Economic Impact

CNG/LNG | Commodity Price | Crude Oil | Decline/Depletion Rates | Economic Impact | Education | Ethane | Exporting | Industrywide Issues | M&A | NGLs | Pipelines | Processing Plants | Regulation | Research | Reserves (Proved and Unproved)

Join MDN at RBN Energy’s “Summer in the City” Event July 23 – NYC
June 30, 2015July 9, 2015

MDN invites you to join us in attending RBN Energy’s “State of the Energy Markets” one-day event in New York City on July 23. Before you hurry to say “yes,” a few caveats. It costs money (a lot of it). It’s aimed at executives working in the industry, as well as traders and investors. If that describes you (and we know that many of you read MDN), you may be interested in attending. We guarantee it will be a great event. Rusty Braziel & company will provide an overview of the key issues facing natural gas, NGLs and the crude oil market. They will explain how the markets for those three commodities interact and affect each other. They will also take a look at prices, where they may be heading, and how infrastructure affects price. If you are really “into energy” as we are, this is a must attend event. Details are below, along with a link to register…
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Economic Impact | Industrywide Issues | Jobs | Regulation | Research

API Study Shows Energy Regulations are Killing Jobs & Economy
June 24, 2015June 24, 2015

The American Petroleum Institute (API) released a new study yesterday authored by Wood Mackenzie, a global research firm, which compares government policies that promote the growth of the energy industry with government policies that stifle energy growth. The study, titled “A Comparison of US Oil and Natural Gas Policies: Pro-development Policies vs. Proposed Regulatory Constraints” (full copy embedded below) finds that the study found that unnecessarily restrictive energy and environmental regulations proposed by the Obama administration will lead to 830,000 lost jobs and a decrease of $133 billion per year in the U.S. economy. In other words, Obama is ruining this country with his energy/environmental policies…
Read More “API Study Shows Energy Regulations are Killing Jobs & Economy”
Economic Impact | Industrywide Issues | Jobs | Lease & Royalty Payments | Pennsylvania | Supply Chain | Susquehanna County

Drilling Slowdown Creates Domino Effect in Susquehanna County, PA
June 18, 2015June 18, 2015

Low natural gas prices and lack of pipelines is affecting more than just the drillers in Susquehanna County, PA–it’s also affecting landowners, gas workers, and the businesses that depend on all of the above. Drillers in northeastern PA (as well as elsewhere) are laying down their drilling rigs. Fewer rigs means fewer new wells being drilled, meaning no royalties for those landowners. And it means fewer jobs for workers, and less business for companies that provide goods and services to drillers, the people who work for them, and landowners with less disposable income. A TV station in NEPA shines a light on the situation in Susquehanna County…
Read More “Drilling Slowdown Creates Domino Effect in Susquehanna County, PA”
Bradford County | Economic Impact | Industrywide Issues | Jobs | Pennsylvania

NEPA Tungsten Plant Begins Converting Marcellus Gas into Hydrogen
June 18, 2015June 18, 2015

This is the story of how abundant and cheap Marcellus Shale gas is helping to secure the jobs of 550 people in Bradford County, PA, people who work in a business that has nothing to do with the Marcellus Shale industry. Yesterday, Global Tungsten & Powders Corp. in Towanda, PA held a ribbon cutting ceremony for a new piece of equipment at the company’s plant that will convert Marcellus Shale gas, extracted locally, into hydrogen used in enormous quantities at the plant. The Global Tungsten plant in Towanda is one of the country’s largest users of hydrogen (who knew?). The company uses hydrogen to manufacture tungsten products at the plant, including components for solid oxide fuel cells (i.e., big batteries). Until now, liquid hydrogen has had to be trucked to the plant daily, from hundreds (even thousands) of miles away. The new equipment unveiled yesterday, which will be owned and operated by Air Products, will provide 80-90% of the plant’s hydrogen needs. Just one more way this evil, nasty fossil fuel called Marcellus Shale gas is benefiting Pennsylvanians (jobs and economy) AND making the planet a better/safer/greener place to live…
Read More “NEPA Tungsten Plant Begins Converting Marcellus Gas into Hydrogen”
Economic Impact | Energy Services | Industrywide Issues | Mahoning County | Ohio | Supply Chain | Vallourec

Youngstown Plant Starts Operations, Selling Pipes to Shale Industry
June 16, 2015June 16, 2015

Although drilling activity in the Marcellus/Utica, indeed across all shale plays, has decreased in the past six months, that doesn’t mean all gas and oil related businesses have been adversely affected. Take Vallourec’s VAM USA LLC subsidiary–a pipe manufacturer with a facility in Youngstown, Ohio. In May, VAM began producing the first pipes for commercial sale at its new premium threading plant in Youngstown. More money, more jobs, rolling into eastern Ohio–thanks to the miracle of hydraulic fracturing. Here’s the details on VAM’s startup in producing pipe products for the shale industry…
Read More “Youngstown Plant Starts Operations, Selling Pipes to Shale Industry”
Economic Impact | Industrywide Issues | Jobs | Research

Manhattan Institute Report Says Shale 2.0 Just Getting Started
June 15, 2015June 15, 2015

The New York-based Manhattan Institute, a non-profit think tank with a mission “to develop and disseminate new ideas that foster greater economic choice and individual responsibility,” released a new report in May titled, “Shale 2.0: Technology and the Coming Big-Data Revolution in America’s Shale Oil Fields” (full copy embedded below). The report explores and debunks the current meme coming from mainstream media, Saudi Arabia and other opponents of shale energy that with the current low price climate shale energy in the U.S. is done…fini…kaput. Mark Mills, Senior Fellow at the Manhattan Institute and author of the paper, says Shale 1.0 is now done, having run it’s course. But we’re still very early in the game and Shale 2.0 is just getting started. And oh, the (economic) places Shale 2.0 will take us!…
Read More “Manhattan Institute Report Says Shale 2.0 Just Getting Started”
Economic Impact | Hydraulic Fracturing | Industrywide Issues | Research

Harvard Study: Fracking is Safe, Profitable, Good for Environment!
June 12, 2015June 12, 2015

Wow–who woulda thought Harvard University would publish a report that says fracking is a good thing (when done right) and that it will create 3.8 million new jobs by 2030 AND lower carbon emissions? The report, titled “America’s Unconventional Energy Opportunity” (full copy below) outlines “a strategic, fact-based approach to developing America’s new energy advantage to increase U.S. competitiveness and drive much-needed job and economic growth, to reducing environmental impacts, and to accelerating progress on climate change.” The authors say that with some tweaks to regulations and by using know best practices, hydraulic fracturing is safe–and an economic bonanza for America–AND good for the environment (reduces nasty carbon dioxide which causes mythical global warming)! It’s important to note the study was self-funded and published by the Harvard Business School. No outside money was involved from the likes of the Park Foundation or Heniz Endowments or William Penn Foundation–virulent anti-drilling Big Green organizations that routinely purchase “scientific” studies with pre-determined outcomes. This time is different. The authors were not beholden to big money benefactors. They are smart people tackling tough issues with an open mind–and the conclusion they come to is the same conclusion reached by millions of people who bother to research the issues: fracking is safe…
Read More “Harvard Study: Fracking is Safe, Profitable, Good for Environment!”
Economic Impact | Industrywide Issues | Statewide WV | West Virginia

WV’s GDP Soars Thanks to Marcellus/Utica Wells & Pipelines
June 11, 2015June 11, 2015

Last year West Virginia’s gross domestic product–the total value of all goods and services produced in the state–increased by 5.1%. Only two other states–Texas and North Dakota–had bigger increases in GDP. What was the reason for the growth? Was it tourism? Nope. The solar and wind industry? Nope. Timber harvesting? Nope. Surely because of coal–WV is a big coal state? Nope. Coal is in decline in the state. You may have guessed by now the reason for WV’s hot GDP growth rate is the Marcellus/Utica industry. With the expansion of drilling, the buildout of “massive” processing plants and yes–the addition of major new pipelines–the state is on a tear economically. So what? Higher GDP equals more investment, more jobs, more prosperity for everyone in the Mountain State…
Read More “WV’s GDP Soars Thanks to Marcellus/Utica Wells & Pipelines”
Butler County | Economic Impact | Energy Services | Energy Transfer Partners | Industrywide Issues | Pennsylvania | Pipelines | Processing Plants

ETP Announces $1.5B Revolution Pipeline/Plant Project in SWPA
June 9, 2015June 9, 2015

An important new project in the Marcellus/Utica was announced by Energy Transfer Partners (ETP) yesterday. The project, dubbed the Revolution Project, includes a new 100-mile gathering pipeline system in Butler County, PA along with a new cryogenic gas processing plant to be constructed “in western Pennsylvania.” The processing plant will be called the Revolution Plant. A pipeline (called the Revolution Pipeline) will be constructed to connect the Revolution Plant to Sunoco Logistics’ Mariner East NGL pipeline to handle NGLs coming from the plant. Another pipeline will be built to connect the plant to ETP’s Rover pipeline to handle natural gas coming from the plant. Also part of the Revolution Project will be a new fractionation facility to be built at the Marcus Hook refinery in the Philadelphia area. Total price tag for the whole shebang: $1.5 billion…
Read More “ETP Announces $1.5B Revolution Pipeline/Plant Project in SWPA”
Economic Impact | Industrywide Issues | Research

Cleveland Fed Says Banks Not Concerned About Bad Loans to O&G Industry
June 5, 2015June 5, 2015

The Federal Reserve Bank did a survey of banks in April asking them about loans made to companies in the oil and gas industry. The results of that survey are interesting. In broad terms, most banks say they aren’t over-exposed to loans to oil and gas companies; that they know some of those loans will go south; and that they aren’t all that phased by the current tough times for the O&G industry. In the words of the Fed, banks aren’t “sounding the alarm” about loans to drillers and midstreamers…
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Beaver County | Economic Impact | Energy Companies | Ethane | Industrialization | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Sets Expectations for What Happens if PA Cracker is Built
June 4, 2015June 4, 2015

In yet another signal that Shell is very serious about building a $3 billion ethane cracker plant northwest of Pittsburgh, the company recently held public meetings in Beaver County, PA, where the plant would be built, to tell members of the local community what they can expect to hear, see, and smell during and after construction–if the plant gets built. Shell wants to be right up front about what happens when an industrial plant like the one they’re building comes into existence. We find that a “good neighbor” kind of thing to do. Look, there will be some inconveniences for a time when this thing gets built. Construction activity at the site will happen 24/7 for a number of years (yes, years) until it is completed. Let’s talk about it right up front so no one is surprised. Although Shell stresses at these meetings that a “final decision has not yet been made,” increasingly it looks (to us) like it has…
Read More “Shell Sets Expectations for What Happens if PA Cracker is Built”
Commodity Price | Economic Impact | Industrywide Issues

Largest Private Oilfield Svcs Co Says Shale is Rebounding
June 3, 2015June 2, 2015

Canary LLC is the largest privately owned (no publicly traded stock) oilfield services company in the U.S. Canary competes with the likes of Schlumberger, Halliburton and Baker Hughes. We wrote about Canary in January 2014, pointing out the company has operations in both the Marcellus and Utica Shale (see Oilfield Services Company Canary Buys Wellhead Competitor). Being privately owned gives one a certain sense of independence and fearlessness. Perhaps even a touch of contrariness. Such is Canary’s CEO, Dan Eberhart, who said last week in a press release that he believes the downward spiral of declining rig counts has stabilized and that a shale recovery has already begun in the U.S. In fact, he said, “the industry is on the way back.” When the head of the country’s largest private company that rents rigs and the manpower to run them says we’re at a turning point and drilling is about to pick up again, you need to perk up and pay attention…
Read More “Largest Private Oilfield Svcs Co Says Shale is Rebounding”
Economic Impact | Industrywide Issues

Natgas Customers in NJ & Philly Get Rate Cut, Thx to Marcellus
June 3, 2015June 2, 2015

If you live in New Jersey, or in Philadelphia (or just about anywhere in Pennsylvania for that matter), and if you use natural gas to heat with, your rates are about to go down, again. Why? Thanks to the enormously abundant, clean-burning Marcellus Shale gas being extracted in Pennsylvania. Thank you for fracking! Here’s good news for those in NJ and Philly…
Read More “Natgas Customers in NJ & Philly Get Rate Cut, Thx to Marcellus”
Belmont County | Economic Impact | Education | Ethane | Industrywide Issues | Ohio | Processing Plants

Belmont, OH School Will Need to Accept $ Cut from Cracker Project
June 1, 2015June 1, 2015

The teachers’ unions won’t like this one. As part of the “aggressive incentive package” (not yet disclosed) by Ohio Gov. John Kasich in order to lure an ethane cracker plant to the state, the local school district in Belmont County will have to accept concessions. That is, John Kasich wants to deny the lil’ chil’ren money OWED to them. The Shadyside school board will need to sign off on any property tax deal cut with the companies (from PTT Global Chemical from Thailand and Marubeni Corporation from Japan) planning to build the cracker plant complex. We seriously doubt that the school will have much choice in the matter. What if the school (and teachers’ unions) say “no”? Will that stop the plant? You can bet your bottom dollar that ain’t gonna happen with John “foreigner hunter” Kasich on the job…
Read More “Belmont, OH School Will Need to Accept $ Cut from Cracker Project”
Economic Impact | Ethane | Industrywide Issues | Ohio | Processing Plants | Statewide OH

OH Gov Kasich Keeps Cracker Plant “Incentives” a Secret–for Now
May 27, 2015May 27, 2015

We continue to find it deliciously ironic that the jingoistic man who hates having “foreigners” from places like Texas, Oklahoma and Louisiana come to work in his state in the oil and gas fields, Ohio Gov. John Kasich, is the man who is desperately courting a Thai and Japanese joint venture to invest billions in his state. Along with that investment will come workers from those countries. We’re talking, of course, about the recent announcement that that PTT Global Chemical, Thailand’s largest integrated petrochemical and refining company, and money partner Marubeni Corporation, a Japan-based company, have selected Belmont County, OH as the location to build a $5 billion ethane cracker plant complex (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). The key negotiator of the deal is JobsOhio, which is an agency set up by Kasich to promote the state. That is, JobsOhio = John Kasich. Now we learn, from none other than PTT, that JobsOhio/Kasich offered “an aggressive incentive package” to lure the project there. How aggressive? JobsOhio (i.e. Kasich) is keeping the details of the incentive package secret until PTT signs the paperwork to proceed with the project–something that won’t happen for at least a year or two…
Read More “OH Gov Kasich Keeps Cracker Plant “Incentives” a Secret–for Now”
Economic Impact | Electrical Generation | Industrywide Issues | Ohio | Regulation | Trumbull County

Lordstown $800M Gas-Powered Electric Plant Gets Village Approval
May 27, 2015May 27, 2015

In April 2014, MDN told you about a proposal from Clean Energy Future to build an $800 million electric generation plant in Lordstown (Trumbull County), OH. The plant will be fired by natural gas from the Utica and Marcellus (see Clean Energy Plans NatGas Electric Generation Plant in Lordstown). At that time, the plan was to begin construction in December 2015 and complete the plant by the end of 2018. There was some initial resistance to the location, so Clean Energy Future changed the location and moved up the timeline to build it (see Lordstown Gas-Powered Electric Plant Moves Up Construction Timeline). Last night the last major hurdle was scaled when the Lordstown Village Council gave the project a big thumbs up. The Village Council voted to offer the project a number of incentives and actively worked to get the deal done–not something you observe very often with these kinds of projects…
Read More “Lordstown $800M Gas-Powered Electric Plant Gets Village Approval”