Exclusive: MSC’s Dave Spigelmyer Goes On the Record with MDN

Dave Spigelmyer

Last Friday MDN editor Jim Willis had the pleasure of speaking (via phone) with the president of the Marcellus Shale Coalition, David Spigelmyer. Some 300 companies make up the membership of the organization–including all of the top exploration & production (E&P) companies and midstream (pipeline) companies operating in our region. Dave himself used to work for Chesapeake Energy once upon a time. He is a Pennsylvania boy, born and bred, and knows the industry inside and out. Dave made time to speak with MDN about a wide range of issues. We should note nothing was “off limits”–Jim asked some tough questions. Below is a transcript of that interview. We tackle topics including the Marcellus industry outlook for 2017, the commodity price of natural gas in our region vs. other locations, the proposed severance tax in PA, various pipeline projects, the Shell cracker, MSC’s lawsuit against DEP Chapter 78a regulations, and the “civil war” between drillers and landowners over the royalty issue. It’s all in there…
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List of Gas Plants, Pipelines Targeted by Sierra Club

The nutjobs at the Sierra Club have done us the favor in identifying their next targets: 409 natural gas-fired electric plants and 83 pipeline projects either under construction or planned. We have both full lists below. (Handy lists for those who want to sell something to the builders of those projects!) Global warming nuttery has metastasized into full-blown insanity at the Sierra Club. Even though natural gas produces far less carbon and harmful emissions than other fossil fuels, the Sierra Club is focusing all of their money, time and resources to defeating anything to do with fossil fuels. If they got their way, they would stop an additional 31 gigawatts of electricity from coming online from gas-fired plants (many of them in the Marcellus/Utica region). They would also stop many M-U pipeline projects. Essentially, they want to force all of us back into the Stone Ages–without the benefit of plastics or the use of fossil fuels. Yes, it IS insanity. Below are not only the two lists (gas power plants projects and pipeline projects), but also a copy of the Sierra Club’s latest foray into Joseph Goebbels propaganda–a report called “The Gas Rush: Locking America into Another Fossil Fuel for Decades.” Real bizzaro stuff…
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FERC Commissioner Resigns Threatening Major M-U Pipeline Projects

FERC Chairman Norman Bay

Last Thursday, Norman Bay, one of three Federal Energy Regulatory (FERC) Commissioners, announced he would resign effective Feb. 3–this Friday. His unexpected resignation directly threatens a number of critical pipeline projects in the Marcellus/Utica. It appears to us to be a revenge resignation–an attempt to screw the Trump Administration. Bay is a Democrat. In fact, all three sitting FERC Commissioners are Democrats. FERC is supposed to have five Commissioners–but there have been two empty slots since last September when Republican Tony Clark left. Last week President Donald Trump announced he would elevate sitting Commissioner Cheryl LaFleur to become Chairman of the Commission, replacing Bay in that role. It should be noted LaFleur has been on the Commission since 2010 and has been, at various times, Acting Chairman and full Chairman. In fact, Norm Bay was elevated by Obama to become Chairman, replacing LaFleur in that role. Did LaFluer leave in a huff? No. She stayed to do the important work of the Commission. Now that the roles are reversed, Bay seems to be bent on revenge against Trump–placing important pipeline projects in danger of not getting timely approvals. It takes three members to have a quorum, to approve projects. Some (including THE Delaware Riverkeeper) are pushing for a block on new appointments to FERC–meaning FERC’s work stops cold. Three critically urgent M-U projects have asked FERC to approve their projects THIS WEEK, before Bay leaves: NEXUS (Spectra Energy), Leach XPress (Columbia Pipeline/TransCanada), and Atlantic Sunrise (Williams)…
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Marcellus/Utica NGLs “Becoming More Lucrative” – 3rd Cracker Coming?!

Last week we brought you a few pickings from the Hart Energy Marcellus-Utica Midstream Conference and Exhibition held in Pittsburgh. One of those pickings were comments from Williams CEO Alan Armstrong and his prediction that production in the Marcellus/Utica would go up by 65% in the next five years (see Williams CEO Says M-U Production Will Grow 65% in 5 Yrs). Another was comments from the Pennsylvania Department of Community and Economic Development which is about to release a new study that our region could comfortably host another four giant ethane cracker plants (see PA Report Says Marcellus/Utica Can Support Up to 4 More Crackers). Below are more comments from the event about NGLs (natural gas liquids), including a stray comment by one person in-the-know who said he’s been approached about hosting a new/third cracker plant in the region…
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Japanese Company Building NatGas Power Plant in (Yes) New York

Somehow, someway, a new natural gas-fired electric plant is in the process of getting built–in anti-fracking New York State (see Orange County, NY Marcellus-Fired Electric Plant OK’d by Judge). Unfortunately it seems that part of the reason it slipped through and got an approval involved a corrupt (and very close) aide to NY Gov. Andrew Cuomo (see NY NatGas-Fired Electric Plant an Inside Job for Corrupt Cuomo Aide). We have news: a second natgas-fired electric plant is now planned in neighboring Dutchess County, NY. The 1,100 megawatt plant is majority owned by JERA Co., Inc., a Japanese company. We have the details below…
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Range Resources Proved Reserves Up 22% to 12.1 Tcfe, Dev Costs Down

Range Resources released details on their proved reserves last Friday. The company reports proved reserves are 12.1 trillion cubic feet equivalent (Tcfe), a 22% jump from 9.9 Tcfe at the end of 2015. Excluding acquisitions and divestitures, Range’s proved reserves were actually up 11%. Range CEO Jeff Ventura said the company replaced 292% of production from its drilling activities in 2016. They have driven down development costs to 34 cents per thousand cubic feet. If it costs an average of 87 cents to gather and get the gas to market (PA IFO estimate), that means it costs Range $1.21 to find, extract and get the gas to market. Range’s announcement was pretty amped-up on their newest purchase of acreage in Louisiana. However, in 2016, almost all of the added proved reserves came in the Marcellus–1,315 out of 1,394 billion cubic feet (or 94%)…
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Baker Hughes 4Q & Full Year 2016 – Ink Runs Red, but Slowing

Oilfield services company Baker Hughes, with major operations in the Marcellus/Utica, posted its fourth quarter and annual 2016 results last week. Financially speaking the numbers were a river of red. BH lost $2.7 billion in 2016 vs. losing $1.9 billion in 2015. However, when you look at the later half of the year, and the fourth quarter in particular, the numbers started to improve. BH lost $417 million in 4Q16 vs. losing $1 billion in 4Q15. The bleeding slowed. BH CEO Martin Craighead, in responding to a question about the company’s North American shale business, said, “So equipment goes where it’s loved the most, and not every basin in North America is created equal right now in terms of pricing.” Hmmm. We wonder if the Marcellus/Utica is loved? Below is the update…
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Will PTT Cracker Project in Ohio Use American, or Imported Steel?

As we inch closer to a final investment decision (FID) on the PTT Global Chemical ethane cracker in Belmont County, OH, and with President Trump’s emphasis on using steel manufactured here at home for pipeline projects like Keystone XL, some are asking whether the PTT project (if it gets approved) will use American steel–or cheap, imported steel. It’s a good question…
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What Would it Look Like if Fracked Gas Stopped Flowing to NY?

If we had a nickle for every time we’ve heard, read or written the sentiment, “If antis don’t want to extract ‘fracked gas’ anymore, why don’t they show us how it’s done”–we’d be rich! The point: without oil and gas, our modern way of life would cease. Stop. Kaput. No more. We are totally dependent on fossil fuels for our existence. Since New York Gov. Cuomo doesn’t seem to want nasty “fracked gas” coming into his state from Pennsylvania (witness his block of the Constitution Pipeline), perhaps PA and all other states sending natural gas to NY should shut the spigots off for a while. It’s fun to muse, what would happen if?… Well, we don’t have to wonder what would happen. We have a great example. In Central New York in January 1977 residents of Syracuse faced a blizzard and a shortage of natural gas. It got so bad factories, schools and other entities that use natural gas had to shut down. Here’s how it looked forty years ago in Syracuse…
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Marcellus & Utica Shale Story Links: Mon, Jan 30, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Shale Crescent bringing jobs back to USA; technicians with welding/pipefitting skills in high demand; Atlantic Coast Pipe good for Virginia; 5 gas stats that will blow you away; who will be the next natgas utility to be taken out following WGI; natgas price surges 4%; the link between natgas and electricity; natgas exports to Mexico may be at risk; and more!
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