Economic Impact

Economic Impact | Industrywide Issues | Marion County | Supply Chain | West Virginia

WV Oilfield Services Co. Extreme Plastics Files for Bankruptcy
February 5, 2016February 5, 2016

Extreme Plastics Plus, Inc. is an oilfield services contractor that provides environmental lining services for oilfield and other commercial markets. The company offers above ground water containment, environmental lining, steel wall secondary containment, and rig mat services. The company’s environmental lining services include freshwater impoundments, double lined with a leak detection system, wastewater impoundments, primary and secondary lining, and rig pads. Extreme Plastics Plus was founded in 2007 and is based in Fairmont, West Virginia with other offices in eastern Ohio, northeastern Pennsylvania, Texas and Oklahoma. Other names used by the company are Three Amigos Rentals and American Well Services. On January 31, Extreme Plastics Plus filed for bankruptcy protection…
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Economic Impact | Industrywide Issues | Jobs | Pennsylvania | Statewide PA

MSC’s Dave Spigelmyer Says Rough Few Years Ahead for Marcellus
January 29, 2016January 29, 2016

David Spigelmyer, who once headed up Chesapeake Energy’s efforts in the Marcellus Shale region, is and has been head of the Marcellus Shale Coalition for the past couple of years. Great guy. Smart guy. Dave published an op-ed in the Pittsburgh Post Gazette in today’s issue. It’s titled, “Shale hits a rough patch: But natural gas remains a boon to Pennsylvania.” The sobering news, according to Dave, is that the price northeast drillers (drillers everywhere) are getting for their gas will remain low in 2016 and 2017 “and perhaps longer.” Businesses are “in survival mode” and and the slowdown in drilling is being felt by “tens of thousands of men and women” who work for this marvelous industry. The statistics, according to Dave, are “numbing.” Sobering words. But we have to face the reality and not look away and pretend otherwise. But, according to Dave, there is hope and we will get through it. Here’s a portion of his no-rose-colored-glasses op-ed…
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CNG/LNG | Economic Impact | Industrywide Issues

CLNG Merges with NGSA, Gets New Director from Former ANGA
January 20, 2016January 20, 2016

The downturn in oil and gas prices doesn’t only affect drillers, and midstreamers, and landowners, and supply chain companies. It also affects trade associations. Last November we told you that America’s Natural Gas Alliance (ANGA) merged with/became part of the American Petroleum Institute (see Two Top O&G Trade Groups to Merge: ANGA & API). Another two trade groups announced a merger yesterday. The Center for LNG (CLNG) announced it is merging with the Natural Gas Supply Association (NGSA). CLNG will retain its identity and become a division of NGSA. In addition, CLNG has a new executive director–Charlie Riedl. Charlie joins CLNG from ANGA. Here’s the low down on two more trade groups combining…
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Commodity Price | Economic Impact | Industrywide Issues

Debate Rages: How Many Shale Drillers will go Bankrupt?
January 13, 2016January 13, 2016

Fadel Gheit, senior oil and gas analyst at Oppenheimer & Co., speculated on CNBC on Monday that half of all U.S. shale oil producers could go bankrupt before the price of oil reaches equilibrium. For Gheit, equilibrium price will be somewhere around $60-$70 per barrel. But, he says, it will take a few years to get there. His thesis is that in the meantime oil and gas companies are spending money out the wazoo and cannot sustain it and a good many of them (the smaller ones anyway) will go under. We compare his comments (below) with what Rusty Braziel recently said to Jim Cramer…
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Economic Impact | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Shortages Begin: Tangible Result of No Pipelines in New England
January 8, 2016January 8, 2016

In December 2014 the Massachusetts-based utility Berkshire Gas Company announced the amount of natural gas they could purchase from the Tennessee Gas Pipeline (TGP) was at full capacity. There’s no additional gas supplies to buy–unless TGP builds their Northeast Energy Direct (NED) expansion project. So Berkshire was forced to tell new customers for natural gas in portions of Franklin County they won’t be able to tap into Berkshire’s line (see Guts: No New Pipeline in MA? Then No New Natgas for Utility Customers). In September, the Massachusetts Dept. of Public Utilities (DPU) approved long-term contracts for three utilities, including Berkshire Gas, to buy natural gas supplies from TGP’s NED pipeline when/if it gets built (see Mass. Approves Plan for Utilities to Buy Gas from New Pipeline). Anti-drilling nutters promptly sued to stop that plan (see Anti Group Sues to Stop Mass. Utilities from Buying Natural Gas). It’s now a year after Berkshire’s first announcement that some communities in Franklin County won’t get new natgas service. Berkshire has had to expand the prohibition area. They’re now turning down new businesses in neighboring Hampshire County, which is causing a stir. We’re not sure why antis don’t get it. No new gas, no new service. It’s pretty simple. Below is the story of a jilted Texas Roadhouse, who says they wouldn’t have purchased land and built had they known they couldn’t get natgas service. Translation: more businesses will stay away, or perhaps even leave, because they can’t get natgas due to the shortage…
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Economic Impact | Industrywide Issues | Jobs | Research

API 2016 State of American Energy Report
January 8, 2016January 8, 2016

Earlier this week the American Petroleum Institute (API) released its annual report, the State of American Energy (full copy below). Several themes are prominent in the report: shale energy’s creation of jobs, the economic growth we’ve experienced due to shale energy, and the fact we are now more secure than we’ve been in generations with respect to energy. We’re far less dependent on foreign oil than we were just a few years ago. That’s great news!…
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Economic Impact | Greene County (PA) | Industrywide Issues | Pennsylvania | Washington County

SWPA Local Leaders Forecast 2016, What’s Ahead for Marcellus?
January 6, 2016January 6, 2016

We’ve brought you a number of opinions and perspectives on what lies ahead for 2016 with respect to our beloved shale energy industry. But it’s one thing for investors and politicians and commentators to pontificate. What about leaders in local communities, like the leaders of one of the most-drilled places in the Marcellus: southwestern Pennsylvania? What do local economic leaders see coming along in 2016? We think getting the opinion of some locals provides much-needed balance…
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CNG/LNG | Economic Impact | Exporting | Industrywide Issues | Research

DOE Study: More LNG Exports Don’t Mean Higher Prices at Home
December 30, 2015December 30, 2015

What would happen if the U.S. increased LNG (liquefied natural gas) exports from 12 billion cubic feet per day (Bcf/d) to 20 Bcf/d? A new report just published by the Dept. of Energy and researched by Rice University and Oxford Economics, titled “The Macroeconomic Impact of Increasing U.S. LNG Exports” (full copy below) finds that although prices for U.S. consumers may go up a little, what would happen is that the production pie would grow and most of the delta (the difference between 12 and 20 Bcf/d) would come from new production. In other words, it’s a win/win. More jobs, more money flowing into the U.S., while at the same time very little rise in gas prices here at home–even if we ratchet up exports significantly…
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Economic Impact | Industrywide Issues

Rig Counts Hit Lowest Level Since 1999
December 29, 2015December 29, 2015

What was happening in the year 1999? Let’s see. Then-President Bill Clinton went on trial in the Senate for lying under oath about getting a BJ in the Oval Office by a young girl, Monica Lewinski. Even though he was guilty, the Republican-controlled Senate lost its nerve and didn’t convict him. He was later stripped of his license to practice law in Arkansas for perjuring himself. The “Sopranos” debuted on HBO in 1999. Seth MacFarlane’s “Family Guy” first aired on Fox. Tom Cruise and Nicole Kidman star in the movie “Eyes Wide Shut.” Basketball star Michael Jordan announced his (first) retirement–only to return in 2001. Hip Hop artist Eminem released his first major record album called ‘The Slim Shady’ which would win him a Grammy the following year. The great Wayne Gretzky played his last hockey game in the NHL. Gretzky’s New York Rangers lost 2-1 to the Pittsburgh Penguins. Quarterback John Elway retired from the NFL in 1999. The third Harry Potter book, “Harry Potter and the Prisoner of Azkaban” was published. “Star Wars: Episode I – The Phantom Menace,” directed by George Lucas, was released in 1999. Oh, and one more thing. The year 1999 was the last time oil and gas rig counts were as low as they were last week, just 700 rigs operating…
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Dominion Energy | Economic Impact | Energy Services | Industrywide Issues | Ohio | Statewide OH

Dominion East Ohio Gas Bills Fall 40% in 1 Year, Thx to Shale
December 29, 2015December 29, 2015

Utility company Dominion East Ohio says it’s customers are benefiting from the low cost of natural gas, thanks to the Marcellus and Utica Shale. In fact, according to Dominion, the cost of the gas itself is down 53% this year over last–and the savings gets passed on to consumers. That’s really good news for those who heat and cool using natural gas. Just because the commodity itself is only half the price, doesn’t mean rate payers will see their bills go down by the same amount. There are two components to the price consumers pay: the commodity flowing through the pipes, and the pipes/infrastructure itself. Even though Dominion East utility bills won’t go down by 53%, they will go down by about 40%. Not too shabby! Here’s what Dominion East is saying about rate decreases for its customers…
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Economic Impact | Industrywide Issues | Jobs | Ohio | Pennsylvania | Statewide OH | Statewide PA | Utica Shale

Turns Out “Foreigners” Working in OH are a Good Thing After All
December 23, 2015December 23, 2015

For years MDN has poked fun at RINO Ohio Gov. John Kasich for his jingoistic talk about not wanting “foreigners” in his state working at Utica drilling sites (see this story from three years ago – OH Gov. Kasich Continues Trash Talk Out-of-State Workers). Don’t tell Kasich, because he hates hearing this, but some are now saying that because Ohio has been employing “foreigners” from exotic places like Texas and Louisiana to work at Utica drilling sites, it has actually turned out to benefit the state. Why? Because in this downturn Ohio businesses are not as adversely affected. If all of those people now laid off had been Ohioans, the Ohio economy would have taken a much harder hit than it has. That’s one of the points in a Cleveland Plain Dealer article. Another point in the article is that because the Ohio Utica is much smaller and was just ramping up as the current price crash hit, when prices recover (and they will recover, eventually), Ohio will take off much faster than the big, old, decrepit Marcellus in Pennsylvania…
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Economic Impact | Industrywide Issues

Moody’s: Fed Interest Rate Hike Hurts the Oil & Gas Industry
December 21, 2015December 21, 2015

Moody’s Investors Service, one of the biggest and most respected ratings services on the planet, issued a statement last week after the Federal Reserve voted to raise interest rates from zero to a quarter point (0.25%). Moody’s offered their opinion of how the interest rate increase will affect U.S. companies. Their conclusion? Companies with good credit quality will be able to absorb the higher interest rate no problem. But companies that are, shall we say, “credit challenged” will have a tougher time. Among those most credit challenged? Yep, the oil and gas sector…
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Commodity Price | Economic Impact | Industrywide Issues

South Jersey Gas Customers Get $58 Xmas Present Thx to Marcellus
December 17, 2015December 17, 2015

Customers of natural gas utility company South Jersey Gas will get a nice Christmas present from the company next month–a credit on their bill for an average $58 per customer–collectively $20 million. Why? Because wholesale natural gas prices paid by the company are so low–thanks to the Marcellus Shale. So said South Jersey Gas in an announcement yesterday…
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Economic Impact | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Statewide OH | Statewide PA | Statewide WV | West Virginia

Poly(ethylene) Wants a Cracker: OH Study Predicts Ethane Tsunami
December 14, 2015December 14, 2015

A researcher and “Executive in Residence” from Cleveland State University, Andrew Thomas, writes about a new study produced by the University “to better understand the ramifications of huge quantities of natural gas and liquid ethane being produced in Ohio.” Unfortunately we were unable to track down a copy of the full study and its results, but we do have the summary as contributed by Thomas in writing for Crain’s Cleveland Business. And wow, what insights we gain! Thomas says the study he worked on concludes that even in this down market, Ohio’s production of natural gas liquids (NGLs), specifically ethane, is on a rocket ride to the moon. He says, “Ohio’s about to see an ethane tsunami.” He also says if all four ethane crackers that have been floated as possibilities for the region get built, that would only sop up one-third of the ethane supply projected to be produced in the Marcellus/Utica. Here’s the high-level but very exciting and insightful news coming from this study…
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Economic Impact | Industrywide Issues | Jobs | Pennsylvania | Statewide PA | Supply Chain

Here’s How Drilling Slowdown Affects the Marcellus Supply Chain
December 14, 2015December 14, 2015

Yes, the slowdown in drilling IS having effect–everywhere, including the Pennsylvania Marcellus Shale. Supply chain companies–those companies not directly involved with drilling but supply goods and services to other companies that are directly involved–are feeling the effects. From hotels and restaurants to a men’s clothing store, the slowdown is having an effect. But it’s not all bad news…
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Coterra Energy (Cabot O&G) | Economic Impact | Energy Companies | Industrywide Issues | Pennsylvania | Susquehanna County

Susquehanna County Residents Love Burning Locally Produced Gas
December 9, 2015December 9, 2015

Susquehanna County, PA, which sits just across the border from where MDN is written in Broome County, NY, is one of the miracles in the Marcellus Shale. Cabot Oil & Gas, among a few other drillers, have extensive operations in Susquehanna County. In fact, all of Cabot’s PA wells are located in that one county, and Cabot produces (at last check) over 1.5 billion cubic feet of natural gas PER DAY. It’s an amazing story. One of the ironies has always been that rural counties like Susquehanna that produce natural gas often aren’t able to use the gas they produce due to lack of pipeline infrastructure. The entire county has 43,000 residents (11,700 families). The largest “city” in Susquehanna County is the county seat of Montrose, population 1,600 (750 households). It’s just not all that economical to run natural gas pipelines to homes around the county–even though residents live atop an embarrassing riches of natural gas. One company, Leatherstocking Natural Gas, changed all that in late 2013 when they started to run pipelines to residences and businesses around Montrose. How has it turned out? The people who are hooked up and burning Marcellus gas locally produced have high praise…
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