Sunoco Strikes Deal with Devil, “Settles” with Anti Groups re ME2

Energy Transfer’s Sunoco Logisitics unit has struck a deal with the devil–the devil being the Philadelphia-based (and odoriferous) Clean Air Council, THE Delaware Riverkeeper and Mountain Watershed Association–that will ultimately lift the current ban on underground horizontal directional drilling (HDD) for the Mariner East 2 NGL pipeline project. The three Big Green groups (well funded by colluding leftist organizations) filed an appeal with the Pennsylvania Environmental Hearing Board to block all HDD work following several drilling mud leaks, one of them fouling a water aquifer in Chester County (see Sunoco LP’s Generous Deal to Chester Co. Residents with Water Issues). The Hearing Board judge agreed and stopped all HDD work, temporarily (see PA Enviro Judge Puts 2-Week Pause on ME2 Pipeline Drilling). However, earlier this week the judge allowed a partial lift of the ban (see PA Enviro Judge Lets Sunoco Restart ME2 Drilling 16 of 55 Locations). Sunoco and the Big Green groups have now “settled.” The terms of the “settlement” call for Sunoco to reevaluate and resubmit plans for HDD drilling at 47 locations for review by the Dept. of Environmental Protection (DEP). Landowners who live within 450 feet of a planned HDD site may request water well testing before, during and after Sunoco’s underground drilling activity. In return, the Big Green groups agreed to drop their appeal requesting no further HDD work. As deals with the devil go, perhaps this one isn’t so bad after all. However, we still question why the groups had standing to bring the action in the first place…
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Cabot O&G Countersues Dimock Anti, Lawyers

It’s about time. Cabot Oil & Gas is tired of being sued, and slandered, by people like Dimock resident Ray Kemble and his ambulance-chasing lawyers. So Cabot has sued back–for $5 million. Kemble lives in Dimock Township, in Susquehanna County, PA. Kemble and other families claimed Cabot’s drilling in the area (nearly 10 years ago) caused problems with their water wells–a claim strongly refuted by Cabot. Cabot settled with most of the landowners, including Kemble.
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Southwestern Energy 2Q17: Marcellus Prod. Up, Drilled 36 Wells

Last week one of the Marcellus Shale’s largest drillers, Southwestern Energy, issued its second quarter 2017 update. While production fell slightly from 2Q16 to 2Q17, the fall was due to Southwestern’s Fayetteville Shale production. In both the northeast and southwest Marcellus, Southwestern’s production went up year over year by 12 billion cubic feet equivalent (Bcfe). Southwestern continues to drill and concentrate solely on Marcellus wells–at least in 2Q17. In northeast Marcellus, Southwestern drilled and brought 21 wells online with an average lateral length of 5,530 feet and an average cost of $5.1 million per well. Perhaps we’d characterize them as “short but cheap” wells. Southwestern also drilled an experimental Marcellus well in Bradford County with a lateral of 12,000 feet. That well, the Seymour 1H, is among the top 10% of Southwestern’s wells, with an initial production rate of 37.7 million cubic feet feet (MMcf) per day. Also of note in the northeast–Southwestern added an additional 140 MMcf/d of pipeline capacity, to get their gas to better-paying markets. In southwest Marcellus Southwestern drilled and brought online 15 new wells, with an average lateral length of 7,627 feet and an average cost of $7.1 million per well. The company reported drilling one Utica well in 2Q17–in Washington County, PA. That well will not be completed and online until later this year. The company’s first Utica well, the O.E. Burge 501H in Marshall County, WV, “continues to exhibit strong productivity, with cumulative production of over 2 Bcf in its first six flowing months.” Here’s the lowdown on Southwestern Energy for 2Q17…
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Carrizo O&G 2Q17: Still Shopping M-U Assets, Choking Back M-U Prod

Carrizo Oil & Gas, a Houston-based driller, actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15. During the earnings call for 1Q17, Carrizo CEO S.P. “Chip” Johnson announced Carrizo is putting up their Marcellus/Utica assets for sale–both wells and leases. Yesterday Carrizo issued its second quarter update, holding a conference call to discuss the past three months. What do we learn from it relative to the Marcellus/Utica? Essentially, the company continues on the path of trying to sell their Marcellus/Utica assets. One questioner asked about the company “choking back” production in the Marcellus/Utica–what would it be if they didn’t restrict production? Answer: 180-190 million cubic feet per day…
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PA Business Roars Disapproval of Senate’s Plan to Tax Energy 4X

Yesterday a group of Pennsylvania business and economic leaders from trade associations representing thousands of PA businesses held a conference call to roar their disapproval of the GOP-led Senate plan to impose high/new taxes on energy in the Keystone State. Those on the call included: Gene Barr, president of the Pennsylvania Chamber of Business and Industry; Terry Fitzpatrick, president of the Energy Association of Pennsylvania; David Taylor, president of the Pennsylvania Manufacturers Association; Mark Chasse, treasurer for Industrial Energy Consumers of Pennsylvania; Stephanie Catarino Wissman, executive director of Associated Petroleum Industries of Pennsylvania; David Spigelmyer, president of the Marcellus Shale Coalition; and Dan Weaver, president of the Pennsylvania Independent Oil and Gas Association. A group of heavy hitters. Their message was loud and very clear: no new severance tax, no new gross receipts tax. To enslave Pennsylvanians with these taxes now–to fix a single year’s budget–would sacrifice PA’s economic future. Gene Barr pointed out the Senate plan taxes natural gas four different times: 1. when drillers drill a well (impact fee); 2. the gas coming out of the well (severance tax); 3. when the gas gets used by consumers (gross receipts tax); and 4. if drillers make a profit, their profits are taxed too (income tax). It is a plan crafted to satisfy Big Education–to funnel money to teachers, rewarding them for voting Democrat. How many times do we have to point out this is not compromise, it’s insanity!…
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‘Father of Marcellus’ Weighs in on Proposed Plum, PA Injection Well

As MDN reported in July, the Federal Environmental Protection Agency (EPA), the agency in charge of approving oil and gas wastewater injection wells, is currently reviewing an application and plan from Penneco Environmental Solutions (division of Penneco Oil Co.) to convert a plugged gas well into a brine (wastewater) injection well in Plum, PA–near Pittsburgh (see New Frack Wastewater Well on the Way in Allegheny County, PA). PA has just a handful of wastewater injection wells–less than 10 of them. The most recent two such projects were vigorously opposed by the municipalities where they are located–Highland Township in Elk County, and Grant Township in Indiana County. The towns eventually backed down when they were sued by the PA DEP over their illegal actions (see PA DEP Issues 2 Wastewater Injection Well Permits, Sues 2 Towns). We expect the project in Plum will also encounter stiff opposition. The Pittsburgh Tribune-Review asked Terry Engelder, the now-retired Penn State University professor and geologist who first discovered the potential of the Marcellus (called “the Father of the Marcellus Shale”) to offer his opinion on the injection well proposal for Plum. Engelder’s advice to Penneco? “[B]e a little bit cautious because [you] don’t really know how the rock will respond to this foreign fluid”…
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Mountaineer Pipeline Under Potomac Latest Focus of Anti Movement

Eastern Panhandle Expansion – click for larger version

In April, MDN brought you the news that Columbia Pipeline (now owned by TransCanada) has filed an application with the Federal Energy Regulatory Commission (FERC) to build a 3.5 mile, 8-inch pipeline that will carry natural gas from Pennsylvania to connect the Mountaineer Gas system in the Eastern Panhandle of West Virginia with the Columbia Gas Pipeline in Pennsylvania (see New 3.5 Mile Pipeline Project to Drill Under the Potomac River). The purpose of the Eastern Panhandle Expansion project is to deliver natural gas via local distribution channels (local utility Mountaineer Gas) to a new industrial facility in Berkeley County, WV, scheduled to open in Fall 2017, and to provide gas to other local businesses and residents in the Tri-State area. Most of the proposed pipeline crosses through a tiny sliver of Washington County, Maryland. The main “issue” with the project is that the pipeline will be drilled underneath the Potomac River, which serves as the border between WV and MD. That has radical anti-fossil fuelers in an uproar. As we pointed out in July, the project is in a fight for its life (see WV Fight Over Simple Expansion of Local Gas Delivery Pipeline). Lack of natural gas is strangling expansion in Jefferson County, WV. But that makes no difference to antis in Maryland who are kicking up a fuss and planning to stage a kayak protest in the Potomac. Below is an update on anti efforts to stop the project, and pro efforts to get it approved and built…
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Patterson-UTI Rig Count Hits New High of 162 in July

As we do every month (and have for more than two years), MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for rig count health in general and rig count health in the Marcellus/Utica in particular. Patterson recently bought out and merged in Seventy Seven Energy (see Patterson-UTI Energy Completes Merger with Seventy Seven Energy). The addition of SSE’s rigs served to rocket up Patterson’s rig count number in April and May (see Patterson-UTI Rig Count Continues to Rocket Skyward – 159 in May). With SSE now fully absorbed into Patterson, the rig count number settled down. In June, Patterson’s count went up by a single new rig in North America, to 160 (see Patterson-UTI Rig Count Hits New High of 160 in June). That was the 13th month in a row Patterson’s rig count has gone up–an astonishing run. The trend continued in July, with Patterson picking up another 2 active rigs for 162 in North America…
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Marcellus & Utica Shale Story Links: Wed, Aug 9, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Washington County, PA neighbors as judge to nix Range well; lawsuit against Cabot O&G in WV claims pipeline negligently maintained; Atlantic Coast Pipe picks up support from NC leaders; Mountain Valley Pipe pro & con sound off at VA public meeting; Sabine Pass brings on another LNG train; US natgas exports exceeding imports; more fake news from NYT re “secret” climate report; Germany says US LNG too expensive, lobbies for alternatives; and more!
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