Williams CEO Says M-U Production Will Grow 65% in 5 Yrs
Hart Energy’s Marcellus-Utica Midstream Conference and Exhibition was held this week in Pittsburgh. Although MDN could not be there in person, there are plenty of reports about what was said. Perhaps the most interesting we’ve read are comments by keynoter Alan Armstrong, CEO of Williams. Among the startling remarks Armstrong made: He expects natural gas production in the Marcellus/Utica to grow by 65% over the next five years–from 23 to 38 billion cubic feet per day (Bcf/d). Yikes! He also said there are currently 60 rigs operating in the M-U, which is “not nearly enough.” In order to meet growing demand, Armstrong says some 100 rigs are needed. Double yikes! Here’s some more pickings from what was said at the conference…
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Can you smell it? We sure can. It’s called hope. Not even a full week in the new Trump Administration, hope can be found everywhere. Liberal Democrats still aren’t sure what hit them. Let us help. It’s competence. It’s someone who gives a damn about the average American. It’s someone who believes the country, as it was founded, is the best country in the world. Donald J. Trump. He’s blown into Washington, DC like a hurricane and things are changing so fast most of us can’t keep up. Case in point: On Tuesday, Trump’s second full day on the job (last Friday and the weekend don’t count), Trump signed an Executive Order “Expediting Environmental Reviews and Approvals For High Priority Infrastructure Projects.” What are ‘high priority infrastructure projects’? A document has leaked, originally compiled by Trump’s transition team, of 50 ‘Emergency & National Security Projects’ that are infrastructure projects–projects the Trump Administration believes should be worked on immediately. Project #20 in the list is Dominion’s Atlantic Coast Pipeline (ACP), a $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. Number 20! How cool is that? No, this doesn’t mean Trump can simply order it approved like some sovereign or tinpot dictator. Our rules and laws must be followed. What it does mean is that the Federal Energy Regulatory Commission (FERC) will now receive enormous pressure to quit dragging its feet and to “fast track” the review for ACP. It means hope on now on the horizon…
Pennsylvania hired research firm IHSMarkit to study the Marcellus and Utica and how many ethane cracker plants the region can comfortably support. Denise Brinley, a special assistant to the Secretary of the state Department of Community and Economic Development, offered a preview of that report at this week’s Hart Energy Marcellus Utica Midstream conference in Pittsburgh. Although the report is due to be published “in the next few weeks,” Brinley spilled the beans on what it concludes: The PA Marcellus can support another two cracker plants, and the Utica can support two crackers. That’s another four cracker plants, theoretically, that our region can support, in addition to Shell’s ethane cracker. However, the study will also show we need more infrastructure (i.e. pipelines) in order to support such projects. Here’s a glimpse into some very exciting news…
The organization that represents county governments in Pennsylvania, the County Commissioners Association of Pennsylvania (CCAP), has a message for Gov. Wolf and state legislators: Even if you pass a severance tax, keep the impact fee in place. It has, over the past five years, become critically important for all counties across the state–not just counties where drilling takes place (those “impacted”). Not only do counties want to maintain the impact fee in general, they specifically want to keep it as it is currently structured–how much drillers are taxed and how the revenue is split. The message loud and clear coming from CCAP: don’t screw with the impact fee, even if you want to (boneheadedly) add a severance tax…
Labor unions, typically big Democrat supporters, are increasingly in love with Donald J. Trump. Why? Because Trump (unlike Barack Obama) is actually pushing ahead with major infrastructure project improvements. He has a list of 50 such high-priority projects (see Hope: Atlantic Coast Pipe on Trump List of High Priority Projects). As we previously reported, Trump signed executive orders earlier this week to restart the momentum on two important pipeline projects: Keystone XL and Dakota Access Pipeline (see 
The issue of “setbacks” has always been a contentious issue when it comes to oil and gas drilling. A setback is the distance from a well to nearby structures–like water wells, homes, schools, whatever. In Pennsylvania the state law requires a minimum of 500 feet between a well and nearby structures. But here’s the thing: Do you measure the distance (as drillers maintain) from the bore hole drilled into the ground? Or from the edge of the well pad? A pad is typically 3-5 acres, and if you measure from the edge of the pad, the “actual” distance from the well to a nearby structure may be 1,000 feet instead of 500 feet. Some argue that measuring from the edge of the pad makes more sense–to protect nearby residents from noise, lights, air emissions, etc. But drillers in some locations are hamstrung, especially if the the location where they drill is on a slope or other tough terrain. Measuring from the edge of the pad may mean not drilling at all. It is that very issue now being debated in Murrysville, in Westmoreland County, PA (near Pittsburgh). It is a wisdom of Solomon kind of issue…
In May 2015 Obama’s 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 
Rabidly anti-drilling organizations like the Philadelphia-based Clean Air Council (CAC) have been using the deep pockets of their contributors to stir up dissent against Sunoco’s Mariner East 2 NGL pipeline, particularly in towns in the Philly orbit (see 
Many of the large integrated oil and gas companies produce an annual report that looks out over the next 20 years. Their best researchers peer into their crystal balls and make predictions about what will happen–and why. BP is one such company. Earlier this week BP released their annual “Energy Outlook – 2017 edition” (full copy below). The big news in the outlook, for us, is finding out that BP predicts LNG (liquefied natural gas) sales will grow seven times faster over the next 20 years than gas sold via pipelines. Making LNG a VERY important part of our future…
Earlier this week BDO USA released its annual 2017 Energy Outlook Survey. The report indicates favorable signs that we are finally on our way to recovery in the oil and gas industry. Following the “particularly volatile 2016, during which oil prices plummeted to their lowest point in over a decade,” energy CFOs say prices will likely increase this year. Which, among other factors, gives them hope. Some of the findings: mergers and acquisitions will accelerate early this year, then level off; changes in regulations are the top concern; and changes in the way partnerships are taxed have the money guys on edge. Here’s the lowdown…