M-U Gas Now Travels to Dawn Hub in Canada via Rover Pipeline

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Last Thursday, May 24, Energy Transfer Partners requested (frankly, begged) the Federal Energy Regulatory Commission (FERC) to approve final startup for the rest of Rover Pipeline not yet flowing–by June 1st. ET has contracts to honor and they promised shippers the full pipeline would be up and running by June 1st. ET requested permission to start up the “Majorsville Lateral, Supply Connector Line B, and Mainline B between CS1 and CS2 and between CS3 and the terminus,” along with a request to begin flowing on the “Burgettstown Lateral.” Note that some of the project has two pipelines, side by side (the Mainline and Supply Connector). ET asked that the second pipes in both cases be allowed to start up, along with the Majorsville and Burgettstown Laterals (see the map). ET got some of what it wanted–everything but permission to start up the laterals–yesterday from FERC. With the startup of Mainline B and Supply Connector B, ET says the Rover Pipeline project is now capable of flowing the full 3.25 billion cubic feet per day of natgas all the way to the Dawn Hub in Ontario, Canada. The only “problem” remaining is to find enough gas to flow the full 3.25 Bcf/d. They won’t be flowing the full 3.25 Bcf/d until all of the laterals are brought online…
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PA Natural Gas Production Hits New All-Time High in 1Q18

Yesterday, the PA Independent Fiscal Office (IFO) released their latest quarterly Natural Gas Production Report for Jan-Mar 2018 (full copy below). It shows natgas production rose 9.9% compared to the same period last year. It also shows the number of producing wells is up 9.1% from last year. Total natural gas production volume was 1,441.2 billion cubic feet (Bcf), and the number of producing wells in 1Q18 was 8,402 (of which 7,913 were shale wells). The biggest news is that once again 1Q18 saw the highest quarterly production of natural gas in the state–ever. The previous quarterly report had been the highest ever until this report (see PA Natural Gas Production Hits Another All-Time High in 4Q17). Two-thirds of the state’s natural gas production comes from four counties: Susquehanna, Washington, Bradford and Greene. The #1 county for natgas production in 1Q18 was, as it was in each quarter of 2017, Susquehanna County, in the northeastern corner of the state. The #1 producing driller in Susquehanna County is Cabot Oil & Gas. Here’s the full 1Q18 natural gas production report from the IFO…
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Dutchess County, NY NatGas Power Plant Begins Construction

Artist’s rendering of Cricket Valley Energy Center project – click for larger version

We who live in New York State live under a dictatorship. Our governor, Andrew Cuomo, has been co-opted by radical environmentalists. He recently stated he would autocratically block any/all new natural gas pipelines AND any/all new gas-fired electric plants (see NY Gov. Cuomo Says He’ll Block All New Gas-Fired Elec Plants). He made the preposterous claim he hasn’t issued any permits for new gas-fired plants during his time in office. Not true. The Competitive Power Ventures (CPV) Valley Energy Center natural gas-fired electric generating plant in Orange County, NY was permitted under Cuomo and will begin service this month (see Orange County, NY Electric Plant to Start Up in June). Valley Energy Center, which will get its gas from the Millennium Pipeline (Marcellus gas), will generate 680 megawatts of electricity–enough to power 650,000 homes. Little did we know, but there is a *second* gas-fired power plant project also permitted under Cuomo that’s just begun construction–in neighboring Dutchess County. Cricket Valley Energy Center (CVEC) is a fully-permitted, approximately 1,100 megawatt natural gas-fired power plant now under construction on an industrially-zoned site off Route 22 in Dover. It will generate enough electricity to power 1 million homes! Similar to CPV’s Valley Energy Center, environmental extremists have launched a barrage of attacks against Cricket Valley. However, Cricket Valley is already under construction and due to go online in 2020. There’s no stopping it now…
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Big Green Sues to Stop DTE Energy’s MI Gas-Fired Electric Plant

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Last June DTE Energy filed paperwork in Michigan to build a new “state-of-the-art” natural gas-fired power plant in St. Clair County (see DTE Energy Files to Build New Natgas-Fired Elec Plant in Michigan). The gas-fired plant will produce 1,100 megawatts of electricity, enough to power 850,000 homes. If all goes according to plan, the new $1 billion plant will go online in 2022, helping to offset three coal-fired plants set to be retired by 2023. The process is long to approve and then build such a project, with many hoops to jump through. The first hurdle, perhaps THE major hurdle, is an approval by Michigan utility regulators. That happened in April. Right on cue the far-left Sierra Club, Natural Resources Defense Council (NRDC), and Earthjustice, all of which seem to have unending sources of cash to file lawsuits, have together filed an appeal with the Michigan Court of Appeals to reverse the Michigan Public Service Commission (MPSC) decision to approve the project…
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Nightmare: Appeals Court Upholds Right to Cancel Pipeline Deals

Drillers may have a new “get out of (pipeline) jail free” card. If you don’t like your 10-20 year pipeline contract, just file for bankruptcy and cancel the contract during the “reorganization” process, emerging from bankruptcy without the responsibility to fulfill the long-term contract you signed. That’s the option just upheld by the Second Circuit Court of Appeals (unsurprisingly located in New York). MDN has covered this issue for more than two years. In March 2016, MDN brought you the news that a NY bankrutpcy court judge had allowed Sabine Oil & Gas, going through bankruptcy, to cancel a pipeline gathering contract with Cheniere’s Nordheim Eagle Ford Gathering in Texas (see Midstream Nightmare Comes True: Judge Lets Driller Cancel Contracts). Nordheim spent $84 million building a pipeline system to Sabine’s wells. In return for laying out that kind of money, Sabine, as is almost always the case, signed a multi-year contract with Nordheim (10 years in this case), ensuring Nordheim would make a profit on its up-front investment. The judge allowed Sabine to unilaterally cancel the deal several years into the contract as part of the bankruptcy process. We asked at the time: If a driller signs a contract and that signature is no longer any good, will anyone build pipeline systems anymore? We later brought you insight from a pair of lawyers who said: “If other judges follow the analysis and conclusions reached in the Sabine Oil case, the expectations of midstream service providers in the oil and gas extraction process might be turned on their heads” (see Lawyers Warn Pipeline Case May Turn Midstreamers “On Their Heads”). Indeed. Now that the Second Circuit has upheld this disastrous lower court decision, with the only appeal option left being the U.S. Supreme Court (which likely won’t take the case), we’re holding our breath to see what happens next. It seems this is the nightmare we can’t wake up from. Will midstream companies quit building gathering systems?…
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Record Demand + Record Production = Flat NatGas Price This Summer

The single biggest factor in whether or not gas drillers are willing to roll the dice and drill another well is….the price of natural gas. When prices are low, say below $3 per thousand cubic feet (Mcf), drillers are less willing to ramp up the rigs and drill new holes in the ground. When the price goes significantly above $3/Mcf, they’re much more likely to drill. Everyone keeps a close eye on the price. We’ve just come through a hard winter that drew down stocks of natural gas in reserve. Less supply with the same or increasing demand equals higher prices. However, if drillers produce more, a lot more, then supply will meet, or even exceed increased demand and the price will stay about the same, or even decrease. So what about the price for natural gas this summer? The Natural Gas Supply Association (NGSA) has just hauled out its crystal ball to predict what may happen with the price of natgas this summer. As our headline indicates, NGSA believes the price will remain about where it is now. From the report (full copy below): “Our expectation for flat price pressure is based on a forecast for tremendous growth in demand that is matched by even more impressive growth in production”…
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Energy Stories of Interest: Fri, Jun 1, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Final vote next Tuesday on PA House bill to reverse over-regulation of o&g; volunteer to be a “shale gas stream monitor”; Chevron shareholders vote down methane proposal; Pittsburgh on the path to prosperity with shale; PA Dems & GOP expect quick budget agreement; TX and CA facing power gen shortages this summer; oil industry upset with Trump over tariffs; Gina McCarthy’s radical environmentalism metastasizes at Harvard; Exxon says the world needs more oil; and more!
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