Atlantic Coast Actual Pipeline Construction Begins in WV

On Friday, the Federal Energy Regulatory Commission (FERC) issued Dominion Energy permission to begin construction of the actual pipeline for the Atlantic Coast Pipeline (ACP) project–in West Virginia. ACP is a (now) $6.5 billion project, up from a projected $5 billion due to delays from regulatory agencies and frivolous lawsuits filed by Big Green groups, that will run from WV through Virginia and into North Carolina–almost to the border with South Carolina. Until now FERC had allowed prep work, like tree cutting. But now actual pipeline construction can begin, which is a momentous occasion, worthy of celebration!…
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$325M Gas-to-Liquids Plant Coming to Floyd County, KY

Last week RCL Chemical announced it has partnered with Y2X Infrastructure to build a $325 million gas-to-liquids (GTL) plant in Floyd County, Kentucky. GTL plants convert natural gas, a hydrocarbon, into other hydrocarbons, like diesel fuel, gasoline, solvents and waxes. An abundance of cheap natural gas in the Marcellus/Utica is one of the prime motivators for establishing GTL plants in the region. Although we’ve heard plenty of talk about such plants, we’ve only seen a few prototypes get built thus far. The RCL/Y2X story caught our attention because Kentucky hates new gas pipelines, yet wants to build a plant that will use gas coming from pipelines (see KY Court Decision Goes Against Pipelines re Eminent Domain). Perhaps attitudes in the Bluegrass State are changing? According to RCL, necessary infrastructure (pipelines) are already present in Floyd, one of the primary reasons RCL wants to locate in Floyd. The company says it will begin construction by the end of this year and have the GTL plant built and operating by 2020. The original plan, a few years ago, was to build a coal-to-liquids (CTL) plant in neighboring Pike County. That plan was eventually scrapped and this new plan to build a GTL project has taken its place…
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What’s Happening with Utica Marcellus Texas Pipeline (UMTP)?

What’s happening with Kinder Morgan’s $4 billion Utica Marcellus Texas Pipeline (UMTP) project? In February MDN told you that Kentucky antis went to court to try and block a plan by Kinder Morgan to convert a portion of the Tennessee Gas Pipeline (TGP) that flows natural gas from the Gulf Coast to the northeast, to reverse the pipeline and flow natural gas liquids (NGLs) from the Marcellus/Utica region to the Gulf Coast (see Kentucky Antis File Lawsuit to Stop TGP NGL Pipe Reversal). We told you in April that a Kentucky county has also gone to court to try and stop the pipeline reversal (see Kentucky County Suing to Stop TGP from Reversing Pipeline for NGLs). The pipeline reversal is part of the UMTP project. UMTP involves converting 964 miles of natural gas service on TGP (to flow NGLs), the construction of approximately 200 miles of new pipeline from Louisiana to Texas, and new storage capacity and laterals in Ohio. UMTP was originally slated to be done later this year. Since Kinder hasn’t even gotten to first base with this project, that ain’t gonna happen. What’s the holdup? And, will UMTP ever get built?…
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Will Trump’s Iran Deal Pullout Affect M-U Drillers? Maybe

Here’s a theme we have been writing about more and more–because it’s important. That theme is this: Oil drillers in Texas (and New Mexico), in the Permian Basin, are drilling so fast and so furious to get oil out of the ground, that they are creating an overabundance of natural gas that increasingly competes with Marcellus/Utica gas. How? Every time you drill for one hydrocarbon, like oil, other hydrocarbons often come of the ground with it. In this case, natural gas. The unintended but significant quantities of natgas coming out of the ground along with Permian oil is referred to in the biz as “associated gas.” As we wrote in March, natural gas prices in Texas did something that hasn’t happened in years–they became cheaper than the price of natural gas selling in the saturated Marcellus/Utica (see Natural Gas Prices in Texas Permian Drop Below Marcellus/Utica). Analysts have cautioned that in some cases the price of natural gas in Texas (in some locations) may actually go to zero! Giving it away!! So drillers can keep pumping oil. The natural gas produced by oil drillers is viewed as a “waste” product. Mind boggling. So how does that relate to Trump’s recent (very wise) action to pull out of the handshake Iran nuclear deal? Because we’re now out of that deal and sanctions are back on, Iran will have trouble selling its oil supplies. Meaning as the price of oil continues to rise due to lack of supplies coming from Iran, U.S. drillers will set up more rigs and drill more wells to produce more high-priced oil in the Permian. And as they do, more natural gas will come out of the ground, contributing to the existing “glut.” And drillers in the Permian will continue to aggressively look for new markets, like the Midwest and southeastern U.S., to try and sell (or give away) their extremely cheap gas. That Permian gas will increasingly compete with gas coming from the Marcellus/Utica. That’s how Trump pulling out of the Iran nuclear deal may impact M-U gas…
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Study Confirms PA Enviro Laws ARE More Strict Than Federal Laws

In April, the Pennsylvania Joint State Government Commission released a report (full copy below) tackling the question of whether or not PA’s environmental laws and regulations are more stringent than federal requirements. The report compared the main state and federal laws in place covering clean air, clean water, natural resources, waste management and more. The report says PA’s laws, “are generally no more stringent than their federal counterparts.” But in the same paragraph, the report says, “Where additional regulations have been made, it is generally justified as a compelling and articulable Pennsylvania interest and addresses definable public health, safety or environmental risks. The area of greatest deviation involves differences between the federal Clean Water Act and the Clean Streams Law. Other more stringent regulations are found in the areas of safe drinking water, the handling of hazardous materials, and mineral extraction. In some instances, Pennsylvania regulations build upon and supplement federal law; in others, Pennsylvania has acted in areas not regulated by the federal government” (pg 6). What does that say to you? It says to us: “Heck yeah, the enviro laws in PA are a lot more strict than federal laws, but there’s good reasons (according to the authors of the report) for it.” Are there good reasons for PA raising the bar higher than the federal government requires?…
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Free Webinar on Price of Natural Gas in Marcellus/Utica – May 17

NGI’s Pat Rau

The price of natural gas is the magic key that unlocks whether, and how much, drilling takes place in the Marcellus/Utica. Drillers (i.e. producers) live and die by the price of natural gas. Traders live and die by it too. And because it’s important to drillers and traders and others in the industry, the price of gas at various trading points along pipelines is of keen interest for landowners too. What controls the price? Supply and demand, of course. But there are other factors too. This Thursday, May 17 at 1 pm Eastern, NGI’s (Natural Gas Intelligence) Director of Strategy and Research, Patrick Rau, will give an online webinar talk EVERYONE needs to attend: “Appalachian Natural Gas Prices — How They are Determined and Where Are They Headed?” Pat is guest presenter for this month’s free Penn State Extension Shale Education monthly webinar series. MDN editor Jim Willis knows and has worked with Pat–and we can assure you, Pat is one smart cookie. He makes the complex world of natural gas pricing understandable. Here’s the announcement of what Pat will discuss on this can’t-miss-it webinar…
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Other Energy Stories of Interest: Mon, May 14, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Where PA’s GOP gov candidates stand on issues important to the gas industry; PTT ensuring possible Belmont County cracker will be on solid footing; Shell Polymers goes back to the future; more than half of Williamsport buses run on CNG; FERC asks court to dismiss Atlantic Sunrise lawsuits; Texas heat may increase natgas prices this summer; Boston electricity 65% higher than other regions; US will be “very strong” for 15-20 years thx to shale & petchem; gas exports will rise following Iran deal pullout; ethane rejection economics; and more!
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