Constitution Pipeline Appeals NY Fight Directly to U.S. Supreme Court
“The reports of my death have been greatly exaggerated” – Mark Twain (and Constitution Pipeline). Last week it was our duty to report the sad news that the Federal Energy Regulatory Commission found they could not override the New York Dept. of Environmental Conservation’s (DEC) decision (under pressure from the corrupt Andrew Cuomo) to block the Constitution Pipeline (see Death of the Constitution Pipeline? FERC Refuses to Overrule NY DEC). FERC found, after an exhaustive investigation, that the DEC had suckered Constitution into refiling a second time, restarting the one-year clock under which NY could render a decision about the pipeline. With four days left on the reset clock, DEC issued a denial of Constitution’s request for a federal water crossing permit (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). Constitution went to the U.S. Court of Appeals for the Second Circuit to overturn DEC’s decision, but ultimately failed (see Court Rejects Constitution Pipe’s Case Against NY DEC; Now What?). With FERC refusing to act, we asked the question last week, Is this the death of the $683 million, 124-mile pipeline from Susquehanna County, PA to Schoharie County, NY to move Marcellus gas into NY and New England? We reached out to Williams and MDN was first to report that Williams said they would continue to fight. And so they have! In a statement issued Tuesday, Williams (i.e. Constitution Pipeline) said they have appealed the Second Circuit’s decision to the U.S. Supreme Court (full copy of the appeal below). Williams maintains if the Second Circuit’s decision upholding the corrupt DEC is allowed to stand, it sets a dangerous precedent for rogue states like NY who refuse to obey the strict interpretation of the law. That is, it allows states like NY to simply reinterpret the law any old which way they want. And that can’t stand…
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Yesterday Antero Resources, one of the biggest and best drillers in the Marcellus/Utica (concentrating on just those two plays), released highlights of their 2017 performance and “guidance” for 2018–their plan for what they will do in 2018. In 2017 the company reports average net daily gas equivalent production was 2.3 billion cubic feet per day, an 18% increase over the same quarter in 2016. In 2018, Antero plans to spend $1.45 billion. What will that buy them? In the PA and WV Marcellus, Antero will run five rigs and drill 120-125 wells, with an average lateral length of 9,300 feet. The company says they will average 9 wells per well pad this year. In the Ohio Utica, Antero will operate one rig and drill 20-25 wells with an average lateral of 11,600 feet. In both the Marcellus and Utica, Antero says the cost to drill those wells will go down another 9% this year over what it cost them last year. Antero continues to be one of (if not THE) best “hedgers” in the business–realizing more money for their gas and NGLs than any other driller in the region…
Anyone with even a passing interest in the natural gas market–either the Marcellus/Utica or elsewhere–knows there is one dominant factor that drives exploration and production: PRICE. The price of natural gas is the tail that wags the entire natgas dog. Low price? Less (or no) drilling, shut-in wells, less leasing–everything is less. High price? Pop the cork on the champagne bottle! When the price goes up and stays up, drillers begin seismic surveys, then leasing, then permits, then drilling. After drilling comes pipelines–both to the well and to market. And businesses tend to gather around points where there is access to natgas (and its byproducts). It’s a virtuous cycle, from upstream (drilling) to midstream (pipelines) to downstream (end users of the gas)–that all starts with price. Who should have an interest in price? Everybody! However, there are some whose jobs and livelihoods depend on price–gas traders, industrial buyers, drillers who need to sell their gas, etc. Those people need a daily update on the price. Who do they turn to? There are several price reporting authorities that monitor trade information for natural gas trading. There is no single price for natural gas–there are hundreds of prices. Gas is traded at trading hubs or points along major pipelines across the country. Each time a trade is done (price requested, price offered or “ask” and “bid”), that valuable information gets recorded and sent to a price recording authority. Each day around 1:30 PM Central Time, NGI gathers up trade information for THAT DAY, trades that have occurred so far at trading points all over the US and Canada, and posts/emails the information to subscribers. It is like getting tomorrow’s prices–the prices everyone else will base their trades on–today! How can you get tomorrow’s prices today? Glad you asked. 
Landowners who live in the Delaware River Basin feel betrayed and disenfranchised following the actions of the aggressive, malignant Delaware River Basin Commission (DRBC)–a quasi-governmental agency set up to oversee and protect water usage within the Delaware River Basin. The DRBC colors WAY outside the lines of its charter by limiting not just water use, but land use within the basin. The Delaware River and its tributaries supply fresh drinking water for some 14 million people, including New York City. The DRBC, under the pretense of protecting water, issued draft regulations on Nov. 30 that will permanently (!) ban hydraulic fracturing in the basin (see 
Once upon a time, it was pretty easy for commodities traders (and others) to predict oil and gas production. You just watch the Baker Hughes rig count. When the number of rigs actively drilling goes up, production will follow X months later. And when active rigs go down, production goes down too. But that is no longer the case! Why? Shale wells are producing more over a longer period of time. And the technology used when drilling today is radically different than tech from just a few years ago. Drillers now drill wells faster–much faster–meaning they can use fewer rigs. And frackers are using “hellish” amounts of sand to frack wells, producing ever-more quantities of oil and gas. What it all means is this: If you’re a trader, you can no longer depend on rig counts as your main metric to calculate production. You need new metrics, such as…
Sometimes it’s hard not to grow weary fighting against Big Green and their seemingly endless sources of funding (and a sympathetic mainstream media) when it comes to the issue of fracking. The very word itself, fracking, is a moniker slapped on the industry as a way of implying there’s something dirty and vulgar about what we do. We can’t tell you how many times readers have lectured us to not use that word–fracking. But the word is now entrenched in the public psyche, so we use it. How do we effectively counter the wrong/false statements and arguments used by Big Green and their supporters? Simply using facts and science, to counter the emotional puking that comes from Big Green, is not enough. The United Kingdom is now entering a phase long past here in the U.S. The U.K. is just now beginning to drill and frack its very first wells. There are more than 300 anti-fracking groups in the U.K. and an almost endless barrage of negative press about fracking in the country. The head of communications recently granted an interview to PR Week about how they are countering the opposition there. It’s an excellent interview and gives us some ideas about how we might counter the opposition on this side of the pond…
The “best of the rest”–stories that caught MDN’s eye over the break that you may be interested in reading. In today’s lineup: Ohio firefighters take part in Utica training program; New Englanders have only themselves to blame for spike in energy prices; North Dakota cuts back oil output due to gas flaring; shale oil output poised to pass 6.5 million barrels in February; oil prices in trouble?; API president Jack Gerard stepping down; Quantum forms new PetroLogistics II; natgas processing economics; the challenge at EPA is deeper than policy; and more!