Industrywide Issues

Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Luzerne County | Pennsylvania

NEPA Anti Group Wins Lawsuit, Dropped from Terrorist Watch List
January 19, 2015January 19, 2015

In 2010, activities of the anti-drilling group Gas Drilling Awareness Coalition, Inc. (GDAC) of Luzerne County, PA (Wilkes-Barre area) caught the attention of the Institute of Terrorism Research and Response (ITRR) Foundation, a company contracted by Pennsylvania’s Department of Homeland Security to monitor potential threats in the Keystone State. The ITRR Foundation put GDAC’s name on a list of organizations to keep an eye on–a so-called “terrorist watch list”–which lists potential threats against “critical infrastructure” in the state. The list with GDAC’s name was circulated to law enforcement agencies and to the drilling industry as well. When word of their inclusion on the list leaked, GDAC huffed and puffed and sued. Lo these 4+ years later, it appears they’ve won that lawsuit and the right to be permanently kept off the list…
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Energy Companies | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Statewide PA | Washington County

Strange: DEP Fines Range Resouces $1.75M for Water Withdrawals
January 19, 2015January 19, 2015

A strange announcement from the Pennsylvania Dept. of Environmental Protection (DEP) on Friday says that Range Resources has agreed to pay $1.75 million to the state for failure to keep track of water withdrawals made by the company (takes a lot of water to frack, much of which comes from creeks and rivers), and for exceeding the amount of water withdrawn according to the plan they have on file with the DEP. What’s strange about the announcement is that a) you can’t find it on the DEP website itself, b) Range was making withdrawals and not recording/tracking the withdrawals from 2009 to 2014–five years–but apparently the DEP didn’t notice or didn’t care, and c) $950,000 of the $1.75 million “fine” (more than half) will go to fix up and operate the Hamilton Abandoned Mine Treatment System in Findlay Township, Allegheny County…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Quigley Says Opportunity to Get Marcellus Drilling “Right” in PA
January 19, 2015January 19, 2015

Pennsylvania Gov.-Elect Tom Wolf’s intended appointment of John Quigley to become the next Secretary of the Dept. of Environmental Protection (DEP) continues to trouble us. We’ve heard from MDN subscribers, people we respect, who say that Quigley is a good bloke, lay off on being critical of his appointment. However, we continue to rely on our eyes and ears and what we see and hear bothers us. Quigley once worked for an avowedly anti-drilling organization–PennFuture. That was enough to concern us. But now we have have his own comments to rely on. Last week he answered, on the record, questions from the Harrisburg Patriot-News. Specifically he indicates that so far PA has not “gotten it right” when it comes to Marcellus Shale drilling, and he looks forward to helping the Keystone State get it right. He doesn’t say what, exactly, has been gotten “wrong” with drilling, which is what troubles us…
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Energy Services | GASFRAC | Hydraulic Fracturing | Industrywide Issues

Waterless Fracking Company GASFRAC Files for Bankruptcy
January 19, 2015January 19, 2015

There’s been some talk in New York that perhaps waterless fracking could play a role in moving the Empire State forward with shale drilling. When such talk happens, it usually centers on Canadian company GASFRAC. Not long ago GASFRAC was engaged in fracking its first Utica Shale well in Ohio (see Details on GASFRAC’s Waterless Frack Test in OH Utica). However, last Thursday GASFRAC announced they’ve filed for bankruptcy in Canada. According to the press release they will remain in operation and the management team in place now will continue to run the company. But let’s be honest, a company in bankruptcy doesn’t inspire a great deal of confidence in a cutting-edge technology that could save New York. The fact remains that water-based fracking is still the cheapest, most efficient way (currently) to frack…
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Air Quality | Alternative Energy | Industrywide Issues | Regulation

Real Reason for EPA Methane Rules: Prop Up Expensive Renewables
January 19, 2015January 19, 2015

One of the keynote speakers at last year’s Shale Insight conference, held in Pittsburgh, was the dynamite Stephen Moore. Steve is the chief economist at the Heritage Foundation–the country’s premier conservative think tank, headquartered in Washington, DC. He’s also a Fox News contributor. Steve not only gave a dynamite speech on the role of shale drilling at Shale Insight, he also came along for the riverboat cruise MDN helped organize. It was great fun to talk with Steve and a number of other industry luminaries who came along for the cruise. Steve is back with a killer editorial in the Washington Times that skewers the latest attempt by the Obama EPA to throttle shale drilling by using the “boogeyman” of fugitive methane. As he points out, Steve says cows farting (our word) contributes more methane to the atmosphere than leakage from oil and gas drilling operations. Be careful farmers–the EPA is coming with corks for the cows next!…
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CNG/LNG | Industrywide Issues | Pennsylvania | Statewide PA

Can Risk-Averse Phila. Gas Works Successfully Expand LNG Plant?
January 19, 2015January 19, 2015

Philadelphia Gas Works (PGW) was up for sale, a winsome suitor was found (UIL Holdings from Connecticut) and the deal to sell the nation’s largest publicly-owned gas utility was obliterated by a corrupt City Council. We won’t recount the history (see our stories here). With the $1.86 billion deal now dead, PGW is moving on and trying to act and behave like a private sector company–except it’s not a private sector company. Last week they announced a 12-day “open season” to gauge interest in expanding their liquefied natural gas plant, a plant that would be fed by Marcellus Shale gas (see Phila. Gas Works Launches 12-Day Open Season to Expand LNG). However, LNG is not regulated like the delivery of natural gas, PGW’s main “business.” That is, there’s risk involved–and the people who bear the risk for PGW, being a municipal-owned utility–are the ratepayers, not the investors/owners, which would be the case if PGW were a private sector company. Are Philly residents willing to risk higher rates if PGW bungles the LNG expansion?…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Let’s Slap 5% Tax on ALL PA Natural Resources, Not Just Shale Gas
January 19, 2015January 19, 2015

One of Pennsylvania’s top conservative (Republican) strategists and consultants, Charlie Gerow, offers up a sobering picture of the hard work ahead for liberal/leftist Gov.-Elect Tom Wolf when, on Wednesday, he assumes office and we drop the “-Elect” part in his title. Gerow points out that Wolf got elected by offering few specifics about his plans to raise taxes, except for a tax on the Marcellus Shale–he was crystal clear on that. When Wolf assumes office on Wednesday, all of his campaign prevaricating comes to an end and he will have to start offering real proposals for big problems. Gerow evaluates the prospects for a Wolf severance tax on Marcellus Shale gas this way:
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Industrywide Issues | Lease & Royalty Payments | Property Value | Supply Chain

Farmers National Opens Minerals Management Branch in Northeast
January 19, 2015January 19, 2015

Farmers National Company (FNC) calls itself the “largest independent mineral management firm” in the country. Started in 1929, the company works with landowners, farmers in particular, to turn their farms into profitable businesses. They also list and sell agricultural properties–one of the largest real estate firms in the country that do so. But it is their “mineral management” service that caught our eye. In a press release issued today, FNC announced they’ve expanded their mineral management services into Appalachia–Pennsylvania, West Virginia and Ohio (Marcellus/Utica country) to assist landowners with managing oil & gas leases and royalties…
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Energy Companies | Energy Services | Industrywide Issues | NGLs | Pipelines | Range Resources Corp | Sunoco Logistics

Range Cuts 2015 Drilling Budget 33%; Mariner East Up & Running!
January 16, 2015January 16, 2015

In addition to release good news yesterday about record high proved reserves (see today’s companion story), Range Resources issued a second press release yesterday to say they’re scaling back the drilling budget (capital expenditures, or capex) for 2015. Originally they set out to spend $1.3 billion on drilling projects in 2015. They’ve just trimmed it back by 33% to $870 million. They’re scaling back because of the low commodity price of natural gas, plain and simple. That’s the bad news. The good news is that 95% of that money will be spent in the Marcellus Shale. The further good news (why the deuce do we always have to hear these things from Range instead of Sunoco Logistics?!) is that the Mariner East pipeline is now up and running, flowing propane from western PA to storage caverns currently–not all the way to Philadelphia just yet…
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Hydraulic Fracturing | Industrywide Issues | Landfills | Pennsylvania | Research | Statewide PA | Wastewater

PA DEP Completes Fracking Radiation Study, Concludes “Little Harm”
January 16, 2015January 16, 2015

We love it when we get to close a loop–especially this one. Exactly two years ago the Pennsylvania Dept. of Environmental Protection, under then Secretary Mike Krancer, embarked on what would become a two-year, top to bottom, “thorough and rigorous” study of radiation in shale drilling (see PA DEP Announces New Study of Radiation in Shale Drilling). That is, they would use real science to figure out whether we will all, as the anti-drillers claim, begin to glow in the dark from exposure to radiation in wastewater, radiation in drill cuttings and radiation in “fracked gas” as they frequently prattle on about. The 200-page study is complete and we have a copy (below). What did the DEP conclude in their “peer reviewed” study? “There is little potential for harm to workers or the public from radiation exposure due to oil and gas development.” That is, the DEP says all of these wild-eyed claims of radiation poisoning are false…
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Energy Services | Industrywide Issues | Jobs | Schlumberger

Schlumberger Firing 9,000 to Reduce Head Count, “Low Oil Prices”
January 16, 2015January 16, 2015

Wow…is about all we can say. Yesterday Schlumberger (pronounced Shlum-Bur-Zhay), the world’s (and the U.S.’s) largest oilfield services company, issued its fourth quarter 2014 and full-year 2014 operating results. Although revenues in 4Q14 rose 6.2 percent to $12.6 billion, earnings, what they pay investors, decreased by 82%–to $302 million for the quarter, largely because of “one-time charges.” The radical drop in oil prices has deeply affected Schlumberger. However, it wasn’t their financial results but this short mention in yesterday’s update that caught everyone’s attention: “In response to lower commodity pricing and anticipated lower exploration and production spending in 2015, Schlumberger decided to reduce its overall headcount to better align with anticipated activity levels for 2015. Schlumberger recorded a $296 million charge associated with a headcount reduction of approximately 9,000.” Ouch. It makes Doug “the ax” Lawler over at Chesapeake look like a junior achiever by comparison. Schlumberger employs about 120,000 worldwide, so 9,000 represents 7.5% of their workforce. Gone…
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Energy Companies | Industrywide Issues | Range Resources Corp | Reserves (Proved and Unproved)

Range Hits Record High 10.3 Tcfe Proved Reserves in 2014
January 16, 2015January 16, 2015

A high level report wrapping up stellar results for 2014 was issued by Range Resources yesterday. Among the things Range is justifiably crowing about: Their proved reserves have increased by 26% to 10.3 trillion cubic feet equivalent (Tcfe). In 2014, it cost Range an average of $0.64 per million cubic feet (Mcf) to find and develop their Marcellus Shale acreage–get it ready to drill. And in 2014, it cost them an average $0.55/Mcf to drill and develop their acreage. That’s a combined $1.19 per Mcf cost to Range to find, drill and product, so you can see they’re still making money on dry gas that sells for less than $3/Mcf (plus they’ve hedged, meaning they get even more for their gas than the going spot price). There’s plenty of other goodies in yesterday’s announcement…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lancaster County | Pennsylvania | Pipelines | Williams

Indians on the War Path Against Pipeline in Lancaster County, PA
January 16, 2015January 16, 2015

A “native American” (i.e. Indian) tribe in Lancaster County, PA doesn’t want the Williams Atlantic Sunrise Pipeline to traverse “sacred” land, and they’re willing to “make noise, protest and rally, block bulldozers” to stop it, according to Chief Carlos Whitewolf. The good Chief Whitewolf is from the Northern Arawak Tribal Nation of Pennsylvania, which arrived in PA in 1898, long after PA was already part of the United States of America. But it gets stranger. There is no Arawak land in Lancaster County. However, there is Conestoga land, belonging to a different tribe. But the Conestoga tribe was “wiped out,” so there are no Conestoga Indians in Lancaster County either. But the good Chief Whitewolf feels an obligation to stick up for them, even though they are no more…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Gov Wolf Defends Anti-Drilling Choices for DEP, DCNR
January 16, 2015January 16, 2015

Pennsylvania Gov.-Elect Tom Wolf is already playing defense about his pick of two people–John Quigley and Cindy Dunn, both of whom have worked for the anti-drilling PennFuture organization–to run the Dept. of Environmental Protection and the Dept. of Conservation and Natural Resources, respectively (see Wolf Officially Announces Quigley to Head DEP, Dunn to Head DCNR). He’s also pretty thin-skinned about the valid observation that he seems to using a lot of Rendell retreads in his administration–both Quigley and Dunn, as well as others, worked for former Gov. Ed “Fast Eddie” Rendell. Seems that Wolf’s “outsider” facade is being ripped right off his face. Wolf’s team is composed of consummate Harrisburg insiders. Here’s what Wolf snipped to reporters yesterday when asked about it…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | PennEast Pipeline | Pipelines

Brainwashing NJ Students Against the PennEast Pipeline
January 16, 2015January 16, 2015

There’s plenty of brainwashing of children going on in New Jersey. The brain washers include the Delaware Riverkeeper and the NJ Sierra Clubbers. Like good little mind-numbed robots, the members of the environmental club at Delaware Valley Regional High School in Hunterdon County, NJ invited Riverkeeper and the Sierra Club to present their dog and pony show bashing away at the PennEast pipeline–and apparently they lapped it right up. Note that no one from PennEast was invited to present the other side of the issue. It’s really important that children be brainwashed early on and not be exposed to opposing arguments (i.e. the truth)–so they can enjoy a lifetime of never having to think for themselves…
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Allegheny County | Industrywide Issues | Pennsylvania | Supply Chain

Pittsburgh Oilfield Services Co Expands with Local Investment
January 16, 2015January 16, 2015

Three Pittsburgh-area oilfield services companies–White’s Equipment Rental, Crossfire Production Services, and White’s Welding–are collectively owned by a single company, White’s Holdings. Owner Calvin White started White’s Welding first, in Oklahoma, and grew the enterprise from there, eventually expanding into the northeast. White’s move to the northeast was prescient. The Marcellus/Utica has supercharged his businesses in the region. It was time to grow, and is often the case, small businesses growing into medium-sized businesses need cash to do so. Enter another Pittsburgh-area company, F.N.B. Capital Partners (FNBCP), a private equity firm. FNBCP has just announced they’ve made an investment in White’s Holdings so the company can expand. That is, White has traded away some ownership (retaining majority ownership) in return for cash to expand the three businesses that serve the drilling industry in the northeast. Another jobs and economic miracle courtesy of fracking…
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