Canadian Enbridge Buying US Spectra Energy for $28B
Another big hairy (midstream) deal with implications for the Marcellus/Utica. Yesterday Canadian pipeline operator Enbridge Inc. announced an all-stock deal to buy out pipeline operator Spectra Energy (based in Houston). Spectra has a number of critical pipeline infrastructure projects under way or planned in the Marcellus/Utica region, including the planned Access Northeast pipeline to New England, the mighty NEXUS pipeline planned to span Ohio, the currently under construction Algonquin Incremental Marketing (AIM) pipeline project, and three projects (Access South, Adair Southwest and Lebanon Express) under way to expand one of the largest natural gas pipelines in the U.S. (and in the northeast)–the Texas Eastern Transmission (Tetco) pipeline. Does a Canadian pipeline company heavily involved in shipping crude via pipelines buying a U.S. company that ships natural gas via pipelines sound familiar? It should. TransCanada bought out Columbia Pipeline Partners two months ago–another case of a Canadian company buying into the bountiful U.S. Marcellus/Utica shale midstream (see TransCanada and Columbia Pipeline Tie the Knot Today). Here’s the low down on Enbridge’s play to buy Spectra Energy, which would form another mega midstream company to rival Kinder Morgan and Williams…
Read More “Canadian Enbridge Buying US Spectra Energy for $28B”
Residents in Wilmot Township (Bradford County), PA are mad as hell over shorted royalty checks–and they aren’t taking it anymore. Yesterday Wilmot Township’s three supervisors passed a resolution demanding, “production be discontinued from wells where landowners are having their royalty checks diminished to nothing or nearly nothing.” That is, they want to block natural gas production from existing shale wells drilled in a town smack in the middle of one of the most-drilled places in Pennsylvania. We’ve long chronicled the fight between landowners and some (certainly not all) drillers who are screwing them out of royalty payments by claiming inflated post-production costs. The issue first came to prominence with claims by landowners signed with Chesapeake Energy, who claimed Chessy had cut a sweetheart deal with its former midstream company (Access Midstream) whereby Access bumped up its charges for piping gas which Chesapeake claimed as an expense and deducted from royalty checks, and then Access turned around and invested big money into the old mothership company (see 
A labor union contract between Dominion Transmission Inc. (DTI) and Local 69 of the Utility Workers Union of America, United Gas Workers expired on April 1st. Since that time the two have come to the bargaining table many times, without success. So Dominion is now trying to bust up the union (our words) by locking out 915 union workers from their jobs across the northeast and mid-Atlantic: in West Virginia, Pennsylvania, Ohio, New York, Maryland and Virginia. Dominion’s top brass says they’ve had to take this step because of the upcoming heating season, about ready to begin. Dominion is concerned that customers not be left out in the cold, literally–so they’re replacing union workers with management workers and temps “trained to handle essential tasks.” Dominion is a large company that not only is an LDC (a local utility that distributes gas to customers), but also a big midstream pipeline company. Here’s what we wonder but haven’t seen addressed: What about Dominion’s Cove Point LNG export plant? Are any of these sidelined union workers off the job at Cove Point, and will that delay the project? Same for the upcoming Atlantic Coast Pipeline project. When it gets built, will it get built without union workers? What about Dominion compressor station upgrades coming to six plants, recently approved by FERC (see 
Antero Resources, one of the biggest drillers in the Marcellus, released their second quarter 2016 update in August (see 
As we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Month by month Paterson’s rig count has declined over the past year plus–until June (see 
We scored a copy of a refreshingly honest (blunt) assessment of the Marcellus industry in Pennsylvania. The letter was written by the Marcellus Shale Coalition’s vice president of government affairs, James Welty. It’s dated August 29 and was written and sent to all Pennsylvania legislators in both the House and Senate. The legislators have been enjoying themselves on summer holiday break and are now returning to work, with just a couple of weeks left in the legislative session. The PA House is in session for 2 1/2 more weeks and the Senate for 1 1/2 weeks (final day is Nov. 15 for each). There’s not much time left to handle the people’s business in 2016. Welty’s letter to the legislators is a frank assessment of the current down market faced by PA’s shale drillers. Welty tells lawmakers that recently adopted Article 78a rules will mean drillers spend an additional $2 million per well to drill–a budget buster for many drillers. He also says PA has the highest effective tax rate on drilling in the country at 12.3%. Although PA doesn’t call it a severance tax, it essentially is a severance tax and costs more than any other oil and gas state, contrary to the lies by Democrats who lust for more money to give away. Give this frank assessment of our beloved industry a read–it’s worth your time to see how the industry characterizes the current landscape in PA…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: MSC donates $1.1M to Junior Achievement; Gov Wolf donates $2M grant for Pitt-Johnstown engineering facilities; NH needs new pipelines; Rep Smith statement on Obama’s buried/sneaky climate agreement; Carnival adds 3 new LNG-powered cruise ships; Brazil kills shale with regulations; and more!