Industrywide Issues

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    NJ Natgas Customers Get 24% Reduction on Their Bill

    An irony of ironies…The anti-drilling lobby in New Jersey is very strong. Even though there’s no recoverable Marcellus Shale gas in NJ, so-called environmentalists continually agitate for a statewide ban on fracking. A number of them also cross the border to make trouble in PA too, showing up for protest rallies. Even though they hate natural gas that comes from fracked Marcellus Shale–the very same protesters burn it to heat their homes and cook their meals. Some of them even use it to power natural gas vehicles.

    So it strikes us as a tad ironic that those same anti-drillers will see yet another huge rebate on their next gas bill from Public Service Electric & Gas (PSE&G), NJ’s largest gas and electric utility. Why? Because PSE&G has been wisely buying cheap Marcellus Shale gas produced in PA, and by law they have to pass along the savings to their customers. So in February their bills will be chopped by 24%, thanks to the same Marcellus gas groups like the Sierra Club are protesting…
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    MDN Takes on Seeking Alpha Blogger over Marcellus Decline Rate

    inside baseballThis is an “inside baseball” kind of article. For those with a casual interest in Marcellus Shale drilling, you’re free to move along. For the rest of us, this is an important issue–and that issue is how fast do Marcellus Shale wells (really any/all shale wells) peter out? After you drill a well, how long does it take before the gas quits flowing in economic volumes? It’s certainly important for drillers investing millions and billions–and for landowners who receive royalties. It’s also important for companies that invest big money in processing plants and pipelines (the “midstream” sector) because those fixed costs take time to recoup and you want to be sure the gas flows long enough to make a profit.

    Increasingly the debate is turning to decline or “depletion” rates–how fast wells peter out. The U.S. Energy Information Administration (EIA) introduced a new drilling productivity report in October (a report we LOVE) that tackles the issue of decline rates. EIA lumps “old” wells together in a single number that they track–they call it “legacy production” or gas production from older wells. A freshly drilled well is considered “new” for precisely one month! After that, it’s production is lumped in with all of the other legacy or “older” wells. Sooner or later drillers will quit drilling new wells and all that will be left are legacy wells, so the sport in the investing industry is to guess when that will happen, and how productive those older wells will be. Enter an article on Seeking Alpha that does a deep dive into this issue by an admitted shale gas pessimist…
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    New NYC Mayor Comes Out Against Fracking Anywhere in NY

    NYC Mayor Bill De BlasioThe new mayor of New York City, Bill De Blasio, is anti-drilling and proud of it. Yesterday he told reporters he doesn’t want to see fracking anywhere in the state. That De Blasio–wow, what a deep thinker he is! Know where he gets his facts and information from about fracking? Watching movies like Gasland. Such intellectual heft. Such gravitas. The man is clearly smarter than any of the rest of us. Thank God he’s the new mayor.

    Of course, De Blasio apparently doesn’t realize that fracking (of conventional oil and gas wells) happens right now in New York State and has been for over 40 years. But hey, let’s not let something like the truth get in the way of spinning a good fiction for the hoi polloi–us ordinary folks. We’re just so in awe of self righteous jerks intellectual leaders like De Blasio, we simply feel unworthy to be in His presence…
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    Northeast Propane Shortage – Andrew Cuomo Partially to Blame

    Propane is one of the natural gas liquids (NGLs) that comes out of the ground along with methane (natural gas) in places like southwest PA and eastern OH–otherwise known as “wet gas” areas of the Marcellus and Utica Shale region. There’s been a number of stories recently in the national media about supply shortages of propane. The Pennsylvania Propane Gas Association issued a press release yesterday addressing those concerns–to layout the reasons why propane is in short supply and why prices for it have jumped.

    When you read beyond the headlines, you’ll find there’s a pretty simple reason why propane prices have skyrocketed in the northeast and New England–it’s because of New York’s anti-fracking governor Andrew “the ditherer” Cuomo. He’s not only dithering about whether or not to allow fracking, he’s also dithering on whether or not to approve a new propane underground storage facility near Seneca Lake–what the industry terms a “critical” need to relieve propane supply issues in this part of the country. Here’s a good rundown on the current propane supply issues plaguing the U.S., including Cuomo’s hand in it…
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    WV Anti-Drillers Try to Tie Coal Chemical Spill to Fracking

    MDN alerted you yesterday that some businesses on the periphery of the shale drilling industry in West Virginia may be affected by the recent coal-related chemical spill in that state that shut off water to some 300,000 residents (see Bumpy Ride for GreenHunter Because of WV Coal Chemical Spill?). Apparently anti-drilling Democrats in the state aren’t stopping at the periphery of the industry–why not use this unrelated chemical spill tragedy to falsely paint the entire shale drilling industry too? Yeah! What a great idea! (Rahm Emanuel: “You never let a serious crisis go to waste.”)

    And so is born one of the most confusingly false and fact-challenged articles we’ve read in a long time–and that’s saying something. A Huntington News reporter was apparently so wowed by has-been WV politician Charlotte Pritt (who once ran for governor in WV and lost), that he accepted her spoon-fed pablum that the recent coal-related chemical spill “has ties” to the fracking industry. The reporter confusingly cites studies going back years from trustworthy sources like (*cough*) Politico, and sprinkles in liberal doses of liberal dogma like “Halliburton loophole,” and apparently expects you to understand what he and Queen Charlotte are trying to say: frackin’s bad for ya man…
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    Oilfield Services Company Canary Buys Wellhead Competitor

    Canary says it is the country’s largest “independent” wellhead services company. They rent equipment and personnel to help energy companies frack wells, and they install wellheads on those wells. Canary, now a $100 million company, announced yesterday that they’ve bought out a smaller competitor: American Wellhead. American has a strong operation in the Permian Shale basin (Texas) which Canary wanted.

    So why is this news for MDN? Because Canary has extensive operations in both the Marcellus and Utica Shale, servicing drillers in the northeast. And because when a company like Canary expands the way they have been expanding, it may mean opportunity for other businesses that work with, or sell to, companies like Canary. And because drillers in the northeast may be interested in knowing what their vendor is up to. For a variety of reasons, we thought this press release from Canary might be interesting for our readers…
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    PA DEP Extends Roadshow for Public Comment on New Drilling Rules

    Roadshow! The Pennsylvania Environmental Quality Board (EQB), a division of the state Dept. of Environmental Protection (DEP), has been in the midst of a 60-day tour, visiting different locations across the state, to elicit public comment on proposed new Marcellus Shale drilling rules called for under the Act 13 law passed in early 2012 (see PA DEP Launches Public Comments on New Drilling Rules, Roadshow).

    Must be the EQB is having fun because they’ve just extended the roadshow for another 30 days. Instead of wrapping up public comments on the proposed new drilling rules by Feb. 12, the new deadline will be Mar. 14. Oh, and they’ve added a couple of more stops to the roadshow tour: Troy and Warren, PA. Here’s the EQB roadshow extension announcement:
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    Bumpy Ride for GreenHunter Because of WV Coal Chemical Spill?

    Is there a connection between the recent chemical leak in West Virginia that cut off water for 300,000 people–a leak related the coal industry–and GreenHunter Water’s plans for a frack wastewater recycling plant in Wheeling, WV? Perhaps. No, GreenHunter had nothing to do with the chemical spill that made national headlines for weeks (see Coal Industry Blamed for West Virginia Chemical Spill). But because GreenHunter plans to store fracking wastewater in tanks above ground “mere yards from the Ohio River” as one article says, they are now coming under increased scrutiny. One might say they’re now under a microscope.

    MDN has covered the long road for GreenHunter in establishing the Wheeling wastewater recycling facility (see these MDN articles). Just when it appeared that the path was clear–and that even the U.S. Coast Guard would finally grant GreenHunter permission to barge frack wastewater from the Wheeling facility–the coal-related chemical spill happened, which may end up adversely affecting the GreenHunter project…
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    Former Marcellus Coalition CEO Katie Klaber Starts Consultantancy

    Con•sult•ant: a person who provides expert advice professionally. Synonyms: adviser, expert, specialist, authority, pundit. One of our favorite Marcellus personalities, Kathryn (Katie) Klaber, former CEO of the Marcellus Shale Coalition, has finally turned up again–as a consultant. Katie has begun her own consulting practice along with partner Ron Pettengill, a Wall Street IT wizard. It will be no surprise that Katie’s new consulting firm will focus on shale, and, if we read her press announcement correctly, help companies navigate the tricky PR waters of aggressive development while maintaining good relations with the public. And Katie should know, because she helped build the enormously successful MSC to its current 300 members–those members being some of the largest upstream (drilling) and midstream (pipelines) companies in the world.

    The Marcellus Shale has become the hottest of the hot shale plays in the United States–and Katie Klaber had a hand in that success. She’s now turning her expertise, specialization and authority into a consulting practice that will deliver her knowledge to companies across the country. Here’s the press announcement from Katie about her newly formed consulting practice, including a couple of customers she’s already serving (advising the Babst Calland law firm and working with global consulting firm Blue Water Growth)…
    Read More “Former Marcellus Coalition CEO Katie Klaber Starts Consultantancy”

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    Williams Expands in PA Again, Adds Local HQ in Fayette County

    Although headquartered in Tulsa, Oklahoma, Williams–one of the largest (perhaps the largest) midstream company in the Marcellus and Utica Shale–continues to expand its footprint in the northeast. The latest area where Williams is expanding is southwest PA–Fayette County to be precise. Williams recently opened a new local headquarters for their Williams Energy division in Fayette. The new location currently employs 75 people (so far).

    Here’s the story of Williams’ ongoing expansion in SW PA…
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    Japan Researchers Say Life Wouldn’t have Begun without Natgas

    Anti-drillers seems to be susceptible to believing in fairy tales–like the myth of man-made global warming. Here’s a new fairy tale anti-drillers may not like so much. This one comes from researchers at the Tokyo Institute of Technology (TIT). In a press release laced with a lot of maybes, could-of’s and probably’s, the bright minds at TIT have a new theory: One of the key substances found on earth today was a necessary component in the formation of life on earth–it was a necessary ingredient in the primordial soup of life. And what, you may ask, is that key, critical chemical compound? CH4…otherwise known as methane…otherwise known as natural gas.

    Oh no! Say it ain’t so!! Not natural gas?! Yep. The same anti-drillers who tell you the world will end by burning natural gas wouldn’t even be here (according the TIT fairy tale) without it. Talk about ironic…
    Read More “Japan Researchers Say Life Wouldn’t have Begun without Natgas”

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    PA Judge Hears Mariner East NGL Pipeline Eminent Domain Case

    court gavelSunoco Logistics–and for that matter, MarkWest–have a lot riding on a single court case in Washington County, PA. It might be a bit melodramatic to say the future of the Mariner East NGL (natural gas liquids) pipeline hangs in the balance, but it certainly is not inaccurate to say the case could cause an extended delay–if it goes the “wrong” way (for Sunoco). What’s the case about?

    Sunoco’s Mariner East “refined products” pipeline spans the entire state of Pennsylvania. In order to connect to that pipeline to ship propane and ethane to the Marcus Hook refinery near Philadelphia, Sunoco first has to build a 50-mile feeder pipeline from the MarkWest processing plant in Houston (Chartiers Township) to Delmont (see the Sunoco map below). The problem is, a group of landowners in Washington County won’t play ball and lease their land to Sunoco to bury the pipeline. Sunoco got tired of negotiating with the recalcitrant landowners, and changed tactics to declare it (Sunoco) has eminent domain power under PA state authority. They sue the 25 landowners for force them to allow the pipeline. The landowners sued back arguing the 50-mile pipeline should come under federal, not state, authority. One of the 25 cases is being used as a proxy for the others and that case was just argued yesterday before a PA judge. A decision, according to the judge, will be “prompt”…
    Read More “PA Judge Hears Mariner East NGL Pipeline Eminent Domain Case”

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    CSSD Makes Case for Quasi-Regulation of Marcellus Drilling

    Yesterday MDN told you that the Center for Sustainable Shale Development (the CSSD) is back, in a big way (see Center for Sustainable Shale Comes Roaring Back (to Life)). About the time we posted that story, we received a number of announcements from the CSSD. One of those announcements was about a session for the press–to listen to and ask questions of CSSD interim director Andrew Place (from EQT) and former governor and EPA administrator Christine Todd Whitman. MDN dialed in to listen, this is what we heard…
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    Are CSSD’s Standards Really Needed? Comparison with PA/OH/WV/Feds

    The Center for Sustainable Shale Development (CSSD) has a big hurdle to leap–convincing drillers to spend a lot of money and time (up to $50,000 and hundreds of hours) to become CSSD certified–and then ongoing monitoring to keep that certification. They’re using a carrot and stick. The carrot is that if you become certified, you’re elite, you’re “in”, you’re special–and landowners will be able to trust you. You’ll have the “Goodhouskeeping seal of approval” on your drilling because you’ve got the cert. The stick is that if you don’t get certified, you’re suspect, you’re in the “out” crowd, you’re not “one of us” and therefore landowners should be wary of signing a lease to have you drill on their property.

    Beyond the perceptions, the real question is whether or not the standards themselves will achieve what they say they will achieve–safer and “sustainable” drilling that does a minimum amount of damage to the environment while retrieving low-cost, more efficient and better for the environment natural gas. But wait (you may ask), don’t the states and even the feds already have a bookshelf full of standards and regulations drillers must follow? Indeed they do. The CSSD says, in essence, those standards are fine, but our (CSSD) standards are far better. The crux of the CSSD argument is that you should voluntarily (with peer pressure and cajoling) follow our standards because we have PA, OH, WV and even the feds beat on how strict and yummy good for the environment our standards are over theirs. In fact, the CSSD has produced a chart (embedded below) to “prove” it…
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    OH House Dem Makes Another Run at Nosebleed 7.5% Severance Tax

    The reliably anti-drilling Ohio State Representative from Youngstown, Robert F. Hagan, would prefer to ban shale drilling outright. Since that’s not going to happen in OH (at least not any time soon), he wants to kill it another way. Last June Hagan introduced a bill in the OH House that would enact a 7.5% drilling tax on Utica Shale drilling, which would of course effectively kill all Utica drilling henceforth (see Youngstown Democrat State Rep Wants to Hike Severance Tax to 7.5%). You have to hand it to those OH Dems–they’re real johnny one-notes: tax more, spend more.

    Hagan is trotting out his obscenely high tax bill once again, trying to whip up support. Good luck with that one Bobby…
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    Minnesota Film Festival Bows to Pressure, Censors FrackNation

    It looks like the peace-loving, open-minded, love and daisies anti-drilling liberals have bullied another venue into dropping a screening of the pro-drilling (and highly recommend) FrackNation. The Frozen River Film Festival in Winona, MN said they had been pressured by libs from Mountain Film in Telluride and the Sundance Film Festival. And so they caved and went running with their tail between their legs instead of standing up for free speech and an alternative view.

    Ever notice how free speech only applies when mouthy anti-drillers want to shut down a public meeting or show their propaganda somewhere–but when the other side wants to talk or show a film, it’s “off with their heads!” Hypocrites–the lot of them. Here’s an update from MDN friend and FrackNation director and star Phelim McAleer about Frozen River Film Festival’s censorship of his film…
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