Explosion & Fire at Rice Energy Drill Pad in Washington County, PA

What a way to ring in the New Year. Some 16 different fire departments were called out to a 4-alarm fire at Rice Energy’s Papa Bear well pad in Somerset Township (Washington County), PA, on January 1st. Rice contractors were in the process of fracking the Papa Bear well pad on Sunday afternoon (yes, gas workers work on Sundays and holidays!) when one of the 20 pumps being used experienced “equipment failure.” Fortunately, no one was injured. The blaze ended up ruining six of the 20 pumps, and damaging four pumper trucks. When nearby neighbors heard an explosion and saw black smoke, they “self evacuated” and got out of Dodge quick. Smart neighbors! The Pennsylvania Dept. of Environmental Protection (DEP) is on the scene investigating and Rice does not yet have an estimate for when operations will resume at Papa Bear…
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FERC Approves Atlantic Sunrise Pipeline! Cabot Grabs More Capacity

1/4/17 Update: Williams finally issued its own press release about this, which we’ve included below.

On the last business day of 2016, the Federal Energy Regulatory Commission (FERC) issued a favorable final environmental impact statement (EIS) for one of the major pipeline projects in the Marcellus/Utica: the $3 billion Williams Atlantic Sunrise Pipeline project. The FERC EIS for Atlantic Sunrise (full copy embedded below) said that although there may be some adverse environmental effects from the project, those effects can be “reduced to less-than-significant levels” by Williams via the plans submitted. FERC considered five alternative routes and chose to stick with the preferred route proposed by Williams. However, FERC did ask Williams two make minor tweaks to four locations along the route of the pipeline. Cabot Oil & Gas, the main customer for the 1.7 billion cubic feet of capacity, was positively giddy with the announcement. Cabot released their own press release to say that although they previously gobbled up 850 million cubic feet (MMcf) of capacity along the new pipeline, they are adding another 150 MMcf to that number, giving the company a grand total of 1 billion cubic feet (out of 1.7 Bcf) of capacity along the pipe when it’s built. Holy moly! That will be 1 Bcf per day of Cabot’s gas going from Susquehanna County, PA to other states, outside the region. VERY smart move by Cabot. Below we have the news and feedback/analysis about the announcement…
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FERC Gives Atlantic Coast Pipeline Thumbs Up, Antis Pitch a Fit

On the last business day of 2016, the Federal Energy Regulatory Commission (FERC) issued a favorable final environmental impact statement (EIS) for the Williams Atlantic Sunrise Pipeline (see today’s companion story). Not to be confused with that project, also on the last business day of the year, FERC issued a favorable draft (not final, but draft) EIS for the $5 billion, 594-mile Dominion Atlantic Coast Pipeline project. This is a huge milestone and an indication that FERC will later issue a favorable final EIS, and then a certificate to allow the project to get built. FERC cautioned there is still more work to be done by Dominion to complete field surveys and submit proposals on certain issues that need to get resolved. However, the draft EIS says based on what they see so far, FERC has confidence that Dominion can minimize damage to the environment in building the pipeline. Of course the childish antis came out of the woodwork to begin bleating and blatting, as they so often do, that they pipeline will kill everyone and everything in its path. Typical…
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Marcellus Biggest Drillers Lock in 2017 Gas Prices at $3+ per Mcf

In September, MDN brought you research on 10 of the largest Marcellus/Utica drillers that have “hedged” their 2017 production (see Hedging Gas Prices in Marcellus/Utica – Who Hedges & How Much?). Hedging is a concept of pre-selling the gas you produce at a price you agree to now, in advance. Although that may sound risky, it’s actually an exercise in risk avoidance. It’s less risky to lock in favorable prices now rather than wait and potentially get far less. How do drillers know what the price of gas will be six months or a year from now? They don’t know, for sure, but there is something called the forward market, that predicts what prices will be at future dates. In fact, traders create contracts now based on prices in the future, and those contracts are reported by various news and data services, like NGI’s Forward Look publication. The company that provided the research back in September, S&P, is back with an update. The latest research shows that all of the top 10 drillers have hedged at least some of their production–and some of them have hedged most or even all of their production. What prices have each of these 10 drillers locked in and for how much production?…
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Antis’ Hail Mary to Stop Mariner East 2 Fails, Pipeline Rolls On

In December MDN told you that anti-fossil fuelers who oppose Sunoco Logistics Partners’ Mariner East 2 Pipeline were making a last, desperate attempt to stop the project by appealing an eminent domain case to the Pennsylvania Supreme Court (see Desperate Antis Try One Last Legal Maneuver to Stop Mariner East 2). Their “Hail Mary” play to get the Supremes to hear the case hinged on getting the high court to overturn established case law that allows Mariner East 2 status to use eminent domain, which would doom the project. The antis have now flamed out with this latest attempt. The PA Supreme Court has refused to hear the appeal and will let the lower court ruling stand that finds yes, Mariner East 2 does have the right to use eminent domain…
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Planned OH Utica-Powered Electric Plant Goes from 1,100 to 1,650 MW

In April 2016 MDN told you about the Guernsey Power Station–a new Utica/Marcellus natural gas-fired electric generating plant proposed for Guernsey County, OH (see New Utica-Powered Electric Plant Proposed for Guernsey County, OH). Apex Power Group at that time said they want to build a large 1,100 megawatt plant in Valley Township–producing enough electricity to power 1 million homes. The plant will generate 500 jobs during construction, and 25 full-time jobs to operate the plant when it’s completed. Apex says construction is targeted to begin in 2018 and will go online in 2020. The good news is that Apex and joint venture partner Caithness Energy have now filed a pre-application for the project–and the application shows they no longer want to build an 1,100 megawatt plant, they now want to build a whopping 1,650 megawatt plant! That’s the biggest natgas-fired electric plant we’ve heard of so far–anywhere. The previous title-holder was Dominion’s 1,600 megawatt plant currently under construction in Greensville County, VA (see Dominion Begins Building Virginia’s Biggest NatGas Power Station). Here’s more about the Guernsey Power Station…
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3 Parents Give Birth to New Fracking Co: BJ Services

Update: MDN’s headline and opening graf below are a tad confusing. As we pointed out in our previous story (here) BJ Services used to exist as a standalone company before it was purchased by, and merged into, Baker Hughes in 2009–for $5.5 billion. Now BH is spinning what is left of the company–an internal division–back into a standalone company once again. So perhaps our tongue-in-cheek analogy of a new company being “born” with “3 parents” is confusing. Our apologies! And our thanks to a sharp MDN reader for pointing out the confusion.

A quick post to note the birth of a new fracking company. As we noted in November, Baker Hughes, Goldman Sachs, and CSL Capital Management pledged to combine investments and assets to form BJ Services, a “pressure pumping” (i.e. fracking) company (see Baker Hughes, CSL & GS Form New US Fracking Co: BJ Services). Baby BJ has officially arrived and is now open for business. Yes, baby BJ has three parents. Hey, if three parents worked for Bridge Jones’s Baby, it can work for a fracker…
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Gulfport CFO Leaves Suddenly to “Pursue an External Opportunity”

In the closing days of 2016, Gulfport Energy, an Oklahoma City-based independent oil and natural gas exploration and production company (“driller”) that is a “top 5” driller in the Ohio Utica Shale, announced that its chief financial officer (CFO) has up and left. Just like that. Aaron Gaydosik, Gulfport CFO, is leaving “to pursue an external opportunity.” While defections in the top ranks of big drillers like Gulfport are not unheard of, they do give investors the jitters. And it makes one wonder what’s going on at the company, given that Gaydosik had only been in that job for the past 2.5 years. Was he pushed out? Did he find a better gig? Inquiring minds want to know…
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PA O&G Jobs Drop 32% in 2Q16, but O&G Jobs Double Over Last 9 Yrs

Last week the Pennsylvania Department of Labor and Industry released employment numbers for the Marcellus industry for the second quarter of 2016. Yes, you read that right–the jobs numbers released were for 2Q16, April through June. Why such a delay? Who knows!? What followed is instructive. The numbers show that year over year, from 2Q15 to 2Q16, those employed by the Marcellus industry went down by 32%. However, the same report shows overall those directly employed by the drilling industry doubled over the past nine years. Yes, we hit a down cycle and lost some jobs, but we’re still light years ahead (and a heck of a lot better off) than where we were just a decade ago. Also keep in mind: we are once again on the upswing with jobs, since 2Q16…
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Top 10 MDN Stories for 2016 – Can You Guess Most Popular Topics? [Free]

Each weekday Marcellus Drilling News locates and shares news from the Marcellus and Utica Shale. Over 50,000 people read MDN each month. Here is a summary of the top 10 most-read stories on MDN for all of 2016. We hope this will give you insight into what stories captured the interest of those in the industry, and landowners as well. Let’s do this David Letterman Top 10 style…
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Marcellus & Utica Shale Story Links: Tue, Jan 3, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Friends and foes wait on appeals court for ruling in Constitution Pipeline; OH voters want no part of frack bans; natgas shows signs of returning to Lycoming County; PA Gov Wolf rejects natgas-powered data center, kills 500 jobs; Spectra paying $1.2 million to run pipe through few miles of New England forest; shale gas in north Georgia?; RBN’s top 10 for 2017; Trump’s energy policy; what lies ahead for 2017; and more!
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