Marcellus/Utica Rig Count Race Tightens: OH Count Closes in on PA

It’s been a few months since we’ve brought you news about the monthly average for Baker Hughes’ venerable rig count–largely because after GE completed it’s merger with Baker Hughes they quit issuing monthly press releases from their website! We spotted a story in the Pittsburgh Business Times that talks about Ohio coming close to parity in their rig count with Pennsylvania–which is a really big deal–and the reasons for it. That story sent us looking for the latest rig count numbers and indeed, it’s true. As of September, PA averaged 33 shale rigs in operation, while OH averaged 29–the closest we’ve ever seen it. If you look at the counts for last week (BH does a weekly rig count too), the numbers are even closer: PA with 31 rigs, OH with 29. We don’t typically monitor the weekly counts as they always fluctuate up and down–better to look at monthly averages. But the fact remains that PA has been pretty steady, operating between 32 and 34 rigs per month since January of this year, while OH has gone from operating an average of 20 rigs in January to 29 last month, and West Virginia has gone from operating an average of 8 rigs in January to 15 rigs last month (nearly doubling). Yet PA is static. Is there an explanation? Some experts think there is, and it can be explained in a single word: pipelines…
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Pathfinder Resources Completes First Marcellus Deal

Less than three weeks ago MDN told you about District 5 Investments, an energy-focused private equity firm based in Texas, which has formed a new subsidiary called Pathfinder Resources in order to invest in the Marcellus/Utica region (see Texas Private Equity Firm Forms to Invest in Marcellus/Utica). According to the initial announcement, Pathfinder will focus on acquiring “producing and non-producing oil and gas mineral interests, royalty interests and non-operated working interested” across the U.S., but with a keen interest in the Marcellus/Utica. The company has not wasted any time. According to the Pittsburgh Business Times, Pathfinder Resources has just closed its first deal in our region…
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OH Congressman Intros Impact Fee for Counties with WNF Drilling

Congressman Bill Johnson

Congressman Bill Johnson, Republican from Ohio’s 6th District, has introduced a bill to compensate counties that contain federal lands, if those lands are drilled for oil and gas. Johnson’s bill, titled Providing Opportunities With Energy Revenues (or POWER) Counties Act (copy below), would siphon off a portion of any royalties paid to the federal government for federal lands that are drilled, sending that money back to the counties where the drilling takes place. Although Johnson and those supporting the bill don’t call it an impact fee, that’s exactly what it is. In Pennsylvania instead of a severance tax, legislators passed Act 13 (in 2012) which contains and impact fee. With PA’s impact fee (roughly the same thing as a severance tax), 60% of the fee raised stays with local counties and municipalities, while 40% goes to the black hole of Harrisburg where it disappears into statewide spending (mainly Philadelphia). It has been a hugely successful model–better than a severance tax. Johnson’s proposed law is not a tax, but reallocates money from existing royalties paid to the federal government for drilling on federal lands. In Ohio, the only federal land where drilling takes place is Wayne National Forest–so those counties where there is WNF drilling would get some extra cash to help out with road repairs, first responders, etc. The brilliance of the plan is that it doesn’t impose any new taxes–it simply reallocates who gets what from the existing revenue stream. Johnson says, “it is a simple issue of fairness”…
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SWPA House Republican to Introduce PA ‘Clean Power Plan’

PA Rep. John Maher

That wily Pennsylvania House Rep. John Maher (Allegheny & Washington Counties) is doing it again. Maher, a Republican, is the guy who came up with the brilliant plan to rename PA’s impact fee to a “severance tax”–because the impact fee is the rough equivalent of a severance tax (see PA House Ctte Votes to Rename “Impact Fee” to “Severance Tax”). The measure, which did not make it to the House floor for a vote, was intended to point out that the Marcellus industry in PA is already taxed–just as much (or more) than if it were called a severance tax. Maher is doing it again. Jumping on the (very good) news that President Trump is dismantling Obama’s odious Clean Power Plan (CPP)–a plan that favors so-called renewables over coal and natural gas for power generation–Maher is proposing a Pennsylvania Clean Power Plan. There are no details as yet. Maher has sent out a memo (copy below) to his fellow lawmakers asking them to join him in sponsoring such a plan–details and a meeting to come later. At first blush you might think Maher has defected to the dark side, proposing that PA stick it’s collective finger in President Trump’s eye in an act of defiance by adopting its own mini-version of the Obama CPP. We don’t think that’s what is happening at all. We think Maher’s CPP will focus on letting the free market figure out how best to reduce carbon dioxide emissions. We have no doubt natural gas will play a starring role in Maher’s version of a CPP…
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FERC Grants Atlantic Bridge Pipe OK to Begin NY Construction

The Federal Energy Regulatory Commission (FERC) last week granted permission to Algonquin Gas Transmission (i.e. Spectra Energy, now owned by Enbridge) to build new pipeline infrastructure in New York State, part of the $452 million Atlantic Bridge expansion project. Atlantic bridge was approved by FERC back in January (see FERC Approves Atlantic Bridge Project for New England/Canada). The project beefs up capacity along the Algonquin Pipeline, along with Spectra Energy’s Maritimes & Northeast Pipeline, to carry more Marcellus/Utica gas into New England and (eventually) all the way to Nova Scotia, Canada. Over the shrill objections of antis, including both U.S. Senators from Massachusetts, FERC allowed construction to begin on Atlantic Bridge in Connecticut back in March (see FERC Grants Atlantic Bridge Pipe OK to Begin CT Construction). Miracle of miracles, the corrupt NY Dept. of Environmental Conservation issued water permits for the project in May (see NY DEC Grants Water Permits for Atlantic Bridge Pipeline Project). And now FERC is giving the green light for construction to commence in NY. What work is happening in NY?…
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Shale Boom Saves U.S. Petchem Industry – Shell Cracker “2nd Wave”

A decade ago the petrochemical industry in the U.S. was in the toilet–in the midst of a downturn. Plants were leaving our shores, heading to other countries. And then the shale revolution hit full force–and changed everything. Petrochemical plants and investment is now skyrocketing here at home, because of shale. Petrochemicals are chemical products derived from petroleum (i.e. oil) and natural gas. The entire plastics industry comes from oil and gas–you knew that, right? Ethylene (which comes from ethane) and propylene (which comes from propane) are used to make polyethylene and polypropylene respectively–that is, plastics. And plastics are used in just about everything you touch, live in, ride in, etc. Plastics make modern life possible. Without plastics, we’d be back in the Stone Ages–living short, brutish lives. Ten years ago our petrochemical industry was flailing, but today it’s thriving. According to an expert speaking last week at Pittsburgh Chemical Day (an annual event), the Shell ethane cracker now under construction is in the “the second wave” of ethane crackers. According to the same expert, we are witnessing the “biggest buildup in the U.S. petrochemical industry we have ever seen.” And it’s all because of shale…
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French Bank BNP Paribas Says It Will No Longer Fund Shale Cos.

We spotted a Reuters story trumpeting word from BNP Paribas–France’s largest bank–that it will no longer “work with oil and natural gas companies that primarily do business in shale or oil sands.” Why? “It plans to boost support for renewable energy projects.” We found that interesting, because BNP Paribas has had a hand in financing a myriad of projects–in the Marcellus/Utica region. Many of the projects they’ve underwritten are in the midstream (pipeline companies), and the downstream (gas-fired electric generating plants). Does the ban on working oil and natural gas companies extend to them? After all, they flow the gas fracked from shale (or oil sands), or burn fracked gas in the case of power plants. Will BNP pull its part of the $400 million credit line from Eureka Midstream (see M-U Pipeline Co. Eureka Midstream Expands Line of Credit to $400M)? Will BNP pull its $460 million worth of loans for the Lawrence County, PA fracked shale gas-fired electric plant (see Ground Broken for Lawrence County, PA NatGas-Fired Electric Plant)? Will BNP pull its backing of hundreds of millions of dollars from two fracked gas-fired OH power plants it’s involved with (see Fluor & Clean Energy Partner to Build 2 OH NatGas Electric Plants). You get our point. This is nothing more than a rankly hypocritical, sleazy, pandering, pusillanimous publicity stunt. Totally meaningless…
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Climate Terrorists Convicted in ND for Damaging Keystone Pipe

Finally, some justice against law-breaking eco-terrorists. You may recall in October 2016, eco-terrorists were arrested when they cut padlocks and chains at five remote flow stations (four different states) and shut down five oil pipelines coming from Canada into the United States (see Climate Radicals Turn Terrorist, Shut Down 5 Canada-to-US Oil Pipes). Two of them shut down the Dakota Access Pipeline, part of which was up and running at that time. The two who shut down Dakota Access were convicted by a jury last Friday–found guilty of their crimes. One of them faces 11 years in prison, and the other 21 years. It’s about time! Why do we care what happened to a couple of loser eco-terrorists in North Dakota? Because some of their members promised to target the Marcellus/Utica region next (see Dakota Access Pipeline Protesters Turn Violent; Coming Here Next?). If people are actually held accountable for their criminal actions, maybe they’ll think twice before doing it elsewhere…
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Guest Post: The Real Record of Ex-EPA Sec. Gina McCarthy

Depending on whether you’re a hardened leftist, or a common sense conservative, Gina McCarthy (former head of the Environmental Protection Agency) was either Savior or Satan. We tend toward the latter–someone who (ab)used her office to push a far-left political agenda. During her tenure, McCarthy oversaw the ramrodding through of the horrible Waters of the United States (WOTUS) and Clean Power Plan (CPP) regulations. It’s taken Team Trump a while, but both measures are being taken apart, plank by plank. Most people from agencies like the EPA retire quietly after their tenure. Not McCarthy. She’s out there in the media attempting to whitewash and cover up her mistakes, and castigating her successor, Scott Pruitt. Mainstream media, which tilts left of Attila the Hun, loves it (and her), giving her a voice. MDN friend Steven Heins, an energy and regulatory consultant and former vice president of communication for Orion Energy Systems, sets the record straight about Ms. McCarthy’s tenure as head of the EPA. Steve reminds us all of some rather uncomfortable truths about the EPA as it was under McCarthy…
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Marcellus & Utica Shale Story Links: Wed, Oct 11, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: FERC extends NY Millennium Valley Lateral Pipeline deadline; WV natgas production up slightly in 2016; conference on petchem impact on Ohio River coming in Nov; Florida Republicans float frack ban bill; EPA moves to dismantle Obama Clean Power Plan; will Trump nuke the energy markets; American-made energy grows, completed wells up 63% this year; global warmers don’t walk the walk; why renewables aren’t lowering Germany’s carbon emissions; and more!
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