Industrywide Issues

Belmont County | Energy Services | Ethane | FirstEnergy | Industrywide Issues | Ohio | Processing Plants

FirstEnergy Confirms Their Site is Future Home of OH Cracker
June 24, 2015June 24, 2015

More cracker plant talk. Yesterday we told you that Shell has received the air quality permit they need from the PA Dept. of Environmental Protection (see Shell Receives Air Quality Permit from PA DEP for Cracker Plant), moving that ethane cracker plant project significantly closer to reality. We also told you that the president and CEO of Odebrecht, the Brazilian company planning to build a cracker plant in WV, has been arrested in a bribery scandal (see Odebrecht CEO Arrested; What Does it Mean for WV Cracker Plant?), making that ethane cracker project less likely, in our humble opinion. The third major ethane cracker in the Marcellus/Utica is planned for Belmont County, OH. PTT Global Chemical, Thailand’s largest integrated petrochemical and refining company, with financial backing from Marubeni Corporation, a Japan-based company conglomerate, plans to build a cracker plant complex in Ohio (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). It has been an “open secret” the site for the plant would be at FirstEnergy Corp’s R.E. Burger power plant site along the banks of the Ohio River. FirstEnergy has, until now, denied they are selling the site. But a FirstEnergy official in a round-about way has just confirmed that yes, IF the cracker plant project gets built, it likely will get built at the R.E. Burger site…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Q: Why is ETE Making a Play to Buy Williams? A: Marcellus/Utica
June 24, 2015June 24, 2015

On Monday, MDN brought you what has to be the biggest midstream news in the Marcellus/Utica for 2015: a proposed hostile takeover of Williams by Energy Transfer Equity (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). We’re a bit dubious about the benefits of a proposed takeover/merger because the market loses competition with such mega mergers. But Wall Street loves these kinds of deals. We see jobs lost due to consolidation and price increases due to less competition. Wall Street sees fatter profits from “economies of scale” and other euphemisms they use for lost jobs and less competition. We spotted a Reuters article that evaluates the proposed ETE deal from the perspective of what it means (for ETE) in the Marcellus/Utica. The story says the primary motivator on the part of ETE in pursuing a takeover/merger with Williams is that it would give ETE a “dominant position” in the Marcellus/Utica…
Read More “Q: Why is ETE Making a Play to Buy Williams? A: Marcellus/Utica”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation | Transco

Mass. DPU Rejects Anti Group’s Request to Join Pipeline Hearing
June 24, 2015June 24, 2015

ENOUGH of these anti-pipeline, anti-drilling, dump-all-fossil fuels protesters and their strategies to stop pipelines in New England. That’s essentially what the Massachusetts Department of Public Utilities (DPU) said in refusing to allow the anti-pipeline group Pipeline Awareness Network for the Northeast (PLAN-NE) “full intervenor status” at a series of hearings the DPU will hold today, tomorrow and Friday to consider whether the contracts sought by the local gas distribution companies (local gas utilities) who want to get cheap, abundant and clean-burning Marcellus natural gas from Kinder Morgan’s proposed Northeast Energy Direct pipeline, are in the public interest. The DPU wants to concentrate on the real issues at hand and not be distracted and derailed by the antics of anti-pipeliners, so the DPU turned down PLAN-NE’s request…
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Commodity Price | Industrywide Issues | Jobs | Research

EIA: Oil & Gas Jobs Plunge 6 Months After Oil Price Plunge
June 24, 2015June 24, 2015

Our favorite government agency, the U.S. Energy Information Administration, has authored an excellent article about how jobs in the oil and gas sector lag behind oil price gyrations. That is, once the price of oil drops to a certain level, it takes a while before jobs in the sector start to disappear. Which makes sense. Oil (and gas) prices are cyclical–they go up, they down, they go up again. It’s always been that way. When prices tank, companies don’t immediately layoff people–it take a few months of wait and see to see if prices will recover. If they don’t recover within a few months? That’s when layoffs start to happen, and the statistics show it. A startling statistic included in the EIA story below: on-shore rig counts hit a new low for the week ending June 19–54% below the same point a year ago. It’s the lowest rig count level in nearly six years. While you can’t say “half the rigs, half the number of jobs,” you can say “half the rigs means a whole lotta jobs are now, 12 months later, gone”…
Read More “EIA: Oil & Gas Jobs Plunge 6 Months After Oil Price Plunge”
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”
Air Quality | Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Regulation | Shell | Statewide PA

Shell Receives Air Quality Permit from PA DEP for Cracker Plant
June 23, 2015June 23, 2015

Finally, after months and months of waiting, the Pennsylvania Dept. of Environmental Protection (DEP) has granted an air quality permit that allows Shell to operate a proposed ethane cracker plant in Monaca (Beaver County), PA. MDN told you the DEP signaled they would approve the air quality permit back in March (see PA DEP Signals Approval for Shell Ethane Cracker Air Quality Plan). Three months later the DEP finally issued the permit–no small miracle given the agency is now run by PennFuture DEP Sec. John Quigley. Shell had stated getting the permit would be a “critical” step in the process to moving forward. Now that they have the permit, what kinds of encouraging words do we have from Shell? The permit “does not mean we have made a final decision to build the project.” Which is the same standard line they’ve delivered since 2011 when this whole process began (see Shell Commits to Building a Billion Dollar Chemical Plant in the Marcellus Region of U.S.). Four years of being teased with this project has led us to think we’ve contracted post traumatic cracker disorder (PTCD)…
Read More “Shell Receives Air Quality Permit from PA DEP for Cracker Plant”
Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

Odebrecht CEO Arrested; What Does it Mean for WV Cracker Plant?
June 23, 2015June 23, 2015

Scandal has rocked Odebrecht, the Brazilian company that in November 2013 announced it wants to build a $4 billion ethane cracker plant complex near Parkersburg, WV (see WV Announces Brazilian Company to Build Ethane Cracker Complex). Marcelo Odebrecht, president and CEO of Odebrecht SA–one of the largest construction companies in South America–was recently arrested for being part of a plan that stole “billions of dollars” from Brazil’s state-run Petrobras oil company. His arrest raises legitimate questions about the viability of the proposed Parkersburg ethane cracker project. We can all pretend that the arrest of the CEO of the company proposing to build the plant has little or no effect on the future of the project–but we’re not children. So let’s not pretend. What do you think is occupying Mr. Odebrecht’s attention these days–building a petrochemical plant in far-off West Virginia, or staying out of jail?…
Read More “Odebrecht CEO Arrested; What Does it Mean for WV Cracker Plant?”
Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | Statewide WV | West Virginia | Wood County

WV Gov Tomblin Not Ready to Give Up on Odebrecht Ethane Cracker
June 23, 2015June 23, 2015

West Virginia Gov. Earl Ray Tomblin, the man who has worked hard to land an ethane cracker plant for his state, is still hopeful that WV will get them a cracker. In a wide-ranging talk at the Wheeling Rotary Club on Monday, Tomblin said Odebrecht, the Brazilian company that announced its interest in building an ethane cracker complex near Parkersburg, WV, continues to move forward with the project–“but at a slower pace.” That certainly is a bit of good news. We’ve not heard anything about Odebrecht advancing the ball on their project since the company announced in April, “the original configuration…needs to be re-evaluated, and a final investment decision on the project will require more diligence.” We took that to mean they’ve hit the pause button (see Odebrect Pushes the Pause Button on WV Ethane Cracker). But Tomblin and his administration don’t view it the same way. Instead of hitting the brakes, Tomblin says Odebrecht has simply reduced pressure on the gas pedal a bit…
Read More “WV Gov Tomblin Not Ready to Give Up on Odebrecht Ethane Cracker”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

More on PIOGA Request to Keep DEP in its Regulatory Box
June 23, 2015June 23, 2015

Yesterday MDN brought you the story of the Pennsylvania Independent Oil & Gas Association’s (PIOGA) third request to intervene in the Act 13 lawsuit decided by the PA Supreme Court (see PIOGA Asks Supreme Court to Stop DEP Denying Permits Using Act 13). The point of PIOGA’s request is to make the DEP follow PA law when it comes to granting shale drilling permits. Our headline and some of the language we used in that article was not completely accurate–we’d like to admit that right up front (although our inaccuracy was not intentional). The headline states that the DEP has denied permits based on portions of the Act 13 lawsuit tossed out by the PA Supreme Court. In researching the issue and speaking with those knowledgeable about PIOGA’s request to the Supreme Court, we’ve not found a specific instance where the DEP has denied a permit based on the tossed out Section 3215(b)-(e). But while denying permits based on rejected portions of Act 13 is not taking place, something far more subtle and insidious IS going on–with the same result as if the DEP were denying permits based on tossed-out portions of Act 13. Let us explain…
Read More “More on PIOGA Request to Keep DEP in its Regulatory Box”
Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Pipelines | Statewide OH | Taxation

For the Children: ET Rover Pipeline $91M in School Taxes 1st Year
June 23, 2015June 23, 2015

In the ongoing fracking wars, pipelines are the latest flash point for irrational anti-drillers. It used to be no one thought twice about a new pipeline going in the ground. But fear mongers from Big Green organizations like the Sierra Club claim those pipelines are a connection straight to Lucifer. We’ve seen groups of anti-fossil fuelers oppose pipelines like the PennEast, the Constitution, the Northeast Energy Direct and many others. One of those many others is the ET Rover pipeline, a 711-mile Marcellus/Utica natural gas pipeline that will serve mostly U.S. customers that will cost $3.7 billion to build and run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. ET Rover is a project of Energy Transfer, the company making a play to take over Williams (see our other stories on that topic). This story is about ET Rover’s campaign to overcome opposition in Ohio where the majority of the pipeline (570 miles of it) will run. According to a press release issued yesterday, the ET Rover pipeline will generate more than $135 million in ad valorem tax revenue for Ohio during its first year in operation. Of that $135 million, an estimated $91 million will be directed to more than 36 local school districts. Perhaps the nutters opposing the pipeline should rethink their opposition before they screw their own kids out of $91 million? As you know, it’s always for the chil’ren. Libraries, hospitals, parks and senior centers are among other local entities that will benefit from the tax revenue from ET Rover…
Read More “For the Children: ET Rover Pipeline $91M in School Taxes 1st Year”
Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B
June 22, 2015June 22, 2015

Sunday evening MDN spotted what has to be THE biggest midstream story of 2015: Somebody wants to buy out and take over Williams Companies. The biggest midstream story of 2014 was the buyout of Access Midstream (the former Chesapeake Midstream) by Williams, creating a company that is nearly the size and certainly a worthy rival of the country’s biggest pipeline company Kinder Morgan (see Big News: Williams Partners Buying Access Midstream for $6B). Williams said at the time the “total transaction value” (or TTV) would create a combined company worth nearly $50 billion (see Deal Details for Williams/Access Midstream Merger – TTV of $50B!). Sunday evening Williams said, in a pair of prepared press releases, that somebody (they wouldn’t name who) has made an “unsolicited proposal” (almost sounding like an indecent proposal) to buy Williams for $64 per share, or a total deal worth $48 billion. Williams has rebuffed the offering, hiring some high-powered bankers to help them out of this mess. The guy and company making the offer, it has since been revealed, is none other than Kelcy Warren, CEO of both Energy Transfer Partners and Energy Transfer Equity, the main shareholder of ETP. ETP is very active in the Marcellus/Utica. We have as much as we can gather on Warren, background on ETP/ETE, his indecent proposal to Williams, and what Williams–one of if not THE largest midstream companies in the northeast–is doing in response to Warren’s proposal…
Read More “Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B”
Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

ETE Says Shareholders Big Winners in Potential Williams Merger
June 22, 2015June 22, 2015

Energy Transfer Equity is offering their side of the story in the proposed merger/takeover of Williams. MDN’s lead story today is about that merger. On Sunday, Williams issued a pair of press releases refusing to name who the suitor is, but essentially said that somebody (ETE) is making an offer to buy them (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). As you know, there’s always two sides to a story. ETE, the main investor in Energy Transfer Partners, is offering their side of the story. ETE’s version is much more lengthy than Williams and includes the claim that the ETE proposal offers a 32.4% premium to Williams stockholders “with a high degree of transaction certainty”…
Read More “ETE Says Shareholders Big Winners in Potential Williams Merger”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

PIOGA Asks Supreme Court to Stop DEP Denying Permits Using Act 13
June 22, 2015June 23, 2015

Please see this MDN follow-up story for an important clarification/update: More on PIOGA Request to Keep DEP in its Regulatory Box

This story is why you pay MDN the “big bucks”–to break down complex issues into an easy-to-understand report. Last Friday the Pennsylvania Independent Oil & Gas Association (PIOGA) filed paperwork with the Pennsylvania Supreme Court asking for permission to, once again, intervene in the Act 13 lawsuit brought by seven selfish PA townships that resulted in portions of the Act 13 oil and gas drilling law to be struck down. Twice before PIOGA, which represents the companies directly affected by the Act 13 law, has filed to intervene and both times it was (incredibly) prevented from doing so. Apparently the people most affected by a lawsuit don’t have “standing” to defend themselves in PA courts–such is their system of “justice.” At any rate, PIOGA’s third attempt may succeed where the first two attempts failed, and that has the anti-drilling selfish towns, along with the Wolf administration, nervous. Why might PIOGA succeed this time? That’s where it gets complicated. In a nutshell, the zoning portions of the Act 13 law (Section 3304) were not the only sections to be struck down by the PA Supremes…
Read More “PIOGA Asks Supreme Court to Stop DEP Denying Permits Using Act 13”
Beaver County | Belmont County | Energy Companies | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Shell

Are OH Officials Worried about Shell’s PA Ethane Cracker? Nope
June 22, 2015June 22, 2015

In April Ohio officials announced Belmont County, OH has been chosen as the site of a potential ethane cracker plant (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Which led us to admit that since we’ve been teased with a cracker for over three years now–with NO ONE actually committing to such a plant–we’re experiencing “cracker fatigue.” But not long after Shell made some serious moves toward committing to build a cracker plant in western Pennsylvania, not far from Pittsburgh. The most recent positive sign is that Shell finally, after three years of faffing about, earlier this month purchased the property the plant would be built on (see Shell Buys Beaver County, PA Property for Future Cracker Plant). Does a Shell cracker reduce the likelihood of an cracker plant being built less than two hours away in Belmont County, OH? Not according to officials in Ohio. In fact, they’re not worried at all…
Read More “Are OH Officials Worried about Shell’s PA Ethane Cracker? Nope”
Anti-Drilling/Fossil Fuel | Crime | Industrywide Issues

The Envrionmental Radicalization of the Anti-Drilling Movement
June 22, 2015June 22, 2015

MDN is beginning to see a pattern. It dawned on us as we were recently listening to several news reports of why young people become “radicalized” and join forces with militant Islamists like those in ISIS (what we used to call Al-Qaeda). People who have become radicalized break laws. They often kill other people. They sometimes commit suicide by strapping bombs to themselves in an attempt to kill others. Sane people have a hard time understanding it. What drives these people to such extremes? What motivates them? Why do kids–some of them from America and other Western counties–become radicalized? Frankly, it usually (almost always) stems back to their childhood. Their heads have been crammed with liberal pap about hating America from a young age. People hate America because they hate freedom. As we were mulling this over, we had a revelation: It’s the same with some anti-drillers. In the same way some young people (and some older people) become radicalized and join ISIS, some are radicalized and join the “green” movement…
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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Talk of Upstate NY Seceding & Joining PA Comes Roaring Back to Life
June 19, 2015June 19, 2015

This story comes right from MDN’s own backyard–in the Town of Windsor, NY. Following Gov. Andrew Cuomo’s decision to temporarily ban shale drilling while he’s in the governor’s chair, there was talk that some New York towns along the border of Pennsylvania are considering seceding from NY State and joining PA (see 15 NY Towns Consider Seceding from NY, Join PA Due to Frack Ban). It was certainly good for a few headlines–the story actually got international play for a while. But then it all seemed to simmer down. The “secession” story has now come roaring back to life with a proposal by a Windsor man (and MDN acquaintance) who is pushing a plan to split NY in two–and have all of upstate NY join Pennsylvania–not just a few towns. He’s even got a proposed platform and he’s working to organize a secession convention! Is this for real? Or is it a stunt–a clever way to focus attention on the abuse of upstate residents at the hands of a corrupt governor? You decide…
Read More “Talk of Upstate NY Seceding & Joining PA Comes Roaring Back to Life”