NFG/Seneca: Pursuing Plan B for Blocked NY Pipeline Project

Last Friday National Fuel Gas Company (NFG), headquartered in Western New York State which operates drilling subsidiary Seneca Resources and pipeline subsidiary Empire Pipeline, issued its second quarter 2018 (everyone else’s first quarter) update. Via Seneca Resources, NFG drills wells in northcentral and northwestern PA. Via Empire Pipeline, they build and maintain hundreds of miles of pipelines. NFG wants to add to their pipeline portfolio by building the Northern Access Pipeline–a $455 million project with 97 miles of new pipeline along a power line corridor from northwestern PA up to Erie County, NY. Northern Access would allow Seneca to drill new wells in an area currently pipeline “constrained.” However, Northern Access construction has been blocked by the corrupt NY Dept. of Environmental Conservation (see Cuomo’s Corrupt NY DEC Blocks NFG Northern Access Pipeline Permit). During a conference call with analysts on Friday, NFG CEO Ron Tanski outlined what we call Plan B for the Northern Access. Yes, NFG still wants to build Northern Access, but they now have an alternative. NFG recently signed an agreement with Williams’ Transco Pipeline to flow 300 million cubic feet per day (MMcf/d) of Seneca natural gas to Transco Zone 6 markets. Transco is talking with other shippers before it files to expand the existing pipeline–a project that would not be online until late 2021. If by some miracle NFG could get the corrupt DEC to change its mind and authorize Northern Access, that project would be online in 2020. Other interesting bits of news coming from last week’s update: Seneca plans to drill Utica wells on some of its existing Marcellus well pads. Seneca added a second drilling rig in 2017, and plans to add a third rig any time now…
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Eclipse 1Q18: No Comment on Process to Buy or Be Bought

Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA, issued its first quarter 2018 update last week. Eclipse has drilled the longest onshore natural gas wells in the world–in the Ohio Utica. Impressive company. In March the company announced it is looking for someone to buy, or (more likely) for someone else to buy them (see Eclipse Resources Board Considering Either Merger or Acquisition). Eclipse CEO Ben Hulburt began the quarterly analyst phone call last week by anticipating questions about the buy/be bought process. He shut down any questioning before it began by saying: “I hope you can understand, because of the nature of this process, we will not be able to address any questions relating to it or discuss it further during today’s call.” So what did Ben discuss? The company drilled 8 wells in 1Q18. They completed (fracked) the company’s first PA Utica well. And he took time to toot the company’s own horn (deservedly so). Eclipse drilled 8 of Ohio’s 10 most productive Utica oil wells in 4Q17. The company has a talent for drilling very long, and very productive wells…
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WV DEP Lifts Block on Rover Pipeline Construction

The vast majority of Rover Pipeline is done, and most of it is now up and running (see FERC Allows Rover Pipeline Startup in Michigan, Close to 100% Done). But there are a few spots here and there where small sections are still not complete. One of those is in West Virginia. In March, the WV Dept. of Environmental Protection (WVDEP) slapped Rover with a “cease and desist” order, stopping all construction of Rover in the state, because of inspections that found 14 violations of water pollution regulations (see WV DEP Orders Rover Pipe to Stop Construction for Violations). The violations occurred in Doddridge, Tyler and Wetzel counties. Violations ran the range of leaving trash behind at construction sites to improper perimeter controls (no erosion devices installed) to failure to clean up the roads they used. The good news is that last Wednesday, WVDEP told Rover they can now resume construction…
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Grandma Red Comes Down from Tree After Judge Orders $1K/Day Fine

Theresa “Red” Terry (whom we call Grandma Red) and her daughter Minor Terry finally came down from the trees where they were perched since April 2 in an illegal attempt to block Mountain Valley Pipeline (MVP) from cutting the trees. They came down on Saturday after a federal judge said if they stayed past midnight Saturday, they would each be fined $1,000 per day. The money would go to MVP. Red said, “Mountain Valley has taken enough from us…There wasn’t a lot more I could do up there besides show my ass and give them money.” As we previously reported, a number of Virginia lawmakers expressed their support of the Terrys and their flagrant disregard of the law (see Virginia Democrat Lawmakers Side with Lawbreakers in MVP Protest). A crowd of 100 or so gathered on Saturday, complete with six packs of beer, to watch the spectacle of Grandma Red coming down to earth. A sycophantic press was there to fawn all over Red and her daughter…
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PennEnvironment Wants Fossil Fuel-Powered (i.e. Electric) Buses

Last Thursday the radical Big Green group PennEnvironment released a “study” that claims PA should move to adopt electric buses, instead of all other alternatives (like compressed natural gas) because electric buses are (supposedly) more environmentally friendly. We understand the argument about replacing diesel-powered engines to lower the amount of nasty stuff that enters the air. But PennEnvironment’s argument to use electric buses is as much about reducing mythical global warming as it is reducing diesel emissions. And here’s the thing PennEnvironment doesn’t tell you (and what their Big Green supporters are too dull to figure out themselves): electricity comes from somewhere. It’s not magic. It’s produced. In PA, as of January 2018, 54% of all electricity is produced either by coal or natural gas-fired plants. Another 40% is produced by nuclear plants. How much electricity is produced in PA by all those gigantic windmills you see when sailing down the Pennsylvania Turnpike, along with solar? A measly 2.9%. So how “clean” are electric buses, really? Put another way, the majority of what powers electric buses is good old fossil fuels. Does PennEnvironment know they’re advocating for more fossil fuel use? Meanwhile, the Wolf administration (surprisingly) continues to invest in CNG buses, which is the smart thing to do…
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Canadian Lowball Shipping Works, Grabs Market Share from U.S.

TransCanada, one of Canada’s leading midstream/pipeline companies, cooked up a deal in 2016 to pipe natural gas from Canada’s West Coast to the East Coast in order to fend off cheap supplies of Marcellus/Utica gas that will flow into Canada from the NEXUS and Rover pipelines (see TransCanada Pipe Drops Price 42% to Compete with Marcellus/Utica). TransCanada dropped their pipeline price by 46% to lure drillers by (theoretically) making it less expensive to get gas from Western Canada, some 2,400 miles away, than from the Marcellus, just 400 miles away. Following a couple of open seasons and stiff regulatory hurdles, the plan was adopted and went into service last November (see TransCanada Pipe Begins Lowball Shipping to Compete with Marc/Utica). In February of this year, TransCanada announced a $1.9 billion plan to expand its Western Canadian pipeline system in a bid to gather up and send even more Western Canadian gas to the East Coast (see TransCanada Spending $1.9B to Bring More Canadian Gas to Northeast). Looks like TransCanada’s gamble paid off. According to records from the U.S. Dept. of Energy, Canada is using more of their own homegrown gas and less gas from the U.S….
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Other Energy Stories of Interest: Mon, May 7, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Lawrence County students build, demo gas and oil rig; PA’s Dem lt. gov. candidates hate pipelines; union welders come out to support Williams NESE pipe project; Cabot buys equipment for NEPA fire companies; irreconcilable differences over PA severance tax; Permian natgas prices collapsing as production takeaway hits capacity limit; radical enviros put people last, destroy habitats and wildlife to end fossil fuels; XTO moving its HQ to Exxon’s Houston office; will oil prices go higher if Trump axes Iran nuke deal; and more!
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