Economic Impact

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…
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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…
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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…
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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…
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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…
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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…
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Economic Impact | Industrywide Issues

Another Reality TV Show Looks to Exploit Shale “Suddenly Rich”
May 26, 2015May 26, 2015

We don’t much care for reality TV shows–especially those that aim to exploit regular folks. The story of fracking and the “untold riches” that flow from it have been the fodder for previous so-called reality TV shows–shows that bombed (see Blood and Oil: New “Reality TV” Series about OH Oil Company and Who Wants to be a (Fracking) Millionaire?). There’s nothing so predictable as a bad idea getting recycled for television. So here we go again. The same people behind “Real Housewives of Orange County” has put out a casting call for people who have struck it rich by signing leases for shale fracking. The new series, titled “Suddenly Rich,” will cast more than just folks who got rich from fracking. They’ll cast people getting rich from the lottery, insurance payout, etc. In other words, they want to show how sudden big money was squandered by poor idiots that don’t know their head from other parts of their anatomy. In a word, it’s about exploitation…
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Commodity Price | Economic Impact | Industrywide Issues | Research

Moody’s Says O&G Company Default Rate in 2015 Going Higher
May 21, 2015May 21, 2015

On Tuesday Moody’s Investors Service released a new report titled “Oil and Gas: The Bad, Ugly and Good.” The 12-page, which will set you back $550 (or free if you’re company subscribes to Moody’s) says, in essence, because the price of oil is recovering slowly, instead of quickly, “weaker oil & gas issuers are at a much greater risk of default.” That is, some drillers in 2015 will either go under or get bought out. How many? A high level summary of the report (below) doesn’t say how many. What it does say is that of all the companies rated by Moody’s with a credit rating of B3 or lower (too much debt, not enough revenue), 15% of all the companies in that list are oil & gas companies. That’s up from 8% of all companies in the list a year ago. In other words, it’s getting worse for drillers (or exploration & production companies, as it’s more properly called)…
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Commodity Price | Economic Impact | Energy Services | Industrywide Issues | Pennsylvania | Statewide PA | UGI Energy Services

SE PA Natgas Customers See Rates Drop 13.5% Thx to Marcellus
May 18, 2015May 18, 2015

Last winter in the northeast saw record-setting cold temperatures in many locations–particularly in Pennsylvania–and near-record demand for natural gas. That would normally mean the price of natural gas used to heat homes and power businesses would rise–significantly. Instead, if you’re among the 178,000 customers who live or work in one of 15 southeastern PA counties served by UGI Penn Natural Gas, your rates are about to go down–again. How much? By an average of 10.3% as of June 1st and another 3.2% on December 1st (total of 13.5% in 6 months). Why? Because UGI now sources ~90% of its natural gas from the cheap, abundant, clean-burning, homegrown, FRACKED Marcellus Shale. Even with record low temps and record high demand, your price just keeps dropping. UGI customers in other PA regions (northeast and central PA) are also seeing rates drop…
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Economic Impact | Industrywide Issues | Ohio | Research | Statewide OH

Spring 2015 List of Shale-Related Infrastructure Projects in OH
May 5, 2015May 5, 2015

We’re excited to share with you an update to a report we LOVE. The sharp researchers at law firm Bricker & Eckler produce a twice yearly called “Shale Economic Development Overview.” It is a list of projects details, by county in Ohio, of those projects started or planned because of shale drilling. The Spring 2015 edition is embedded below. The first edition of this list was published in October 2013 and showed projects worth $12.2 billion. Last October that number had risen to a staggering $21.5 billion. For this report, the new total rises to $28 billion–a more modest increase than before, but the fact that it’s increasing is a testament to the fact that although drilling has greatly slowed, the midstream (pipelines and processing plants) have not…
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Belmont County | Economic Impact | Ethane | Industrywide Issues | Jobs | Ohio | Processing Plants

Belmont County Elated with Cracker Plant Announcement (Drip)
April 24, 2015April 24, 2015

We hate to rain on Belmont County, OH’s parade, but we have to point out their celebration over the announcement about a potential ethane cracker plant announced on Wednesday may be a bit premature (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Yes, we’re super excited at the prospect of a cracker plant getting built somewhere in the northeast–and if it’s this one, to be built by Thailand and Japan, we’ll be as elated as the officials in Belmont County are (see below). However, we would like to point them to Beaver County, PA, about an hour’s drive across the border, where local officials there have been waiting for more than three years for Shell to get off the pot with a project to build a cracker plant there. Elation–when it comes to these cracker plant projects–sooner or later turns into concern, and eventually into dimmed and elusive hope. The one thing Belmont County CAN celebrate is that the company proposing to possibly build the cracker plant in the county will spend around $150 million to evaluate the site first–so at least the county will get a bit of an economic bump from that…
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Belmont County | Economic Impact | Ethane | Industrywide Issues | Jobs | Ohio | Processing Plants

It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site
April 23, 2015April 23, 2015

As we told you Tuesday, Ohio is now squarely in the ethane cracker race (see Rumor: Ohio Cracker Plant Announcement Coming This Week). As predicted, yesterday Ohio Gov. John Kasich and Belmont County, OH officials announced a pair of companies from Thailand and Japan were partnering with the aim of building an ethane cracker plant in Belmont County (see the announcement below). It is a $5 billion project, according to media reports–larger than the price tag for both the possible Shell ethane cracker in Beaver County, PA and the Odebrect ethane cracker/petrochemical facility in Parkersburg, WV–which is now on pause (see Odebrect Pushes the Pause Button on WV Ethane Cracker). Speaking of which–you may now color us skeptical and jaded that any of these projects, including the one in Ohio, will ever get built…
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Anti-Drilling/Fossil Fuel | Belmont County | Economic Impact | Energy Companies | Industrywide Issues | Ohio | Rex Energy

Belmont County, OH Landowners Spread the Wealth Around
April 13, 2015April 13, 2015

One of the early slanders MDN heard against drilling is the typical class warfare argument. Some citizens (landowners and drillers) are winners of the “drilling lottery” and everyone else around them suffers with all of the negatives and none of the po$itive$. We call it the Beverley Hillbillies argument–rich, white, liberals who can’t stand the fact that flat-busted farmers have come into some money. They’re jealous. It’s a bigoted and repugnant argument we’ve heard made by people like a certain Cornell professor (see Everyone Wins – Not Just Landowners – When Marcellus Drilling Happens in a Community). The image they portray is that the people who make money from drilling–landowners and drillers–are money-grubbing misers. Ebeneezer Scrooge counting his piles of gold coins. The only problem with that image is, it’s not true. As you might expect, salt-of-the-earth farmers DON’T just hoard the money–they share it. Like a group of landowners (along with Rice Energy) in Belmont County who have donated, so far, $170,000 to a fund that benefits local community groups–like fire departments and food banks. Their goal is to see the fund swell to $10 million–all of it benefiting local groups and charities. Whoops! There goes another lie peddled by anti-drillers that’s been completely deflated…
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | Research

Nonpartisan Brookings Research Finds Huge Benefits from Fracking
April 7, 2015April 7, 2015

The nonpartisan Washington, DC-based think tank the Brookings Institution recently published a detailed paper on the enormous benefits of shale gas to American society as a whole. Titled “Welfare and Distributional Implications of Shale Gas” (full copy below), the research paper finds that the average American household that burns gas now saves $200 per year on the cost of that gas, a cumulative economic impact of adding $13 billion more in disposable income into the economy. In fact, as of 2013, Brookings finds the “fracking revolution” as they call it, has improved the economic well-being of consumers a staggering $74 billion per year. All because of the miracle of fracking…
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Brooke County | Economic Impact | Electrical Generation | Industrywide Issues | Jobs | Regulation | West Virginia

Brooke County, WV Marcellus-Powered Electric Plant Plan Advances
April 6, 2015April 5, 2015

A month ago MDN brought you the big news that the father and son team building a $615 million, 549 megawatt electrical generating plant near Moundsville, WV that will be powered by Marcellus Shale gas are planning to build three more of them–all in West Virginia (see Big News: 3 More Marcellus-Powered Electric Plants Coming to WV). Two of the three new plants will, if built, be located in Brooke County, WV. Last month the Brooke County Commission signed two memorandums of understanding with Energy Solutions Consortium (father and son Andrew and Matthew Dorn) to agree to a plan to let the Dorns build the plants and then sell them to the county, leasing them back to run them–a plan called a PILOT plan, or “payment in lieu of taxes.” The plan allows the Dorns to avoid paying prohibitively high property taxes on the plants while still generating a big, fat payment to the county and local school district. Last week the local board of education and town council also signed on to the plan, an important next step in making the project a reality…
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Economic Impact | Energy Services | Industrywide Issues | PennEast Pipeline | Pennsylvania | Pipelines | Statewide PA

PennEast Payola? Buying Support One Community at a Time
April 1, 2015April 1, 2015

In March 2014 MDN wrote about Williams spreading money around with local fire departments and other non-profit organizations in communities where they want to build the much-needed Constitution Pipeline (see Constitution Pipeline Payments to Groups – Donations or Payola?). The Constitution ended up paying out more than $1 million in grants to local groups. Our point at that time was maybe Williams should wait until the pipeline is approved and built before they hand out money. It just seemed to us like a not-so-transparent attempt at influencing (buying?) support for the project. Do we need that support? Sure! But wait until the pipeline is approved and built, and THEN help out those communities and be a good corporate citizen. Seems our advice fell on deaf ears. PennEast Pipeline is now trying the same tactic. Yesterday PennEast announced another round of community grants–handing out $70,000 this time around. PennEast is giving $5,000 each to 14 different organizations, most of them fire & ambulance departments in Pennsylvania and New Jersey…
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