PA House Introduces Balanced Budget with NO Severance Tax
The Republicans in the Pennsylvania House of Representatives have done the hard work that PA Senate Republicans failed (or refused) to do: they have just introduced a budget bill that doesn’t raise a single tax, including no horrible severance tax–and yet they will balance a wildly overspent budget. How will they accomplish this feat of Houdini magic? By tapping into the bloated extra money budgeted but not spent by numerous state agencies. For example: mass transit, ports, rails and infrastructure accounts have a cumulative extra $507 million sitting in bank, unused. Why not reallocate it? Hazardous waste and industrial cleanups, agriculture, environmental, conservation and recycling programs have an extra $440.5 million laying around. Why not reallocate it? Etc. House Republicans, unlike their traitorous Senate counterparts, have “found” $2.4 billion in money laying around, unused in other accounts, that they plan to reallocate to the state budget. Genius! This is why House Speaker Mike Turzai should be PA’s next governor, not the inept Tom Wolf…
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As part of a general announcement issued yesterday, CONSOL Energy provided an update on their best guesstimate (called “guidance” in the business) of how much natural gas production the company will achieve in 2017. The latest guidance reveals that production will be LOWER than previously thought. Earlier in the year CONSOL said they should see on the order of 420-440 billion cubic feet equivalent (Bcfe) of natural gas production this year. The number will be more like 405-415 Bcfe. Why the drop? Ceramic beads. When completing a well, a driller fracks the well with small charges, creating cracks (fractures) in the rock. Into those cracks the driller flows water with sand–or alternatively ceramic beads instead of sand. When the water washes out (or gets absorbed into the rock), the sand or ceramic beads stay in place, keeping the rock propped open so gas and oil can escape out into the well. That’s why sand and ceramic beads are called “proppant.” CONSOL, at least for some of its wells, uses ceramic beads. And according to yesterday’s announcement, completion designs using the beads is taking longer than they thought, slowing down progress on completing and bringing wells online. Hence the lower overall output for this year…
Patterson-UTI Energy, an oilfield services company with major operations in the northeast, has just cut a deal to buy out a second company in a deal worth roughly $220 million. The company getting bought is MS Energy Services, a leading provider of directional drilling services in most U.S. shale plays, including a big presence in both the Marcellus and Utica Shale. It was only April of this year that Patterson completed a buyout of Seventy Seven Energy (SSE) in an all-stock deal worth $1.76 billion (see 
As we do every month (and have for more than two years), MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for rig count health in general and rig count health in the Marcellus/Utica in particular. Patterson recently bought out and merged in Seventy Seven Energy (see 
British banking powerhouse Barclays is holding its annual Barclays CEO Energy-Power Conference this week in New York City (at the Sheraton in Times Square). Media is not allowed–we’ve tried to score a pass in the past and were turned down flat. The top brass for many different types of energy companies show up to brief investors on the latest goings on within their companies. Some of the companies showing up have a major presence in the Marcellus/Utica, including the largest natural gas producer in the U.S.–Chesapeake Energy. Chessy CEO Doug Lawler provided an update at the Barclays event yesterday. The interesting thing is, Lawler’s talk was recorded and transcribed for all the world to read, on the Seeking Alpha investor’s website. Looks like someone from the media was admitted to the event (sour grapes). Lawler spoke about the company’s accomplishments over the past few years. He also spoke about each of the major shale plays where they operate, including both the Marcellus and Utica. Among Lawler’s statements: He called the M-U, “a very, very strong producing area for the Company.” He went on to say this about the Marcellus: “When you think about the Marcellus, the stability of that asset, the cash flow it generates, it’s world class.” Thanks Doug! We (in the Marcellus) appreciate the compliment. He said the Utica is a “potential growth” area for the company. Below is the portion of Lawler’s remarks where he talks about our region…
In January 2016 Pennsylvania Gov. Tom Wolf and his now-fired Secretary of the Dept. of Environmental Protection (DEP), John Quigley, introduced an awful four-point plan to supposedly reduce methane emissions by 40% over the next five years (see 
Yet another anti-shale argument falls. You read and hear plenty about a community’s tax base (i.e. property values) going down when/if shale drilling and associated infrastructure, like processing plants, come to town. That’s fake news. Here’s real news: In Doddridge County, WV, prior to the shale revolution visiting the county, the total assessed value for all properties in the county added up to $457.5 million. Seven years later, in 2017, with multiple wells drilled and massive new MarkWest natural gas processing plants built, total assessed value for all properties in Doddridge is now $1.4 BILLION. That’s a three-fold increase in seven years! Most of the increase comes from the oil and gas industry. Quite frankly, there’s no end in sight. Values will continue to rise in Doddridge…
A group of 57 gentry landowners in Virginia and West Virginia, backed by an out-of-state Big Green group, have just sued the Federal Energy Regulatory Commission (FERC) in an attempt to gut the 80-year old Natural Gas Act that gives FERC the right to grant eminent domain for pipeline projects. Specifically, the colluding landowners oppose Dominion’s $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina, and EQT’s $3.5 billion Mountain Valley Pipeline project, a 303-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The frivolous lawsuit filed yesterday in the U.S. District Court for the District of Columbia (full copy below) claims the landowners’ property is a “taking” not properly compensated under the U.S. Constitution–even though landowners are paid and they can continue to use their land as they see fit, as long as they don’t put a building overtop the pipeline. Here’s the latest on Big Green’s effort to oppose every square inch of new natural gas pipelines anywhere, including in the Marcellus/Utica…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Dominion handing out another $1M to community groups, apply now; Jana Partners continues to badmouth EQT-Rice deal; FERC gives OK for Cove Point to test LNG facility; PA rig count goes up by 1; former CONSOL exec tapped for federal fuel office; gross gas output climbs; how American fracking ran OPEC’s oil recovery off the rails; Evolution Engineering attracts investor; Western Australia bans fracking; China becomes world’s 3rd largest shale producer; and more!