Economic Impact

Economic Impact | Energy Services | Industrywide Issues | NGLs | Pipelines | Processing Plants | Williams

Williams Spending $20B (!) on Marcellus/Utica Infrastructure Next 5 Years
December 2, 2013December 2, 2013

MDN released Volume 2 of the 2013 Marcellus and Utica Shale Databook in October. Volume 2 contains one of MDN’s proudest achievements: a comprehensive list of midstream/infrastructure projects either on the boards or already under way in the Marcellus and Utica Shale region. Cumulatively the projects represent a mind-blowing $40 billion investment (see MDN’s 2013 Databook Vol 2 Finds Staggering $40B in NE Midstream Projects).

Although when we released Databook Vol. 2 we thought trumpeting our findings of $40 billion in investment may sound exaggerated and overblown to some, little did we know we may have underestimated the number! An article appearing in Tulsa World says a single company–Williams–has committed to spending $20 billion on Marcellus and Utica infrastructure (pipelines and processing plants) over the next five years. One company! Such numbers makes our jaw hit the floor…
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Economic Impact | Electrical Generation | Industrywide Issues | Pennsylvania | Wyoming County (PA)

P&G’s Only Energy Self-Sufficient Plant is Powered by Marcellus
November 27, 2013November 27, 2013

Consumer goods behemoth Procter & Gamble (P&G) has 150 manufacturing plants worldwide that make things like Pampers diapers, Charmin toilet paper and Bounty paper towels. Only one of those 150 P&G manufacturing plants is 100% energy self-sufficient–providing all of its own massive energy needs without the need to tap into the local utility grid. Can you guess where it’s located? The 100% energy self-sufficient P&G plant is in Mehoopany (Wyoming County), PA, near Scranton/Wilkes-Barre. The P&G plant in Mehoopany is powered exclusively by Marcellus Shale gas drilled right on P&G’s own property! In fact, P&G is producing so much electricity by using Marcellus gas that they sell electricity back to the local utility grid–enough electricity to power 20,000 homes! What a tremendously proud, feel-good moment this is.

Northeast PA is showing the world how shale gas is making the U.S. energy independent. Bye bye tinpot dictators in the Middle East who hate our guts! Bye bye messy wars to keep oil flowing. Hello home-grown energy, home-grown jobs and home-grown economic prosperity. Here’s the P&G feel-good story that will keep you smiling while you eat turkey tomorrow…
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Commodity Price | Economic Impact | Hydraulic Fracturing | Industrywide Issues | New York | Statewide NY

Big News: Bloomberg Writes Positive Marcellus Shale Article!
November 27, 2013November 27, 2013

Whenever we start reading a Bloomberg article about the Marcellus Shale, shale gas drilling in general, or fracking, we just know how skewed to the anti-drilling side of the ledger the story will be. So imagine our surprise when we read an article that actually reports (gasp!) the truth about the Marcellus Shale. Even though Bloomberg usually tells us the low price of natural gas can’t last, the whole shale gas thing is a house of cards waiting to collapse, drillers are trying to hoodwink investors, blah blah blah–this time even Bloomberg can’t ignore the fact that natural gas being piped into New York City is selling below the price of the benchmark Henry Hub in Louisiana–and likely will for years to come. Thanks to the Marcellus.

The Bloomberg article does a good job of giving the big picture with respect to gas prices and how drilling has become more efficient, how infrastructure (pipelines) are helping to get all that gas to market (abundance of supply equals lower prices), and predicting what’s coming next. At the end of the article is an obligatory few sentences from anti-drillers about how shale drilling will poison all of our water and make farms uninhabitable. Well, it is Bloomberg after all. But on balance, this is a good article and worth your time to read. The article begins this way…
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Economic Impact | Industrywide Issues | Lycoming County | Pennsylvania

Is the Marcellus Already Going Bust in Lycoming County, PA?
November 25, 2013November 25, 2013

Has the Marcellus Shale drilling industry already going bust? If you read the headlines of say, oh, the Philadelphia Inquirer, that may be the conclusion you reach. But if you read beyond the headlines you’ll find a different story.

The number of drilling rigs in the Marcellus is down a bit from what it was a year or two ago, that’s for sure. With less drilling comes less of a lot of other things needed for drilling (hotel visits, construction, security, catering, etc.). However, it may be more accurate to view the Marcellus drilling industry as more like taking a breather. Regrouping. Assessing. One thing is for sure, although some parts of the Marcellus drilling industry may have dipped (not gone bust, but slowed a bit), other parts of it are just picking up steam. A better metaphor is “ebb and flow”…
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | Ohio | Pennsylvania | Pipelines | Processing Plants | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

Deloitte & EIA: 90,000 Marcellus Wells Drilled in Next 20 Years
November 25, 2013November 25, 2013

A new report published by consulting powerhouse Deloitte references (and affirms) U.S. Energy Information Administration’s predictions that it will take at least $5 trillion of investment in the oil and gas sector between now and 2035 to main current levels of oil and natural gas production and meet future demand as it rises. The report is titled “The challenge of renaissance: Managing an unprecedented wave of oil and gas investment.” Unfortunately we couldn’t locate a copy–but reportedly it’s full of interesting facts–like the $5 trillion number.

Another eye-popping number from the report: Current estimates are that 90,000 Marcellus Shale wells will be drilled over the next 20 years. That kind of activity will spur an unfathomable economic revival in the northeast like we haven’t seen in since, well, forever! The study says while “trillions” will be spent on upstream (drilling), “hundreds of billions” will need to be spent on midstream (pipelines & processing plants) in order to keep up with the production. More from the Deloitte study…
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | New York | Ohio | Pennsylvania | Research | Statewide NY | Statewide OH | Statewide PA | Statewide WV | West Virginia

Marcellus/Utica States Slip in Global Petroleum Survey
November 21, 2013November 21, 2013

Each year, the Canadian-based Fraser Institute surveys petroleum industry executives and managers (864 of them for 2013) asking them their opinions on the barriers to investing in exploration and production in various geographies across the globe. That is, what makes them more likely or less likely to spend money drilling in a particular location? It’s vitally important to understand what drives investors because without money, drilling doesn’t happen.

The Global Petroleum Survey, as it’s called, tallies the survey responses and ranks each geography from most desirable place to invest, to least desirable. MDN reported the rankings last year (see Energy Execs Rank Drilling Locations Including WV, OH, PA, NY). A copy of this year’s full report/rankings is embedded below. How did Pennsylvania, Ohio, West Virginia and (yes) New York fare this year, compared to last?…
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Economic Impact | Energy Services | Ethane | Industrywide Issues | Jobs | Odebrecht | Processing Plants | West Virginia | Wood County

Analysis: Why Parkersburg, WV for a Cracker Plant Complex?
November 20, 2013November 20, 2013

Don Surber from the Charleston Daily Mail writes a good analysis article in today’s edition that attempts to answer the question, “Why would Brazilian company Odebrecht pick Parkersburg, WV to build an ethane cracker plant?” Surber argues the selection of Parkersburg as the location vaults it into potentially being the most important city in the entire state of WV. He’s right.

Surber’s main point: Don’t focus on the ethane cracker, as nice as that will be. Instead, it’s the three polyethylene plants Odebrecht is going to build that are the real story, the real diamond, if (still a big if) the ethane cracker gets built. Why? It is the polyethylene (plastics) plants that will create a renaissance in manufacturing (i.e. jobs) in the region…
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Economic Impact | Industrywide Issues | Pennsylvania | Roads | Statewide PA

PA’s Roads Vastly Improved – Thanks to Marcellus Drilling
November 18, 2013November 18, 2013

The new president of the Marcellus Shale Coalition, Dave Spigelmyer, has hit the ground running. He’s making the rounds (recently in Scranton, see Cabot’s Big CNG Celebration at Johnson College in Scranton, PA). Now, he’s hitting the editorial pages of major state newspapers, like the Harrisburg Patriot-News.

In an editorial published yesterday, Spigelmyer makes a strong case for the enormous positive impact shale drilling has had on the state’s infrastructure–roads in particular. He points out over the past several years Marcellus drillers have spent 3/4 of a billion dollars to improve PA’s roadways. That’s money that didn’t come out of taxpayers’ pockets. And in addition to now $400+ million raised from an impact fee/tax, another $1.8 billion has flowed in to local and state coffers from taxes on Marcellus-related activities. It’s hard to overstate the huge economic impact the drilling industry has had in PA…
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Braskem | Economic Impact | Energy Services | Ethane | Industrywide Issues | Jobs | Odebrecht | Processing Plants | Statewide WV | West Virginia | Wood County

WV Announces Brazilian Company to Build Ethane Cracker Complex
November 15, 2013November 15, 2013

Yesterday West Virginia Gov. Earl Ray Tomblin was flanked by representatives from Brazilian chemical company Odebrecht to announce the company has chosen a site near Parkersburg, WV (third largest city in the state) to be the potential site of an ethane cracker plant complex. The complex will have an ethane cracker, three polyethylene plants and infrastructure for water treatment and energy co-generation. Gov. Tomblin was justifiably proud to make the announcement, calling it a “game changer” for West Virginia. He’s right.

Odebrecht will build the plant, and once built, it will be operated by Braskem, another Brazilian company with operations in Pennsylvania (51% owned by Odebrecht). MDN told you about Braskem’s interest in a WV ethane cracker all the way back in March 2012 (see Second Company Interested in Building Cracker Plant IDed). So it appears Odebrecht/Braskem have been sniffing around the concept of building a cracker in WV for at least a year and a half. We have a lot of coverage of the announcement below. The key word here is: caution. Like the Shell cracker, this is very early in the process and not yet a 100% done deal…
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Beaver County | Braskem | Economic Impact | Energy Companies | Energy Services | Ethane | Industrywide Issues | Jobs | Odebrecht | Pennsylvania | Processing Plants | Shell | Statewide PA | Statewide WV | West Virginia | Wood County

Clash of the Ethane Cracker Titans: PA vs WV Smackdown
November 15, 2013November 15, 2013

As MDN mentions in today’s companion story about the newly announced potential ethane cracker plant complex to be built near Parkersburg, WV, there is angst in Pittsburgh about whether or not a WV cracker plant will help or harm the potential cracker plant to be built by Shell northwest of Pittsburgh in Beaver County, PA.

The Pittsburgh Business Times, a bit critical and skeptical of the WV cracker (no surprise there), tackles the question of, “Is you a friend or is you foe?”…
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Economic Impact | Ethane | Industrywide Issues | Jobs | Processing Plants | Statewide WV | West Virginia | Wood County

Officials Say Cracker Will be Truly Huge for WV Jobs & Economy
November 15, 2013November 15, 2013

One final story in MDN today about WV ethane cracker mania (see our other two stories posted today for full coverage of the announcement from yesterday). Although WV Gov. Earl Ray Tomblin and officials with the companies that would build and operate a proposed ethane cracker in WV–Odebrecht and Braskem–were careful to say this is a preliminary announcement and not a 100% done deal, it’s still just too juicy a carrot to leave alone for the Tomblin administration.

Although Tomblin says Oderbrecht is “exploring” the possibility of building an ethane cracker, he’s also shouting that this is the best thing for West Virginia since sliced bread was invented (our words, but certainly his sentiment). And sure enough, right on the heels of his announcement, Tomblin officials were talking about the thousands of new jobs this project will generate and the incredible economic impact it will have on WV. IF built, they are 100% correct, this will be an economic and jobs-generating engine like none we’ve seen in the northeast for generations–no doubt about it. The key word, though, is IF…
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | Jobs | Lackawanna County | Luzerne County | Pennsylvania | Supply Chain

NE PA Audience Hears How to Plug in to the Marcellus Supply Chain
November 15, 2013November 15, 2013

The Marcellus means jobs and an economic boom for northeast Pennsylvania. That was the message delivered yesterday in Wilkes-Barre at a Marcellus forum hosted by State Sen. John Yudichak and State Sen. John Blake (both from the Scranton/W-B area). The forum was attended by over 100 people–local contractors, trade unions, small manufacturers and others. MDN friend John Augustine from the Marcellus Shale Coalition was one of the featured speakers, with lots of good tips for those who want to plug in to the Marcellus supply chain.

The Wilkes-Barre Times Leader was on hand and filed this helpful report:
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Economic Impact | Industrywide Issues | Research | Supply Chain

The Important Role of Engineering/Construction Firms in Shale
November 15, 2013November 15, 2013

Engineering and construction firms play a big and important role in the shale drilling industry. If you ever attend a trade show, like the top-notch Shale Insight event hosted by the Marcellus Shale Coalition, and walk around the exhibition area, there are a LOT of engineering and construction companies with booths. And rightfully so–because without them drilling and the associated work (clearing sites, constructing buildings, installing pipelines, siting compressor plants, etc.) would not get done.

Uber big consulting firm PricewatershouseCoopers (PwC) recently released a “report” (i.e. white paper) that discusses how engineering and construction companies can successfully help deliver shale oil and gas products at quicker speeds and lower costs through integrated project planning. That is, PwC is trying to drum up some business. If you’re an engineering/construction company, they can show you a way to do it better, by using their high-priced consultants. 🙂 Still, the white paper has a few useful points to make, and so we pass it along to you…
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Economic Impact | Ethane | Industrywide Issues | Jobs | Processing Plants | Statewide WV | West Virginia | Wood County

BIG NEWS: West Virginia is Getting an Ethane Cracker Plant
November 14, 2013November 14, 2013

The Parkersburg News and Sentinel is reporting that WV Gov. Earl Ray Tomblin will make an announcement today that has been years in coming: West Virginia is getting its own “multi-billion-dollar ethane cracker chemical plant” and it will be located in Wood County. If this rumor, which seemingly originates with reliable sources, bears out, this is seriously good news for WV. In fact, we’re jumping up and down happy! For years MDN has been pulling/cheerleading/advocating for WV to get their own cracker–we think they deserve it.

The speculation is that Tomblin sealed a deal for a cracker plant on a recent European trade mission trip (see WV Gov Going to Europe to Find Him a Cracker). While he was in Europe, he said by phone he would have a big announcement a few days after he returned home. We speculated at the time, three weeks ago, that he might be talking about a cracker (see Did Gov Tomblin Find a European Investor for a WV Cracker Plant?). Was our speculation accurate? We will know today…
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Belmont County | Carroll County | Economic Impact | Housing | Industrywide Issues | Ohio | Stark County | Utica Shale

OH Utica Shale Gives Rise to Crop of New Hotels
November 14, 2013November 14, 2013

It seems as if new hotels are springing up all over the Utica Shale in eastern Ohio. The latest announcement: A New York City asset management firm says they’ll spend $5.2 million to build an 83-room hotel in…Carrollton, OH. Where? Exactly. Carrollton isn’t even a city–it’s a village, population 3,200, and it’s in Carroll County–in the middle of nowhere. But Carrollton also happens to be in the middle of one of the hot spots of the Utica Shale. And this hotel isn’t the only new hotel going up in Carrollton! A second hotel is already under construction in Carrollton–for $13.3 million (100 rooms).

Here’s the low-down on the new Carrollton hotel, and several other recently announced hotel projects in eastern Ohio’s Utica Shale region:
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | Research

EIA Drilling Report Nov 2013: Marcellus Ready to Blow by 13 Bcf/d
November 13, 2013November 13, 2013

Last month the U.S. Energy Information Administration launched a fabulous new Drilling Productivity Report (DPR) that covers six of the key shale formations producing oil and gas in the U.S. Last month we learned that the Marcellus had just blown by an astonishing 12 billion cubic feet of natural gas production per day, and if the Marcellus were its own country, it would be the eighth largest producing natgas country in the world (see New EIA Drilling Productivity Report: Marcellus Passes 12 Bcf/d!).

The November DPR from EIA came out yesterday. What do we learn from it? The Marcellus is on the cusp of passing 13 Bcf/d in natural gas production! The numbers just continue to astonish and amaze everyone, and confound anti-drilling critics who keep saying “it won’t last–not long from now it’ll all just peter out and decline.” Yeah right, you keep telling yourself that one. Here’s the latest full DPR from the EIA:
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