WV Update on China Investment: “Dirt Could be Flying This Year”

WV Commerce Sec. Woody Thrasher

West Virginia State Commerce Secretary Woody Thrasher, the man who brokered an unbelievable deal with China, getting China to agree to spend a mind-blowing $83.7 BILLION in the Mountain State over the next 20 years, gave an update to WV legislators yesterday on the China deal. In early November Thrasher visited China as part of a trade delegation with President Trump. On that trip, China agreed to invest a total of $250 billion in American (mostly energy) projects, $83.7B of which (a full third!) will go to investments in WV (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). One legislator at yesterday’s meeting wanted to know when the state might begin to see actual construction activity. Thrasher, who said he’s already made three visits to China and is leaving for his fourth visit this Saturday, said the Chinese have “a great sense of urgency” about beginning projects in the state, and that “the dirt could be flying this year.” Thrasher cautioned legislators that the state needs to up its regulatory and business game–to make the state more attractive to China and others who will flock to the region following a buildup of the shale/petrochemical industry. Thrasher also hinted that the Chinese may be willing to invest in the much-talked-about $10 billion NGL storage hub, the same project that recently received positive signs it will receive a loan guarantee from the federal government (see Appalachian NGL Storage Hub Gets Serious with DOE Loan Guarantee). Here’s Thrasher’s timely update to WV legislators…
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CNX Res. 2018 Plans: 65% Marcellus Drilling, 35% Utica Drilling

CNX Resources, the gas drilling part of what used to be CONSOL Energy (but now is it’s own separate company), issued guidance yesterday for how much money they intend to spend on drilling in 2018. CNX will spend somewhere between $790-$880 million on drilling and midstream projects this year, with 65% of that total going for Marcellus projects, and 35% for Utica projects. That high level number breaks down as $515-$580 million for drilling and completions, and $275-$300 million for water, land and midstream infrastructure. CNX expects to drill 75 wells, 60 of them in the Marcellus, in PA and WV, and 15 in the Utica, in PA and OH. CNX plans to frack 51 wells this year, mostly in PA, and bring 59 wells online to production, again mostly in PA. The company also provided a big tease by saying it will spend $75-$100 million on running water pipelines “for two major stacked pay project areas that the company expects to be ready in the fourth quarter of 2019.” Hmmm. Wonder where they intend to expand in 2019? No CNX’s tease will stoke the rumor mill. As part of yesterday’s announcement, CNX also provided impressive data on a pair of dry Utica wells they recently drilled in Westmoreland County, PA…
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Confirmed: LNG Coming to Boston on Jan 22 is Illegal Russian Gas

We now have confirmation from the Russians themselves that the natural gas shipment on its way to Boston we alerted you to a few days ago is, indeed, Russian gas from the Yamal LNG plant, located in the Russian Arctic (see Russian LNG Coming to Boston to Alleviate NatGas Shortage?!). Even the ultra libs at the Boston Globe are admitting it’s Russian gas. We certainly hope American authorities are on the case and will stop the shipment because it is ILLEGAL. As we told you in our story posted Monday, the U.S. slapped the Yamal LNG plant with sanctions following Russia’s moves against the Ukraine. It’s illegal to receive gas produced from that plant. Shippers attempted to whitewash the gas by unloading it in the UK, and a few days later, reloading it on a different ship, the Gaselys, now heading at full speed for Boston. This is an outrage, for a number of reasons, but we’ll mention two: (1) The gas is illegal. (2) More pipelines from the Marcellus Shale region, about 300 miles from Boston, would alleviate the high prices and shortages New England currently experiences. Instead, the “leaders” of New England continue to block pipelines–preferring to get their gas illegally from America’s enemies…
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New Bill Would Force PA DEP to Work WITH the Marcellus Industry

Pennsylvania State Rep. Brian Ellis (Republican from Butler County) introduced House Bill (HB) 1960 on Jan. 5. The bill, known as the “State Agency Regulatory Compliance Officer Act,” would create a new Regulatory Compliance Officer position in each state agency, including the Dept. of Environmental Protection (DEP). The new Compliance Officer would have the authority “to block an agency from imposing fines and penalties for violations and to rewrite the policies under which fines and penalties are imposed.” The aim of the bill is to force all PA state agencies (including the DEP) to work *with* the people and companies they regulate. It would create a different mindset–instead of “gotcha” enforcement of regulations, it’s aimed at making it easy to comply with regulations. The bill states this in its opening lines: “(1) It is the purpose of this act for agencies to work collaboratively with, instead of acting punitively towards, regulated communities. (2) Agencies should strive to make the regulations which the agencies administer and enforce as clear and easily navigable as possible for regulated communities. (3) In administering a regulation, an agency’s primary goal should be to ensure compliance rather than to exact punishment.” Those who love Big Government don’t like this bill. Will this bill go anywhere? Who knows! What the bill indicates to us is that at least some legislators (Republicans) in Harrisburg are listening and “get it.” What do they get? That PA has developed a reputation for burdensome regulations and if the state wants the Marcellus miracle to continue, and grow, things need to change at the DEP. A $83.7 billion investment by China in neighboring WV’s shale/petrochemical industries should be a bright, red slap across every PA legislator’s face. Wake up! If you don’t fix the DEP, quickly, you’ll lose PA’s Marcellus momentum to someone else…
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Work on Mariner East 2 Continues Following “Stop Work” Order

Last week MDN reported the news that the Pennsylvania Dept. of Environmental Protection (DEP) has suspended all construction work on the Mariner East 2 Pipeline (ME2) project until further notice (see PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline). However, all doesn’t necessarily mean all. A Chester County, PA anti’s celebration of the stop work order came crashing down when she noticed that work was still happening in an area located near her home. How can this be?! It seems the DEP’s statement that “all construction must stop” means “all construction which the DEP permits and authorizes must stop,” which can be further defined as “anything that disturbs the ground.” If the work involves digging, shoveling, etc., it’s stopped. But there’s still plenty of work that can continue–work that is not permitted by the DEP, including welding pipes together. That’s what’s happening at the site in Chester County–and local antis desperate to stop ME2 are mad and discouraged that Sunoco Logistics Partners continues to keep at least some of their workers busy while the company works to get full construction activity restored…
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Jessup Town Board Continues Effort to Stop Gas-Fired Elec Plant

We don’t know how many times we have to keep ringing the bell–this is a five-alarm situation! Wake up! A group of Democrats elected to the Jessup, PA Borough Council (Scranton suburb) are actively trying to block the completion of the state’s largest natural gas-fired electric generating plant–the first phase of which will be ready to go online in a little over a month. A bunch of ninny nanny antis didn’t like that they couldn’t stop the project, so they used money and help from Big Green groups last November to launch successful campaigns to defeat incumbent Council members who voted to authorize the Lackawanna Energy Center to be built by Invenergy (see Scranton Antis Get Political Revenge for Gas-Fired Power Plant). A new majority of anti-power plant radicals took office last week and wasted no time in attempting to slow (or stop) the project (see New Town Board Tries to Stop Nearly-Done Gas-Fired Plant in Jessup). Yesterday, Jessup Council members voted unanimously to hire the same attorney used by Big Green group Delaware Riverkeeper, Jordan Yeager, to “investigate” a request by Invenergy to flush 56,000 gallons of heated water (used to cool the plant) per day down the municipal sewer system. Council voted, unanimously, to pay Yeager and another attorney from the same Big Green law firm $225 per hour for their “expertise” in reviewing Invenergy’s request. No doubt the new council members are hoping Yeager can figure out a way to deny Invenergy’s request and perhaps kill the plant–or at the very least delay the project as long as possible. That seems to be the strategy here. Why else would Jessup Council hire a Big Green lawyer like Yeager? This is NOT a good faith effort to work with Invenergy, as some Council members pretend. It is a bad faith effort to screw Invenergy and stop the plant…
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Hand Wringing in PA Following FERC Rejection of Coal/Nuke Subsidies

Pennsylvania legislators (Democrats and RINOs) who were banking on the federal government to “fix” the problem of the free market are panicking after the Federal Energy Regulatory Commission rejected DOE Sec. Rick Perry’s so-called Grid Resiliency Pricing Rule that would tip the scales in favor coal and nuclear energy, keeping unprofitable electric generators in business longer (see FERC Rejects Trump DOE Plan to Favor Coal & Nukes re Electric Grid). The PA legislators are panicking because nuke and coal plants in the state may now shut down much sooner than expected. To be fair, those plants employ a number of good people–and we hate to see anyone lose a job. But the fact is new gas-fired plants are taking their place, and those new gas plants generate good jobs too. The legislators were hoping the feds would do something, and since the feds aren’t doing anything, that means the problem now bounces back to the individual states, including PA. There’s a lot of hand wringing around Harrisburg. To which we say, relax! Marcellus Shale gas has got your back. Most of the noise about this issue comes from those who own the dinosaur/dying facilities. They don’t really give a flip about “grid reliability.” They only care about their own businesses and seek crony capitalism to prop up the bottom line. FERC made the right decision. PA legislators need to get a grip. This is not the end of the world…
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During Drilling “Downturn” PA Local Govts Still Reap Econ Benefits

One of the loudest, most persistent arguments by Democrats (and RINOs) in Pennsylvania in favor of a severance tax is that the existing impact fee (actually, better called an impact “tax”) have decreased over time because of a decrease in the number of new wells drilled due to the downturn in the market. There are two gigantic problems with their argument: (1) the impact tax has turned around, and is rising again (see IFO Predicts PA Impact Fees for 2017 Will Soar, Near Record High); and (2) a new study by environmental think tank Resources for the Future finds that even during the “downturn years,” the most heavily drilled shale states (including PA) saw an increase in revenue to local governments. Although impact tax revenue may fluctuate up and down, on average townships in PA now have more revenue because of shale than they did prior to the Marcellus revolution. Although the oil and gas industry has always been a “boom and bust” industry, and will remain so, it now appears the highs will not be as high and the lows not as low as they once were. Below is a full copy of “Local Fiscal Effects of a Drilling Downturn: Local Government Impacts of Decreased Oil and Gas Activity in Five US Shale Regions”…
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Our Favorite Govt Agency, EIA, Gets New Leader: Dr. Linda Capuano

Dr. Linda Capuano

Our favorite government agency, the U.S. Energy Information Administration (EIA), now has a new Administrator. President Trump has appointed Dr. Linda Capuano to the position. She began her new job yesterday. Capuano was, until her new job at EIA, a fellow in energy technology at the Baker Institute Center for Energy Studies. She was also on the faculty of Rice University’s Jones Graduate School of Business, where she taught operations strategy for the executive MBA program. EIA is about as non-political of an agency as you can find in Washington, DC. We’re sure she will keep it that way. EIA needs to be apolitical because they publish critical information on energy–both its production and use. There’s no room in cold, hard data for political gamesmanship. We religiously follow the EIA’s monthly Drilling Productivity Report (see the most recent edition here: EIA Dec ’17 Drilling Report: New Year to Begin in Record Territory). Please join us in welcoming Dr. Capuano to this very important position…
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Marcellus & Utica Shale Story Links: Wed, Jan 10, 2018

The “best of the rest”–stories that caught MDN’s eye over the break that you may be interested in reading. In today’s lineup: Interview with CRSD’s Susan LeGros; NY Gov. Cuomo’s latest energy proposals try to cut down natgas; rig count stands at 21 in OH Utica; Arctic blast send natgas prices through the roof in North Carolina; California municipalities may have committed securities fraud in targeting Exxon; corporate raider Carl Ichan still hassling SandRidge Energy; utilities cut rates, credit Trump tax reforms; Agility Gas gets patent for ethylene shipping on LNG carriers; Germany scraps 2020 climate change targets because they won’t meet them; and more!
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