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Ohio NGL Storage Permit Expires, Builder Says Project Still Alive
Mountaineer NGL Storage is planning to build an NGL (primarily ethane) storage operation in Monroe County, OH, located just across the river (and border) from West Virginia. Last summer David Hooker, president of Mountaineer and president of the parent company Energy Storage Ventures (located in Denver, Colo.) announced the project had received all necessary permits to begin construction, and that construction “could” begin by the end of March this year (see Mountaineer NGL Storage Says Construction Begins in OH 1Q20). One teeny tiny problem. One of the necessary permits needed for the project expired last week. What’s going on?
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One of our favorite Energy in Depth writers, Nicole Jacobs, has just published a great post that outlines the huge impact new natural gas-fired (mostly Utica Shale gas) power plants have had and will have in Ohio. She includes a list of 10 projects either already built and running, under construction, or on the books to get built. When you add up the total capacity for all 10 plants, they will generate an amazing 9,215 megawatts of electricity, enough to power upward of 9 million homes! The companies building those 10 plants are investing $15.9 billion. This is huge for Ohio’s economy.
In a disappointing decision, Pennsylvania Commonwealth Court recently ruled a long-running lawsuit filed against Grant Township (Indiana County, PA) will continue on through the court system. For the past several years we’ve reported on the case of Grant Township, a town that passed an ordinance cooked up by the radical Community Environmental Legal Defense Fund (CELDF) to try and block a state-approved injection well. Part of the ordinance was tossed. However, Commonwealth Court has decided the town can continue to try and make a case that it should be able to override state law with its home-cooked regulations because by doing so they will somehow protect citizens’ health, which the town says is allowed under PA’s poorly-written Environmental Rights Amendment (ERA).
If you operate a company that sells a product (particularly a commodity product) you only have two ways of making a profit: Sell the product for more money or cut expenses (or both). For oil drillers, the price of the product sold is pretty much fixed. Some drillers have “hedged” their production, pre-selling future production at a specific price. But many don’t hedge. And hedging contracts typically don’t extend beyond a year. In the case of oil, the world market sets the price, and the price this week is about half of what it was last week. That means most shale oil drillers won’t make a profit–unless they can trim costs. One of the ways drillers are attempting to cut costs is by asking the companies that do the actual drilling and perform services for them (oilfield services companies, or OFS) to cut the rate they charge.
Back in the day, your humble editor, Jim Willis, worked first an intern and later as a paid staffer in the Ronald Reagan White House. Very cool experience for a hick kid from Upstate New York. After a stint at the White House, Jim stayed in D.C. and went to work on Capitol Hill, working for Congresswoman Helen Bentley (Republican from Maryland). One of Bentley’s favorite issues was to fight against the dumping of machine tools by foreign companies on the American market. Companies in other counties would sell machine tools here more cheaply than it cost them to make, using backdoor funding from their governments to make up the difference. Eventually, our machine tool companies couldn’t compete and would go out of business, leaving the market wide open to foreign competitors, at which time they would jack their prices up.
MARCELLUS/UTICA REGION: Clean Hands Andy, in stunning reversal, endorses natural gas?; DCNR, DEP are canceling or converting meetings to calls or online due to coronavirus concerns; OTHER U.S. REGIONS: Judge approves $143M natural gas explosions settlement; NATIONAL: U.S. crude oil exports increased to nearly 3 million barrels per day in 2019; More U.S. oil producers slash budgets amid price rout; US oil, gas rig count drops by three on week to 835; further decline expected; Betting on a bailout, investors rush into U.S. energy funds; UW professors receive provisional patent for method to reduce gas flaring; U.S. shale oil producers aren’t as hedged as you think, implying more downside for associated gas production; Angry US landowners are killing off renewable energy projects; INTERNATIONAL: How long will the oil price war actually last?; A global natural gas market is starting to emerge.