Energy Services

Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Lawyer Tells NH Landowners ‘7 in 10 Chance’ Pipeline is Coming
February 9, 2016February 9, 2016

A lawyer meeting with a group of New Hampshire landowners in New Ipswich, NH last night gave them a dose of cold, hard reality. He told them, “There’s a seven out of 10 chance this pipeline is going to come” through their town, referring to Kinder Morgan’s Northeast Energy Direct pipeline. He told those present they can fight it, they can not negotiate with Kinder Morgan, and if they do so, it’s to their own peril. His solution? Band together as a group and negotiate good terms and conditions for the pipeline. Have a say in the matter. In other words, don’t be jerks–be reasonable and understand whether you want it or not, it’s coming. And if you negotiate now, you’ll get a better deal than if behave like petulant children…
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Baker Hughes | Energy Services | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Rig Counts for World, US & Marcellus/Utica Continue to Tumble
February 8, 2016February 8, 2016

The number of active drilling rigs worldwide, in North America and in the Marcellus/Utica continued to tumble in January. Baker Hughes released their average rig count data for January last Friday. The news, as we expected (but nevertheless hoped wouldn’t be the case) was not good. Worldwide the number of active oil and gas rigs fell by 78. In North America the rig count went down by 28 rigs, but that’s not the full story. Rig counts in the United States fell by a whopping 60 while the rig count in Canada went up by 32. So here at home the story was bloodier than the top level numbers indicate. What about in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. Region-wide rigs went down another by seven in the Marcellus/Utica. All three states that we track–PA, OH, WV–had rig count losses in January…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Susquehanna County | Williams

Actor James Cromwell Admits He’s Clueless, Fights Pipeline Anyway
February 8, 2016February 8, 2016

James Cromwell as Zefram Cochrane

Hollywood stars are some of the dumbest people on the planet. We’ve seen it again and again. They glom onto a “cause” either to boost their own sagging careers (get their name into the press again), or because they have an otherwise empty and meaningless life, or because–who the heck knows why? They certainly aren’t experts–although they pretend to be. Susan Sarandon and Yoko Ono joined the anti-fracking movement and rode a fossil-fuel-belching bus from New York City up to Susquehanna County, PA two years ago to “tour” the fracking fields of northeastern PA (see Looney Toons Anti-Fracking Celebrities Visit Montrose, PA). Another Hollywood nutjob is James Cromwell, who played Zefram Cochrane (mythical creator of the warp engine) in the 1996 movie Star Trek: First Contact (one of our favs). Cromwell, a New York City resident, owns a home in upstate, in Orange County. A natural gas-fired power plant is scheduled to be built near his summer home and he’s been protesting, to the point of getting himself arrested in December (see Actor James Cromwell Arrested Protesting NY Power Plant Site). Cromwell has been unsuccessful in stopping progress on the power plant. Apparently he’s in a down cycle right now with his career, and he was reading the newspapers and noticed a story we also noticed (and highlighted) last Friday–an anti-drilling family trying to stop a pipeline from clipping a few maple trees on their property (see Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It). Cromwell decided to take a Friday drive to visit the five acre plot and lend his name to their cause. Thing is, he admitted he’s essentially clueless about the whole thing–but since it’s a natgas pipeline, and he now hates natgas, what the heck. It only took him maybe two hours to drive from his upstate home to Susquehanna County to pay some fellow antis a visit…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Susquehanna County | Williams

Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It
February 5, 2016February 5, 2016

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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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Did Deerfield, MA Just Threaten Citizens Who Want Pipeline?
February 5, 2016February 5, 2016

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?…
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Antero Resources | Crestwood Midstream | Energy Companies | Energy Services

Is Crestwood Exploring Sale of Marcellus Assets to Antero?
February 4, 2016February 4, 2016

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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Energy Services | Patterson-UTI

Patterson-UTI Average Rig Count Falls to 78 in January
February 4, 2016February 4, 2016

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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Energy Services | Industrywide Issues | Pipelines | Rockies Express Pipeline

New Midwest Pipeline to Tap REX’s Marcellus/Utica Gas
February 4, 2016February 4, 2016

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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Energy Services | Industrywide Issues | Marathon Petroleum | MarkWest Energy | Processing Plants

MarkWest Completed 3 Processing Plants in ’15, 5 More Coming in ’16
February 4, 2016February 4, 2016

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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Energy Services | Industrywide Issues | Pipelines | Spectra Energy

Spectra Energy Provides Update on 3 NE Pipeline Projects
February 4, 2016February 4, 2016

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 Energy | Energy Services | Industrywide Issues | M&A

Dominion Resources Makes Play for Western NatGas Company Questar
February 2, 2016February 2, 2016

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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Energy Services | Summit Midstream

Instead of Selling, ECP Increases Ownership of Summit Midstream
February 2, 2016February 2, 2016

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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Energy Companies | Energy Services | Equinor/Statoil | GE Oil & Gas | Hydraulic Fracturing | Industrywide Issues

4 People Win GE/Statoil Contest to Reduce Water Used in Shale
February 2, 2016February 2, 2016

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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Columbia Pipeline Group | Energy Companies | Energy Services | Gastar Exploration

Gastar’s Mike McCown Retires; Peg Heeg Joins Columbia Pipeline Bd
February 2, 2016February 2, 2016

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…
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Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

A Crack of Light for the West Virginia Cracker?
February 1, 2016February 1, 2016

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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Energy Services | Industrywide Issues | New York | Pennsylvania | Pipelines | Regulation | Statewide NY | Susquehanna County | Williams

FERC OKs Tree-Cutting for Constitution Pipeline – in PA
February 1, 2016February 1, 2016

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…
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