Mariner East 2 Pipeline Construction Shuts Down re COVID-19
As we told you last Friday, there was some confusion over whether or not construction of the Mariner East 2 (ME2) pipeline, which is nearing completion, is included under Pennsylvania Gov. Tom Wolf’s “stop work” order to prevent PA residents and workers from further spreading the COVID-19 coronavirus (see Is ME2 Pipe Construction Stopped Following Wolf COVID-19 Order?). Pipeline infrastructure and utilities are on the “life-sustaining” list, both in PA and as a directive from the federal government. However, “Utility Subsection Construction” was on the non-life-sustaining list–due to be temporarily shut down. ME2 construction continued after Wolf’s Thursday order. The confusion has now cleared, and yes, ME2 construction is in the process of ceasing.
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Advanced Power Services is building a 1,100-megawatt natural gas-fired electric generation facility in Wellsville, Columbiana County. Dominion Energy is building 5 miles of new pipeline, called the West Loop Project, from western PA into Ohio to feed the Wellsville plant (see 
Many states in the northeast and in Appalachia are now in lock-down mode with most businesses shuttered to prevent the spread of COVID-19 coronavirus. However, certain activities and businesses continue to operate. They are called “life-sustaining” or “critical” or “essential.” On the list of essential businesses in both Pennsylvania and Ohio are shale drillers. Although drillers continue to work, at least one Marcellus/Utica driller, CNX Resources (we suspect others) is making changes to keep its employees and contractors protected against the virus.
We spotted an interesting article appearing in the American Oil & Gas Reporter about results from using tiny ceramic beads as a proppant in oil and gas wells in several shale plays. Typically sand is used as a proppant to “prop open” tiny fractures to allow oil and gas to escape from shale rock. Sometimes ceramic beads are used. The article is based on a paper delivered at the Society of Petroleum Engineers’ Hydraulic Fracturing Technical Conference & Exhibition, held Feb. 4-6 in The Woodlands, Texas. Of particular interest to us are the findings for the Utica and Marcellus. The “micropropped” Utica wells showed a marked increase in oil production, while no such increase in production happened in micropropped Marcellus wells.
It certainly doesn’t feel as though we’ve hit the bottom yet when it comes to the effect of the coronavirus and Saudi-Russia oil price war on American shale companies. We still have a way (down) to go, unfortunately. But all is not lost. There is hope on the horizon. That’s the message we take from comments by an Enverus analyst. According to RBN Energy, we’ve seen this movie before. Maybe this movie has a different storyline, but the plot is the same. Can we predict how it will play out this time based on previous downturns? RBN offers up the five stages a shale play goes through.
What happens when an oil driller has a well or two or dozen where they get great oil production, but there are no pipelines connected to cart away the associated natural gas that comes out of the borehole along with the oil? There are only a couple of options–venting (releasing methane into the air) and flaring (burning the methane, turning it into carbon dioxide). There are a number of innovative companies that have a new solution: Go ahead and burn the methane, but burn it to produce electricity, and use the electricity (at the well site) to power computers. The computers are connected to a network of other computers and form a sort of supercomputer. Crusoe Energy Systems is one of those innovative companies, now using their distributed computing systems at oil wells to work on computations aimed at finding a vaccine for the COVID-19 coronavirus.
Should the U.S. government step in to help the American oil and gas industry, given the current double crisis of both lower demand (COVID-19) and oversupply (the Saudi-Russia oil price war)? We’ve written about rumblings that since the Saudis and Russians are dumping oil (selling it far below the price to make it) on the world market, in an attempt to bankrupt American shale drillers, that the government should consider either imposing tariffs on imported oil, or possibly embargo imported oil. Free traders are aghast at such a notion. Fair traders (like yours truly) are less aghast, although as a general rule we don’t favor government intervention in the marketplace. Below are two differing views on whether or not Uncle Sam should do something to help O&G. Interestingly, the American Petroleum Institute says “no way” to government intervention.
MARCELLUS/UTICA REGION: PA DEP expands use of online tools, conference calls to hold public meetings, hearings; Beaver County plants to suspend operations, lay off more than 500; NATIONAL: We must not let the shale industry go bankrupt; U.S. rig count plummets as producers react to oil’s collapse; Google serving as NRDC outlet to promote fracking falsehoods; U.S. natural gas, oil operators said prepared to deal with coronavirus pandemic; Staring at $20 oil, exploration and oilfield services firms prepare to ‘write off’ 2020; Lower for longer: COVID-19’s impact on crude oil and refined products; Biden’s shifting energy position has oil and gas sector on edge; INTERNATIONAL: Saudis may hold out up to two years in price war, Fitch analyst says; Saudi Arabia’s oil price war is backfiring; Coronavirus shows our reliance on the ‘precautionary principle’ has ruined our ability to manage risk.