Tyler County, WV Mentioned as Candidate for $10B NGL Storage Hub

In May 2016, MDN brought you the news that a researcher at West Virginia University (WVU) believes a natural gas liquids (NGL) storage hub is what the Marcellus/Utica region really needs (see WVU Researcher Says Marcellus/Utica Needs an Ethane Storage Hub). According to Brian Anderson, director of WVU’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. We need that ethane here, in our area. Kevin DiGregorio, executive director of the Chemical Alliance Zone, also took up the cause in an editorial in July 2016 (see WV, OH, PA, KY Should Cooperate on $10B NGL Storage Hub). Since that time we’ve run a number of stories about the proposed $10 billion NGL storage hub for the Marcellus/Utica. In particular, West Virginia’s two U.S. senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat) have been pushing hard for such a hub (see WV Senators Ask Trump to Create NGL Storage Hub Commission). It has been thought that WV and PA and OH would need to cooperate to help fund such a project. Even the mighty Shell cracker is “only” costing $6 billion! So $10 billion is almost incomprehensible. But then everything changed last week when we told you we now have a pretty good idea of how the project will get funded–by the Chinese (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). West Virginia has, from the beginning, been the state most often mentioned as the location for such a storage hub–but until now no specific site has come across our radar. That’s changed. With money flowing from China for a bevy of shale-related projects, different locations across the Mountain State are speaking up. Tyler County is the latest, saying they are under consideration for the $10B NGL storage hub, and they will do “whatever needs to be done” to win the project. There are, however, two other locations in WV also under consideration…
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Antero’s $275M WV Wastewater Recycling Facility Ready to Launch

By our reckoning, Antero Resources’ $275 million wastewater recycling facility in Doddridge County, WV is either already operational, or will be within the next few days (sometime this week). In 2015 Antero hired Veolia Water Technologies Inc. to build a new shale wastewater recycling facility in Doddridge County (see Antero Building New 60K Bbl Wastewater Recycling Facility in WV). The facility, called the Clearwater Facility, will process 60,000 barrels of wastewater per day, separating water, salt and radioactive particles. The salt can be sold to municipalities for use as road salt–but frankly there’s not enough of a market to sell it all. And not all of it will be of sufficient quality to be sold that way. So Antero also spent $20 million to build a landfill next to the plant for the salt (see Update on Antero’s $275M Wastewater Facility in WV). According to the Clarksburg Exponent-Telegram, an Antero official recently said the Clearwater Facility is set to open in “the first part of November.” If you consider the first 15 days of the month the first part of the month, that leaves two days for the facility to be up and running. Hence our speculation it either already is open, or will be this week…
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Pittsburgh-based Water Provider for Shale Drillers Expanding

HydroEdge Solutions is on the grow. The company designs and operates temporary water lines for Marcellus/Utica drillers. The company started in 2013 in Pittsburgh with three employees, and today they have 92 employees! HydroEdge is looking to add another 20 employees using $8 million of debt financing they just received from an unnamed “independent, third party lender.” That money breaks down as a $5 million one-year loan and a $3 million line of credit. Some of HydroEdge’s A-list customers include EQT, CNX/CONSOL, Rice Energy, Statoil, and EdgeMarc Energy. Impressive list. Here’s the lowdown on an up-and-coming service provider in the Marcellus/Utica, flush with cash and ready to hire…
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Update on Proposed 60-Mile Pipeline from NW Pa. to NE Ohio

Click for larger version of map

We have some progress to report, and a pair of public hearings coming up, for a pipeline project proposed to run from Meadville, PA area (Crawford County) and extend in a northwest direction to Ashtabula County, OH. Three weeks ago MDN brought you details about the proposed Risberg Line Project, to be built by RH energytrans (see New 60-Mile Pipeline Proposed from NW Pa. to NE Ohio). The project will use approximately 32 miles of existing pipeline in an established Right of Way originating in the Meadville, PA area. Approximately 16 miles of new pipeline will be installed in Pennsylvania and approximately 12 miles of new pipeline will be installed in Ohio–meaning 28 miles of brand new “greenfield” pipeline needs to get built. The new news that we’ve learned is that two school districts in Ohio where the pipeline will traverse have agreed to reduce the amount of property tax the pipeline would need to make by 75% over a 15-year period. That’s a huge vote of confidence. We also learn that around 100 Erie and Ashtabula county property owners have already signed easements to allow the pipeline across their property. While no pipeline project anywhere in the northeast has a smooth ride, this one certainly seems to be sailing right along. Perhaps the first test of whether or not anti-fossil fuel nutters will begin to oppose it will come at a pair of public hearings for the project–one on Dec. 5 in Conneaut, OH, and the other Dec. 6 in Edinboro, PA…
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Et tu Brute? PA Rep. Garth Everett Falls for Severance Tax Trap

We have long admired Pennsylvania State Rep. Garth Everett, Republican from Muncy (Lycoming County), PA. Everett has been in the forefront of trying to get “minimum royalty” legislation passed that would guarantee PA landowners would get minimum royalty payments of 12.5%–regardless of any kind of post-production expenses. He’s been introducing a bill to do just that for the past three sessions (six years), the most recent attempt this year in February (see PA Rep. Garth Everett Reintroduces Minimum Royalty Bill, 3rd Time). Although Everett’s stance on the minimum royalty bill has him at odds with the drilling industry, he has always struck us as pro-gas and a friend to the industry. So we were particularly saddened to read Everett is now voicing support for a Marcellus-killing severance tax. Perhaps Everett has been influenced by fellow Lycoming County politico State Sen. Gene Yaw, who sold out the industry by supporting a severance tax during the recent budget votes (see Traitorous PA Senate Republicans Pass Severance Tax Bill). MDN note: Sen. Yaw reached out to MDN several times with caustic comments, taking issue with our view of his betrayal of the industry. Or maybe Everett’s newfound love of taxation has happened in response to the industry vigorously opposing his minimum royalty bill for the past six years, i.e. revenge. Whatever the reason, Everett is now saying he supports a severance tax–as long as the tax can’t be deducted from landowner royalties…
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FERC Commissioner Powelson Uncensored: New England Trouble Ahead

We love Rob Powelson, newly-minted Federal Energy Regulatory Commission member appointed by President Trump. Before joining FERC, Powelson was a member of the Pennsylvania Public Utility Commission. We love him because he speaks his mind. Although he’s circumspect about what he says, Powelson still finds a way to get in those zingers. You never have to wonder what he thinks. For example, in March of this year (before joining FERC), Powelson said this: “The jihad has begun…At the Federal Energy Regulatory Commission groups actually show up at commissioners’ homes to make sure we don’t get this gas to market. How irresponsible is that?” (see Potential FERC Com. Powleson Calls Anti-Fossil Fuelers “Jihadists”). Yes! He called eco-jihadists, “jihadists,” which of course sent the left into a tailspin. He later had to walk back that comment (see Powelson Under Fire for Calling Enviro Jihadists, “Jihadists”). At a conference last week, Powelson was at it again. We call it being uncensored–and that’s a good thing. Powelson said that Cove Point LNG is now up and running, as of Nov. 1st. He also had some choice comments about New England’s abysmal electric situation and New York’s obtuse opposition to shale gas…
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Eclipse Res. 3Q17: Super-Laterals Proving to be Super Productive

Last week Eclipse Resources, the “super-lateral” Marcellus/Utica driller, turned in its third quarter 2017 update. Eclipse is a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in the Ohio Utica. Eclipse has drilled the top three longest onshore oil/gas wells in the world. What do we glean from the 3Q17 update? Two of their world’s longest onshore wells–the Great Scott 3H and Outlaw C11H–are now online and pumping. They are pumping record-setting amounts of condensate. Each is averaging 3,300 barrels of oil equivalent (BOE) to date on a restricted choke, consisting of almost 50% condensate and 68% in total liquids. Gushers! During 3Q17 Eclipse drilled 10 wells in all, including four super-laterals with an average lateral length of over 17,500 feet. So far the company has drilled 11 super-lateral wells with an average lateral length of ~18,000 feet–averaging just 16 days from spud to total depth. Incredible! The company had average daily production of 353 million cubic feet equivalent per day (MMcfe/d). On an analyst phone call, Eclipse’s top brass said they are working to create a “reputable” super-lateral program, meaning (our words) building a successful program of long laterals that also makes big money. Here’s the 3Q17 update, along with portions of the analyst phone call and the latest slide deck…
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Questerre Plans 8 Initial Well Pads in Canadian Utica 2018-2019

Although the primary focus of Marcellus Drilling News has always been on Marcellus and Utica Shale gas (and oil) as found in the northeastern U.S., the Utica Shale also underlies part of Canada’s Quebec province. From time to time we highlight news concerning the Utica in Canada. There hasn’t been much news to highlight over the years since Quebec has had a moratorium on fracking at least as long as New York’s moratorium (now at 9 years and 9 months and counting). But as we reported in December 2016, something of a minor miracle happened–the Quebec National Assembly voted to pass Bill 106, ostensibly to support Quebec’s “clean power plan” (see Fracking in Canadian Utica Shale Takes Big Step Closer to Reality). The bill includes a section that “lays out a framework for oil and gas development” in Quebec. Fracking will not begin immediately. The bill does, however, mean that new regulations will come along in 2017 and after that, it’s an almost certainty that fracking will begin. Those draft rules were finally been released in September of this year (see Quebec Government Publishes Draft Utica Fracking Regulations). Questerre Energy, which owns Canadian Utica leases in Quebec and has long lobbied get the government to allow Utica drilling. In Questerre’s recently-released third quarter 2017 update we get an update on their plans to drill in the Canadian Utica. The company says if progress continues with the draft regulations, they have eight well pad sites picked out where they will drill first–in locations that have been oil and gas friendly in the past…
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Marcellus & Utica Shale Story Links: Mon, Nov 13, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: WV legislators, industry leaders digesting $83.7B shale deal; Marcellus natgas lowers bills for all Americans; Tellurian cuts $15.2B deal with Bechtel to build Driftwood LNG; Texas ethane going to China; Permian peak in just 3 years?; fake fractivist news from Reuters; Algeria lectures US shale to get “more humble”; the coming boom in UK (yes UK) shale; and more!
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