Energy Services

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    Marcellus/Utica Gas-to-Liquids Not Dead! Dominion Sniffing Around

    Once upon a time there was an initial flurry of interest in converting shale gas, specifically Marcellus and Utica Shale gas, into other products like diesel fuel using technologies first pioneered in the 1920s. The process is called gas-to-liquids, or GTL, and there were three our four projects mentioned in the northeast over the past couple of years. The project closest to reality seemed to be the Ashtabula (OH) Energy GTL plant that got a final necessary permit from the Ohio EPA in July (see Ohio EPA Issues Final Permit for Ashtabula GTL Plant). However, parent company Velocys became embroiled in controversy, suspending its CEO for possible “serious misconduct” (see Velocys GTL Company Suspends CEO for Possible Serious Misconduct). With the collapse of the price of oil, all GTL projects seemed to fade away primarily because the substance that the natural gas would be converted to–things like diesel fuel and gasoline–are cheap direct from the refiner. That is, it’s just not economic to use natgas as the feedstock for something made cheaper via different method (refining oil). However, we have exciting news of a potential new GTL project, backed by Dominion, in the Marcellus/Utica area. Dominion’s project would convert natural gas into isobutanol and farnesene…
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    What Happened Behind the Curtains of the Marathon/MarkWest Deal?

    pull curtain backA couple of interesting tidbits have come to light regarding the impending buyout of MarkWest Energy by Marathon Petroleum, announced in July (see Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum). First interesting tidbit: As recently as February of this year, MarkWest rebuffed an informal offer from Marathon telling Marathon they prefer to be a standalone company. Then the continuing low price apocalypse deepened, changing everything. The second interesting tidbit: Two other companies were bidding to takeover MarkWest, starting in May. It appears that MarkWest didn’t want to be wedded to either of those companies and went running into the arms of Marathon instead…
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    More Suitors Line Up to Buy Williams – Spectra Energy Makes a Bid

    Early in the year, midstream giant Energy Transfer Equity began an attempt to woo another midstream giant Williams into a buyout. Williams resisted and the whole thing went public in June when ETE announced they would pursue a hostile takeover (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). Williams has continued to spurn the overtures of ETE and has instead gone shopping for another suitor (see Williams Continues to Resist ET Offer, Talks with Other Suitors). We now know of one serious alternative suitor to ETE. Reuters published an exclusive, insider story revealing that Spectra Energy is now bidding to merge with/takeover Williams. Kinder Morgan is also interested and sniffing around, but at this point Spectra seems to be in the lead…
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    Anti-Pipeline “Hands Across Our Land” Protest in VA & WV a Bust

    Hands Across Our Land, a minuscule gathering in three locations in Virginia and one location in West Virginia organized by the far left Sierra Club and the extremists of 350.org, held “protests” so small yesterday that if it weren’t for local media looking for any story to report during the summer doldrums, nobody would have noticed there even was a protest. Casual observers would have thought, “Oh, there’s a small group, perhaps a (nutty looking) family out for a stroll.” The “protesters” were there to object to two necessary, innocuous, safe natural gas pipelines from being buried in the ground–Dominion’s 550-mile Atlantic Coast Pipeline which is due to run from West Virginia through Virginia and into North Carolina; and EQT/NextEra US Gas Assets’ 330-mile Mountain Valley Pipeline from West Virginia into southern Virginia. As is typically the case, most of the protesters were in their 50s and 60s, former hippies who have found a new cause (anti-fossil fuels) to rejuvinate their otherwise meaningless lives…
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    Dominion Buys 26% of Iroquois Gas Transmission Pipeline

    Dominion has just purchased themselves a bigger seat at the Marcellus/Utica midstream (pipeline) table with the purchase of 26% of the Iroquois Gas Transmission System. The Iroquois, you may recall, is one of two pipelines that will connect to the Constitution Pipeline to be built by Williams starting later this year. The Constitution will flow 650 million cubic feet (MMcf) per day of Marcellus Shale gas mostly from Cabot Oil & Gas wells in Susquehanna County, PA. The 125-mile Constitution will run from PA into New York and connect with the Iroquois (and the Tennessee Gas Pipeline) in Schoharie County, NY. The Iroquois is a 416-mile interstate natural gas pipeline running from the U.S.-Canadian border at Waddington, NY, through NY and western Connecticut to its terminus in Commack, NY, and from Huntington to the Bronx, NY. The Iroquois supplies clean-burning natural gas to local distribution companies (LDCs) an electric power generators in New England and the greater New York City area. Increasingly the Iroquois is flowing Marcellus Shale gas. It is that pipeline that Dominion has just purchased a major piece of…
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    Carole King: VA Pipeline Makes Me Feel Like an Unnatural Woman

    Another famous white, rich, aging, hippie woman has lined up against pipelines. At least this famous white, rich, aging hippie, Carole King, has talent–unlike Yoko Ono who is talentless, someone who still rides the coattails of her famous husband, God rest his soul. Carole King doesn’t need fame or to increase her personal fortune, unlike Ono. So why is she speaking out against the Dominion’s Atlantic Coast Pipeline and where it will run in Virginia? Because the pipeline will come close to land owned by Yogaville, an “ecumenical spiritual retreat” in Buckingham County, VA that King has $upported for decades. Most folks think of yoga as funky pretzel-like stretches people do at the gym or at a special class at your local community college. What they may not know is that yoga is as much a spiritual practice (i.e. religion) as it is an exercise routine. Apparently King is one of its practitioners. Makes her Feel Like A Natural Woman. Good for her. Whatever gets you through the day, right? King wrote directly to Dominion CEO Thomas F. Farrell II to request he ax the pipeline plan and instead stick up solar panels and windmills. Here’s why King is wrong about the Atlantic Coast Pipeline affecting Yogaville…
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    Medical Doctor Exposes Anti-Pipeline Lies about PennEast

    Dr. Gilbert Ross, M.D., is the senior director of medicine and public health at the American Council on Science and Health in New York. Dr. Ross penned an eloquent article that exposes the lies being peddled by the “leaders” of Hopewell Township, New Jersey in their vote to prevent construction of the PennEast Pipeline in the township. Dr. Ross makes the point that we have repeatedly made (although far less eloquently) for years here on MDN: The real philosophy that underpins the actions of people opposing fracking, pipelines, anything to do with shale–is an irrational hatred of fossil fuels. But opposers can’t cast their opposition in those terms or they would be laughed out of office and out of public meetings. So they use FUD–fear, uncertainty and doubt–to make the hoi polloi believe oil and gas drilling and pipelines are somehow a threat, a danger to everyone and everything. That is, they lie about the risks associated with oil and gas in order to advance their own twisted anti-fossil fuel agenda. Here to make the point better than we do is Dr. Ross, writing in a major New Jersey newspaper…
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    GreenHunter Changes Strategy with USCG re Wastewater Barging

    change of strategyGreenHunter Resources, the fresh water and wastewater subsidiary of driller Magnum Hunter Resources, has changed strategies and has backed off their tough talk in dealing with the U.S. Coast Guard (USCG) with respect to barging brine down the Ohio River. You may recall MDN was the first to decipher just what was going on between GreenHunter and the USCG with respect to GreenHunter’s intention on barging (see GreenHunter/Coast Guard War of Words — MDN Explains It). The USCG is being manipulated by the Obama administration into blocking a request for GreenHunter to begin barging of wastewater (brine, actually). GreenHunter informed the USCG they have the legal right to do it under an existing 1987 rule that allows for it. The USCG has said not so fast, brine from shale wells may contain more radioactivity than brine from conventionally drilled oil and gas wells. In so many words, GreenHunter told the USCG they would move forward, daring the USCG to stop them (see GreenHunter to Coast Guard, We’re Barging While You Fiddle Around). As recently as May, GreenHunter claimed barging would begin soon (see GreenHunter Says OH River Wastewater Barging to Begin September). However, in an analyst conference call on Friday reviewing second quarter 2015 results, both parent company CEO Gary Evans and GreenHunter COO Kirk Trosclair changed their tune. Now GreenHunter is talking with the USCG again and attempting to convince them to let barging operations begin. You can hear the frustration both in GreenHunter’s comments, and in the comments by investors probing them on the topic…
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    FANG Protesters Chain Themselves to RI Compressor Station Gate

    FANG logoLet’s talk about optics and the strategies employed by fossil fuel haters. We’ll leave aside our standard argument that people who hate fossil fuels, like natural gas, are wildly hypocritical as their very existence is a direct result of the benefits of fossil fuels. Today we focus on two men who hit life’s lottery–one (younger) became a pediatrician, the other (older) a physics professor. Last week the two chained themselves to the entrance of Spectra Energy’s Burrillville, Rhode Island compressor station to call attention to Spectra’s Algonquin Incremental Market (AIM) project to beef up the compressor station and add pipelines to bring more cheap, abundant, clean-burning Marcellus Shale natural gas to gas-starved Rhode Island and other New England states. The two protesters belong to a fossil fuel hate group called FANG–Fighting Against Natural Gas. Using PVC pipe, chicken wire and (yes) tar, they intertwined their arms to make it extremely difficult to un-knot them. The police had to cut away a section of the fence and cart the fence and the two protesters to the hospital where doctors and nurses had to waste time untangling the mess. The optics, of course, is that FANG wants you to hear about a doctor and a physics professor (supposedly smart people) who put themselves in harm’s way to protest something–so the something must be evil and rotten since these two virtuous “high value” (and smarter than the rest of us) members of society are sounding the alarm. We think you should focus on different optics–the logo/mascot FANG uses on their website (pictured here, taken from their website). A wolf bearing its fangs indicates extreme danger–and a willingness to go to extremes to cause property, and perhaps even bodily, damage. Homeland Security should take note…
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    GreenHunter Resources 2Q15: Revenue Down, But Bleeding Less Too

    GreenHunter Resources, the fresh water and wastewater subsidiary of driller Magnum Hunter Resources (now focused totally on the Marcellus/Utica), issued its second quarter 2015 update on Friday. The company is a small company compared to others in the oil and gas space with revenues in the few million per quarter. In 2Q15 GreenHunter’s revenues were $4.6 million, down 33% from $6.9 million in 2Q14. No surprise there since drillers are scaling back their activities. GreenHunter has trimmed its operating loss number–from $3 million in 2Q14 to $1.6 million in 2Q15–so the bleeding is slowing, a good sign. The 2Q15 update below brings us up to speed on a number of interesting initiatives at GreenHunter, including their new wastewater injection wells in Meigs County, OH. However, the interesting thing MDN picked up on was in the unscripted comments during GreenHunter’s earnings call held on Friday with analysts. That’s so important we’re dedicating a separate post to it today. Here is the 2Q15 update from GreenHunter…
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    Tiny Balls & Instant Credit – Oilfield Services Cos. Get Creative

    For some time we’ve told you that drillers in the Marcellus/Utica, as well as other shale plays, have been hammering oilfield services companies on price. Oilfield services companies are companies like Sclumberger (largest such company in the world) and Halliburton (second largest in the world) and Baker Hughes (fifth largest in the world, being gobbled up by Halliburton later this year). Oilfield services companies provide much of the equipment, personnel, chemicals and other supplies to do the actual drilling and fracking of shale wells. They’re the contract workers, hired to do a job. Last December MDN was hearing that oilfield services companies were being forced to discount prices by as much as 20% (see Marcellus Oilfield Services Cos Being Forced to Discount). By February, when it was obvious the price downturn would last for an extended period of time, MDN picked up on Magnum Hunter’s comments that they were getting prices discounted by as much as 40% (see Magnum Hunter Slashes Drilling Budget by 75% for 2015). In addition to slashing prices, oilfield services companies, in an attempt to stay in business, are innovating in two other ways: (1) they’ve become bankers, allowing drillers to buy their services on credit, and (2) refracking existing wells with “tiny rubber-coated balls”…
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    MarkWest Sued for “Wrongful Death” in Washington, PA Car Crash

    On Saturday, Jan. 3, 2015, a MarkWest Energy truck driven by a MarkWest worker, according to court documents, failed to stop at a stop sign at the intersection of Route 136 and Brownlee Road in Washington County, PA. That failure had tragic consequences. The Chevy Silerado truck hit a tiny Ford Fiesta car and a passenger in the car, Donna Simboli, 58, was killed. A lawsuit has just been filed in Washington County on behalf of Simboli’s two children (no ages given) against MarkWest for “wrongful death”…
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    OH Minority Report: Shut Down Wells Before They Cause Earthquakes

    Minority ReportThe Chief of the Division of Oil and Gas Resources Management for the Ohio Dept. of Natural Resources (currently Rick Simmers) is a man with a lot of power. He has the power, according to a ruling just handed down on August 12, to make his own decisions about suspending permits to operate in the absence of specific violations of a law or regulation. In September 2014 Simmers suspended permits for two wastewater injection wells in Trumbull County, OH after a very low level earthquake was detected close to those wells (an earthquake that couldn’t be felt at the surface and caused no damage of any kind). American Water Management Services sued saying they hadn’t violated any laws or regulations on the books and their permits could not just be arbitrarily revoked like that. But the Ohio Oil and Gas Commission said nope–Tom Cruise, er, a, Mr. Simmers can arbitrarily do what he wants when there is no specific rule or guideline or law–because he has the best interests of the people at heart…
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    CELDF Tries to Shut Down GreenHunter’s OH Injection Wells

    The radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) is making mischief in neighboring Ohio. The CELDF is using some of its millions of Big Green dollars to file a lawsuit against Meigs County, OH Commissioners because the commissioners refuse to put an illegal ballot measure up for a vote in November. The CELDF pressured the citizens of Highland Township in Elk County, PA in 2013 to pass a so-called Community Bill of Rights–the same kind of law they want Meigs County to adopt (see today’s companion story about the ecosystem that speaks). Meigs County already has two injection wells recently brought online by GreenHunter Resources, with plans to bring another two online in the near future (see GreenHunter Brings 2 New Injection Wells Online in Meigs County, OH). GreenHunter has built out a barge terminal along the Ohio River in Meigs County where they plan to unload barged brine for disposal (see GreenHunter Resources 1Q15: Bets the Ranch on OH Injection Wells). The CELDF so-called Community Bill of Rights would stop GreenHunter’s injection wells and the barge terminal from operating. Can you imagine the lawsuits and the amount of money Meigs County residents would have to pay out if that happened? It would likely bankrupt the county. Meigs County commissioners rightly seek to protect the citizens they were elected to represent from this horrific economic apocalypse. And so now, the CELDF is suing Meigs commissioners because they won’t allow the ballot measure to proceed…
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    Is Wayne County, OH Sheriff Breaking the Law re NEXUS Pipeline?

    It appears that an anti-pipeline member of the Wayne County, OH sheriff’s department, Capt. Doug Hunter, has convinced his boss, Sheriff Travis Hutchinson, to ride roughshod over the members of the department–telling deputies they can’t, in their off-duty hours, moonlight as security guards for the NEXUS Pipeline. Hunter’s argument to Hutchinson is that a member of the sheriff’s department going out with surveyors, who have been threatened by anti-pipeline wackos, somehow “intimidates” landowners. Even though the sheriff’s deputies are not in uniform, not driving a police car, and are otherwise unrecognizable to landowners as belonging to the sheriff’s department when they tag along to be sure the surveyors don’t get accosted by the peace-loving landowners the sheriff is “sworn to serve.” Sheriff Hutchinson bought Hunter’s argument hook, line and sinker. And so Sheriff Hutchinson has told his deputies what they can and can’t do in their off-duty hours. Hmmm. We wonder how the deputies like being told what they can and can’t do when they’re off the clock? We wonder if they like the sheriff preventing them from earning extra money working for a private company (a common practice with off-duty law officers)? Could the sheriff himself be breaking the law by disallowing his deputies from working for one specific private company, when (we presume) he allows the very same practice for other private companies?…
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    Stark County, OH Judge Orders Sheriff to Assist NEXUS with Surveys

    In Summit County, OH, a county judge has denied NEXUS Pipeline’s request to force recalcitrant landowners to allow surveyors on their property (see Summit County, OH Judge Denies NEXUS Request to Survey Properties). In neighboring Stark County, it’s the reverse. A judge in Stark County granted NEXUS a court order allowing them to survey properties where the pipeline may potentially run. And whereas in Wayne County (borders both Summit and Stark) the Wayne County Sheriff won’t let his deputies work as off-duty security guards for NEXUS (see today’s story questioning the legality of the Sheriff’s action), the judge in Stark County has ORDERED the sheriff there to enforce NEXUS’ right to enter properties to survey them. The Stark County sheriff is telling his on-duty deputies to accompany surveyors to protect them. Is your head spinning yet?…
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