Economic Impact

Economic Impact | Industrywide Issues | Jobs | Ohio | Supply Chain | Trumbull County

Drilling-Related Manufacturer Brings 150 Jobs to Trumbull County
November 11, 2013November 11, 2013

Another huge positive economic impact from Marcellus/Utica Shale drilling is coming to eastern Ohio. Legacy Measurement Solutions Inc. of Addison, TX, a manufacturer of measurement equipment used in the oil and natural gas industry, is setting up a new 73,000 square foot plant in Trumbull County, OH early next year. The plant will “ramp up slowly” but will eventually employ 150 people. This is seriously good news for Brookfield, where the plant will be located, and Trumbull County in general.

More jobs, more tax revenues–it’s an economic boomlet from just one company…
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Economic Impact | Energy Services | Industrywide Issues | Kinder Morgan | New York | Pipelines | Statewide NY | Tennessee Gas Pipeline

Kinder Morgan Opens the Valves on TGP Northeast Upgrade
November 4, 2013November 4, 2013

Good news for those who live in the northeastern U.S.–Kinder Morgan, owner of the Tennessee Gas Pipeline, said on Friday they have thrown the switch (or in this case opened the valves) on their new $500 million Northeast Upgrade Project. The upgrade to TGP’s system in Pennsylvania and New Jersey adds 636,000 dekatherms per day of additional capacity to the system, which means more Marcellus Shale gas is now flowing to markets like New York City and the coast of NJ.

This is very good news indeed. Kinder Morgan’s announcement from Friday:
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Access Midstream Partners | Cardinal Gas Services | Economic Impact | Energy Services | Industrywide Issues | Ohio | Pennsylvania | Pipelines | Processing Plants | Statewide OH | Statewide PA | Statewide WV | Utica East Ohio Midstream | West Virginia

Access Midstream Will Invest $3.8B in Marcellus/Utica by End 2015
October 31, 2013October 31, 2013

Access Midstream Partners is heavily involved with the pipeline/processing plant infrastructure buildout happening in both the Marcellus and Utica Shale region. Access is the lead company in the joint venture known as Cardinal Gas Services (the other partners being TOTAL and EnerVest), and an important partner in Utica East Ohio Buckeye (along with M3 Midstream and EnerVest). According to Access CEO Mike Stice on an investors call yesterday, his company’s total investment in the Marcellus Shale by the end of 2015 will be $1.8 billion, and the total investment in the Utica will be $2 billion.

A combined $3.8 billion investment in the northeast spanning 2012-2015–from one company. Simply astonishing! Here’s a few highlights from Stice’s talk yesterday…
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CONSOL Energy | Economic Impact | Energy Companies | Industrywide Issues | Pennsylvania | Statewide PA | Statewide WV | West Virginia

CONSOL Sells More Coal Mines, Investing $24B(!) in Shale Drilling
October 29, 2013October 29, 2013

CONSOL Energy continues what seems to be its inevitable transformation from being a coal mining company to being a natural gas drilling company. The federal government (EPA) is killing the coal industry by killing electric power generating plants that run on coal with onerous new “pollution” standards. It is intentional–Obama’s EPA wants to kill coal. CONSOL is feeling the heat–losing more and more customers for their coal. And so CONSOL has announced they’re selling five more of their coal mines located in West Virginia and Pennsylvania and using the money to expand their natural gas drilling operation.

In fact, CONSOL says it plans to invest an eye-popping $24 billion in West Virginia and Pennsylvania natural gas drilling over the next 10 years. By comparison, MDN found in the most recent volume of the Marcellus and Utica Shale Databook that announced midstream infrastructure projects in the northeast add up to a $40 billion investment. CONSOL, a single driller, will spend more than half that amount on new drilling alone! These are truly staggering numbers and very good news for the states involved. Too bad New York (where MDN is located) is seeing NONE of this investment…
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Economic Impact | Energy Companies | Energy Services | Hilcorp Energy | Industrywide Issues | Jobs | Mahoning County | NGLs | NiSource | Ohio | Pennant Midstream | Pipelines | Processing Plants | Utica Shale

OH Gov. Kasich Dedicates Hickory Bend Plant, No Foreigners Found
October 29, 2013October 29, 2013

Ohio Gov. John Kasich was on hand yesterday for a ceremonial ribbon cutting for the Hickory Bend cryogenic processing plant in Mahoning County, OH. Pennant Midstream, a joint venture of NiSource and Hilcorp’s Harvest Pipeline subsidiary, dedicated the plant by inviting Kasich and a number of state and local officials. The Hickory Bend processing plant separates natural gas liquids (NGLs or “wet gas”) from methane (or “dry gas”). It has been up and running since summer, however, it won’t begin shipping separated NGLs to the M3 Momentum fractionation plant in Kensington until December. Hickory Bend is also a network of 55 miles of wet gas gathering pipelines in the region.

Gov. Kasich had plenty to say as he dedicated the plant. In typical fashion he was there sniffing out “foreigners” and was happy to pronounce he didn’t find any. (For an example of Kasich’s obsession with “foreigners”–i.e. out of state workers–see OH Gov. Kasich Goes Foreigner-Hunting in Strasburg.) Kasich also dissed Pennsylvania in his comments. A handful of protesters were on hand for the ceremony, bleating about methane migration, but they were far enough away that nobody heard them…
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Economic Impact | Guest Post | Industrywide Issues

Marcellus in Perspective – 5th Largest Natgas Producing “Country”
October 28, 2013October 28, 2013

Last week MDN told you about the U.S. Energy Information Administration’s finding that Marcellus Shale production had passed 12 billion cubic per day (Bcf/d), a full two years ahead of predictions made by Penn State’s Terry Engelder (see New EIA Drilling Productivity Report: Marcellus Passes 12 Bcf/d!). MDN friend and prolific story idea/link contributor Chris Acker, a geological engineer with an MBA who grew up in the oil fields of Venezuela where his dad was a petroleum engineer, offers the following helpful perspective on just how much 12 Bcf/d really is…
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Economic Impact | Industrywide Issues | Jobs | Ohio | Supply Chain | Trumbull County | Wastewater

3 More Wastewater Injection Wells on the Way in Trumbull County
October 28, 2013October 28, 2013

A small Ohio conventional natural gas drilling/excavating company is getting new life and expanding thanks to the Utica Shale. Kleese Development has applied to the Ohio Dept. of Natural Resources (ODNR) to re-purpose several vertical wells to be injection wells. Three older conventional natural gas wells located in Trumbull County, OH–on U.S. Route 422 near Templeton Road–will be converted to shale frack wastewater injection wells if the ODNR approves the project.

If the ODNR does approve the project, frack wastewater won’t be the only thing injected in Trumbull County. The company is also injecting money and jobs into the local economy…

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Economic Impact | Industrywide Issues | Pennsylvania | Pipelines | Processing Plants | Regulation | Statewide PA

Philly Conference: Dramatic Ramp-up & Challenges in PA Midstream
October 24, 2013October 24, 2013

A conference in Philadelphia yesterday, hosted by the law firm Blank Rome and by engineering firm Hull and Associates, focused on the importance of the midstream–pipelines and processing plants. And for good reason–there’s an incredible amount of money being spent in the midstream sector. Here’s what grabbed our attention about the conference: One of the speakers quoted numbers from Oil and Gas Journal that say spending on pipelines across the U.S. was $8.6 billion last year, in 2012–but this year, that number is zooming to $38 billion!

We will add our own number to that mentioned at yesterday’s conference. MDN has just published Volume 2 of the Marcellus and Utica Shale Databook. In our new volume we compiled a comprehensive list of 111 midstream and infrastructure projects that either already are being built or have been announced. MDN found that from 2013 and spanning the next 10-15 years, announced midstream projects in the Marcellus/Utica region will top $40 billion of investment! That’s investment in just the Marcellus/Utica…
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | Research

New EIA Drilling Productivity Report: Marcellus Passes 12 Bcf/d!
October 23, 2013October 23, 2013

Terry Engelder is a Penn State University geologist and professor. He was previously named to Foreign Policy magazine’s list of Top 100 Global Thinkers for his work with the Marcellus Shale. MDN calls him the “rock” star of the Marcellus, if you’ll pardon the pun (see Prof Terry Engelder: Marcellus Rock Star). In years gone by Dr. Engelder predicted that sometime in 2015 the Marcellus would be producing 12 billion cubic feet of natural gas per day. For his breathtaking, bold (and frankly wild) prediction he was praised by some, but scorned and ridiculed by many.

As MDN announced yesterday, the U.S. Energy Information Administration (EIA) is launching a new monthly Drilling Productivity Report (DRP). The very first report was issued yesterday (full copy embedded below). What does it show? It shows that Engelder was wrong. The Marcellus has just passed the 12 Bcf/d mark–now–this month. That is, the Marcellus is even more productive than Engelder’s so-called wild fantasy. According to an EIA spokesman, natural gas production from the Marcellus has surprised even the brainiacs at EIA who study this stuff for a living…
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Economic Impact | Ethane | Industrywide Issues | Processing Plants | Statewide WV | West Virginia

Did Gov Tomblin Find a European Investor for a WV Cracker Plant?
October 22, 2013October 22, 2013

At the beginning of October, MDN told you that West Virginia Gov. Earl Ray Tomblin was heading out on a 13-day whirlwind European ~~vacation~~ trade mission to five different countries. One of his aims was to find someone to invest in an ethane cracker plant in West Virginia (see WV Gov Going to Europe to Find Him a Cracker). Tomblin is almost done touring Europe and said by phone from Switzerland that “he expects to make announcements within the next few days concerning deals made” as a result of his trip.

Will one of those announced deals be an investment in a cracker plant?…
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Economic Impact | Electrical Generation | Exporting | Industrywide Issues | Research

GE Report: Natural Gas Taking the Limelight in World Energy
October 21, 2013October 21, 2013

Last week GE released a new report titled “The Age of Gas and the Power of Networks” (full copy embedded below). In the report, the brains at GE say that natural gas will soon rival coal use throughout the world, and is even starting to take some of oil’s market share away. By 2025 the report says 20% of the world’s natural gas supply will come from unconventional (i.e. shale) gas. Most that will come from the U.S. and Canada, and the majority of that will come from two shale plays: the Marcellus and the Eagle Ford. It shows the incredible importance of the Marcellus to the world’s energy supplies in the coming decades.

Other interesting factoids found in the report: 89% of natural gas is transported via pipelines, the rest by rail or truck or ship. LNG exports will play an increasingly important role as America continues to generate more natural gas that we can use here at home. And not surprisingly, the power sector (electric generation) will be the key future driver of demand for more natural gas, especially with tighter EPA regulations on coal generating plants…
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Economic Impact | Industrywide Issues | Jobs | Pennsylvania | Statewide PA

Marcellus Credited with 90% of New Jobs in PA 2005-2012
October 17, 2013October 17, 2013

Does Marcellus Shale drilling generate real jobs? You bet it does. Try this statistic on for size: Of all the new jobs created in Pennsylvania from 2005-2012, 90% of them were created by the drilling industry. No, that’s not a misprint. Those numbers come from analysts at Raymond James, a highly respected financial services firm. In addition, new hires in core Marcellus Shale industries were up 35% in the second quarter of 2013 compared to the second quarter of 2010. As one RJ analyst said, “unconventional oil and gas is not just a flash in the pan.” It will be a job-creating engine for decades to come.

When someone tells you drilling doesn’t create jobs, tell them to go fly a kite…
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Economic Impact | Ethane | Industrywide Issues | Processing Plants | Statewide WV | West Virginia

I’m Hooked on an (Ethane) Feeling, High on (Cracker) Believing
October 16, 2013October 16, 2013

Will the northeast ever get an ethane cracker plant to handle the massive amount of ethane being produced in wet gas areas of western PA, eastern OH and the panhandle of WV? Some people think so (MDN among them), although each year that goes by without a cracker it seems less likely because of new ethane and NGL pipelines being built to haul ethane out of the northeast. Still, people “in the know” say they have a feeling. Kind of reminds us of the old BJ Thomas song, “Hooked on a Feeling.”

Yesterday at the Wheeling (WV) Economic Outlook Conference, Don Rigby, executive director of the Wheeling-based Regional Economic Development Partnership, was the latest “in the know” person to say he’s hooked a cracker feeling…
Read More “I’m Hooked on an (Ethane) Feeling, High on (Cracker) Believing”
Economic Impact | Industrywide Issues | Processing Plants

Gas-to-Liquids Trend Picks Up Steam in Northeast
October 15, 2013October 15, 2013

An interesting trend to keep an eye on: gas-to-liquids (or GTL). Gas-to-liquids converts natural gas into other hydrocarbon compounds–like diesel fuel and chemicals used in manufacturing. If the economics are right, GTL may well become an important market for an abundance of very cheap natural gas in the Marcellus/Utica region. In fact, MDN has brought you stories about three such facilities that have been announced in the Marcellus/Utica region (see Chemical Manufacturer to Build Gas-to-Liquids Plant in PA; Altoona Area Getting $200M Marcellus Gas-to-Liquids Plant; and Utica Shale Gas-to-Liquids Plant Planned for Ashtabula, OH).

An article by SNL Financial highlights the fact that GTL is not just a northeastern U.S. trend and not just a national trend, but indeed it is an international trend…
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Economic Impact | Ethane | Hydraulic Fracturing | Industrywide Issues | Research

Tipping Point: More NatGas Now Produced by Shale than Conventional
October 14, 2013October 14, 2013

According to energy consulting firm PIRA Energy Group, the United States has reached a tipping point: We now produce more natural gas from shale deposits and “tight gas” formations (i.e. “unconventional sources”) than we do from traditional, conventional sources.

In a wide ranging article (below), PIRA and others quoted talk about the tremendous drop in prices for natural gas and gas liquids, the startling turnaround in chemical manufacturing in this country (because of the abundance of cheap natural gas and feedstocks like ethane), and the importance of the Marcellus/Utica in this whole equation. Hint: Nearly 1/3 of the natural gas being produced from shale comes from the Marcellus/Utica…
Read More “Tipping Point: More NatGas Now Produced by Shale than Conventional”
Economic Impact | Hydraulic Fracturing | Industrywide Issues | Research

Purdue Researchers: Shale Energy Adds $478B Per Year to US Economy
October 14, 2013October 14, 2013

Researchers at Purdue University recently presented the results from two studies analyzing the economics of shale energy and its impact on the U.S. economy (summary embedded below). They discussed their findings at the annual North American joint conference of the United States and International Associations for Energy Economics in Anchorage, Alaska (in July). What did the Purdue researchers find?

Purdue researchers found that shale oil and gas will increase the gross domestic product (GDP) of the United States by an average of 3.5% per year through 2035. In raw numbers, that means each and every year shale is adding $478 billion to our economy–a number so large it’s breathtaking. It seems to MDN that shale energy is single-handedly keeping our country out of yet another recession…
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