Energy Services

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    Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It

    We’ve often said that pipelines should not be allowed to use eminent domain. But what about when there’s no other choice? What if there are one or two holdout landowners whose land over which a pipeline must travel if it is to get built at all? In those cases, pipeline companies are left with no other choice but to invoke eminent domain. Williams, in planning and now beginning to build the Constitution Pipeline from Susquehanna County, PA into New York to Schoharie County, NY, has bent over backwards, forwards, and sideways to accommodate landowners along the proposed route. In fact Williams has changed more than half of the route in response to requests from landowners. Williams is, today (Feb. 5), beginning to selectively cut down trees along the route–in Pennsylvania for now (New York is next). There’s one small portion of the route Williams wanted to avoid but could not–running through a stand of maple trees. The owners of those trees have aligned themselves with some of the most radical of radical anti-drillers to oppose the pipeline and they are now running a public relations campaign to attempt to try and create a public uproar. We at MDN do NOT sympathize with them–for a number of reasons…
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    Did Deerfield, MA Just Threaten Citizens Who Want Pipeline?

    Deerfield, MA seems to be inhabited (infested?) with radical anti-fossil fuelers who get the creepy crawlies when they think about a pipeline being buried in the ground–even though miles of pipelines are already in the ground under their feet right now and have been for decades. The Deerfield town health board, in the past, has claimed “unlimited power” to stop Kinder Morgan’s proposed Northeast Energy Direct (NED) pipeline (see MA Town Health Board Claims “Unlimited Power” to Stop TGP). The town tried to get Kinder Morgan to sue them over the pipeline (see Deerfield, MA Hoping Kinder Morgan Sues Them over Pipeline “Ban”). When that didn’t work, Deerfield tried to sue the Federal Energy Regulatory Commission (see Mass. Town Sues FERC to Stop Pipeline Claiming Gas is for Export). When that didn’t work, the town filed a second lawsuit against the federal government (see Deerfield’s 2nd Bite at the Litigation Apple Against NED Pipeline). Now the town is claiming its police force will stop surveyors from entering a property–even if those surveyors have permission from the state–if the landowner doesn’t want them there. Deerfield is on very thin ice and about to fall through. But what if a resident wants to allow a surveyor and wants the pipeline? “Deerfield residents who choose to grant Kinder Morgan access to their private property do so at their own risk, according to the town.” Is that a not-so-veiled threat, from the town against it’s own citizens?…
    Read More “Did Deerfield, MA Just Threaten Citizens Who Want Pipeline?”

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    Is Crestwood Exploring Sale of Marcellus Assets to Antero?

    The following is highly speculative and the equivalent of rumor, but sometimes it’s fun to engage in a bit of rumor-mongering. We spotted a post on the investor website Seeking Alpha that posits the following theory: Crestwood Equity Partners (i.e. Crestwood Midstream), owner of major pipelines and other facilities in the northeast and in other locales, “may” be looking to sell their Marcellus operations to Antero Resources and their Bakken Shale operations to Tesoro Logistic Partners. It must be said up front the person authoring the article owns units (i.e. shares) of Crestwood (CEQP) and is in no way objective. Articles on Seeking Alpha attempt to persuade investors to buy or sell securities. However, the rationale laid out in the article intrigues us and we think it’s worth pondering whether or not Crestwood is about to shed large parts of the company, and what that might mean for our region…
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    Patterson-UTI Average Rig Count Falls to 78 in January

    As we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Previously Patterson’s December rig count number went down by 10% from November–from 91 in November to 82 in December. The count has dropped again for January–down to 78 active rigs for the month. For many months Patterson’s Canadian rig count has stood at four. Below is the announcement for January’s numbers, along with a chart we’ve created showing Patterson’s average monthly rig count number from March 2015 through January 2016…
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    New Midwest Pipeline to Tap REX’s Marcellus/Utica Gas

    An exciting new market for Marcellus and Utica Shale gas may open up in the next 2-3 years in the Midwest. On a quarterly analyst conference call yesterday, Laclede Group (St. Louis-based natural gas utility) said they plan to build a 60-mile pipeline from St. Louis through southwest Illinois and connect to the Rockies Express (REX) and Panhandle Eastern Pipeline (see the map below). That will bring low-cost Marcellus and Utica Shale gas to the utility, not only for resale to gas customers, but also potentially for new natgas-powered electric plants planned to replace retiring coal-fired plants. The project will cost $170-$200 million and take 2-3 years to complete, according to Laclede CEO Suzanne Sitherwood…
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    MarkWest Completed 3 Processing Plants in ’15, 5 More Coming in ’16

    MarkWest Energy, now a subsidiary of Marathon Petroleum, reported its fourth quarter and full year 2015 results yesterday. Net income–revenue less expenses–was down for MarkWest in 2015, but at least the company is still in the black. MarkWest had $178 million in net income for 2014, and $157 million for 2015. Not too shabby considering the disastrous results many other companies have had. Net income for 4Q15 for MarkWest was a paltry $18 million, vs. $37 million in 4Q14. Among the operational highlights for MarkWest for 2015: The company commenced operation of one processing plant and two fractionation facilities in the Marcellus shale, increasing their total processing capacity by 200 million cubic feet per day and fractionation capacity by 73,000 barrels per day. Looking ahead to 2016, MarkWest says they have 10 major processing and fractionation projects currently under construction on a just-in-time basis, with five of the 10 expected to be completed in 2016. They expect to spend $1-$1.5 billion on capital expenditures in 2016. Here’s the update…
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    Spectra Energy Provides Update on 3 NE Pipeline Projects

    Midstream giant Spectra Energy released their fourth quarter and full year 2015 update yesterday. It was a mixed bag. Overall Spectra showed strong performance for the year, but their natural gas liquids business combined with a weak Canadian dollar worked to drag down the company’s financials. Of primary interest for us is a section in the report updating us on several important pipeline projects for the Marcellus/Utica: NEXUS, AIM and Access Northeast…
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    Dominion Resources Makes Play for Western NatGas Company Questar

    In what is being called a “cheap” deal, midstream and local utility Dominion, with a major presence in the Marcellus/Utica region, has floated a takover offer to Questar Corporation, offering to buy the company for $4.4 billion. Questar is a Rockies-based integrated natural gas company operating through three principal subsidiaries: Questar Gas provides retail natural gas distribution in Utah, Wyoming and Idaho; Wexpro develops and produces natural gas on behalf of Questar Gas; and Questar Pipeline operates interstate natural gas pipelines and storage facilities in the Western U.S. The deal is an attempt by Dominion to diversify out of the northeast/Mid-Atlantic region. It’s also a deal to bump up Dominion’s natural gas footprint, lessening the company’s reliance on electric power generation which is not growing. The reason this is MDN news is because…
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    Instead of Selling, ECP Increases Ownership of Summit Midstream

    In November MDN told you that the majority owner of Summit Midstream, private equity firm Energy Capital Partners (ECP) was looking to sell some or all of their units (i.e. shares) in the company (see Summit Midstream 3Q15: Current Owner ECP Looking to Sell). At the time ECP owned 43.8% of the company. Looks like that plan didn’t work out so well–at least so far. In a recent Securities and Exchange Commission filing, Summit reveals that ECP now owns 47.1% of the company…
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    4 People Win GE/Statoil Contest to Reduce Water Used in Shale

    GE and Norwegian oil giant Statoil today announced four winners of their Open Innovation Challenge, a contest designed to use crowd sourcing to find solutions that reduce fresh water use in shale oil and gas production. There of the winners are in the United States, and one is from Australia. Each winner gets a cash prize of $25,000 with the promise of future funding for their technology. Here’s the cool new technologies that won this year’s contest…
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    Gastar’s Mike McCown Retires; Peg Heeg Joins Columbia Pipeline Bd

    From time to time we mention people coming and going at various drilling and midstream companies. The reason we mention it is because when there are changes at the top of an organization, it has the potential to affect the future actions of that organization. We have two such moves to report. The first is that Mike McCown, senior vice president and chief operating officer for driller Gastar is retiring. We’ve quoted Mike a number of times over the years–he’s an important cog in the Gastar wheel. The second bit of news is that Peggy Heeg has joined the board of directors at midstream giant Columbia Pipeline. Peggy is an attorney and former general counsel at El Paso Corporation…
    Read More “Gastar’s Mike McCown Retires; Peg Heeg Joins Columbia Pipeline Bd”

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    A Crack of Light for the West Virginia Cracker?

    Speaking at an industry conference in Pittsburgh last week, West Virginia’s Dept. of Commerce Secretary, Keith Burdette, indicated there’s still a faint blip on the monitor that Odebrecht may yet decide to build an ethane cracker plant in Wood County, WV. According to Burdette, Odebrecht’s subsidiary Braskem will purchase more land for the cracker by the end of the first quarter. If the Odebrecht cracker project was as dead as a door nail (which it has appeared to be in recent months), it doesn’t seem like they would continue to spend money on it. Right? Burdette also said all three large cracker projects, Odebrecht, Shell’s project in PA, and PTT Global’s project in OH have indicated they are likely to push off a final investment decision (FID) until 2017. Bummer…
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    FERC OKs Tree-Cutting for Constitution Pipeline – in PA

    In a crushing blow to anti-drilling radicals who have tried their best to stop the Constitution Pipeline, the Federal Energy Regulatory Commission (FERC) has granted Williams, builder of the Constitution, permission to begin cutting down trees along the pipeline’s path in Pennsylvania. Williams still cannot fell trees in New York State, where the bulk of the pipeline will be built. However, FERC would not grant permission for PA unless they intend to grant permission on the other side of the border too–and everyone knows it. Currently New York’s anti-drilling governor, Andrew Cuomo, is holding up the 125-mile project that will deliver natural gas from Susquehanna County, PA to Schoharie County, NY by connecting with two interstate pipelines. Cuomo is about to create a constitution crisis in which the federal government will be forced to overrule the state and allow the pipeline to be built. Cuomo is withholding stream crossing permits–the only thing left before bulldozers begin to clear a path. Cuomo is once again caving to pressure from his lunatic left base of supporters. And he’s about to turn New York into a third-rate state, controlled by the federal government, through his unwillingness to grant the permits…
    Read More “FERC OKs Tree-Cutting for Constitution Pipeline – in PA”

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    Blue Racer Midstream: Keeping a Sharp Eye on the Bottom Line

    Blue Racer Midstream is a joint venture between Caiman Energy II and Dominion. It is a privately-held company, so we don’t have SEC reports and public statements about the company from which to gage how it’s doing. However, every now again Blue Racer’s upper management shows up at an industry conference. Last week Blue Racer’s relatively new CEO, Stephen Arata, spoke at the Hart Energy Marcellus-Utica Midstream event in Pittsburgh. It’s no surprise that Arata said the company has had to curb spending and growth, giving the downturn in oil and natgas prices…
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    Baker Hughes 4Q & Full 2015 Update: Blood Everywhere

    Yesterday oilfield services giant Baker Hughes (with a big presence in the Marcellus/Utica) released fourth quarter and full year 2015 results. There’s blood everywhere. Revenue for the year was $15.7 billion, down $8.8 billion compared to $24.6 billion for 2014, a 36% drop. Of course, average rig counts dropped 34% in 2015, so it’s no wonder revenues tanked–the service Baker Hughes provides was more than one-third less in demand. Looking at 4Q15 only, revenue for the quarter was $3.4 billion, down $3.2 billion (or 49%) compared to the fourth quarter of 2014. Ouch, there goes another arterial wound with blood pumping out on the floor. The good news, if there is any, is that the company kept expenses in check. According to Baker Hughes CEO Martin Craighead, “Despite this challenging environment, we generated $1.2 billion of free cash flow during the year, after more than $446 million of restructuring payments. This achievement was the result of our ongoing commitment to maintain capital discipline, as well as solid progress on initiatives to improve working capital.” As for the Halliburton shotgun wedding, Craighead said, “With regard to the merger, I continue to be extremely pleased with the efforts of our team supporting the regulatory review process and developing plans for a successful integration. We are fully dedicated to closing the merger as early as possible.” What’s ahead for 2016? “Looking ahead, we are forecasting rig activity worldwide to continue to decline throughout 2016. At current commodity prices, the global rig count could decline as much as 30% in 2016, as our customers’ challenges of maximizing production, lowering their overall costs, and protecting cash flows are now more acute.” Eeks, another bleeder. Below are select portions of yesterday’s bloody update…
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    Criminals Arrested Blocking Crestwood Seneca Lake Facility

    We Are Seneca Lake
    We Are Seneca Lake criminals being carted off in a paddy wagon

    When someone organizes and repeatedly shuts down a legal, functioning business with so-called “civil disobedience,” it’s not civil and it’s not an act of disobedience–it’s a crime. If you show up with a bunch of nutters to block the entrance to a facility once and the cameras are there to record it–you’ve made your point. Anti fossil-fuel radicals opposed to creating an underground propane storage facility in a depleted salt mine along the shore of Seneca Lake (in upstate New York) have recently stepped up their so-called civil disobedience at the facility–staging weekly blockades at the site three weeks in a row. One of those instances was on Martin Luther King, Jr. Day, when Sandra Steingraber, so-called scholar in residence at Ithaca College (where she’s paid to agitate and never teaches a class) invoked the name of Dr. King attempting to tie the great civil rights struggle with anti-fossil fuel nuttery. It’s offensive. Below is a rundown, with the names of the latest criminals who have colluded to try and shut down a legal business, Crestwood Midstream, from operating the facility they own at Seneca Lake…
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