Utica Pipeline Explosion in Noble County, OH Affects Natl Output

Seneca Lateral pipeline fire – Noble County, OH

On Wednesday around 2:30 am in the morning, a section of 24-inch pipeline that runs from the MarkWest Energy natural gas processing plant in Noble County, OH and the Rockies Express (REX) pipeline (also in Noble County) exploded and caught fire. The Noble County Emergency Management Office says it happened about three miles north of Summerfield, Ohio, near Ohio State Routes 513 and 379. Fortunately, no one was injured. Neighbors heard the explosion and saw a glowing night sky. The only damage was to some nearby trees. That short segment of pipeline is known as the Seneca Lateral, owned by Tallgrass (owner of REX Pipeline). Tallgrass is investigating the cause of the accident. Believe it or not, that one pipeline and the gas it flows from the MarkWest plant to REX, carrying it to the Midwest, has caused the entire national output of natural gas to decrease by an estimated 2%, according to Reuters. A single small pipeline can actually move the needle on output! Right away the Sierra Club jumped into the story with a wild claim that the pipeline was not properly reviewed before regulators signed off on it. Typical headline-grabbing propaganda from the Clubbers. Here are the details we could find about the explosion/fire…
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Ambridge Water Authority Strongly Opposes Shell Ethane Pipe Route

Shell has had pretty smooth sailing with their proposed 97-mile Falcon ethane pipeline project–a pipeline that will feed the mighty $6 billion cracker plant Shell is building in Beaver County, PA. Shell did not use eminent domain but instead negotiated with (paid big bucks for) rights of way along the pipeline’s path. That process continues. There have been some grumblings here and there, particularly from Big Green groups. But all in all, there has been remarkably little opposition–that is, until now. Shell filed an application to build the Falcon project back in October (see Shell Files PA Application for Ethane Pipe to Feed Cracker Plant). On Jan. 20, Shell filed an application for federal stream crossing permits–something the PA State Dept. of Environmental Protection (DEP) issues (see PA DEP Invites Public Comment on Shell 60-Mile Ethane Pipeline). Because of the stream crossing application, the Ambridge Water Authority (in Beaver County), an organization that oversees a reservoir that provides drinking water for ~30,000 people, is expressing “strong opposition” to the route of the Falcon pipeline. Wait a minute. Didn’t Ambridge know the route back in October, when Shell first filed? Yes. However, the stream crossing permit application reveals details either not in, or not obvious, in the original application–details that the pipeline will go under three streams that feed the Ambridge reservoir. That’s got the board up in arms. In a statement, the Water Authority said, “we will do everything in our power to try and have the pipeline relocated outside of our watershed and away from our main, and only, raw water line.” Whether or not there’s any legitimacy to their concerns, Shell now has a PR situation on its hands–the old “it’s going to poison our drinking water” canard that’s a favorite of those who oppose drilling and pipelines. It will be interesting to see how Shell handle’s this situation…
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PennEast Pipe Gives Holdout Landowners Feb 5 Deadline to Sign

It took over three years, but finally PennEast Pipeline received a full, final approval from the Federal Energy Regulatory Commission (FERC) two weeks ago (see FERC Grants Final Approval for PennEast Pipe – Real Battle Begins). PennEast is a $1 billion, 120-mile primarily 36-inch natural gas pipeline that will stretch from Dallas (Luzerne County), PA to Transco’s pipeline interconnection near Pennington (Mercer County), NJ. The pipeline is an important conduit to move gas from the prolific gas fields of northeastern PA to markets in southeast PA and New Jersey. There has been plenty of opposition, mostly whipped up by Big Green groups like THE Delaware Riverkeeper and the nutty Sierra Clubbers of NJ. PennEast has been (for years) negotiating with landowners along the pipeline’s proposed route, to purchase easements. Some 75% of landowners have either signed leases and/or allowed survey access of their property. Some landowners apparently bought in to the Big Green lie that this project won’t happen, so they have refused to negotiate or allow survey access. Time has now run out. With the FERC certificate in hand, PennEast can now go to court and request eminent domain proceedings against the holdouts. PennEast has sent letters to the holdouts telling them they have until Feb. 5 to accept the generous offer PennEast has made. After that, the landowners can expect to receive court paperwork telling them to allow access. What generally happens is that (a) a court order appears granting PennEast access to the property now, and (b) months or even over a year later, a judge will decide what a fair value is (typically less than being offered by PennEast) for the lease. The holdouts should have known this day was coming, but denial is a powerful emotion…
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CNX 4Q17 Results: Drilled 4 New Wells, Completed 19 Wells

CNX Resources, the gas drilling part of what used to be CONSOL Energy (but now is it’s own separate company), issued their fourth quarter 2017 update earlier this week. What a difference a year can make, at least financially! In 4Q16 CNX lost $300 million. In 4Q17 CNX made a $282 million profit. That’s a swing of $582 million–over half a billion dollars. CNX used $103 million of that money to buy back some of the company’s outstanding shares of stock. CNX produced 118.9 billion cubic feet equivalent (Bcfe) of production during 4Q17, which translates to 1.32 Bcfe per day. That’s new record high production for CNX. Production costs fell to $2.17 per thousand cubic feet (Mcf). During most of 4Q17 CNX operated 2 horizontal shale drilling rigs, adding a third rig in late December. The company only drilled four new wells in 4Q17: one dry Utica Shale well in Monroe County, OH; one deep dry Utica Shale well in Greene County, PA; one deep dry Utica Shale well in Indiana County, PA; and one Marcellus Shale well in Greene County, PA. However, they kept the rigs busy by completing 19 wells–DUCs, or Drilled but UnCompleted wells, drilled prior to 4Q17. CNX proved they can walk and chew gum at the same time over the past three months. While they were drilling 4 new wells and completing another 19 wells, during that same time period they (a) split the company in two, separating the gas drilling business from the coal business, (b) bought and closed on Noble’s 50% share of what was CONE Midstream (now CNX Midstream Partners), and (c) bought back $103 million shares of the company’s common stock. Busy beavers! Here’s the full 4Q17 update from CNX Resources…
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MPLX 2017 Results: Income Up Astounding 241%, Adding 6 Plants

MPLX, which used to be known as MarkWest Energy prior to selling itself to Marathon Petroleum, issued its fourth quarter 2017 update yesterday. And wow, what an update! MarkWest…OK, MPLX (old habits die hard)…is the Marcellus/Utica region’s leading gas processing company. MPLX’s facilities process on the order of 60% of all the gas produced in the Marcellus/Utica. The region produced record volumes of gas in 4Q17 (and indeed for all of 2017), which in turn led to record volumes of gas processed (separating the methane from the other hydrocarbons), and record volumes of fractionation (separating the other hydrocarbons into their respective components) for MPLX. Net income soared, both for the fourth quarter and full year. In 4Q17, MPLX’s net income was $238 million, up from $133 million in 4Q16–a 79% increase. For the entire year, MPLX’s net income was $794 million, vs. $233 million in 2016. That a 241% increase year over year! Yeah, the Marcellus/Utica came back big time in 2017. But MPLX isn’t sitting around basking in the glow of success–they have big plans for 2018. In the Marcellus/Utica, MPLX will add six new gas processing plants, increasing the company’s processing capacity by 21% to over 7 billion cubic feet per day. Additionally, MPLX expects to add 40,000 barrels per day of ethane fractionation capacity, and 60,000 barrels per day of propane-plus fractionation. Below is the full update along with the latest PowerPoint presentation…
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Locals Opposed to Jessup Power Plant Question Emissions “Credits”

Invenergy is currently building the Lackawanna Energy Center, a 1,480 megawatt plant in Jessup, PA (near Scranton) that will cost “well over $1 billion” according to an exclusive MDN source working on the project. When the plant is done (first phase ready sometime this month), and when it goes online (to be determined), it will be Pennsylvania’s largest natural gas-fired electric generating plant. Unfortunately, a group of Democrats got themselves elected to the Jessup Borough Council specifically to try and block the completion of the project (see Jessup Town Board Continues Effort to Stop Gas-Fired Elec Plant). They just took office in January and already have thrown up roadblocks. Wednesday the PA Dept. of Environmental Protection held a hearing about the facility’s potential impacts on local (and regional) air quality. Some three dozen folks showed up to trash talk the project. They’re questioning the plant’s Emission Reduction Credits (ERC). This plant will put some bad stuff in the air (small quantities), as all electric generating plants do. In order to “offset” the negatives of putting those small quantities of bad stuff in the air, the plant must purchase ERCs. That is, someone somewhere else will sell their “right” to emit the same bad stuff (i.e. pollute) in return for cash. That’s a grossly oversimplified and perhaps not totally accurate way to say it–but it serves the purpose of understanding the complex issue of ERCs. At the DEP hearing, those who oppose the plant were questioning the ERCs for this facility. Their argument is, maybe the air quality in the entire region will benefit from having a clean-burning natgas-fired plant, but will that benefit for the region (and country) be at the expense of making the air worse for the neighbors who live near the plant? As much as we disagree with those who oppose this project, their question is valid and important…
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UGI Energy Tweaks LNG Peak Shaver for Bethlehem, PA

UGI LNG’s Temple I peak shaver near Reading, Pa. with 3-million-gallon storage tank

It’s time to learn something new (there’s always something new to learn in this industry). Ever hear of a peak shaver? No, nothing to do with that thing guys use in the morning to shave off the stubble. An LNG peak shaver is a unit used for storing surplus natural gas, to have extra natgas on hand and ready during times of peak consumption during really hot summers or really cold winters. Sometimes your local gas utility will build and use a peak shaver (small LNG storage facility), so they don’t run out of natgas at a critical time, and to help with keeping prices lower by drawing down from storage if prices spike. Low prices make for happy customers. UGI, a diversified energy company with both midstream (pipeline) operations and one of PA’s largest utility companies, uses peak shavers. We’ve written about their use of peak shavers in the past (see UGI Building LNG Plant in NEPA, Local Marcellus Gas to Feed It). We’re interested in such facilities because of their potential as a new demand source for our plentiful gas supplies. UGI is proposing a new peak shaver for Bethlehem, PA. The project hit some early opposition, so UGI has tweaked the design, meaning they can proceed…
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EPA Director Scott Pruitt Suspends Obama WOTUS Rule

In May 2015 the Obama rogue Environmental Protection Agency (EPA) along with the Obama U.S. Army Corps of Engineers (USACE) released a finalized rule clarifying what “Waters of the United States” (WOTUS) means vis a vis what can be regulated under the federal Clean Water Act (see EPA Power Grab: Redefines Waters of the U.S. to Include Everything). Essentially the rule change redefined everything down to mud puddles (no, we’re not exaggerating) as being subject to the federal Clean Water Act. It was yet another attempt to bring oil and gas regulation under the purview of the federal government, a violation of the U.S. Constitution. We won’t recount the history of lawsuits and counter lawsuits that have ensued. We’ll only tell you that in January the U.S. Supreme Court entered the fray by determining which courts can here lawsuits regarding WOTUS (see U.S. Supreme Court Changes Jurisdiction for WOTUS Challenges). We said this last week: “Because of legal wrangling, [EPA Administrator Scott] Pruitt must take two years to develop a replacement for the destructive version of WOTUS–and in the meantime, the Obama version of WOTUS (sadly) remains in effect.” Little did we know, but Pruitt has just pulled off a coup by giving an order to suspend/delay the Obama version of WOTUS until a new version is ready (in two years). Finally, a little sanity is restored to environmental regulation…
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Penn State Students Brainwashed by “Fossil Free” Campaign

Crazy Bernie Sanders (yes THAT Bernie Sanders, U.S. Senator from Vermont) along with ultra-radical 350.org and its leader Bill McKibben, have launched a new campaign called Fossil Free. It’s actually “thinking free” (as in the absence of all thinking), but we’ll leave that for another post. The new campaign is the ultimate outcome of global warming belief metastasized. Bernie, who is a political rock star for naive young Millennials, appeared with several other speakers at an event in Washington, D.C. that was live streamed to more than 300 “watch parties” across the country. The theme of the campaign is to end the use of all fossil fuels. One of the watch parties was a group of students at Penn State. By all accounts, the young skulls full of mush sat there bedazzled by Crazy Bernie–mouths open, drool trickling down the corner of their mouths. They were brainwashed. They worship this almost-octogenarian for who knows why? The problem is, these kids have not been taught to think critically. They accept, at face value, the lies spread by people like Sanders and McKibben. The kids just automatically believe it–like a blind faith–because Bernie says it. Penn State is (or was) a good school. What’s going on that they’re turning out kids who don’t, and won’t, think for themselves? Here’s recap of the Penn State Crazy Bernie “watch party”…
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Marcellus & Utica Shale Story Links: Fri, Feb 2, 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: H&H offers public tours of Penn Twp well pad; NJ governor supports DRBC frack ban; homeowners in new development totally unaware of Shell ethane pipeline coming through; officials say road projects, Marcellus Shale, energizing WV; why natgas prices just tanked; US crude oil production hits 10M barrels, highest since 1970!; did frackers just hit a capitulation boom; four trading houses shake up LNG industry; South Africa may turn into major new market for US natgas; and more!
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