They are dangerously stupid. This report (read it below) illustrates just how catastrophic it would be to ban fossil fuel extraction on federal lands. The report finds that the U.S. economy would lose 400,000 jobs and $70 billion in annual GDP if we were to abandon energy development on public lands, as President Obama and presidential hopeful Hillary Clinton and the entire Democrat Party advocate…
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Report Documents Pipeline Safety: 99.999% Liquids Delivered Safely

AOPLTwo week ago the Association of Oil Pipe Lines (AOPL) released a new report documenting liquids pipeline safety performance and outlining industry-wide efforts to improve pipeline safety in 2016 and beyond. “2016 API-AOPL Annual Liquids Pipeline Safety Excellence Performance Report & Strategic Plan” (full copy below) was developed jointly by AOPL and the American Petroleum Institute (API), and it highlights pipeline safety trends over the last five years. In short, pipelines are THE safest form of transportation period. The report finds that 99.999% of crude oil and petroleum products (like gasoline) that are piped reach their final destination safely. Essentially everything makes it to where it’s going safely, contrary to the wild claims by anti-fossil fuel nutters. The Marcellus Shale Coalition (MSC) quotes from the report in a recent press release to support a number of proposed pipeline projects in the Marcellus/Utica…
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